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Anglo American

At helm of Anglo American, consummate miner digs deep for savings – by Eric Reguly (Globe and Mail – April 26, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

LONDON — Mark Cutifani and I meet in the strangest places. My first encounter with the CEO of Anglo American, one of the world’s biggest mining companies, came last September at a Vatican mining conference in Rome. He and other mining bosses were learning how to inject a bit more of the Holy Spirit into their digging activities.

The second time was two months later at a gold mine in Chelopech, Bulgaria, of all places. The little mine wasn’t Anglo’s. It belonged to Toronto’s Dundee Precious Metals and Mr. Cutifani was there to learn how the Canadians had reduced costs by some 50 per cent through a range of technologies, such as novel underground WiFi and data networks. “This is where the innovations are, in the small mines,” he said at the time, decrying the lack of technology in Anglo’s own mines.

The third meeting came in March, at Anglo’s headquarters in London, near Trafalgar Square, at the heart of what used to be world’s greatest empire. The location is appropriate. Anglo American was founded in 1917 by Sir Ernest Oppenheimer with £1-million ($1.85-million) in capital from British and American sources (hence the name Anglo American). Like Britain, it would establish outposts around the world. From its foundation in South Africa – home to its vast gold, platinum and diamond operations – it would expand into base metals in Canada, coal and manganese in Australia and iron ore, ferronickel and copper in Latin America. At one point, Anglo was the world’s mightiest mining company.

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Anglo to Move Away From Labor-Intensive Platinum Mining – by Firat Kayakiran (Bloomberg News – April 24, 2014)

 http://www.bloomberg.com/

Anglo American Plc (AAL), the world’s biggest platinum producer, plans to switch to mechanized open-pit mining from labor-intensive underground output, as its South African operations remain crippled by a three-month strike.

The company aims to make the transition in five to 10 years to improve productivity, Chief Executive Officer Mark Cutifani said at the company’s annual general meeting in London yesterday. The change would have to be carried out in a way that’s “sensitive to its social ramifications,” he said.

A third day of talks between producers and union officials ended yesterday without a resolution or plans for further negotiations. Output at Anglo American Platinum Ltd. (AMS) dropped 39 percent in the first quarter because of the walkout over pay, Anglo said yesterday. The company reduced its forecast for full-year production by as much as 13 percent, with more cuts possible if the deadlock persists.

Cutifani “is bang on,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said in an e-mail. “The only way to get safe platinum is to get people out of the stope.

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Anglo seeks buyer for Rustenburg operations – by Staff Writer (Business Day Live – April 14, 2014)

http://www.bdlive.co.za/

ANGLO American is seeking a buyer for its Rustenburg platinum mines as the group looks elsewhere to extract the metal, CEO Mark Cutifani said on Friday. In a BusinessDay TV interview with editor Peter Bruce, Mr Cutifani said the skills within Anglo could be better deployed elsewhere than the deep-level, labour-intensive and technically complex mines that make up Rustenburg.

The mines under consideration are operated by Anglo American Platinum (Amplats), an 80% held Anglo subsidiary. Mr Cutifani has indicated before that Rustenburg was no longer a core asset, but this was the first time he has been explicit about wanting another party to own the mines.

His comments have a deeper resonance as a strike at the mines enters a third month. “The Rustenburg resource is not what it used to be,” Mr Cutifani said. “I don’t think that’s where our best skills set sits.

“That’s why I’ve been quite vocal saying we should consider taking a step back from Rustenburg. We should be focusing on the more mechanised operations, which is what I think we do much better, and allow someone who has a better skills set in those types of mines to run those kinds of assets,” he said.

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Will Anglo American’s investors think the newest boss is really worth £5.3m? – by Louise Armitstead (The Telegram – March 30, 2014)

http://www.telegraph.co.uk/

Mark Cutifani, the no-nonsense Australian, is focusing on the rich seam of problems at the troubled mining giant

Mark Cutifani ought to have his hard hat on. The last two chief executives of Anglo American before him were bulldozed out by angry shareholders and now, almost exactly a year into the job, the new boss has provocatively dumped his £5.3m pay deal in front of them.

The Australian-born Cutifani has the distinct advantage over his immediate predecessor, Cynthia Carroll, of being both a qualified mining engineer and a man. But still, the proposal to extract £2m compensation for the loss of incentives at his previous job, plus £836,000 to cover the move from Johannesburg, is a brave ask.

Last year, investors gave Cutifani a bloody nose after just a few weeks at the FTSE 100 mining giant when 28pc voted against the remuneration report. Now they have the details, what will happen at the annual meeting next month?

“They will vote and we will see,” says the no-nonsense Cutifani. “We’ve made quite a few changes since last year, and I’m good with that.” He accepts the pay deal could have been improved with more performance links.

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Anglo ‘not anywhere near where we need to be’ – Cutifani – by Leandi Kolver (MiningWeekly.com – February 14, 2014)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – While Anglo American’s financial results were encouraging, they were “not yet satisfactory”, said CEO Mark Cutifani at the diversified major’s results presentation on Friday.

“The business improvement is encouraging, but we are not anywhere near where we need to be as a group,” he stated. Anglo reported a 6% increase in underlying profit to $6.6-billion for the 2013 financial year, with the company’s earnings before interest, tax, depreciation and amortisation having increased by 7% to $9.5-billion.

After deducting tax and profits attributable to noncontrolling interests, which represented a greater proportion of profit than in 2012, the company’s underlying earnings decreased by 7% to $2.7-billion. Underlying earnings a share amounted to $2.09.

The company also declared impairments of $1.9-billion, principally in relation to its Barro Alto operation, in Brazil, its platinum portfolio review, the Michiquillay operation, in Peru, and the Foxleigh mine, in Australia. Meanwhile, the group’s net debt increased by $2.14-billion to $10.65-billion, while net debt to total capital at December 31, 2013, was 22.2%, compared with 16.3% at December 31, 2012.

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UPDATE 2-Anglo’s overhaul starts to pay off with sharp output rise – by Silvia Antonioli (Reuters India – January 29, 2014)

http://in.reuters.com/

LONDON, Jan 29 (Reuters) – Anglo American on Wednesday produced a forecast-beating rise in fourth quarter iron ore output and a new quarterly record for copper, a sign efforts to improve performance at its major mines are starting to pay off.

Anglo, the fifth-largest diversified mining group, has embarked on an overhaul plan under chief executive Mark Cutifani, after years of sector-lagging returns.

Cutifani said in December the plan would focus mainly on improving operations of major mines but did not envisage immediate asset sales. Anglo has long lagged rivals in returns and share performance. Its shares have lost about 60 percent of their value in the last three years compared with a 40 percent decline for the sector.

In the past two years, it has been hit by labour troubles in South Africa, operational hiccups at copper mines and multibillion-dollar cost overruns in Brazil. The fourth-quarter production figures helped to boost Anglo’s shares which were one of the top gainers in the FTSE 100 index.

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Anglo chief warns on pace of innovation – by James Wilson (Financial Times – January 26, 2014)

http://www.ft.com/home/us

One of the world’s senior mining leaders has called on the sector to speed up innovation or risk being marginalised by groups that spend more on research.

Mark Cutifani, Anglo American chief executive, said research and development in mining was lagging behind the oil and gas sector at a time when there was an urgent need for larger and better deposits of many metals and minerals.

In 10 years the world would “have to pay to move twice the amount of waste to get the same minerals to market”, he said. “We need to do it differently. We need a better way. We need to innovate.”
Innovation in oil and gas has transformed the energy landscape in the US, with fracking and horizontal drilling unlocking vast reservoirs of shale gas previously considered uneconomic to develop. By contrast innovation in mining has been incremental. Many methods have changed little except for the size of equipment used.

“Our industry is damned by the fact that our spending on innovation, research and development is one-10th that of the petroleum industry,” Mr Cutifani said.

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Cutifani vows to restore Anglo American’s iconic status – by Martin Creamer (MiningWeekly.com – December 12, 2013)

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Anglo American CEO Mark Cutifani, who this week charted the company’s progress and pathway forward, has vowed to restore its iconic status.

“Anglo American in my 37 years in this industry has been an icon. We intend to put it right back up there,” he said in a media conference call from London.

On Thursday, the the day of the company’s major investor update, Anglo American opened at a higher £13.08 a share on the London Stock Exchange, after investment banker Canadian Imperial Bank of Commerce set a “sector outperform” rating on the shares the day before and investment management company Sanford C Bernstein reiterated the “outperform” rating the next day, American Banking & Market News reported.

Analysts at Deutsche Bank last week reiterated a “buy” rating on the stock in a research note to investors, Analyst RN reported. Hosting a presentation to update investors on the London- and Johannesburg-listed company’s strategy, Cutifani said he knew of no other mining major that was in the process of doubling its earnings before interest and taxation (Ebit).

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Miners say Anglo American departure casts pall on all of Alaska industry – by Yereth Rosen (Alaska Dispatch – November 10, 2013)

http://www.alaskadispatch.com/

When Mike Heatwole, vice president of corporate communications for the Pebble Limited Partnership, gave a status report of the controversial and beleaguered Pebble project to a friendly audience in Anchorage Thursday afternoon, he laced his speech with sadness and resignation.

“What a difference a year makes. If you think about it, what a difference a few months makes,” Heatwole told attendees at the Alaska Miners Association convention.

Heatwole’s company would build one of the world’s largest open-pit copper mines in the headwaters of Alaska’s Bristol Bay. He closed his presentation with a slideshow of smiling workers, in the company’s Anchorage office, in the field and elsewhere. All were laid off after Anglo American, the moneyed partner in the project, announced in September that it was abandoning Pebble and its investment in it.

The Pebble partners had planned to submit a formal mine plan by the end of the year, kicking off permitting applications, he said. Now, with Vancouver-based Northern Dynasty Minerals Ltd as the only remaining partner, that timetable is unclear.

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Mining benefits 8 in 10 South Africans ‘directly, literally’ – Cutifani – by Martin Creamer (November 5, 2013)

 http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Eight out of every ten South Africans benefited “directly and literally” from mining, outgoing Chamber of Mines of South Africa president Mark Cutifani said on Tuesday.

Cutifani, who is also Anglo American CEO, told the chamber’s 123rd annual general meeting (AGM) in Johannesburg that the mining industry was South Africa’s best chance of eradicating poverty. “In the end, we are an industry for the people,” he said.

The National Development Plan (NDP), which was endorsed by most constituencies, clearly reasserted the conviction that the mining sector was at the epicentre of the economic growth strategy and it was critical that all South Africans understood that they were actually the owners of the South African mining industry.

For example, more than 60% of Anglo American’s operating South Africa assets in coal, platinum, iron-ore, diamonds and manganese were held by the historically disadvantaged – “a massive transformation of ownership”.

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SA GDP could have gained if mining had grown like peers – Cutifani – by Forecaster Ecosa (Mineweb.com – November 1, 2013)

http://www.mineweb.com/

Mining should have raised South Africa’s GDP annual growth rate by 1% if it had grown at the same rate as its peers, says Mark Cutifani.

JOHANNESBURG, SOUTH AFRICA – Mining should have raised SA GDP annual growth rate by 1% if we had grown at the same rate as our mining peers, Anglo American CEO Mark Cutifani said on Thursday at the Fourth Enterprise Development Conference in Midrand.

“If mining had grown over the last seven years like our peers, instead of contracting, we would be heading the country towards the 5,4% growth target of the National Development Plan (NDP). A growing mining industry will be vital in creating an environment for sustainable employment growth and rising living standards, inclusive economic development and improving the country’s competitiveness. Mining has been, and remains, the bedrock of the South African economy, but we want to make it once again the engine of the South African economy,” he said.

Real value added in the mining sector peaked in 2005 on an annual basis, but then dropped by 9.8% in the subsequent seven years. In the second quarter 2013 it contracted by 5.6% compared with the first quarter on seasonally adjusted annualised basis.

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Quo vadis Amplats, Griffith & Cutifani’s Anglo? – by David McKay (Miningmx.com – October 16, 2013)

http://www.miningmx.com/

[miningmx.com] – AN analyst at Johannesburg asset management company, Stanlib, planted the idea recently that although the South African government had formally rejected mines nationalisation as policy, a subtler expression of state interference had become practice.

This is, of course, a reference to the repeated government and union interference in restructuring activities of the publicly-listed Anglo American Platinum (Amplats).

The logic is that in allowing government to dictate the final shape of its restructuring plans, Amplats had granted the state a role in its affairs as if it owned it. As a stakeholder, the state has more influence over Amplats than shareholders who finance it. That has now been extended to unions.

So it is that Amplats agreed to adjust its restructuring plans a third time falling in with demands from the Association of Mineworkers & Construction Union (AMCU) to provide voluntary separation packages to employees identified for retrenchment, and replacing contractors with full-time employees.

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Mining is critical for the planet – Cutifani – by William Lawrence (Mineweb.com – October 10, 2013)

http://www.mineweb.com/

Anglo American CEO, Mark Cutifani, is the new chairman of the ICMM Council and has already made it apparent where he would like the organisation to focus in the year ahead.

LONDON (MINEWEB) – “Mining is critical for everyone on the planet” said Mark Cutifani at an ICMM reception yesterday evening in London, as he set out his stall on what he thinks the International Council on Mining and Metals should be focussing on as his term begins as the august organisation’s chairman.

According to its website, the ICMM’s basic brief is as follows: to improve sustainable development performance in the mining and metals industry. Its core membership comprises 21 mining and metals companies (the world’s largest miners) as well as 35 national and regional mining associations and global commodity associations working, in combination, to address core sustainable development challenges.

The ICMM now serves as an agent for change and continual improvement on issues relating to mining and sustainable development. It requires member companies to make a public commitment to improve their sustainability performance and report against their progress on an annual basis.

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Alaska’s Zombie Gold Mine to Nowhere – by James Greiff (Bloomberg News – October 1, 2013)

http://www.bloomberg.com/

James Greiff is a Bloomberg View editorial board member.

What happens when the main financial backer pulls out of a project? The answer is usually clear: The deal fails, which is what the foes of a gigantic gold and copper mine in Alaska are counting on. But in this case the mine has only been dealt a setback and is far from dead.

That about sums up the state of play after last month’s announcement by Anglo American Plc that it would pull out of a partnership that planned to build what’s known as Pebble Mine, proposed for the Bristol Bay region of southwest Alaska. If the mine were developed, it would be the biggest of its type in North America — and located on the headwaters of rivers flowing into the world’s most productive salmon fishery.

Environmentalists, the commercial salmon industry and local indigenous tribes were ecstatic, as one might expect. They had argued — no doubt correctly — that the mine couldn’t be safely developed without damaging the salmon fishery, and they waged a savvy campaign that no doubt raised the stakes for Anglo American.

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Silicosis claims and the gold mines: To settle or not? – by Sarah Evans (Mail and Guardian – October 1, 2013)

http://mg.co.za/ [South Africa]

A recent settlement between miners and Anglo American could be a precedent as the gold industry prepares for a looming silicosis class action suit.

Despite being a landmark case, the confidential nature of a recent settlement between Anglo American and silicosis sufferers means there is little legal precedent for future cases, at least in terms of financial compensation.

But the agreement has other implications: as the number of silicosis damages claims against the gold mining industry piles up, and in the face of a looming class action suit, out-of-court settlements could become the norm as mining companies try to avoid bank-breaking court rulings.

In the weeks to follow, the high court in Johannesburg will decide whether to collate three class action claims against 30 of South Africa’s gold mines.

This comes on the back of a landmark settlement between Anglo American and 23 silicosis sufferers, seven of whom died waiting for the case to be finalised. Their claim was instituted in 2004 and was due to go to arbitration in 2014.

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