Global miners face succession crisis as old guard nears retirement – by Susan Taylor and Nicole Mordant (Reuters Canada – July 20, 2015)

http://ca.reuters.com/

TORONTO/VANCOUVER (Reuters) – As if slumping commodity prices and unhappy shareholders were not enough, global mining companies are also facing a looming succession crisis.

Several mining CEOs have reached or are nearing retirement age and industry executives, recruiters and analysts worry that there is not enough people with the right skills and experience to replace the old guard.

It is the price of a ‘lost generation’ – those now in their 40s who failed to find jobs in the industry during a mining downturn in the 1990s and early 2000s and have drifted elsewhere.

“There is a shortage of potential CEOs because the industry doesn’t invest in people,” said Mark Bristow, the 56-year-old Chief Executive of mid-tier gold miner Randgold Resources RRS.L.

As a result, companies may need to promote relatively green management or recruit outsiders, raising the risk of costly strategic mistakes at a time when the industry can least afford them.

For example, Kinross Gold K.TO replaced CEO Tye Burt, a former investment banker, in 2012 after its share price cratered and a blockbuster acquisition went sour.

Burt led Kinross to a $7.1 billion purchase of Red Back Mining in 2010, a deal that contributed to more than $6 billion in writedowns and provoked deep investor discontent.

Mining companies typically focus on building projects when they plot the future, not career paths, said Douglas Groh, portfolio manager at Tocqueville Asset Management.

“The industry is not good at succession planning. It is more in the moment,” said Groh, whose fund is a major gold sector investor.

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