Anglo American (AAUKY.PK) had one very important goal in mind when it made the decision to replace its current Chief Executive Officer: reversing the $14 billion loss of market value it experienced during the five years Cynthia Carroll held the company’s top position.
In a statement made on Tuesday, the mining company announced that Mark Cutifani will replace Carroll on April 3, resigning his position as chief executive at Johannesburg-based AngloGold Ashanti (NYSE:AU). As Bloomberg reported, he will paid a salary of $1.9 million, plus additional incentives.
Over the past year, numerous projects ran over budget, including the Minas-Rio iron-ore mine in Brazil, and labor disputes in South Africa hampered production, leaving Anglo American in need of expert .
“The appointment ticked one of the major boxes, which is getting experienced operational talent,” Sanford C. Bernstein Paul Gait told the publication over the phone. “His deep mining experience makes him a very different CEO from Cynthia but the strategic direction of the group is still uncertain. We don’t expect anything on that for about six months.”
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Cutifani had a good tenure at AngloGold, where he worked to benefit from record-high prices with improve capacity and advocated economic changes in South Africa. Under his leadership, the company’s operating margins rose from minus 16 percent in fiscal 2007 to an estimated 30 percent for fiscal 2012, according to Bloomberg.
The government of South Africa has a interest in Anglo American’s new appointment after the company’s platinum, iron ore, and diamond mine operations were disrupted by strikers complaining of poor living conditions and bad labor unions. As current Anglo Chairman told the publication, the country’s minister has reacted positively to the company’s choice. He also stated that the mining company is reviewing its platinum business in South Africa and may announce details within “a few weeks.”
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