In his first speech as CEO of Anglo American, Mark Cutifani lays out a number of the challenges facing his new charge and the rest of the mining sector.
GRONINGEN (MINEWEB) – New Anglo American CEO, Mark Cutifani, is not known for pulling his punches. And, his first speech as Anglo American CEO was no different.
Speaking at the group’s Annual General Meeting, Cutifani told Anglo American shareholders that with the group’s share price languishing compared to its peers, business as usual was no longer acceptable.
“As a major diversified company, we need a more focused articulation of the value proposition that will guide our strategic positioning,” Cutifani said, before adding that Anglo American (and the rest of the sector) need to look beyond the mining industry for inspiration.
“To be brutally frank, our industry lags the petroleum, manufacturing and aviation sectors and other more progressive and innovative heavy industry players in terms of operating practices – there is no reason why our industry should not use the best from all of these ‘restless innovators’.”
Indeed, Cutifani said, ” over the last five years, the sector has been guilty of “a lack of capital discipline, a lack of focus on returns and incapacity to translate good intent into business results.”
But, he added, while “there has been considerable media commentary on strategy in our industry recently, with new chief executives promising not to make acquisitions, not to develop new projects and to return cash to shareholders in ever increasing amounts. I will not make promises where I am not sure we can consistently deliver value or where we do not have an execution strategy.”
One of the major reasons for this lack of discipline, Cutifani told shareholders, is that the sector has lost sight of what the obvious issues are.
To this end, when appraising new business opportunities, be they M&A or new projects, Anglo American is going to approach the decision based on three criteria:
“Is it the best place to commit that capital compared to all other options?
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