Duncan Wanblad, Anglo American’s chief executive, wanted to be a doctor but instead followed his father into the mining industry. Now he needs to perform emergency surgery on his 107-year-old company for it to survive.
This week the South African executive unveiled a drastic set of sales and demergers, which could raise up to $25bn by some estimates, to head off an unsolicited £34bn takeover approach from Australian rival BHP.
The proposal includes hiving off Anglo’s South African platinum business, selling its trophy diamond brand De Beers and curtailing spending on the contentious $9bn Woodsmith fertiliser project in the UK, which Wanblad personally championed.
“They are in a big hole and trying to dig themselves out of it,” said one former senior Anglo executive who worked with Wanblad. “He has taken 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 then became an Anglo lifer. “I love this company,” he told the Financial Times earlier this week.
A keen cyclist, season ticket holder of Watford FC and classic car collector, Wanblad has the mind of a mechanic and knows the business inside out, colleagues said.
More unassuming than his predecessor, Mark Cutifani, Wanblad is described as thoughtful and detailed.
In a sign of Wanblad’s attention to minutiae, meetings with him tended to take longer than those with other Anglo executives, said Norman Mbazima, chair of Anglo American Platinum (Amplats), who has known Wanblad since 2007. Amplats is one of the companies to be spun off under both Anglo’s restructuring and BHP’s proposal.
But this forensic approach may also explain why Wanblad did not take more decisive action last year, especially after Anglo shares in December suffered their biggest one-day fall since the 2008 financial crisis.
“Duncan tends to make sure he understands the facts and take the time to weigh his options before making decisions,” said another former Anglo executive. “This is not a luxury that one always has as a CEO”.
In February, despite investor pressure to sell assets, Wanblad said Anglo would not “shrink itself to greatness”. Three months later he is proposing to do just that.
“The question is why didn’t they do this earlier?” said one top-20 shareholder.
Problems arguably started for Wanblad before he took over as chief executive two years ago. Under his predecessor Cutifani, a crippling debt crunch in 2015 forced Anglo to slash costs and cut its portfolio mining assets from 68 to 37. Cutifani centralised the group’s innovation and technology functions, set about developing the giant Quellaveco copper mine in Peru and bet on the potential for technical advances to boost performance.
When Wanblad took over in April 2022 Anglo’s London-listed shares were at an all-time high but things have since unravelled. Falling platinum and diamond prices have weighed on performance and broken infrastructure in South Africa has throttled operations. Meanwhile the technological gains envisioned by Cutifani have failed to materialise.
Wanblad has downgraded production guidance three times since becoming CEO and dismantled the centralised innovation and technology function.
Wanblad and Cutifani no longer talk to one another, according to people familiar with their relationship. Cutifani is now the chair of Vale Base Metals.
Anglo’s investors must now judge how much Wanblad is to blame for the FTSE 100 group’s problems and whether his plan to make it a leaner operation would generate more value than a BHP takeover.
In his favour, Wanblad has a track-record of offloading non-core assets. Between 2009 and 2013 he sold Tarmac, a British building materials group, exited gold mining stakes and divested a steel business.
“At one point, we’d call him the ‘used mine salesman’, since he was always selling one of Anglo’s business,” said Mbazima.
Wanblad — born in Randfontein, west of Johannesburg, when the country was still riven by apartheid — also hopes to win support from the government in South Africa, where Anglo was founded in 1917, and which is one of the company’s biggest shareholders through its state-owned Public Investment Corporation.
“This is not us leaving South Africa in any shape or form,” he told the FT this week after what he described as a “long” meeting with South African president Cyril Ramaphosa. In contrast, BHP plans demand a spin off of all of Anglo’s South African assets as a prerequisite to any deal.
The thorniest and most consequential divestment in Wanblad’s strategy will be De Beers, according to James Whiteside, head of metal and mining corporates at Wood Mackenzie, who estimates the diamond business should raise about half of what he estimates could be $25bn in targeted sales proceeds from the restructuring.
“There’s a lot that could go against them,” Whiteside said. The world’s largest diamond producer has curtailed 2024 production by 10 per cent to stem a market rout and is in no shape to be sold or listed this year, according to analysts.
The decision to stick with Woodsmith in Yorkshire could also prove problematic, given the mine’s huge costs have contributed to negative cash flow and swelling debt.
Wanblad led the acquisition of the project in 2020 as strategy director and has backed it as CEO, despite the fertiliser the underground mine will produce being untested in the market in large quantities.
Wanblad this week said Anglo would hold on to the project but cut spending from $1bn a year to a $200mn in 2025 and nothing in 2026. The moves will delay first production to well beyond 2027, but fertiliser will be a third pillar of the “new Anglo”, alongside copper and iron ore.
For its part, BHP is aiming to exploit Wanblad’s loss of credibility in the eyes of some shareholders to win support for its proposed break-up of the company that is not dissimilar to Anglo’s own plans.
Mike Henry, chief executive of BHP, told investors in Miami this week to consider which management team can better deliver on its word. “What we’re bringing forward here is a clear plan with a record of disciplined and successful execution,” he said.
The question for investors is whether Anglo’s “used mine salesman” can prove Henry wrong or whether Wanblad’s proposal amounts to too little too late.
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