What kind of Anglo will Carroll run?

[miningmx.com] — MINING house diehards must be turning in their graves at the thought of a woman heading Anglo American. Others will welcome it as a further sign that the glass ceiling is cracking.

It must be said that Cynthia Carroll (49) has excellent qualifications for the job. She holds degrees in geology from Skidmore University (bachelor’s) and the University of Kansas (master’s), as well as an MBA from Harvard.

After spending eight years as a petroleum geologist with Amoco, she joined Alcan in 1989, and now heads its primary metals group. This has an annual turnover of about US$12bn and employs 18,000 people in 20 countries. It’s said to contribute about three-quarters of the Alcan group’s profits.

And she’s not entirely a stranger to SA: her unit of Alcan was handed responsibility for the group’s 49% stake of the Coega aluminium smelter project, acquired when Alcan took over France’s Pechiney in 2003. Involvement in that amounts to a crash course in the politics of doing business in South Africa.

Not first choice

The plan is for her to join the Anglo board in mid-January and succeed Tony Trahar on March 1, a month or so ahead of the next AGM.

Carroll was not one of the names mooted in the market as a possible replacement for Trahar. Rumour is that she wasn’t the first choice, but the job was turned down by preferred candidates. One has to wonder how long ago her name came into the frame: as recently as August 1 she joined the board of US food group Sara Lee.

Keeping in touch with Sara Lee from Alcan’s base in Montreal is one thing; from London, it’ll be more difficult. Running Anglo in the next few years will surely be a taxing enough occupation on its own, especially if she has to overcome the tag of being a second-best choice.

Trahar too risk-averse

And what sort of Anglo will she be running? It’s ironic that Trahar’s cleaning-up of Anglo’s portfolio in recent years seems to have left the group a takeover target rather than possible predator in the restructuring of the resources sector. That’s a strange position for the world’s third-biggest resource group to be in.

Trouble is, Trahar’s necessary pruning wasn’t accompanied by an aggressive enough programme of new projects. True, like other mining groups, it can produce an impressive flow chart of planned projects, but after taking over the Disputada copper project in Chile and Shell’s Australian coal interests Trahar eschewed any further external growth, seemingly misjudging the strength and duration of the resources boom.

Contrast this with Xstrata, headed by South African Eskom reject Mick Davis, or some of the Russian resource groups being egged on by another South African, Brian Gilbertson. Trahar, for all his positive attributes, may have been just too risk-averse at a time when Anglo’s move to London needed a more aggressive approach.

AngloGold and Anglo Platinum

Maybe Anglo should have been more proactive in building up its stake in Anglo Platinum; maybe in retrospect it was a mistake to run down the stake in AngloGold.. Instead, it delisted De Beers, at what many considered an excessive price, and has since reportedly experienced a deteriorating relationship with the Oppenheimer family.

If both AngloGold and Anglo Platinum were wholly-owned, Anglo would be far less vulnerable to a predator. It might also have led to a different management dynamic. Trahar had the typical insider career path at Anglo, achieving high visibility only when he attained high rank.

AngloGold’s boss Bobby Godsell is a very different character, and it’s easy to imagine tense moments with the two of them sitting around the same boardroom table; but it’s also likely that Anglo wouldn’t have let as many opportunities slip as it has in recent years. And there’s been no shortage of corporate activity that Anglo could have chosen to get involved in.


Now, even if it manages to stay independent, it will lose its position in the world’s top three resource companies. If Brazil’s CVRD succeeds in its bid for Canadian nickel miner Inco, it will leapfrog Anglo to become the world’s second-biggest resources company. And that from an outfit founded in Brazil with just a single mine in 1942, when Anglo was already 25 years old.

On reflection, maybe it’s not the diehards who should be turning in their graves at Carroll’s appointment; it’s Ernest and Harry Oppenheimer, in despair at how their lovingly constructed family firm has botched up the next phase of the progression into the major global force it could and should have become.

Michael Coulson holds shares in Anglo American.