Johannesburg - Global diversified mining giant Anglo American yesterday announced a shake-up of the leadership at two South African subsidiaries amid an environment in which mining houses were buckling under the pressure of volatile prices and low demand from China.
The leadership shift comprised the appointment of Themba Mkhwanazi as the new chief executive at Kumba Iron Ore with effect from September 1.
Anglo American Platinum’s July Ndlovu, the executive head of processing operations, has been appointed to replace Mkhwanazi as chief executive of Anglo American’s South African coal business, with effect from September 1.
Into the fire
Mkhwanazi, who has been chief executive of Anglo American’s Coal South Africa business since May 2014, was jumping from the frying pan into the fire. Coal is recovering after a price slump, but iron ore declined 40 percent last year amid a global glut driven by expansion by the world’s largest metals producers.
Anglo said yesterday that Mkhwanazi’s appointment followed Norman Mbazima’s decision to step down after four years to focus on his role as deputy chairman of Anglo American South Africa, with effect from August 31.
Mbazima would remain a member of Anglo American’s group management committee and play a key role in the processes to restructure and divest Anglo American’s non-core assets in South Africa, including its interest in Kumba, Anglo said in a statement.
Anglo became the first major producer to be rated junk after its credit assessment was cut by Fitch Ratings, following a similar downgrade by Moody’s Investors Service in February amid questions about its ability to sell assets in a “buyers’ market”.
Negative outlook
The company’s rating was reduced to BB+ with a negative outlook from BBB-, Fitch said, while Moody’s cut Anglo to Ba3 on Monday. Standard & Poor’s had Anglo at BBB-, its lowest investment grade.
Anglo is looking to sell coal and iron ore assets after losses bled into a fourth year.
After a torrid 2015, when Anglo fell victim to the global commodity price rout and lost 75 percent of its market value, the company accelerated a plan to exit iron ore and coal to focus on its more profitable assets – diamonds, platinum and copper. Kumba, once the bedrock of Anglo’s dividend, has struggled to remain competitive as a supply glut fed by Rio Tinto Group and BHP Billiton met a slowing economy in China, the biggest consumer of the steelmaking ingredient.
Mkhwanazi is Rio Tinto’s former regional general manager for the Americas and chief operating officer of Richards Bay Minerals.
Kumba’s chairman Fani Titi said Mbazima’s leadership over the last four years had coincided with tumultuous times for the mining sector and a steep decline in the iron ore price.
“Mbazima responded swiftly to these challenges, never shying away from the tough decisions needed to ensure the company’s sustainability,” Titi said.
“Throughout his tenure, Mbazima displayed the sort of temperament, technical insight and integrity, which attracted the support of staff and stakeholders even as he led the company through major changes.”
Kumba’s share price fell 1.75 percent to R124.29 on the JSE yesterday.
* With additional reporting by Bloomberg
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