Under pressure, Anglo CEO Cynthia Carroll quits – by Clara Ferreira-Marques and Sinead Cruise (Reuters – October 26, 2012)


(Reuters) – Anglo American’s (AAL.L) Chief Executive Cynthia Carroll has quit after more than five years in the job, under pressure from investors over the miner’s lagging share price and continued dependence on troubled South Africa.

A geologist by training, New Jersey-born Carroll ruffled feathers when, fresh from the aluminum industry, she became the first non-South African, the first woman and the first outsider to take the top job at Anglo in 2007.

Brushing aside suggestions she was pushed to leave, Carroll and Chairman John Parker, her long-standing supporter, said on Friday there had been “differences of opinion” with shareholders but the decision to step down was her own, as she approached a seventh year in a “very grueling and demanding role”.

Carroll’s efforts to streamline a miner with colonial roots that became a sprawling conglomerate, her campaign to cut billions in costs and efforts to shift Anglo’s centre of gravity away from South Africa have won her support among investors. A campaign to improve ties with South Africa’s government has also garnered plaudits.

But her relationship with investors became more troubled after big-ticket acquisitions like the Minas Rio iron ore project in Brazil – an early bid to diversify Anglo’s portfolio – which became mired in cost overruns and delays.

Anglo has yet to give a final cost for the project it bought in a $5.5 billion deal at the top of the commodities cycle, but analysts say spending could rise to $8 billion from current forecasts of $5.8 billion, already twice original estimates.

“Institutional pressure has been building for some time to replace Cynthia, so the news will be welcomed,” one of Anglo’s 15 largest shareholders said.

“Ultimately, running Anglo is one of the toughest jobs around and, although Cynthia made a good start as CEO, the feeling is the company has gone backwards in the last two to three years.”

Other investors also pointed to a mixed record at the top.

“Her strategic moves didn’t always hit the mark. The acquisition of Minas Rio, promptly followed by a dividend cut, was a particular low point,” another of Anglo’s 15 top investors said. Anglo scrapped its 2008 dividend to preserve cash.

Crippling strikes in platinum and iron ore mines in South Africa in recent weeks have revived long-standing worries over Anglo’s exposure to the country, aggravating concerns about a share price that has underperformed its peers.

Despite her cost cuts, according to analysts at Macquarie, under Carroll Anglo has lost one-third of its value on a U.S. dollar market capitalization basis and is now worth $25 billion less. Other major miners are worth at least the same as they were at the start of 2007.

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