* Cutifani to take reins at Anglo American on April 3
* Has been CEO of AngloGold Ashanti since 2007
* Anglo shares trade more than 2 percent higher
By Clara Ferreira-Marques
LONDON, Jan 8 Australian mining executive Mark
Cutifani, a one-time coal miner, has been appointed chief
executive of Anglo American, taking on what analysts and
investors say is one of the toughest jobs in the business.
Cutifani, who will step down as chief executive of
Johannesburg-based AngloGold in March, had been one of
several outsiders in the running for the top job at Anglo after
Cynthia Carroll quit in October. He was named as a frontrunner
over the weekend.
Shares in Anglo, which have underperformed the sector by
almost 20 percent since the start of last year due to strikes,
delays and cost overruns, were up more than 2 percent in both
London and Johannesburg, as investors welcomed a move many hope
will herald a review of its underperforming assets and a
restructuring of the portfolio.
Cutifani, a prominent figure in South African mining after
more than five years at the helm of AngloGold, will be the first
Anglo chief executive with hands-on experience since the company
was founded almost a century ago, having worked mining shifts in
Australia while he studied engineering.
"I think his appointment is, at the very least, good, based
on his reputation - and it also has the merit of being decided
on pretty quickly," one of Anglo's 20 largest investors said.
"The pros and cons of geographical experience are far less
important than finding a strong and experienced candidate, which
would appear to be the case with Mark."
Another of Anglo's top 20 shareholders said Cutifani was a
"reasonable appointment - external and with plenty of South
Cutifani, who takes over at Anglo on April 3, gave little
detail on his plans for a group that has struggled in recent
years with languishing shares, restive South African unions and
budget blow-outs at a key Brazilian project.
He hinted at a review of Anglo's portfolio and said he would
participate in an annual strategy review in July after three
months at the helm, but declined to comment on key details,
including whether he might consider splitting off assets such as
Anglo's South African operations.
At AngloGold, he never excluded a spin-off of the group's
South African operations and did not shy away from complex tasks
including increasing exposure to the spot gold price by winding
down a loss-making hedge book that could have sunk the company
at the height of the crisis.
Anglo, like many of its peers, trades at a discount to the
sum of its parts and has long been considered a break-up target.
Analysts, who welcomed a faster-than-expected appointment, said
an imminent, radical push from the new arrival was unlikely.
"It takes time... before you start to see benefits, in
platinum in particular - this is a three-year job, not a
one-year job. It is not a simple switch, or Anglo would have
done it," analyst Des Kilalea at RBC Capital Markets said.
SOUTH AFRICAN CHALLENGES
Cutifani, a 54-year-old, straight-talking father of seven,
will be only the second non-South African to run Anglo. But it
was Cutifani's South African mining credentials - specifically
five years at the helm of Johannesburg-based AngloGold - that
were critical for the group when considering his appointment.
The only mining chief executive to attend a mass memorial
for striking miners shot during unrest in South Africa last
year, he was named head of the country's Chamber of Mines in
November. Anglo chairman John Parker said the country's
government had responded "positively" to the appointment.
"Cutifani has very strong relations with labour, the various
stakeholders," said Lesiba Seshoka, spokesman for South Africa's
National Union of Mineworkers, adding the union would still have
preferred a "previously disadvantaged South African".
Comments from workers in the smaller, more radical and
potentially more problematic AMCU union, however, were less
conciliatory, and tensions remain high in the settlements around
South Africa's largest platinum mines.
"We need (Carroll) back. She is not only interested in
profits, she also cares about the working class," winch operator
Evans Ramokga, 29, an AMCU recruiter and employee of Anglo's
platinum arm, Amplats, told Reuters in Rustenburg.
Anglo, for which South Africa still accounts for more than
half its forecast earnings, has battled combative unions and
faces a year of restructuring at its platinum arm. One in four
South Africans are unemployed and general elections are due in
Cutifani takes over just as Anglo prepares to unveil plans
later this month for Amplats. The world's largest producer of
the precious metal has been battered by the wave of strikes that
hit the South African industry last year, as well as escalating
costs and weak European demand.
South Africa will not, however, be the only item on the
to-do list for Cutifani. His Brazilian experience will be
welcomed as Anglo tackles problems at its flagship Minas Rio
iron ore project.
Minas Rio, a 2008 deal which aimed to diversify the group's
operations, has become notorious as a top of the cycle
acquisition that could now cost well over three times the
original estimate to develop.
Cutifani ran AngloGold from 2007, when he was plucked from
Canadian mining group Inco, now part of Brazil's Vale
. Despite facing falling production along with much of
the rest of the sector, he turned the gold miner into one of the
most efficient in the industry, boosted returns on capital, and
introduced quarterly dividends.
AngloGold said that until Cutifani takes over, its chief
financial officer and technical development head would act as
interim chief executives.
Cutifani will receive a 1.2 million pounds ($1.9 million)
basic salary, as well as bonuses tied to earnings per share,
plus some 2.4 million pounds of compensation for loss of
incentives on leaving AngloGold. He will be required to invest
in Anglo shares to the value of twice his basic salary within