JOHANNESBURG (miningweekly.com) – Anglo American CEO Mark Cutifani, who this week charted the company’s progress and pathway forward, has vowed to restore its iconic status.
“Anglo American in my 37 years in this industry has been an icon. We intend to put it right back up there,” he said in a media conference call from London.
On Thursday, the the day of the company’s major investor update, Anglo American opened at a higher £13.08 a share on the London Stock Exchange, after investment banker Canadian Imperial Bank of Commerce set a “sector outperform” rating on the shares the day before and investment management company Sanford C Bernstein reiterated the “outperform” rating the next day, American Banking & Market News reported.
Analysts at Deutsche Bank last week reiterated a “buy” rating on the stock in a research note to investors, Analyst RN reported. Hosting a presentation to update investors on the London- and Johannesburg-listed company’s strategy, Cutifani said he knew of no other mining major that was in the process of doubling its earnings before interest and taxation (Ebit).
He told Mining Weekly Online in a media conference call from London that more than 60 of the company’s assets had been studied in the last six months.
“To be quite frank, what needs to be done is not complex work. It’s basic stuff,” Cutifani said, adding that the potential value unlock for shareholders was “demonstrable”.
“We have to get on and get it done,” he said of the company’s turnaround through delivering a 15% return on capital employed (ROCE), and by extracting savings of $0.9-billion worth of Ebit from new projects, $1.2-billion from operations and another $1.3-billion from value leakage in overheads and supply opportunities.
Cutifani reported that $500-million in overhead leakage had already been plugged, 60% of the commercial opportunities had already been locked down and a $300-million project improvement would come through next year.
Anglo American has probably been the least aggressive of the diversified majors in optimising sales prices and by exercising more of it, 20% of the $3.5-billion savings targeted have already been achieved.
“We’re showing a $500-million gap to get to the 15% ROCE and we’ll be working through the detail to get there in the next 6 to 12 months,” he added.
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