[miningmx.com] – THE high-rise eyrie of Anglo American’s Johannesburg offices are a reminder of the once dominant position held by the mining group in South Africa. A combination of disastrously poor metal prices, and bad management choices have changed things, however.
Mark Cutifaninow sits atop a company where success is measured in how quickly the group can shrink its global footprint. He has promised the sale of up to 35 assets, some of them in South Africa, in order to restore the cash generation and put the group on a firmer footing.
Analysts have been critical. Cutifani’s accelerated restructuring programme went down like a lead balloon because investors didn’t think he had delivered on his earlier promised one. As a result, he is suffering a reputational crisis as much as Anglo is facing a financial one.
Still, Anglo American sits high in the psyche of South Africans, if not as much in their economy.
Succeed in restructuring the group rapidly enough, which includes minimising the balance sheet from cash outflows, and Cutifani can look forward to a time when the pace of China growth improves again. Fail, and he may face eviction just as his predecessor, Cynthia Carroll, was ejected.
Key among his challenges will be getting Kumba Iron Ore and Anglo American Platinum to stop leaking cash. This may involve uncomfortable conversations with the South African government over job losses.
He also has to deliver on promises to sell the group’s domestic coal mines although this is a matter fraught with complexity as it involves buyers agreeing terms with Eskom which is driving for better (cheaper) coal supply deals.
