New AngloAmerican chief executive Mark Cutifani
The mining industry’s focus on costs in response to weak markets leaves it “in danger of fixing on a mantra that will be potentially damaging long term,” said Anglo American cheif executive Mark Cutifani.
“We will keep ourselves open to possibilities, but the one word that will drive decisions we make will be value,” Cutifani,whotook the chief executive job in April, said in an interview in Canberra. “If you look at Glencore, they bought assets at the bottom of the cycle and have done well.”
Cutifani’s predecessor Cynthia Carroll quit in October after Anglo lost about $14-billion in value during her tenure and suffered cost blowouts and delays at an $8.8 -billion iron- ore project in Brazil. After leaving his post as chief executive of Anglogold Ashanti, Africa’s largest gold producer, to join Anglo, Cutifani pledged to scrutinise every aspect of the business.
Cutifani, 55, will announce the outcome of that business review next month, in an exercise that has focused on performance, allocation of capital and the importance of South Africa to the company’s portfolio, he said.
Even as the London-based miner of commodities including coal, copper and diamonds won’t rule out potential acquisitions, Cutifani said he is also questioning whether the company should remain a major diversified producer.
Diversified Producer
"You start with the proposition, is there value in being a major diversified?” Cutifani said. “And you have to test it both ways… When you ask that question it’s amazing what areas you look at, what roads you go down in terms of how you create value,” he said.
Anglo posted a $1.5-billion full-year loss for 2012 after a $4.6-billion writedown at its biggest project and amid falling commodity prices and strikes in South Africa. Anglo is forecast to post earnings of $2.6-billion for fiscal 2013, according to the mean of 14 analyst estimates compiled by Bloomberg.
In a speech earlier in the day to an industry forum in Canberra, Cutifani said the outlook is grim for mining as companies adapt to lower prices and weakening demand. – Bloomberg