Miners’ boards need a tune-up for austerity era 21 Feb 2013 Of the four big miners to change CEOs recently, only BHP Billiton managed to do it smoothly. The bosses may have messed up, but company boards are not blameless. They need to do better as the commodity cycle enters a new - and more challenging - phase.
Marius Kloppers will be hard act to follow at BHP 20 Feb 2013 The miner’s outgoing boss benefited from great assets, management discipline, a bull market, and some luck. BHP’s returns were solid under Kloppers, despite the financial crisis. His successor, Andrew Mackenzie, will stick to the formula, but he’ll need more luck to do as well.
Iron miners need to know when to quit digging 14 Feb 2013 Rio Tinto’s new boss, like his peers, is offering spending restraint. But the huge profit from fast growing Chinese demand for iron ore won’t last forever. For low-cost producers, the temptation is to dig, dig, dig. If everyone does the same, prices and profit could tumble.
Bumi shareholders should back incumbent board 13 Feb 2013 Competing plans to salvage value at the coal miner both have serious flaws. But current management, rather than Nat Rothschild, is best placed to achieve an all-important split with Indonesia’s Bakrie family. Once assured by a promised break fee, investors should offer support.
Polyus sale could leave gold deal bulls hanging 6 Feb 2013 Russian billionaire Mikhail Prokhorov’s potential exit from Polyus, the Siberian gold miner, has revived talk of a tie-up with fellow Russian producer Polymetal. An enlarged national player might please the Kremlin, but the industrial logic of gold mergers is weak.
Glencore Xstrata needs governance champ in chair 24 Jan 2013 The commodity trader’s board is already stuffed with operational expertise. CEO Ivan Glasenberg should resist the temptation to go for more of the same. The board needs a chairman with impeccable governance credentials. One former UK government minister fits the bill.
China’s role in Rio Tinto chief’s downfall 18 Jan 2013 Tom Albanese’s $38 bln Alcan deal was a bet China would use more aluminium and close down its unprofitable producers. Instead, it has propped them up, helping push prices down and the CEO out of his job. It’s a reminder that China’s state capitalism plays by different rules.
Rio’s snap succession makes bad news look worse 17 Jan 2013 The miner’s investors were expecting a big writedown, although maybe not $14 bln, including $3 bln on a 2011 African coal deal. But even though the new CEO, Rio iron ore chief Sam Walsh, is experienced and capable, the decision to replace Tom Albanese immediately looks rushed.
Anglo opts for high-risk, high-reward in platinum 15 Jan 2013 The embattled miner deserves credit. Its long-awaited platinum restructuring was more aggressive than expected. The task for the incoming CEO is to execute without more of the labour unrest that hit output in 2012. The shares’ subdued response suggests investors are rightly wary.
New Anglo boss needs free hand to make changes 8 Jan 2013 Mark Cutifani’s operational nous and South African experience make him a good choice to run Anglo American. But the miner’s incoming boss should set his own agenda, including examining a breakup. Anglo’s institutional inertia already threatens to undermine his authority.
Rothschild’s Bumi shake-up puts cart before horse 8 Jan 2013 The British financier wants to sack most of the board of Bumi, the stricken coal miner, and its new CEO. His slate of replacements is impressive but his shake-up plan looks half-baked. The first priority should be completing a proposed split with Indonesia’s Bakrie family.
Nat Rothschild’s Bumi plan still faces obstacles 11 Dec 2012 The financier said that top Bumi Plc shareholders back his plan for unwinding the disastrous mining tie-up with Indonesia’s Bakrie family. Investors cheered but the mechanics are murky and a clean break looks tricky. Even if it works, Rothschild’s reputation won’t recover fast.
Freeport deal triangle gets cozier and cozier 7 Dec 2012 The mining group’s market value has plunged $6 bln following news of its foray into energy. Yet the chairman will come out ahead. Now it seems the boss of one target, Plains Exploration, will collect $130 mln and a pay rise. Freeport’s board owes shareholders an explanation.
Freeport’s $20 bln splurge lives down to tradition 5 Dec 2012 The miner’s complex plans to buy oil explorers Plains and McMoRan swiftly erased $5 bln of value. Freeport Chairman Jim Bob Moffett also runs and partly owns McMoRan, which gets a rich 74 pct premium. The strategic and governance bravado affirm the industry’s Wild West culture.
Abramovich peace mission rewards all at Norilsk 4 Dec 2012 The oligarch is to buy 7.3 pct of the Russian nickel miner. The deal resolves a spat between shareholders Interros and Oleg Derispaka by giving the former management say and the latter dividend security. But Abramovich won’t have broked peace for nothing.
Glencore-Xstrata re-rating to start in boardroom 30 Nov 2012 With the Xstrata takeover done, the market has work to do to get to grips with “Glenstrata”. Valuing the miner-trader is tricky. The shares look cheap, but a big integration looms. A re-rating depends on the trading business proving itself and the board getting governance right.
New Glenstrata chair faces big repair job 20 Nov 2012 Xstrata chairman John Bond is going after shareholders approved Glencore’s $31 bln takeover, but snubbed the board in a complicated vote. His successor needs a forceful personality. Glencore fluffed the chance to get a strong chairman before its float. Now is the time to fix it.
Qatar dodges shareholder duty on Glenstrata 19 Nov 2012 The emirate may be confident of Glencore’s ability to retain Xstrata’s top talent. But abstaining from the vote on retention bonuses in the merger after pushing aggressively for better terms leaves a job half done and makes the sovereign fund look inconsistent at best.
"No" vote on Glenstrata pay creates little value 15 Nov 2012 Glencore’s $32 bln Xstrata offer will probably succeed now lead shareholder Qatar is backing it. A $220 mln retention plan for top staff may fail. But paying up to keep talent, while unpalatable, makes sense. The enlarged company will struggle to hold on to the savings.
Anglo needs a dealmaker CEO to unlock value 14 Nov 2012 It may be tempting to replace Cynthia Carroll with an operational obsessive who can deliver big projects. That’s one area where the outgoing boss struggled. But the miner really needs a visionary who can make tough calls, like demerging platinum and finding a buyer for the rest.