Cynthia Carroll’s Anglo American legacy – by Geoff Candy ( – October 29, 2012)

The numbers only really tell one side of the story.

GRONINGEN (MINEWEB) – When Cynthia Carroll, a coal geologist by training and, formerly, of Canada’s Alcan, took the reins at Anglo American in March 2007, then Chairman Mark Moody-Stuart cited her “clear leadership and communication skills, her highly relevant hands-on operational experience and her record of working with governments and other key stakeholders,” as important attributes.

This is the legacy Carroll leaves behind her by the numbers: In its 2006 financial year, Anglo American’s produced $5.5 billion in underlying earnings, a 46% increase over 2005. Operating profit jumped 54% to 9.8 billion and net debt fell 33% to 3.3 billion. The group also recorded the deaths of 44 employees and contractors. In 2011, the group reported a group operating profit of $11.1 billion and underlying earnings of $6.1 billion. It spent $5.8 billion in capex and reduced net debt to $1.4 billion down from $7.4 billion in 2010. The group also reported 17 deaths.

In between those numbers, however, lies a much broader story. Firstly, as my colleague Dorothy Kosich wrote a year after Carroll’s appointment was announced, “Carroll shattered the glass ceiling of international mining as the first female CEO to head a mega-mining company, specifically with deep South African roots. In an industry, which barely allowed women to work underground a couple of decades ago, Carroll’s appointment is a substantive indicator of change in mindset among international miners…Carroll also hails from Canada’s Alcan, where as president of the Primary Metals Group, she had to convince a sceptical public that smelting aluminium could actually evolve into a sustainable, environmentally clean activity.

Alcan has been a member of the Dow Jones Sustainability Index for several years, is a participant in the United Nation’s Global Compact, and won numerous awards and recognition for sustainability. At the same time, Carroll helped shepherd Alcan to the highest profitability and returns in the history of the company, developing a combined $10 billion project pipeline. Her portfolio involved job creation, project development, and transcending all geographies and all aspects of sustainable development.”

It was hoped that Carroll could do something similar at Anglo American but, from the outset there were doubters and, rumours of her imminent departure. This was partly a function of the group’s continual attempts to remodel and restructure itself – attempts that had begun well before Carroll came on board and, partly because of its performance relative to its peers.

From March 2, 2007 to date, Anglo American’s share price has fallen just over 33%. Over the same period, only Xstrata has done worse, declining 63.5%. Rio Tinto is up 5.54% while BHP Billiton is the clear winner, with an increase 76.7%.
But, this was no ordinary period of time. Smack in the middle of these numbers lies the global financial crisis that decimated earnings across the mining board – commodity prices fell, capex was cut and jobs lost.

For Anglo American it resulted not only in heady falls in operating profit between 2008 and 2009, including a 98.5% drop in earnings from its platinum business, an 87% fall in diamond earnings and a 98% drop in nickel, among others, but it culminated in the group passing on its dividend for the first time in its 95-year history – a definite, if somewhat unfair black mark against Carroll.

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