Management shake-up at Fortescue Metals

Stephen Pearce Image: The West Australian

Two top FMG executives Stephen Pearce and Nick Cernotta, are stepping down from the company.

CFO Stephen Pearce has resigned from FMG to take up a role as finance director for Anglo American, while Cernotta will be replaced by Rio Tinto’s former head of innovation and technology, Greg Lilleyman.

Pearce has led FMG as CFO since 2010, and played a major role in driving down the miner’s debt over the past year, with Fortescue having paid down more than US$1 billion in debt to date.

It is believed he was approached by Anglo American to aid the company in carrying out a similar program of slashing costs and divesting assets.

Pearce replaces outgoing Anglo finance director Rene Medori, who announced his intention to retire in March.

Anglo American CEO Mark Cutifani welcomed Pearce to the company.

“We are very pleased that Stephen Pearce will be joining Anglo American as finance director,” Cutifani stated.

“Stephen brings proven financial and commercial experience gained across the extractive and related industries. His strong relationships with the debt and equity capital markets have proven immensely valuable in his role at Fortescue, as has his work across complex cost and other efficiency performance programmes. We look forward to welcoming him to Anglo American in January 2017. We are also very grateful to René Médori for his ongoing commitment to the asset divestment and restructuring processes that he will continue to lead until his retirement at the end of 2017.”

Pearce stated his excitement to join the global miner.

“I am delighted to be joining Anglo American at what is undoubtedly a pivotal time for our industry,” Pearce said.

“I look forward to working with Mark Cutifani and the senior team to create the new Anglo American. Through the portfolio restructuring and business improvement and efficiency programmes, we will create a very different investment proposition for Anglo American’s shareholders.”

Speaking to the West Australian on the move, Pearce admitted the move was a surprise for him also, as he had not considered leaving FMG until approached by Anglo American, adding that Anglo American’s current ‘challenging’ position was one of the deciding factors for the move, after he helped FMG clear its debt levels.

“Clearly, we’ve made huge inroads here on our costs, we’ve substantially reset the balance. So if there was a time to be thinking about moving on, then now is probably not a bad time,” he said.

Fortescue also congratulated Pearce on his new role, thanking him for his work at the iron ore miner.

“Among his many contributions, Stephen has been a key part of a tightly focused and disciplined approach to generating strong operating cash flows and evolving the balance sheet,” FMG said in a company statement.

“The strength of the highly capable team of senior leaders across finance, procurement and shipping is testament to Stephen’s contribution to Fortescue.”

FMG chair Andrew Forrest also wished Pearce success at Anglo American.

“Given the great progress on cost and debt reduction, and Stephen advising his keenness to pursue an international operations and finance role, this is an appropriate time for Stephen to move out of Fortescue to pursue those objectives,” Forrest said.

He went on to welcome former Rio Tinto executive Grey Lilleyman, Cernotta’s replacement, with Fortescue CEO Nev Power adding, “We are delighted to welcome Greg to Fortescue for the next phase of our journey.”

Cernotta was the miner’s third operations director in as many years, and was a key player in the company’s benefication strategy and driving down operating costs.

“Greg brings a wealth of industry knowledge with a personal style and approach strongly aligned with FMG’s values and culture.

“His extensive experience in leading safety and operational excellence combined with his thorough knowledge and passion for technology and innovation provides for the further development of Fortescue’s strong operational and cost performance.”

FMG is currently on the hunt for Pearce’s replacement.

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