Mining everyman picked as Anglo chief

CLARA FERREIRA-MARQUES
Last updated 11:12 09/01/2013

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An Australian former coal miner, Anglo American's newly appointed chief executive, is a far cry from the patrician Oppenheimer family who founded one of the world's largest mining groups almost a century ago.

Mark Cutifani, colleagues say, eats lunch in the staff canteen with the rank-and-file. When he arrived at his current job running AngloGold Ashanti, the world's third-largest gold mining group, he took the doors off the executive offices.

"It was incredibly refreshing," said one former colleague. "He is an everyman - certainly not aloof."

Anglo has never been led by an executive with hands-on mining experience. It has tended to pick its leaders internally, typically Oxford graduates who were assistants to the Oppenheimers before rising to the top.

Outgoing New Jersey-born boss Cynthia Carroll, appointed in 2007, was the first outsider.

"It gives him moral authority, gravitas, and that's a necessary component of this job. Arguably, Cynthia didn't have that," said analyst Paul Gait at Sanford Bernstein.

"This is very early days, we'll see how it all goes, but it's good news for the moment. A couple of caveats around the strategy of the group and what they are actually going to do, but if they are going to deliver on operational change, Mark has as good credentials as any," Gait said.

Cutifani - plucked on Tuesday from AngloGold to run Anglo - will need his common touch as he tackles challenges ahead including an overhaul of the group's South Africa-focused platinum arm, squeezed by activist unions in a country where one in four is unemployed.

But Cutifani will also need charisma and his three decades of mining experience as he tries to push strategy changes through a board led by outspoken heavyweight John Parker.

The new man will have to turn around a lagging share price, poor investor returns, and operating troubles in Brazil and Chile, as well as South Africa.

'CHALLENGING JOB'

"It's a challenging job, probably the most difficult in the mining industry right now," analyst Des Kilalea at RBC Capital Markets said. "He comes with a good reputation."

Cutifani, 54, had a blue-collar upbringing in an industrial seaside town south of Sydney, the son of an Italian immigrant father and a mother of Irish extraction. He credits a multi-lingual family with teaching him to listen.

As an engineering student, Cutifani worked in a local colliery. He went on to work for a number of Australian mining companies and then Canadian nickel group Inco, where he was chief operating officer before a takeover by Brazil's Vale.

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In 2007, he joined AngloGold Ashanti, which was created from Anglo's gold assets but is now a separate company.

He has faced falling production, but improved profitability, cut debt, and made a radical US$6 billion ($7 billion) investment to unwind the group's loss-making position in gold futures, one of the largest hedge books in the industry.

Without that decision, which ended what was a popular practice in the 1990s, high gold prices could have left the group on the verge of collapse.

"It was a ballsy decision," the former colleague said. "We didn't have cash to spare."

As head of AngloGold, he also tackled increased mechanisation and operated some of the most toughest mines in the sector. AngloGold owns Mponeng, the deepest gold mine in the world.

A relative unknown in South Africa on arrival, Cutifani has  become one of the country's most prominent mining executives, building ties with government and unions - vital in a country where mining still represents about 10 per cent of the economy.

According to AngloGold, Cutifani was the only mining chief executive to attend the mass memorial for striking mine workers shot during the wave of unrest that battered the South African industry last year.

Unions on Tuesday criticised Anglo's failure to appoint a black South African or a woman, but the government is said to have backed the appointment.

The South African government-owned Public Investment Corporation - the second-largest investor in Anglo, which had criticised Carroll - said it "commended" the board.

Cutifani, a sports fan who once said his life philosophy was "no regrets", has seven children from two marriages.

- Reuters

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