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Mark Cutifani, mining boss who extracted Anglo American from crisis

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Via Financial Times

When Anglo American announced plans this week to rescue a huge UK mining project, its straight-talking chief executive Mark Cutifani was conspicuous by his absence.

Instead, it was chief financial officer Stephen Pearce who explained why Anglo had offered £386m to buy Sirius Minerals, the company struggling to develop a giant potash mine under the North York Moors.

That would be unthinkable at many miners but not at Anglo, which has experienced a remarkable change in fortunes since Mr Cutifani, who exudes an easy Australian charm, took the helm in 2013.

Under the 61-year-old industry veteran, Anglo has been transformed from the sector’s laggard into a miner that can go head-to-head with Glencore, Rio Tinto and BHP.

“He’s one of the best CEOs I have recruited . . . and a tremendous team player,” said John Parker, who chaired Anglo for eight years until 2017. “There’s not a trace of arrogance in Mark. He’s not one of these egotistical CEOs. He always has his feet on the ground and will always give his team their head and their credit.”

The fact Mr Cutifani was prepared to take a back seat on the Sirius transaction — company insiders say he sat alongside Mr Pearce during calls with media and shareholders on Wednesday — speaks to a new confidence at Anglo, now a darling of analysts and investors.

“I think we have restored Anglo’s pride in itself,” Mr Cutifani told the Financial Times last year.

That was not the case when the twice-married father of seven was appointed chief — the first mining engineer to run Anglo, a leading producer of copper, platinum and iron ore, and the owner of diamond company De Beers.

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Its share price had slumped, relations with investors were at rock bottom and the company had written off billions of dollars on bad deals, including Minas Rio, a large iron ore mine in Brazil that was over budget and way behind schedule. Myriad operational problems also needed fixing.

Worse was to come in 2015 as commodity prices crashed during a brutal downturn in the commodity market, forcing Anglo to scrap its dividend and sell assets, including its former fertiliser business, to pay down debt

Mr Cutifani said that crisis provided him with the “burning platform” needed to radically streamline the company and improve its performance. “No one does that sort of work and enjoys it,” he said.

Today, Anglo has 34 mines, compared with 68 in 2012, and its workforce stands at 90,000, down from more than 160,000 — but as Mr Cutifani never tires of telling analysts and investors, its output is 8 per cent higher and unit costs are 27 per cent lower. Aided by higher commodity prices, its share price is up 850 per cent from its 2016 nadir. 

“He’s done a great job,” said Philip Hampton, who served as a non-executive director at Anglo for nine years until 2018. “Mark diagnosed the challenges, which were fairly fundamental . . . things like how you work a mine.”

It is a measure of Anglo’s new standing with investors that its share price barely budged in the wake of the Sirius bid news, even though it will have to spend more than $3bn to bring the project to completion. 

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“To us, this appears to be a speculative foray into a ‘green’ commodity for Anglo,” said Edward Sterck, analyst at BMO Capital Markets.

Mr Cutifani was born 1958 in Wollongong, a beachside industrial city just south of Sydney, to a blue-collar family with Italian and Irish roots. A talented student and sports fanatic (he now supports Chelsea FC), Mr Cutifani worked shifts at a local mine to put himself through university where he studied mining engineering.

Aged 29, Mr Cutifani became general manager of a gold mine and by his mid-thirties had landed his first leadership role at Sons of Gwalia, an Australian gold miner. 

Here his career stumbled, partly because of financial problems caused by a hedging programme, and he eventually left for a lower-ranked role in Canada at nickel producer Inco. However, things were soon back on track and he was appointed chief executive of South Africa’s AngloGold Ashanti.

Credited with restoring its fortunes and improving its safety record he was then poached by Anglo, where his first move was to sell the company’s corporate jet. 

“Mark is a very good leader. He’s got that sort of blokey Australian charm, which can be a bit deceptive because he’s very smart and got quite an intellectual approach,” said Mr Hampton, adding: “But you never ever spend any time with Mark without talking quite a lot about sport.”

Mr Cutifani, whose pay doubled to almost £15m in 2018, says he does not want to leave Anglo until he has delivered Quellaveco — a $5bn copper project in Peru due to come on stream in 2022 — and rolled out new technology he believes can make mining more sustainable. 

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“I think Quellaveco is important given our history with Minas Rio . . . I think that is the right time to talk about succession. But it depends on what the board wants,” he told the Financial Times last year.

“What I don’t want to do is take away too much runway from the people we’ve got coming through.”

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