Are we seeing a new changing of the guard for the major miners?
There are rumours in the air of more cuts at the top, and conditions are looking ripe for a repeat of the mass management changes we saw recently.
Only two years ago we witnessed a bloodbath at the top as CEO changes rocked nearly every major miner, including BHP, Rio Tinto, Anglo American, Kinross, as well as quite a few others.
Marius Kloppers, Tom Albanese, and Cynthia Carroll all got the boot when their businesses changed focus and direction as the Great Boom began to lose steam.
Anglo American led the way with the axing of Carroll, then it was Rio Tinto’s turn with the ‘mutual’ culling of Albanese, and BHP soon following suit and replacing Kloppers with current incumbent Andrew Mackenzie.
At the time it was an investor revolt; all demanding higher and higher returns in the face of the start of what became the downturn; they were almost unwilling to accept that the heady days were over and thus the scapegoating and fingerpointing – driven by diminished returns and many a poor choice during a previously aggressive acquisition period – ramped up, resulting in a change of management.
And now with the new CEO at the top of Rio Tinto – as Jean-Sebastien Jacques steps into to Sam Walsh’s shoes – and BHP reconfiguring its entire business as well as getting rid of some major executives such as Jimmy Wilson and Tim Cutt as it merges all of its Australian operations into a single unit, the management landscape is changing once again.
So who will be next? Which head will be on the chopping block?
Will it be Anglo American’s Mark Cutifani, who has been at the helm as the miner implodes and announces plans to completely pull out of Australia; will it be Vale’s chief again as the Brazilian Government once more decides to wade into its affairs; will Peabody finally file its long predicted Chapter 11 bankruptcy; or will BHP’s Mackenzie feel the sting?
Who can tell?
This is a new era in mining, and we’re seeing the dramatic re-evolution of the ‘new miner’ that focuses on corporate and social responsibility as well as shareholder returns.
Ethical investors are demanding more and more of miners, and not every CEO has the wherewithal to successfully lead from the front and build the business when commodity prices collapse and the market enters a long period of weakness.
The market smells blood, and it is up to this new guard to lead the industry into the new age of mining.
But as to who will be at the vanguard of this change, only time will tell.