Founded as a gold mining company in 1917 in South Africa by Ernest Oppenheimer (with help from Herbert Hoover and J. P. Morgan), Anglo American plc is the world’s fourth-largest diversified mining company by market value. Now based in London, Anglo has been led since 2007 by Cynthia Carroll (MBA ’89), the first woman and first non–South African to hold the firm’s top spot.

In addition to South Africa, from which it derives roughly half its profits, Anglo operates in some 45 countries, employing about 160,000 workers. Its products include platinum (used mainly in automobile catalytic converters), iron ore, coal, copper, nickel, zinc, and diamonds. Revenues in 2008 were $26 billion.

At Anglo, despite a dividend cut and substantial layoffs prompted by the economic downturn and a collapse in commodity prices, Carroll, who topped Fortune magazine’s “International Power 50” list of women executives in 2008, has won praise for combining a conservative financial approach with progressive policies.

Raised in New Jersey, Carroll studied geology at Skidmore College, went on to earn a master’s in the field at the University of Kansas, and became a petroleum geologist at Amoco. Later, she joined the Canadian company Alcan, rising through the ranks and eventually becoming CEO of its Primary Metal Group, a position she held until taking over at Anglo. Carroll and her husband, David, have four children.

When you began at Anglo, what needed the most attention?

Safety, first and foremost. Any fatality is a terrible thing, and there were too many throughout the group, particularly in South Africa, where 44 employees died in accidents the year before I took over.

Two months after I became CEO, I shut down one of our South African platinum mines after several fatalities there. There were 28,000 employees at that mine; we brought people up from below ground and worked to retrain and refocus them. We lost millions of dollars while production was curtailed, but it was the right thing to do. We’ve improved our safety performance by 40 percent, and although we set the standard in South Africa and everywhere else we operate, we’ve got to do better.

The second area that needed improvement was government relations. Starting first in South Africa, we’ve worked to upgrade that relationship substantially. Black economic empowerment deals are required in South Africa, and I’m proud that we are now fully certified in that area and enjoy the support and endorsement of the Pretoria government. That’s an enormous achievement, based on where we were just a couple of years ago.

Similarly, whether it’s dealing with governments in Chile, Brazil, or Australia, I think we are seen as a partner of choice.

What about more bottom-line issues?

We’ve identified growth opportunities and have about $50 billion worth of projects in the pipeline. We’ve launched two major profit-enhancing initiatives that are expected to deliver $2 billion of operating profit in three years’ time. One is on the procurement side, where we’re applying global procurement practices and integrating all parts of the business. The second is what we call Asset Optimization: getting the most out of each and every asset, day in and day out, working closer and closer to best practice.

What keeps you up at night?

Right now, I’m thinking a lot about the preservation of our balance sheet and cash position. Whatever spending we have ongoing, it clearly has to be for the highest shareholder value. We have ratcheted down our capital expenditures for this year from an original figure of $10.1 billion to $4.5 billion and are concentrating on three major projects, two in Brazil and one in Chile. We must deliver these projects on time and on budget. Meanwhile, we’re cutting production and putting some other projects on hold. We still have our longer-term strategic goals in place, but this is a time when focusing on the short term is necessary.

As a woman in a male-dominated industry, you stand out. Indeed, women have long been considered bad luck in mines! How do you make change happen?

I like to believe that women actually bring very good luck! But yes, until recently, women in South Africa weren’t allowed to work underground. Today, we have 1,400 women working in coal mines there. In platinum, deep underground and in very physical and demanding jobs, there are some 2,500 women miners. A few years ago, we had virtually none.

Where I’d like to see more women is at the executive table. I do think, however, we’re setting a good pace for change. We’ve introduced an approach we call One Anglo that’s based on the core values that underpin the company in all its activities. With the support of the executive team, we’re rolling that out across the organization. We have applied value-based management throughout the company and are inviting people to think out of the box, take much more responsibility for themselves and others, and really drive for value.

Mining operations can directly affect communities, the environment, politics, and nationalist sentiment. Does that make your job more complex than if you were a CEO in a less “hot-button” industry?

Absolutely. Increasingly, we need two licenses to operate: one from our host government and the other a social license from affected communities. To maintain that welcome, we need to generate real sustainable benefits for those communities over the lifetime of a mine and beyond.

That means providing education and training to raise local people to a standard where they can access jobs. It also means seeking ways to augment other sources of livelihood and build the skills of the community. We are world leaders in enterprise development through our incubator units in South Africa and Chile, which support over 220 freestanding businesses providing jobs to some 13,500 people. In South Africa, I’m also very proud that we have the largest workplace HIV testing and treatment program in the world, through which we provide free antiretroviral drugs to our 3,000 HIV- positive employees.

In South America, we have multimillion-dollar projects to improve goat and cattle breeds, boost honey production, and diversify agricultural output. We work hard to improve local infrastructure, water, and sanitation, and we partner with NGOs like CARE International and Fauna & Flora International. We’ve moved from a paternalistic to a participatory approach to community development and social investment.

Despite those efforts, some critics say Anglo has ignored local and environmental concerns at several sites. What would you point to as a model Anglo project?

Our technical experts audited our Barro Alto nickel project in Brazil last year, and they said they’ve never seen one so impressive on a range of issues. It has a state-of-the-art plant design. It recorded 966 days without a lost-time injury. Outside the mine, we are spending millions of dollars on socioenvironmental efforts in the surrounding region: schools, a hospital, electrification, job training in support enterprises, health-care programs, environmental protection, and bio-diversity. These initiatives have garnered national recognition and earned prestigious awards. This is the kind of benchmark I want Anglo to be known for.

In Alaska, we’ve spent over $100 million on environmental and socioeconomic impact studies pursuant to developing a copper mine at Bristol Bay in an area rich in fisheries and in native people’s heritage. This proposed Pebble Mine project is an important one that would create many hundreds of jobs in an area where jobs are few. But if I’m not satisfied we can proceed without harm to the local people and the environment, then we simply won’t do it. We will not go where communities are against us.

The Extractive Industries Transparency Initiative (EITI), launched by Prime Minister Tony Blair in 2002, seeks greater disclosure of what companies pay, and what countries receive, for oil, gas, and mining. Will it discourage corruption and help commodities-rich countries avoid “the resource curse”?

The EITI isn’t a silver bullet, but it makes embezzlement of resource revenues by corrupt elites a great deal more difficult. It also establishes an inclusive process in mineral-dependent countries for a broader discussion among parliamentarians, civil-society groups, and the media about how these time-limited revenues should be used.

As long-term investors, we support EITI for these reasons. And because it contributes to building trust, it helps make clear what we as a company are contributing to our host societies, and strengthens governance and political stability. It’s a slow process but almost thirty countries have at least started to implement it, with several mining-industry countries such as Peru, Ghana, Liberia, and Guinea appearing to make good progress. Anglo was one of the first companies to back EITI, and I would say of all the mining companies, we have been the most actively engaged with it.

Oil companies, looking ahead to depleted petroleum reserves, are reinventing themselves as energy companies. Do you have to think about diversifying?

I don’t believe oil companies are actually doing that in any significant way. The oil and gas companies are focused on technological advancements around oil and gas rather than on activities that are not core-related. I think we take exactly the same view in our industry and our business. Our emphasis is on doing things much smarter and more efficiently for the longer term. As we make investments, we think about the footprint we will have for 50 to 100 years and beyond. That’s where our attention lies.

When is the economy going to bounce back to business as usual?

Oh boy. I’m not going to try to predict that. I will say only that we are looking at a tough two years ahead. We’re applying substantially reduced prices in our underlying assumptions for 2009 as well as 2010. All mining companies are cutting back across the board; they’re curtailing greenfield exploration as well as developmental brownfield projects. Because demand, especially from China, will surge, there’s going to be a severe shortage in supply during the initial recovery from this slump. When the cycle does change, and it will, there’s going to be a big upswing for this industry.

Featured Alumni

Featured Alumni

Class of MBA 1989, Section D

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