Anglo American: Shareholders Rejoice CEO Departure, But What’s Next?

Hear those cheers? It’s likely they’re coming from Anglo American (AAUKY.PK) shareholders.

Investors in the mining giant received welcome news Friday when much-maligned Chief Executive Cynthia Carroll announced she would step down as soon as the company finds a replacement. Carroll, the first woman to run a major miner and the first non-South African to lead Anglo, had more than her fair share of bumps during her five year ride as CEO.

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Unpopular with some shareholders from the beginning, Carroll heard calls for her ouster grow increasingly louder this year after operational setbacks and labor strikes at company platinum mines led to investor unrest. Share prices have fallen 25 percent since Carroll took the reigns in 2007.

However, Carroll’s departure is no guaranteed cure-all. For one, it’s unfair to say Carroll’s tenure was all bad. The company’s operations grew safer under her watch – with fatalities dropping 60 percent – and thanks to recent strategy Anglo’s commodities portfolio is primed to perform well in the future.

Secondly, Anglo, and whomever it selects to succeed as CEO, still must figure out how to deal with the messes Carroll will leave behind. Analysts at Bank of America Merrill Lynch view the departure as a positive catalyst for Anglo stock and have upgraded it to a Buy rating. They believe Carroll’s absence will allow for new changes, like the spinning off of Anglo’s troubled platinum mining business and the sale of part the company’s expensive Minas Rio project in Brazil. However, there are others who believe such moves will prove impossible, regardless of who’s leading the company.

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