Twitter

Anglo American

Anglo CEO’s plan to reignite mining – by Rob Rose (South Africa – Business Day – March 17, 2013)

http://www.bdlive.co.za/

MARK Cutifani, who will step into the CEO’s seat at Anglo American in the next few weeks, said that, by confronting seven issues that spook foreign investors, South Africa’s mining industry can “turn the dial” and begin growing again.

Speaking at a dinner in Parktown, Johannesburg, on Thursday night, organised by the Chamber of Mines and attended by Mineral Resources Minister Susan Shabangu, Mr Cutifani said 2013 represents a “starting point for a new future for the mining industry”.

South Africa’s mining industry has flagged in recent years, battling a stream of bad news. This included the Marikana shootings last year and former ANC Youth League leader Julius Malema’s campaign for mines to be nationalised.

It meant that while the JSE’s all-share index climbed 60% from 2008 onwards, South Africa’s mining firms did not grow at all. Mr Cutifani pointed out that “in real terms, when you take into account inflation, that means we’ve destroyed about 30% value”.

Mr Cutifani, an Australian mining engineer, will take charge of Anglo American at its London head office. He has successfully led AngloGold Ashanti for the last six years. During that time, the company was the best-performing miner in terms of share-price growth and return on capital.

Read more

Profits Drop at Big Five Miners – by Reuters (New York Times – February 12, 2013)

http://www.nytimes.com/

MELBOURNE — Global mining companies are set to unveil their biggest profit decreases in more than a decade and are clearing the decks with multibillion-dollar write-downs on poorly performing assets as they bring in new chief executives.

A sharp drop in commodity prices is likely to have driven down profits for the second half of last year by 40 percent to 50 percent at the top five mining companies when compared with the same period in 2011, forcing them to shelve expansion projects, slash costs and sell assets.

For the top three — BHP Billiton; Vale, based in Brazil; and Rio Tinto — iron ore earnings are likely to cushion losses in coal, aluminum and nickel for the period.

Chief executives are being punished for splurging in the boom years on projects and acquisitions instead of rewarding shareholders more generously, and investors are calling for Rio Tinto and BHP to rethink their policies.

One of the 10 largest shareholders in BHP and Rio Tinto’s Australian-traded stocks said his fund had been pressing both to pay out more of their profit to shareholders. The shareholder, Ross Barker, the managing director of Australian Foundation Investment, said that the companies were not paying higher dividends to shareholders so they could use the funds for investments that would deliver attractive returns.

Read more

With blood in the water, mining’s great white shark is on the hunt – by Eric Reguly (Globe and Mail – February 23, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

ROME — Beheadings are putting the mining world through something akin to the French Revolution. Mining bosses who landed their jobs in the bubble era – 2006 and 2007 – or did their signature top-of-the-market deals in those years are being fired with alacrity. Or they are announcing their retirements, much to the delight of shareholders grown weary of the value destruction borne of stunningly overpriced takeovers and soaring costs.

The changing of the guard started in the autumn, when Cynthia Carroll said she would quit as chief executive officer of Anglo American. Not long after, BHP Billiton, the world’s top mining company, revealed that it would replace Marius Kloppers, the man who made a wrong bet on shale gas and botched the attempted takeover of Potash Corp. of Saskatchewan (the new CEO is Scotsman Andrew Mackenzie). Last month, it was Rio Tinto boss Tom Albanese’s turn. The biggest sinner of them all, he was knocked off for his boneheaded purchase of Montreal’s Alcan in 2007 for $37-billion (U.S.), most of which has now been written off.

Canadian mining bosses have been frog-marched to the guillotine too – Tye Burt of Kinross Gold and Aaron Regent of Barrick Gold were two of the late 2012 victims. A year earlier, Roger Agnelli was pushed out of Vale, the Brazilian company that paid an eye-watering price for Canada’s Inco.

The last man standing is Ivan Glasenberg, the Glencore International CEO who is about to become the head of the mining and trading colossus to be formed by the merger of Glencore and Xstrata, the Anglo-Swiss miner that owns Falconbridge.

Read more

UPDATE 2-Chile’s Collahuasi says mineral resources up 19 pct in 2012 – by Fabian Cambero (Reuters.com – February 6, 2013)

http://www.reuters.com/

SANTIAGO, Feb 6 (Reuters) – World No. 3 copper mine Collahuasi said on Wednesday its mineral resources grew by 19 percent to 9 billion tonnes last year compared with 2011 levels, due in part to new drilling campaigns and improvements in mining design.

Average ore grades are 0.81 percent copper, Collahuasi said, an enviable level as grades slip in many of leading copper
producer Chile’s ancient, tired deposits. Mining reserves increased 10 percent to 3.2 billion tonnes, the mine added.

“The notable increase in our base of mineral resources gives a clear indication of the significant future potential of an
expansion at Collahuasi,” new chief executive officer Jorge Gomez said in a statement.

Collahuasi is seeking to turn the corner after a tough 2012. The deposit produced around 284,000 tonnes of red metal last
year, tumbling roughly 37.3 percent from 2011 levels. It hopes to produce more than it did in 2012, Gomez told Reuters late last month.

Global miners Anglo American and Xstrata each own 44 percent of the mine. The remaining 12 percent is owned by a consortium of Japanese companies led by Mitsui & Co.  Collahuasi is mulling expansion plans that seek to double annual production. But Xstrata’s head of copper, Charlie Sartain, said last year no progress on ambitious expansion plans would be considered for the operation until the current turnaround was complete.

Read more

Live from Mining Indaba 2013: Cynthia Carroll, outgoing Anglo American CEO with Geoff Candy – by Moneyweb.co.za (February 6, 2012)

http://www.moneyweb.co.za/moneyweb-home

Carroll talks mining prospects, Anglo projects and the Plat Review.

GEOFF CANDY: Hello and welcome to this Mineweb.com Newsmaker podcast. Joining me here live at the Cape Town Convention Centre is Cynthia Carroll, the outgoing CEO at Anglo American. Cynthia, you took over the reins at Anglo American in March 2007. It’s been an exceptionally eventful five years, not just for Anglo American but for the sector as a whole. What do you think is the most significant change you’ve seen in the mining sector in those five years?

CYNTHIA CARROLL: Well, first of all we have clearly gone through two significant economic downturns that I don’t think anybody anticipated, and at the same time Anglo American had two record years – 2008 and 2011. I think that there has been a developing disconnect between the expectation of investors and what the mining companies have been able to deliver in the short term. And during the peak of the cycle when everything was going gangbusters, everybody was saying you have to invest and you have to spend and we want to see growth and we want to see production.

But we’re in a period right now, again that nobody would have predicted when there has been much more contraction, starting with Europe in terms of demand and then a slowing down in Asia. So some investors are walking away completely from the industry, others are putting greater demands on industry heads to say, we want to be assured of our returns first and foremost before you spend any money, and we want you to cut back significantly.

Read more

Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

SIR ERNEST OPPENHEIMER (1880-1957)

It is impossible when considering mining in the 20th century not to place the Oppenheimer family at the centre of the development of the South African industry, one that is pre-eminent in the production of precious metals. Sir Ernest Oppenheimer played a crucial role in establishing the Anglo American group and, as Chairman of De Beers, in organising the modern diamond-trading cartel, the Central Selling Organisation, now much reformed.

Sir Ernest was born in 1880 in Freidberg, Germany, where his father Edward was a cigar merchant. The Oppenheimers were a large German Jewish family with excellent connections, particularly in the diamond business in England. When he was 16 he went to England and started work as a clerk in the London office of diamond merchant A. Dunkelsbuhler, who was his cousin, and became a naturalised Briton.

Read more

South Africa Faces Tax Dilemma as Mining Industry Costs Soar – by Mike Cohen & Paul Burkhardt (Bloomberg.com – February 5, 2013)

http://www.bloomberg.com/

South Africa’s government faces a dilemma: how to help mining companies weather surging costs and depressed commodity prices as the ruling African National Congress seeks to wring more revenue from the industry.

Upheaval has plagued platinum and gold producers since August last year, when thousands of workers staged a series of illegal strikes, winning pay increases of as much as 22 percent. Adding to mining costs, Eskom Holdings Ltd., which supplies about 95 percent of South Africa’s power, is seeking 16 percent average annual tariff increases until 2018 to fund expansion.

While Mining Minister Susan Shabangu says the government is committed to working with the industry, the ruling ANC wants the country to derive greater benefit from its minerals. At a conference in December, the party said a “resource-rent” tax, or higher royalties, were under consideration.

“I’m quite worried,” Nick Holland, the chief executive officer of Gold Fields Ltd. (GFI), Africa’s No. 2 gold producer, said in an interview yesterday at the Investing in African Mining Indaba, a gathering of more than 7,500 industry executives. “We can ill afford to accept any taxes beyond what we have. It’s just going to increase the speed of the decline of the mining industry.”

Mining output slumped 11 percent on a seasonally adjusted basis in the three months through November from the prior three months, government data show. Nine loss-making platinum-mine shafts were shut in the second half of 2012, according to the Department of Mineral Resources, while Anglo American Platinum Ltd. (AMS), the largest producer, last month announced plans to idle four shafts, which may result in as many as 14,000 job losses.

Read more

Glencore’s Glasenberg Seen Eyeing Anglo After Xstrata – by By Matthew Campbell & Jesse Riseborough (Bloomberg.com – Feb 4, 2013)

http://www.bloomberg.com/

What will Ivan do next? That’s the question likely to percolate amid seaside cocktails in Cape Town this week as mining executives gather for a four-day industry confab of speeches and discreet meetings.

Ivan, as everyone calls him, is billionaire Ivan Glasenberg, chief executive officer of Glencore International Plc. (GLEN) Next month he’s due to close a $37 billion takeover of Xstrata Plc (XTA), creating the world’s fourth-largest mining company. While he isn’t scheduled to address the annual Investing in African Mining Indaba conference, his outsized role in the industry almost guarantees speculation about his next move.

It could be a whopper. Glasenberg, 56, may consider a long- speculated takeover of Anglo American Plc (AAL), according to people familiar with his thinking. The $43 billion mining giant trades at the cheapest level relative to profit of any rival, data compiled by Bloomberg show. Also on his mind: Smaller deals such as a purchase of Eurasian Natural Resources Corp. (ENRC), which has operations in the Democratic Republic of Congo that complement Glencore’s, said the people, who asked not to be identified because the matter is private. First Quantum Minerals Ltd. (FM) is also a candidate, according to Sanford C. Bernstein & Co.

“I don’t see why Glasenberg shouldn’t try this again with another target,” said Paul Gait, a mining analyst at Bernstein in London. “If Glasenberg wants to continue expanding, he has two choices: double down on the Congo via the ENRC or First Quantum route and be a third-world miner, or set up a lower political-risk entity by merging the Anglo and Xstrata operating assets.”

Read more

Anglo American – Haunted by history – by Rex Gibson (Financial Mail – January 31, 2013)

http://www.fm.co.za/

What’s in Mark Cutifani’s in-tray

What kind of company will Mark Cutifani inherit? Every move Anglo American makes provokes an intense response from its myriad local stakeholders. This despite its moving its primary listing to London 14 years ago . Rex Gibson reflects on the role mining, and in particular Anglo American, has played in the SA economy.

It may be one of the most inept public relations performances ever by a government not renowned for its PR skills. President Jacob Zuma went to the World Economic Forum in Davos intending to reassure the world that SA welcomed investors in mining. But it appears that nobody told some of his top lieutenants.

A few days before, mineral resources minister Susan Shabangu launched a broadside of remarkable ferocity and insensitivity against Anglo American and its subsidiary, Anglo American Platinum (Amplats). The two culprits had had the nerve to announce their business proposals without talking to her.

Though clearly directed at these two, her bullying approach carried a disturbing message for the industry as a whole: “I’ll show you who’s the boss.” The result was that Zuma felt obliged to repudiate Shabangu, insisting that investors were welcome. But that didn’t do much for the confidence and sense of security of those looking to store their money for the long term in a safe place.

Read more

UPDATE 3-Anglo American’s $4 bln hit clears decks for new CEO – by Sarah Young and Brenda Goh (Reuters.com – January 29, 2013)

http://www.reuters.com/

LONDON, Jan 29 (Reuters) – Anglo American took a $4 billion hit to its Minas Rio project on Tuesday, clearing the decks for new boss Mark Cutifani and indicating that the delayed Brazilian operation will eventually get off the ground.

Minas Rio, which is now costing Anglo more than three times its original estimates, has been seen as Anglo’s most significant failure of recent years and is partly responsible for costing outgoing chief executive Cynthia Carroll her job.

The writedown to the valuation of the huge iron ore project and a jump in the bill for its development to $8.8 billion, alongside a planned overhaul for the company’s troubled platinum business, are as near to a clean slate as new CEO Cutifani is going to get.

Shares in Anglo American gained 2.2 percent to 19.14 pounds ($30.06), topping Britain’s blue-chip leader board in midday trading after the announcement of the impairment charge. “The Minas Rio impairments give the incoming CEO a clean slate, creating a degree of positive sentiment,” Bernstein analyst Paul Gait said.

“The greater detail and clarity on the progress of Minas Rio can only increase the confidence around the executability and delivery of the project.”

Read more

Striking Amplats miners agree to return to work – by Ed Stoddard (Globe and Mail – January 17, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

JOHANNESBURG — Reuters – Anglo American Platinum Ltd. (Amplats) miners will end an illegal walkout from Wednesday night and want talks to prevent further action against the world’s largest producer of the precious metal, a labour leader said.

Workers at three of Amplats’ South African mines went on a wildcat walkout from Tuesday’s overnight shift, hours after the company, a unit of London-listed Anglo American, announced plans to mothball shafts and cut 14,000 jobs.

“The strike was only for last night,” Amplats labour leader Evans Ramokga told Reuters. He added workers would press management to find a way to head off job cuts, which were equal to about 3 per cent of South Africa’s overall work force in the mining sector. Amplats officials were not immediately available to comment.

Amplats earlier said an unspecified number of employees at its Khomanani, Thembelani and Tumela mines, in the heart of South Africa’s platinum belt, had refused to go underground.

Only Khomanani was among the mines slated for indefinite closure or sale by the company, so the wildcat action indicates militant labour activists had persuaded miners in other shafts to join sympathy strikes.

Read more

All change at the top – Top global mining CEOs an endangered species – by Lawrence Williams (Mineweb.com – January 17, 2013)

http://www.mineweb.com/

Nearly all the world’s top industrial and gold mining companies have been, or are in the process of, changing their CEOs. What impact will this have on future metals production?

LONDON (MINEWEB) – Rio Tinto’s Tom Albanese is the latest victim of rapidly shrinking endangered species, the major mining CEO.

It may have taken almost 6 years but, the primary reason for the departure was the mega-miner’s foray into aluminium with the takeover of Alcan in 2007, just ahead of the big commodity price collapse of 2007/2008.

Aluminium has never fully recovered from that and at last Rio has taken the decision to write off $10 billion against the fall in value of one of the world’s biggest aluminium producers.

Albanese might have survived this on its own, but the recent $3.5 billion purchase of Mozambique coal developer, Riversdale, just. two years ago, which is now being almost entirely written down in Rio’s books was just too much for the company’s board and shareholders to live with. Albanese had to go

But Albanese is not alone. Of the world’s 10 largest mining companies, eight CEOs have been pushed, resigned, or are at least rumoured to be leaving. Look at the list: Top global miner BHP is reported in the Australian press to be seeking a successor to CEO, Marius Kloppers;

Read more

Amplats offers new non-mining job for every mining job lost – by Martin Creamer (MiningWeekly.com – January 15, 2013)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Anglo American Platinum (Amplats), which is setting out to create at least one new non-mining job for every mining job lost in its proposed downsizing, saw its own share price and the global platinum price rise after announcing the most far-reaching restructuring of its 58-year history, which proposes that two mines close, four shafts be mothballed, a mine be put up for sale and the 14 000 mining jobs earmarked for shedding be matched by the creation of at least an equal number of new non-mining jobs.

In addition to redeploying one-third of 14 000 people back into the rest Anglo American group and the mining industry as a whole, Amplats is offering a new non-mining job opportunity, on top of a retrenchment package, to each of the employees who cannot be placed in another mining job and are forced to enter the non-mining space.

The aim in reducing the employee complement to 45 000 is to be job neutral. “We’ll seek to ensure that we compensate for any necessary labour restructuring through the creation of an equivalent number of non-mining jobs,” Amplats CEO Chris Griffith said.

This saw its share price rise 1.28% on the JSE to R497.30 before 10 am and the platinum price rise to $1 691/oz, overtaking a gold price of $1 653/oz. South Africa’s Chamber of Mines CEO Bheki Sibiya applauded Amplats for setting out to create new non-mining jobs in housing, infrastructure and small business development in Rustenburg and labour-sending areas to make amends for the mining jobs lost.

Read more

S. Africa’s Amplats to shed mines, 14,000 jobs – by Ed Stoddard (Globe and Mail – January 15, 2013)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

JOHANNESBURG — Reuters – Anglo American Platinum, the world’s top platinum producer, said it will mothball two South African mines, sell another and cut 14,000 jobs, risking a repeat of last year’s strikes when about 50 people died.

In a review announced on Tuesday that is seen as crucial to reviving the fortunes of Anglo American, which owns about 80 per cent of Amplats, the platinum producer said it aimed to cut output by around a fifth or 400,000 ounces.

But analysts have cautioned the cut could be overstated, as it is based on production capacity that Rustenburg mines have not matched for several years. Against forecast production, the cuts may amount to closer to 300,000 ounces.

Amplats has said it probably fell to a full-year loss because of the 2012 strikes, which were centred on Rustenburg where most of the job cuts will fall. The price of platinum rose over 2 per cent to 3-month highs, leaping past gold for the first since March last year, on concerns over supply.

Reaction was swift, with an Amplats labour leader threatening a strike across its South African operations if the indefinite closures, when they would be put on “care and maintenance”, go ahead.

“If they put any shaft on care and maintenance, all of the operations will go on strike. Nothing like this will be allowed,” said Evans Ramogka, labour leader in Rustenburg.

Read more

Thunderous applause as Anglo CEO commits to SA mining solution – by Martin Creamer (MiningWeekly.com – December 4, 2012)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – South Africa had succeeded in extricating itself from its grave political problems in the past and the country would succeed again in finding solutions in the wake of the horrific Marikana tragedy, Cynthia Carroll said on Tuesday.

At the same time, the Anglo American CEO, who is stepping down after six years, warned that South Africa had to restore stable labour relations and foster a business environment attractive to international investors.

Carroll drew thunderous applause from a packed Gordon Institute of Business Science (GIBS) audience when she concluded her 30-minute address by saying that “the naysayers and the doomsdayers constantly forecast disaster, but in response, I say loud and clear, South Africa has done it before and it will do it again”, by arriving at a post-Marikana solution to which her company was also totally committed.

She said that the Constitutional foundation that had been laid when South Africa transitioned from the “dark night of apartheid to the new dawn of democracy” would help the country disentangle itself from its post-Marikana crisis.

She observed that the curse of unemployment had resulted in mineworkers often having a large number of economic dependents, against the background of the migrant labour system loosening the bonds of family life and dislocating communities.

Read more