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LONDON — Mark Cutifani and I meet in the strangest places. My first encounter with the CEO of Anglo American, one of the world’s biggest mining companies, came last September at a Vatican mining conference in Rome. He and other mining bosses were learning how to inject a bit more of the Holy Spirit into their digging activities.
The second time was two months later at a gold mine in Chelopech, Bulgaria, of all places. The little mine wasn’t Anglo’s. It belonged to Toronto’s Dundee Precious Metals and Mr. Cutifani was there to learn how the Canadians had reduced costs by some 50 per cent through a range of technologies, such as novel underground WiFi and data networks. “This is where the innovations are, in the small mines,” he said at the time, decrying the lack of technology in Anglo’s own mines.
The third meeting came in March, at Anglo’s headquarters in London, near Trafalgar Square, at the heart of what used to be world’s greatest empire. The location is appropriate. Anglo American was founded in 1917 by Sir Ernest Oppenheimer with £1-million ($1.85-million) in capital from British and American sources (hence the name Anglo American). Like Britain, it would establish outposts around the world. From its foundation in South Africa – home to its vast gold, platinum and diamond operations – it would expand into base metals in Canada, coal and manganese in Australia and iron ore, ferronickel and copper in Latin America. At one point, Anglo was the world’s mightiest mining company.
That’s no longer the case. It now has the dubious distinction of being the smallest of the Big Five global mining groups – the leaders are BHP Billiton, Vale, Rio Tinto and Glencore Xstrata – and did its best to alienate investors in recent years through massive cost overruns, uninspiring leadership, mediocre engineering and a labour dispute in its South African platinum mines which has yet to be resolved. In 2009, Xstrata (before its merger with Glencore) took pity and offered to buy the ailing company. Anglo’s then CEO, Cynthia Carroll, rejected the overture, vowing to restore the company’s fortunes.
The effort failed. As the shares tumbled, Ms. Carroll, who was the first female CEO in the company’s history, and the first outsider, resigned. In came another outsider, Mark Cutifani, an Australian by way of Sudbury, Ont., and South Africa, with a licence from the board of directors to shake up the place. That was a year ago. Today, the new focus is on boring but worthy pursuits, like capital discipline and shareholder value, not the fun but destructive activities like growth for the sake of growth. “We were forcing growth through the system and that’s partly how we got into trouble,” Mr. Cutifani says.
We are having breakfast in the dining room on the main floor of Anglo’s offices, just beyond the lobby, whose display cases are full of colourful minerals, old photos and curiosities such as a life-size lioness cast in silver-coloured alloy. Breakfast is, sadly, rather bland. When I worked in the mining camps in Ontario to fund my university years, we gorged on eggs, bacon and sausages for breakfast, and I had assumed the canteen at Anglo would serve up similarly robust fare. Instead, it was yogurt, toast and croissants. At least the coffee was in the mining spirit – it was bad.
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