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JOHANNESBURG, Oct 26 (Reuters) - Cynthia Carroll's resignation as chief executive of Anglo American has highlighted the miner's exposure to South African platinum, an industry crippled by violent strikes in recent months.
Carroll, who stepped down on Friday under pressure from investors over the miner's lagging share price and continued dependence on strike-hit South Africa, spearheaded investments in iron ore and other resources to diversify beyond platinum.
Anglo's platinum business ties it to South Africa's restive "platinum belt", which accounts for 80 percent of global output of the precious metal and has been paralysed by strikes since August.
Anglo owns 77 percent of Anglo American Platinum (Amplats) . Although responsible for 24 percent of its parent's 2011 revenue, Amplats brought in just 8 percent of total operating profit because of soaring costs.
Anglo put the business under review months ago, the result of which, Carroll said on Friday, will be delivered by year-end.
"Anglo has been far too exposed to Amplats for two decades now," said Peter Major, mining analyst at Cadiz Corporate Solutions, a Cape Town-based consultancy.
"The new CEO has got find a way to maximise the value of what they have got and then reduce exposure."
While Carroll had opposed hiving off Amplats or paring back Anglo's stake, the review was expected to propose closing high-cost shafts and even selling assets. Closing shafts would likely mean more friction between Anglo and unions in the platinum belt, 120 kilometres northwest of Johannesburg.
South Africa has been gripped by its worst labour unrest in decades following a violent strike that broke out at Lonmin's neighbouring Marikana mine in August.
On Aug. 16, police shot dead 34 strikers, the most violent security incident in post-apartheid history. Since then, strikes have spread across the mining industry and workers at Amplats have not returned to work.
Drastic job cuts may be difficult, given South Africa has been struggling to bring down an official unemployment rate of around 25 percent.
"Because of the low margins at the Rustenburg operations they (Anglo) would be justified to mothball those mines but they do not have the political willingness to have that discussion with government," said Justin Froneman, platinum analyst at SBG Securities in Johannesburg.
Some analysts have said the mines run on a cash margin of 1 percent. Mothballing refers to the costly procedure of maintaining a shaft that is not producing.
Labour leaders in Rustenburg said they did not believe Carroll's departure would significantly change the six-week deadlock between strikers and management at Amplats.
"This resignation reflects the confusion and disorientation in their own ranks," labour activist and community representative Mametlwe Sebei told Reuters.
While Carroll faced criticism from shareholders over Anglo's stock price, she was able to build a strong relationship with South Africa's ANC government - no small feat, given the party has flirted with nationalising mines.
"It is a sad day to see a dynamic woman like Cynthia Carroll being relegated once more to a back seat by men," mining minister Susan Shabangu said on Friday.
"She was a woman who was very vocal, she was a woman advancing industry - better than men, I will tell you."
Other diversified miners have steadily outperformed Anglo, in part because they have no major exposure to platinum.
BHP Billiton , the world's top mining company, reaps just 2 percent of its revenue from southern Africa. During the past five years, its market value has risen about $100 billion.
South African platinum miners - Amplats, Impala Platinum and Lonmin - have been hit by rising labour and power costs and the expense of safety stoppages that are part of a government clamp-down on fatalities.
They have also been hammered by a steep drop in the price of platinum, down about a third from its record high in 2008. Amplats has seen its market value fall about $19 billion over Carroll's tenure, to $12 billion.
On a conference call to discuss her resignation, Carroll said: "We are looking for a fundamental shift in performance in order to ensure creating and sustaining a competitive business for the long term".
SGB's Froneman said the company was unlikely to cut its ties to platinum. "Changing the CEO would not necessarily cause them to have a massive change of heart around Amplats. It has been a core asset of theirs for so long and I do not think a CEO can impact that direction substantially."