What next for Anglo American? With the company in the midst of restructuring, it may seem a little early to ask that. But investors have good reasons to do so.

Anglo came late to the “stronger-for-longer” view on the mining cycle. That is why, in spite of rising profits, its shares have lagged those of faster-growing peers in recent years. They have perked up a bit since last October, when Tony Trahar, chief executive, announced plans to shed various bits of the group.

In spite of good progress on this, several issues remain unresolved – such as what happens to Tarmac. The aggregates business does not fit with mining, but it is a handy cash generator. However, apart from the Mondi paper and packaging business – due to be spun off by the end of the year – Tarmac generates the lowest return on net assets of any of Anglo’s divisions. If Anglo is to close the gap with BHP Billiton and Rio Tinto in terms of margins and returns, divesting Tarmac in a second round of restructuring looks unavoidable.

For investors, that prospect should only add to Anglo’s attractions. The mining sector’s fortunes rise and fall with commodity prices, and valuation multiples have been compressed steadily in recent years. In a sector lacking differentiation, Anglo’s restructuring potential sets it apart.

If anything, though, that increases the pressure on Anglo’s management to speed things up. Investors will be looking for words to that effect at Anglo’s interim update on Friday. Some cash-rich competitors lack adequate organic investment opportunities and are running short of manpower and equipment: witness the takeover tussle for Falconbridge and Inco in Canada and the wads of cash being funnelled back to shareholders. By year-end, Anglo, with its enviable spread of durable assets, will have net cash and also be faced with the imminent departure of Mr Trahar. His successor will be looking over his shoulder from day one.

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