[miningmx.com] — EVERY COUPLE OF YEARS or so semi-literate hacks get an opportunity to paraphrase Oscar Wilde’s line in The Importance of Being Ernest that to lose one parent (or, in our case, executive) is a misfortune, but to lose two is careless.
The opportunity has come up again last week, as Anglo American announces the departure of the CEOs of its two major listed subsidiaries, AngloGold Ashanti and Anglo Platinum.
It’s inevitable that the question is raised whether it’s a coincidence that this double loss has come so soon after the arrival of Cynthia Carroll at the head of Anglo itself, and though all concerned are trying to play the link down, I wouldn’t mind betting that if Tony Trahar were still around, at least one of those departures wouldn’t have happened – or, at least, not in the way it did.
For Ralph Havenstein’s departure from Anglo American is so abrupt that it is only now starting to look for a successor. At least with Bobby Godsell, the process has been orderly enough for the simultaneous announcement that he’s to be succeeded by Mark Cutifani, who in spite of his name is an Australian, who’s been running the big Brazilian mining company CVRD.
This is all the more important in that the last thing Anglo needs as it seeks to disengage – indeed, disinvest – from AngloGold is for an impression to form that the company has leadership problems.
Industry insider
Godsell and Havenstein have two things in common: neither is, in the strict sense, a mining man; and both are too young for the business community to be deprived of their skills by premature retirement.
Though he’s only 54, Godsell has spent 33 years with Anglo and has in effect been running AngloGold and its predecessor since July 1995. So to that extent he’s very much an industry insider, but it must be remembered that he started out in industrial relations – where he built up a good relationship with Cyril Ramaphosa, then head of the National Union of Mineworkers. His degrees are BA, MA, and he was in fact one of the first non-mining types to be named to so high a post in the industry.
Havenstein is only 49, and his background is in chemical engineering. Before joining Anglo Platinum four years ago, he was a career Sasol man, and ran Sasol Chemical Industries. Despite having a more technical bent than Godsell, my impression was always that he found it hard to adjust to the ethos of the mining industry.
And he certainly lacked Godsell’s political skills – which, it must be said, he would hardly have picked up anywhere at the top level of Sasol since 1994. Anglo Platinum has come under fire from government for tardiness in implementing affirmative action and BEE, and though it blames agents provocateurs, it’s plain fact that its relations with some of the local communities around its operations have been rocky.
But as Havenstein made clear, the breaking point was Anglo Platinum’s safety record, which has been particularly poor this year. His admission that a new leader is needed to change the safety mindset at Anglo Platinum is implicit acknowledgement that he wasn’t able to imprint his own personality deeply enough on the company.
Financial independence
Not that AngloGold’s record is flawless. It is the only one of South Africa’s big three gold miners to have conducted an active hedge programme, which has cost it huge sums in the gold bull market of recent years. Even the merger with Ashanti is not universally rated as a great success operationally, and AngloGold failed to hold on to the services of ex-Ashanti boss Sir Sam Jonah, whose appointment as an AngloGold director was originally considered a great coup.
Both companies are also losing other senior people. At AngloGold, International COO Roberto Carvalho Silva (55), who has been with the group since 1973; at Anglo Platinum, executive director and operations expert Robin Mills. Because of Havenstein’s departure, Mills has deferred his for a whole month – which, if anything, only underlines the precipitancy of the blow-up.
Havenstein has been non-committal about his future plans, which is understandable as he’s probably only just started to think about them. God sell says he hopes to travel less and devote more time to good works.
One standard question in these cases is whether such people have achieved financial independence. With God sell, this is fairly easy to answer.
His AngloGold earnings last year alone totalled R11.9m, including R2.2m on exercising share options. At financial year-end he still held 260,000 options, at an average take-up price of R104. At the current R292.50, these are R49m in the money – before tax. But even after Pravin Gordhan takes his cut, this should leave him comfortably placed.
For Havenstein, one can’t be so sure. His annual salary was R21.8m, including a whacking R14.8m on exercising options – did he have a presentiment that he might not be around much longer?
Talents
At year-end he still held only 8,100 options, at R236.43. Here the gross profit is only R5.4m, at the current R918. But Anglo Platinum has a complex remuneration system, and he also held 47,800 shares under the executive share ownership scheme, the long-term incentive plan, and deferred bonus.
The value of these is impossible to work out from the annual report – a little more transparency needed here, perhaps? But it must be substantial, so he’s probably also not short of the odd penny. But at under 50 he’s too young to envisage the beneficent squirarchical future that God sell says he yearns for.
In any event, my guess is that God sell, too, will soon find himself far more actively involved in some field or other than he now seems to envisage. As I said at the outset, both men have talents that South Africa can’t afford to have lying idle.
