Global resources group Anglo American has commenced a process of identifying a successor to CEO Tony Trahar, who has indicated he plans to retire next year, Anglo chairperson Sir Mark Moody-Stuart said on Tuesday.
Moody-Stuart told the group’s AGM in London that Trahar was determined to first complete the restructuring of Anglo American before stepping down, believing it would be appropriate for him to make way for a new leader to oversee the next phase of the group’s plans for growth.
“Since Tony will by then be approaching his normal retirement age, the board has accepted the logic of this view. It provides us with the prospect of securing a smooth and orderly transition and of creating a leadership group with the prospect of many years in the job. We have, therefore, commenced a process of identifying a successor,” Moody-Stuart said.
Trahar said that progress was being made on each front of the restructuring process, which was aimed at focusing more on its core mining business.
The restructuring entailed the listing of Mondi, the group’s paper and packaging business, on the LSE, the disposal of the group’s South African steel and vanadium business, Highveld, and the restructuring of Tongaat Hulett, in which Anglo has a 52% stake, so as to list separately its aluminium operations.
It also included a strategic review of Tarmac’s businesses with a view to improving its overall returns, reducing the group’s stake in AngloGold Ashanti and buying back $2-billion of the group’s own shares.
Trahar said that some shareholders might question why, given Anglo’s planned focus on mining assets, it had chosen to reduce its exposure to AngloGold Ashanti at a time of rising gold prices.
“It is important to note the relatively small share of our earnings — some 3% in 2005 — that now comes from gold. But more particularly, gold companies have a distinctive group of investors and trade on different multiples compared with diversified mining companies. Thus, the value of our stake in AngloGold Ashanti has not been fully reflected in our overall market capitalisation.
“Already, through reducing our stake to some 41,8% we have realised some $1-billion in cash. The announcement of our strategy on AngloGold Ashanti and the steady progress with its implementation has been well received by the markets,” Trahar explained.
He added that the group would continue to support value-creating opportunities in Mondi leading up to a separate listing.
“We can take credit for having built Mondi, through a combination of organic growth and shrewd acquisitions, into a major player in both business papers and packaging. Nevertheless, the time is now appropriate to prepare Mondi for a listing in its own right,” he stated.
“In regard to Tarmac — the core of our industrial minerals division — there are significant overlaps and synergies between its extractive businesses and many of the disciplines involved in mining. It also adds stability and geographical diversity to our earnings. Thus we continue to regard it as a core business whilst seeking to improve its margins and returns on capital. This process has already begun, with a number of smaller businesses having been identified for disposal and recent acquisitions in Romania, Poland and the Czech Republic adding to its growing European base,” Trahar added.
He said the group had also disposed of Boart Longyear, its mining equipment business, Samancor Chrome and a number of smaller business interests in its Ferrous and Industries division for 1,1-billion. — I-Net Bridge