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January 17, 2013 9:54 am
For a while, it seemed Tom Albanese would be the last chief executive of the world’s largest miners left standing.
With Cynthia Carroll leaving at Anglo American, Mick Davis set to depart Xstrata and a process under way to find a successor to Marius Kloppers at BHP Billiton, the Rio Tinto chief executive appeared a good bet to outlast them all despite the disastrous decision to spend $38bn on Alcan, the Canadian aluminium group, at the top of the cycle. With his surprise departure, the changing of the guard at the biggest mining groups is well advanced – with other high-profile changes last year at Barrick Gold, Kinross, Codelco, Antofagasta and Impala.
“What we’ve seen in the recent past is subtle and not-so-subtle shareholder activism asking ‘how are you allocating capital?’” says Des Kilalea, analyst at RBC Capital Markets. “It really started when the cycle turned – metals prices started to fall away and the quality of investments came under more scrutiny.”
Among the senior ranks, Mr Davis may or may not choose to serve six months overseeing the combined Glencore-Xstrata while the timing of Mr Kloppers’ departure remains uncertain.
BHP’s board late last year started a search for his replacement, which people familiar with the matter said could take up to 24 months.
Industry insiders privately doubt that BHP’s chairman, Jac Nasser, will take that long to make his decision, arguing that a change could come within the next few months.
That Mr Nasser has a well-established crop of internal candidates reinforces this view. Among the hopefuls, Andrew Mackenzie, the head of non-ferrous, and Alberto Calderon, head of aluminium, nickel and corporate development, are widely seen as frontrunners.
With investors in unforgiving mood, would-be CEOs will be treading carefully. “There will be more [casualties] to come across the mining space,” says Mr Kilalea. “Managers who held the reins when investments did not produce the hoped returns will have to put their hands up and say, ‘on my desk, the buck stops’.”
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