Anglo’s Carroll Says Platinum Will Be Successor’s Main Challenge
Cynthia Carroll, the Anglo American Plc (AAL) chief stepping down in two months, said her successor’s main challenge will be returning the company’s platinum unit to profitability after strikes last year wiped out earnings.
“We’re going to be shutting down shafts, we’re going to be shutting down operations, that’s not easy,” Carroll said today in an interview in Cape Town.
AngloGold Ashanti Ltd. (ANG) Chief Executive Officer Mark Cutifani will succeed Carroll in April, taking the reins of a company that lost almost a quarter of its value since her arrival in March 2007. Anglo has suffered cost blowouts at its Minas-Rio iron-ore project in Brazil, while platinum production slumped last year amid strikes and spiraling operating costs.
“We need to recognize and tackle the enormous economic challenges the platinum sector faces,” Carroll said at a conference earlier today. Anglo plans to invest 100 billion rand ($11.2 billion) in the next decade in platinum as it reorganizes assets in an industry “in crisis,” she said.
The company’s platinum unit, the world’s largest producer of the metal, yesterday posted a full-year loss and kept its dividend suspended. The company last month proposed the halt of four mine shafts to curb costs.
Platinum was one of seven metals and minerals singled out by Carroll as “core” to the business as she pursued plans to double output across all units by 2020. As Europe’s financial crisis took hold and Chinese growth slowed, several divisions struggled as commodity demand dropped, weighing on prices.
Anglo said Jan. 29 it will write down $4 billion from the value of its Minas-Rio project and raise spending for a sixth time, to $8.8 billion. The development has suffered licensing delays and budget overruns since Anglo bought it in 2008 at a time when commodities were nearing their peak.
“We’ve gone through the worst time,” Carroll said today. “We had 330 permits and licenses that we had to get for Minas- Rio and we got all but 17. We’ve gone through a tough time from the operational side.”
The company has said the project, which spans the eastern Brazilian states of Minas Gerais and Rio de Janeiro, would boost its total iron-ore production by at least 55 percent. It will be a “legacy” of Carroll’s time at Anglo, she said today.
“If I could do it all over again, I would’ve had many more conversations and try to explain what the challenges are and how we’re going to overcome those challenges and how I’m going to take this organization forward,” she said. “I was so focused on turning this company around, but I knew we had to take some tough action.”
The CEO, whose resignation was announced Oct. 26, was the first woman and non-South African to head the company. She moved to Anglo after almost two decades at Canada’s Alcan Inc., where she rose to become president of the primary metals group.
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