* Carroll to remain in position until successor is appointed
* BHP's Vanselow, Xstrata's Davis in frame as replacements
* Shares rise over 4 percent on the news
By Clara Ferreira-Marques and Sinead Cruise
LONDON, Oct 26 Anglo American's Chief
Executive Cynthia Carroll has quit after more than five years in
the job, under pressure from investors over the mining group's
lagging share price and continued dependence on strike-hit South
A geologist by training, New Jersey-born Carroll ruffled
feathers when she moved from the aluminium industry to become
the first non-South African, the first woman and the first
outsider to take the top job at Anglo in 2007.
Rejecting suggestions Carroll was pushed out, Chairman John
Parker, her long-standing supporter, said there had been
"differences of opinion" with shareholders but the decision to
step down was Carroll's own, as she approached her seventh year
in a "very gruelling and demanding role".
"Institutional pressure has been building for some time to
replace Cynthia, so the news will be welcomed," one of Anglo's
15 largest shareholders said.
"Ultimately, running Anglo is one of the toughest jobs
around and, although Cynthia made a good start as CEO, the
feeling is the company has gone backwards in the last two to
Carroll's efforts to streamline a mining group with colonial
roots that became a sprawling conglomerate, her campaign to cut
billions in costs and efforts to shift Anglo's centre of gravity
away from South Africa have won her support among investors.
A campaign to improve ties with South Africa's government
has also won praise - South Africa's mines minister, Susan
Shabangu, said Carroll's departure was a "disappointment".
But Carroll's relationship with investors became troubled
after big-ticket acquisitions such as the Minas Rio iron ore
project in Brazil - an early bid to diversify Anglo's portfolio,
which suffered cost overruns and delays.
Anglo has yet to give a final cost for Minas Rio, bought in
a $5.5 billion deal at the top of the commodities cycle, but
analysts say spending could rise to $8 billion from current
forecasts of $5.8 billion, already twice original estimates.
"Her strategic moves didn't always hit the mark. The
acquisition of Minas Rio, promptly followed by a dividend cut,
was a particular low point," another of Anglo's 15 top investors
said. Anglo scrapped its 2008 dividend to preserve cash.
Crippling strikes in platinum and iron ore mines in South
Africa in recent weeks have revived long-standing worries over
Anglo's exposure to the country, aggravating concerns about a
share price that has underperformed its peers.
Despite her cost cuts, according to analysts at Macquarie,
under Carroll Anglo has lost one-third of its value on a U.S.
dollar market capitalisation basis and is now worth $25 billion
less. Other major miners are worth at least the same as they
were at the start of 2007.
Anglo's recent deals - including its decision to take
control of diamond mining giant De Beers, raising its stake in
Kumba Iron Ore and a July coal deal in Mozambique -
have arguably done little to move away from a region that has
held back its shares and, earlier this month, prompted an
outlook downgrade from rating agency Standard & Poor's.
So far this year, Anglo stock has lagged the sector by
almost 20 percent. Shares rose on news of Carroll's departure
and at 1415 GMT were up 4.4 percent at 1939.5 pence, while the
broader UK mining sector was up 0.8 percent..
The board did not immediately name a successor - a detail
some analysts and industry sources took as a sign that the
decision, though not unexpected, was to some degree unplanned.
Parker told reporters there was no rush to pick a replacement
for Carroll and that the 55-year-old would stay in place until a
replacement was appointed, which could take months.
"For whoever comes in, the challenge of Minas Rio and the
challenge of restructuring the platinum industry in South Africa
doesn't go away," said analyst Des Kilalea at RBC in London. "To
some extent, it's probably the most difficult mining company to
manage at the moment."
Industry analysts, industry sources and investors point to
at least two likely successors for Carroll - Brazilian Alex
Vanselow, the former chief financial officer of BHP Billiton
and South African-born Mick Davis, the outgoing chief
executive of Xstrata.
Parker - in a reference to a storm over Davis' pay, one of
the highest on Britain's FTSE - said Anglo could not afford him.
An internal replacement is less likely, but analysts point
to Chris Griffith, a platinum veteran who was plucked from his
job at the helm of Kumba in July to run Anglo American Platinum
. His recent move, though, may rule him out.
A new name may not prove an immediate solution for Anglo's
troubles, from cost pressures to Brazilian delays, even if the
company could use the opportunity to review its involvement in
South Africa as well as platinum, and sell a stake in the costly
Minas Rio project or write down its value.
The biggest challenge is expected to be South Africa, where
strikes have spread to Anglo American Platinum (Amplats), the
world's top producer of the precious metal. The unrest has
revived talk of a spin off of Amplats, in which Anglo currently
owns an almost 80 percent stake - something Carroll has opposed.
Strikes have also hit Anglo's Kumba iron ore unit, which
alone has accounted for almost half the miner's profit.
Kumba's Sishen mine has begun to ramp back up, but Amplats
workers have not yet returned to the Rustenburg, Union and
Amandelbult operations, which include some of its most labour
intensive shafts, and those that have suffered deepest margin
compression since 2008.
The group is expected to conclude a review of the platinum
business by the end of the year.