This week things abruptly turned around, and these three articles give some insight into the situation as well as the fact that in Southern Africa (and here I mean South Africa and Angola) a luta continua ~'the struggle continues'.
Kentke
Oct 27, 11:39 AM (ET)
By RODNEY MUHUMUZA
Police disperse Anglo Platinum Workers at Olympia Stadium in Rustenburg, South Africa, Saturday Oct. 27 2012. Police fired rubber bullets at striking miners at the Anglo American Platinum mine in Rustenburg Saturday as the company announced it had agreed to reinstate 12,000 South African workers dismissed earlier this month for staging illegal strikes. The police fired on hundreds of miners in the North West province who had gathered near the Olympia Stadium, apparently to block another rally by the Congress of South Africa Trade Unions (COSATU). It was unclear if anyone had been injured. (AP Photo)
JOHANNESBURG (AP) - Anglo American Platinum agreed to reinstate 12,000 South African workers dismissed earlier this month for staging illegal strikes, a spokeswoman said Saturday, as police fired rubber bullets at some striking miners in Rustenburg.
The police fired on hundreds of Anglo American Platinum, or Amplats, miners in the North West province who had gathered near the Olympia Stadium, apparently to block another rally by the Congress of South Africa Trade Unions (COSATU). It was unclear if anyone had been injured.
The Amplats strikers, in the black T-shirts associated with the Association of Mineworkers and Construction Union (AMCU) and armed with sticks and stones, threatened to attack COSATU marchers in red T-shirts, according to the South African Press Association, which reported Saturday that some of the miners had vowed not to return to work until their wage demands were met.
AMCU is a start-up union that represents strikers who regard COSATU and the National Union of Mineworkers (NUM) as too close to mine bosses and their capital. The miners said that representatives from NUM have not been properly representing them during the strikes.
Some of the Amplats miners had been threatening since their dismissal to make the company's three operations in Rustenburg ungovernable if they were not reinstated and their salaries increased. They want 16,000 rand (about $1,800) in monthly pay. Amplats only offered them a one-off "hardship allowance" of 2,000 rand (about $230) if they accepted to return to work.
Mpumi Sithole of Anglo American Platinum said the workers had until Tuesday to return to their jobs "on the same terms and conditions of employment" as before they went on strike.
Sithole said that a meeting Friday of "all parties expressed commitment for a return to work in the interests of the employees, their livelihoods and the company." Amplats' decision to reinstate the fired workers came the day after the chief executive of its parent company, Anglo American, announced her resignation. Earlier this month the rating service S & P's had lowered its outlook on Anglo American from "stable" to "negative" because of the turmoil in South Africa. Amplats is the world's top producer of platinum.
If the Amplats miners return to work, it would bring an end to labor unrest that damaged South Africa's reputation as an investment destination. At the peak of the strikes, some 80,000 miners, representing about 16 percent of the mining workforce, were on strike across South Africa. The labor unrest originated in the platinum belts outside Johannesburg and later spread to gold and iron mines.
And behind the scenes.....
Anglo CEO Quits Amid Pressure by Investors
By DEVON MAYLIE, ALEX MACDONALD and JOHN W. MILLERJOHANNESBURG—Anglo American PLC Chief Executive Cynthia Carroll broke through the male-dominated mining ranks to lead one of the world's biggest miners but resigned Friday after failing to meet pressure from investors to rein in costs and reduce dependence on South Africa.
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Cynthia Carroll will leave her post after a successor is named.
The resignation of Mrs. Carroll, 55 years old, puts the focus on a company operating in some of the world's most volatile regions and shaken by protracted labor strikes and nationalist efforts—all at a time when the industry faces slowing demand and high development costs.
Founded in 1917, London-based Anglo American is the world's fifth-biggest mining company in terms of stock-market value, currently about $24 billion, and clings to an old-school corporate culture. In South Africa, it owns a picturesque vineyard where it likes to entertain clients. Enter, in 2007, Mrs. Carroll, a New Jersey geologist with a Harvard MBA and a strong track record of managing metal companies.
At Anglo, she earned plaudits for improving safety and recording record profits in 2008 and 2011. But analysts and institutional investors have criticized Mrs. Carroll's handling of the Minas Rio iron-ore mine in Brazil, acquired in two stages in 2007 and 2008 for a total of about $6.6 billion.
Cost estimates for developing the mine have soared since then, and iron-ore prices have recently fallen. Analysts at Deutsche Bank in London say Anglo American has spent about $9.85 billion on the project so far, including the original acquisition cost, but they estimate its current value at $4.3 billion.
A nickel mine in Brazil and a copper mine in Chile, two of the company's other major development projects, also are running over budget, according to Deutsche Bank, Macquarie First South and other analysts.
Trucks at an iron-ore mine operated by Anglo American unit Kumba Iron Ore in Shishen, South Africa.
"Anglo American prior to Cynthia Carroll was conservative, too conservative," said Patrice Rossouw, head of equities for Sanlam Investment Management, a South African investment firm with a 0.4% stake in Anglo that has been among the shareholders pushing for a change. When she was hired, "there was a change in risk appetite, but the investments were costly and came too late in the cycle."
In a statement, the South African government's Public Investment Corp., which owns a 7% stake n Anglo, said: "Poor capital allocation has eroded value in the company over the last few years." It cited a "long list of projects" that it said reduced the value of Anglo and made returns to shareholders unattractive.
Chairman John Parker denied on a conference call that Mrs. Carroll's resignation was prompted by disgruntled shareholders. "Inevitably there are differences of opinion on issues with CEOs" and investors, but "this is Cynthia's decision, and she was the one who first broached the subject of her departure with the company's board," said Mr. Parker.
On the conference call, Mrs. Carroll said, "there is never a good time to leave...but I think it's time to pass the baton to someone to take [Anglo American] even further."
Anglo has lost about a third of its market value since Mrs. Carroll became CEO on March 1, 2007, mining analyst Jeff Largey of Macquarie Research said in a note, while rivals have been able to preserve or increase their values.
Anglo shares rose more than 4% Friday in London trading.
Mrs. Carroll is to step down after a successor is named. JP Morgan Cazenove said it might take six to 12 months to replace Mrs. Carroll. Mr. Rossouw, the South African institutional shareholder manager, said Alex Vaneslow, a former chief financial officer of BHP Billiton Ltd., BHP.AU -1.48% and Mick Davis, CEO of Xstrata XTA.LN +0.57% PLC, should be among the candidates. Neither would comment, according to spokesmen.
Investors are looking at whether leading mining firms can navigate the current double whammy of spiraling costs and slipping commodity prices. Global mining rivals such as BHP Billiton, Xstrata and Rio Tinto PLC have reacted by reducing capital investment at certain mines and cutting jobs.
The new CEO will also have to deal with troubles in South Africa, where Anglo still earns half its revenues, partly from costly deep mines with declining ore grades. After months of violent strikes and protests, it laid off 12,000 striking workers at mines there this month, and production continues to be disrupted.
Mrs. Carroll received criticism for increasing the company's exposure to South Africa even as peers have retrenched there. Anglo has boosted its stake in Kumba Iron Ore Ltd. of South Africa and earlier this year bought majority control of De Beers, the world's largest diamond producer, with mines in South Africa, for $5.1 billion.
The sale in August of part of the company's Anglo Sur copper complex in Chile was also controversial. Mrs. Carroll drew fire from investors and analysts for having invested $2.8 billion to develop a copper mine there despite Anglo having a contractual agreement, signed before she arrived, that ultimately allowed Chilean state mining company Codelco to acquire a quarter of the venture at below market value.
Corrections & Amplifications
Anglo American CEO Cynthia Carroll has decided to step down. An earlier version of this article and headline incorrectly said she was retiring. She has for nearly six years been the only female CEO of a major global mining company. An earlier version of this article incorrectly said she had been there for seven years.
Write to Devon Maylie at devon.maylie@dowjones.com, Alex MacDonald at alex.macdonald@dowjones.com and John W. Miller at john.miller@wsj.com
A version of this article appeared October 27, 2012, on page B1 in the U.S. edition of The Wall Street Journal, with the headline: Anglo CEO Quits Amid Pressure by Investors.
And because you know I'm going to try to give you as much of the story as I can.....
What’s Behind Anglo CEO Carroll’s Abrupt Exit
Cynthia Carroll, chief executive of Anglo American PLC.
AP Photo.
By Joseph B. White
Cynthia Carroll’s resignation as CEO of mining giant Anglo American PLC is prompting hand-wringing about the run of departures among the already small cadre of women running big listed companies. But, pending more revelations, the circumstances appear to be a straightforward matter of a board of directors losing patience after a long run of trouble that hammered the stock.
As the WSJ’s Alex MacDonald and Devon Maylie report, Ms. Carroll’s six-year tenure at the top had some successes, but what’s stood out recently are costly setbacks and miscalculations. Labor conflict at its platinum mines in South Africa has cost the company nearly 1.9 billion South African rand (about $217 million) in lost production since July, MacDonald and Maylie report. In Chile, Ms. Carroll’s decision to invest $2.8 billion in a big copper mine even though state owned mining company Codelco had a right to acquire a quarter of the venture at a price below market value also drew investor criticism, they report.
Analysts and investors have soured on Ms. Carroll’s leadership. The company’s shares skidded from a high of 2,910 GBP in February to a low of 1,748 in August. They have popped up this morning since Ms. Carroll’s decision to resign was announced. Goldman Sachs earlier this month put a “sell” rating on the company’s stock, citing a litany of woes:
“Its platinum division has been negatively exposed to a very weak European autos market (hurting PGM prices) and more recently strikes at its major mines in South Africa (hitting production). These strikes have spread to Kumba from which the company made c.40% of its 1H12 EBITDA, and which has also seen the iron ore price fall 25% in 2012 to date. De Beers, its diamond unit, is currently experiencing weaker pricing, reflecting sales growth fears, and its copper unit is experiencing lower than planned production from Los Bronces (Chile) and its Collahuai JV (also Chile). Lastly, the met coal price has fallen sharply on the back of weaker global steel demand, from c.US$280/tonne at the beginning of 2012 to c.US$145/t currently. Anglo has also seen its major near-term growth project, Minas Rio (iron ore, Brazil) delayed by at least 18-months and perhaps by over two years.”
Ms. Carroll’s not alone in her troubles. The global mining industry has hit a downdraft as Europe’s economy has sagged, China’s industrial machine has slowed and the U.S. economy has continued to plod. As the WSJ reported earlier this month, big resource companies are slashing billions out of their capital budgets – conserving cash under pressure from investors who’ve dumped their shares. But cutting back today could mean crimped growth tomorrow. Whoever gets Ms. Carroll’s job will have plenty to dig through.
