Duncan Wanblad: the ‘used mine salesman’ who blows up Anglo American

Duncan Wanblad, the CEO of Anglo American, wanted to become a doctor but instead followed his father into mining. Now he must perform emergency surgery on the 107-year-old company to survive.

This week, South Africa’s chief executive unveiled a dramatic series of sales and demergers, which some estimates could raise as much as $25 billion, to head off an unsolicited £34 billion takeover of Australian rival BHP.

The proposal includes divesting Anglo’s South African platinum business, selling trophy diamond brand De Beers and curbing spending on Britain’s controversial $9 billion Woodsmith fertilizer project, where Wanblad personally advocated.

“They are in a big hole and trying to dig themselves out,” said a former senior Anglo manager who worked at Wanblad. “It took him far too long to come up with a plan.”

Wanblad, 57, started his career at Johannesburg Consolidated Investment, which was broken up in the 1990s under a post-apartheid black empowerment drive. He subsequently became an Anglo-lifer. “I love this company,” he told the Financial Times earlier this week.

Wanblad is an avid cyclist, Watford FC season ticket holder and classic car collector. He has the mind of a mechanic and knows the trade inside and out, according to colleagues.

Wanblad is more modest than his predecessor, Mark Cutifani, and is described as thoughtful and detailed.

Anglo American's Woodsmith mine
Anglo American’s Woodsmith mine, which Wanblad personally defended © Anglo-American

In a sign of Wanblad’s attention to detail, meetings with him tended to last longer than those with other Anglo executives, says Norman Mbazima, chairman of Anglo American Platinum (Amplats), who has known Wanblad since 2007. Amplats is one of the companies being spun off from Wanblad under both Anglo’s restructuring and BHP’s proposal.

But this forensic approach could also explain why Wanblad did not take more decisive action last year, especially after Anglo shares suffered their biggest single-day drop since the 2008 financial crisis in December.

“Duncan tends to make sure he understands the facts and takes time to weigh his options before making decisions,” said another former Anglo executive. “This is not a luxury you always have as a CEO.”

In February, despite investor pressure to sell assets, Wanblad said Anglo would “not retreat from greatness”. Three months later, he proposes to do just that.

“The question is: why haven’t they done this before?” said a top 20 shareholder.

Wanblad’s problems probably started before he took over as CEO two years ago. Under his predecessor Cutifani, a crippling debt crisis in 2015 forced Anglo to cut costs and reduce its portfolio of mining assets from 68 to 37. Cutifani centralized the group’s innovation and technology functions, began developing the giant Quellaveco copper mine in Peru and gambled on the potential for technical advances to improve performance.

When Wanblad took over in April 2022, Anglo’s London-listed shares were at an all-time high, but things have since unraveled. Falling platinum and diamond prices have depressed performance and South Africa’s broken infrastructure has hampered operations. Meanwhile, the technological benefits Cutifani envisioned have not materialized.

Line chart of share prices rebased in pence terms, showing Anglo shares lagging behind rivals under Wanblad's tenure

Wanblad has cut production guidance three times since becoming CEO and dismantling the centralized innovation and technology function.

Wanblad and Cutifani no longer speak to each other, according to people familiar with their relationship. Cutifani is now the chairman of Vale Base Metals.

Anglo’s investors must now assess how much Wanblad is to blame for the FTSE 100 group’s problems and whether his plan to turn it into a leaner operation would generate more value than a takeover of BHP.

To its advantage, Wanblad has a track record of divesting non-core assets. Between 2009 and 2013 he sold Tarmac, a British building materials group, exited gold mining interests and sold a steel company.

“At one point we called him the ‘used mine salesman’ because he always sold an Anglo business,” says Mbazima.

Wanblad – born in Randfontein, west of Johannesburg, when the country was still torn apart by apartheid – is also hoping to get support from the government in South Africa, where Anglo was founded in 1917 and which through its state is one of the largest shareholders of the company. owned by a public investment company.

“This is not leaving South Africa in any form,” he told the FT this week after what he described as a “long” meeting with South African President Cyril Ramaphosa. By contrast, BHP’s plans call for a spin-off of all of Anglo’s South African assets as a condition of a deal.

The thorniest and most consequential divestment in Wanblad’s strategy will be De Beers, according to James Whiteside, head of metals and mining businesses at Wood Mackenzie, who estimates the diamond sector should generate about half of what he estimates to be $25 billion of targeted sales revenue could be. from the restructuring.

“There’s a lot that could go against them,” Whiteside said. The world’s largest diamond producer has cut production by 10 percent in 2024 to counter a market disruption and is unlikely to be sold or listed this year, according to analysts.

The decision to stay with Woodsmith in Yorkshire could also prove problematic as the huge costs of the mine have contributed to negative cash flow and mounting debt.

Wanblad led the acquisition of the project in 2020 as strategy director and has supported it as CEO, even though the fertilizer the underground mine will produce has not yet been tested in large quantities on the market.

Wanblad said this week that Anglo would continue the project but cut spending from $1 billion a year to $200 million in 2025 and nothing in 2026. These steps will delay first production until well beyond 2027, but fertilizer will save a third be a pillar of the project. “new Anglo”, in addition to copper and iron ore.

BHP, for its part, is aiming to exploit Wanblad’s loss of credibility in the eyes of some shareholders to win support for the proposed break-up of the company, which is not much different from Anglo’s own plans.

BHP CEO Mike Henry told investors in Miami this week to consider which management team could best deliver on its word. “What we are putting forward here is a clear plan with a track record of disciplined and successful implementation,” he said.

The question for investors is whether Anglo’s ‘used mine salesman’ can prove Henry wrong, or whether Wanblad’s proposal is too little, too late.

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