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Anglo American’s boss Duncan Wanblad has said the British mining group will not “shrink itself to greatness” in the face of growing pressure to take radical action in reshaping its misfiring portfolio and reversing a slide in shares.
Wanblad said on Monday he was not looking at asset sales and was planning first to make them more resilient to low commodity prices, despite insisting in December that the business has “no sacred cows” — a day when the group’s shares suffered their worst one-day fall in 15 years.
“I’m not looking to get rid of it [any particular businesses]. I’m looking how to optimise it and make it more resilient,” the chief executive said, speaking on the sidelines of the Mining Indaba conference in Cape Town. “You don’t shrink yourself to greatness in these companies.”
He also warned that thousands of job cuts were likely in its platinum group metals business based in South Africa — a sensitive issue for the ruling African National Congress ahead of elections this year.
That would follow moves by other platinum producers in South Africa to reduce headcounts, which the country’s Minerals Council estimates could result in somewhere between 4,000 to 7,000 job losses across the industry.
Wanblad, a former director of strategy at the company, is under scrutiny from investors because shares have more than halved since he took the reins in April 2022. They took a further beating in December after the group unveiled deep cuts to its production forecasts.
The business has also been hit by price collapses for diamonds and platinum as well as problems at its Quellaveco copper project in Peru that only started production in 2022.
It has easily been the poorest performing mining stock of the big groups, including BHP, Rio Tinto and Vale.
While Wanblad has unveiled plans to shave $1bn off in costs, expectations in the market have grown that an activist could demand more radical steps at the 108-year-old company.
In response to speculation that Anglo could spin off its struggling diamond producing unit De Beers, Wanblad said it was “not specifically” something that it is considering.
“Because it’s at the bottom of the cycle doesn’t mean it’s time to throw it out,” he said.
But he added that he was “actively considering” other proposals — as he had been doing for some time — to restructure the business such as splitting up its assets focused in southern Africa with those located in other parts of the world.
He said part of the reason behind December’s production downgrade was unwinding optimistic projections made under previous boss Mark Cutifani on delivering output and sustainability improvements through technology.
“We were perhaps a bit more optimistic than we should have been in terms of the rate that they might get to full fruition,” he said, although insisting it was not a mistake.
Another problem for Wanblad is the $9bn underground mine in North Yorkshire — the Woodsmith project — that will produce a new kind of fertiliser, which has burdened the group with a big capital expenditure bill.
He said that there was a possibility of accelerating a decision to bring in partners for the project to this year, which would help to reduce its spending burden.
Additional reporting by Rob Rose in Cape Town
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