Ian Cockerill, CEO, Anglo Coal
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» Cockerill's last hurrah
» Whither Mr Cockerill?
» Cockerill joins Anglo Coal as CEO
» The thrill of a fresh challenge lures Cockerill
» Cockerill, Munro quit Gold Fields

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Switching to black gold
Brendan Ryan
Posted: Fri, 02 May 2008

[miningmx.com] -- IAN Cockerill's move from Gold Fields to run Anglo Coal has left most mining sector observers wondering what's going on - and for a very good reason: it makes no sense given the known facts.

At Gold Fields Cockerill is CEO of one of the world's major mining companies listed on a string of stock exchanges worldwide and is his own boss. He has to report to a board of directors but, essentially, he's in charge of his own destiny. He's "the man" at Gold Fields and a serious player in international mining circles.

Should there be a major dispute over the way he's running the show, he's also entitled to put his side of things to the board, which would vote on his future.
status is absolutely irrelevant to me
At Anglo Coal, Cockerill will be running an unlisted, wholly owned division of Anglo American and he'll have to report to a boss - Anglo American CEO Cynthia Carroll. She's shown herself to be a boss with very strong views on specific agendas her executives had better implement - or else.

Just ask former Anglo Platinum CEO Ralph Havenstein, who disagreed with Carroll over the practical implications of her "zero fatality" safety campaign and ended up making a swift departure.

So moving to Anglo Coal has to result in some loss of freedom for Cockerill. Take dealing with media/mining analysts as one small example. As boss of Gold Fields, Cockerill's free to do pretty much as he sees fit. That could change.

The classic example here is BHP Billiton, where certain top South African executives - who were once confident enough in their positions to speak to certain financial reporters and analysts - were muzzled as head office in Melbourne clamped down on them.

Why would any sane CEO take a decision that to outsiders - including this reporter - looks like a step backwards career-wise? One possible explanation is that Anglo is about to do something radical with Anglo Coal that justifies putting an executive of Cockerill's status at the helm.

So what could be in the pipeline that shareholders aren't being told about at this stage? One possibility might be a mega-merger with another energy company to create a worldwide energy giant controlled by Anglo.

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Cockerill replies: "Nothing like what you're suggesting has been indicated to me as part of taking up this position." However, he makes it clear it's likely a major transformation is about to take place at Anglo Coal in terms of its scope as an energy business - and that's why he has taken on the job.

It seems Anglo Coal is looking for opportunities in sectors of the energy business other than just selling thermal and coking coal. Says Cockerill: "This job pushes a lot of buttons for me. It's all about intellectual and professional challenges. The issue of status is absolutely irrelevant to me and the structure isn't that important.

"Energy is one of four key factors that will affect the future of our world, and this opportunity has come along to get into the energy sector at a time when I was about to move on from Gold Fields anyway."

Asked about the implications of reporting to Carroll, as opposed to his current position, Cockerill says: "In my discussions with Cynthia Carroll she's made it clear she expects improvements in the running of the existing assets, such as better operating profit and cost performances. But she's very keen to grow the existing footprint of the business and to look at new opportunities. I think I understand what's required but, obviously, there also has to be an element of good faith here.

"The task for the Anglo Coal management team is to dig out the opportunities and motivate them to the Anglo board to get the support needed to develop them. It's far too early for me to talk about specifics, but my sense is that there's a broad canvas on which to work. There are lots of options and I don't know where it's all going to go - but the journey looks appealing."

Anglo Coal operates mines in South Africa, Australia, Venezuela and Colombia and contributed US$614m (6%) to total group operating profit of $10.1bn in 2007. That was down sharply from the $862m (10%) contribution to group profits of $9.8bn in 2006, with the problem area being Australia.

Earnings in Australia were hit by lower sales caused by port and rail infrastructure bottlenecks, plus the 11% rise of the Australian dollar against the US dollar.

Anglo Coal produced 95.6 million tonnes last year (2006: 94 million tonnes), of which 59 million tonnes came from South Africa, 25.2 million tonnes from Australia and 11.3 million tonnes from South America.