By Alec Hogg
Early in my career, like most young financial journalists the prized invitation was to Anglo American’s Christmas cocktail party. It was like a rite of passage, recognition your work was being read in the right places. Plus a rare opportunity to shake the hand of Harry Oppenheimer, SA’s diminutive business icon of his age.
It’s 15 years since Mr Oppenheimer passed away and his family sold out its remaining stake in the business in 2011, banking $5bn. Thankfully, Harry is not around to witness tomorrow’s proceedings when Anglo CEO Mark Cutifani gives details of a survival plan to cut the already trimmed down group’s payroll from 135 000 to just 50 000. It’s the last roll of the dice for this once mighty company started by Sir Ernest Oppenheimer in 1917.
Anglo’s woes trace back to 2009’s ill-timed $14bn investment in the Minas-Rio iron ore mine, creating a debt mountain just as the commodity price cycle turned. In the last five years Anglo shares have become a virtual negative ten-bagger, posting annual declines since 2011 of 28%; 16%; 35%; 9% and a staggering 68% last year.
Mark Cutifani, drafted in to rescue the group in 2013, was then rated SA’s best mining executive. But investors now doubt even he is good enough to overcome managerial blunders which transformed the company’s fortunes. A timely reminder of Warren Buffett’s warning that when the reputation of a good manager comes up against a bad company, it’s the company which tends to win.
