Cutifani says tough decisions needed to restore credibility
Anglo American’s (LON:AAL) chief executive Mark Cutifani is known for not sugar-coating his statements and Wednesday was not the exception. Speaking at a conference in Johannesburg, South Africa, the executive said the past 10 years will be remembered as a “lost decade” for the country’s mining industry.
And for Anglo itself too, as the executive warned the company will make tough decisions over the next two years to restore credibility.
“Real values in terms of our companies have declined by 30 per cent,” CNBC Africa quoted Cutifani as saying.
For an industry that is the most important driving force of the local economy, (directly and indirectly contributing 18% to GDP), this is simply not good enough, he noted.
“We have spread ourselves too thin [and] we haven’t invested enough time and intellectual effort to realize sufficient returns on individual assets,” he added.
Anglo’s boss, who began a review of operations from Australia to Brazil after joining the firm in April last year, plans to increase the London-based company’s return on capital to at least 15% by 2016 and will consider selling businesses that pull down the average.
Cutifani’s comments come as Glencore’s (LON:GLEN) interest in Rio Tinto (LON:RIO) has fuelled industry speculation that Anglo may become a takeover target for one of its larger rivals.
But last month, barely a week after he told The Wall Street Journal he was “very open” to takeover offers, Cutifani announced that a big corporate break-up à la BHP Billiton (ASX:BHP) was definitively not in his books.