Miner Anglo American picks new chairman
LONDON: Mining group Anglo American on Friday appointed John Parker as chairman amid the British-South African group's fight to stay independent after recently snubbing Swiss rival Xstrata's merger bid.
Parker becomes chairman on August 1, replacing Mark Moody-Stuart who is retiring after seven years in the job.
"The announcement of Sir John Parker as the new chairman of Anglo American sends a clear statement that they see a strong and independent future," said Mark Priest, a senior trader at ETX Capital.
The Financial Times (FT), which Friday reported the appointment before the official announcement, said choosing the experienced Parker could boost support for the group's board among shareholders.
Anglo American chief executive Cynthia Carroll is said to have lost some shareholder support after deciding to cut the group's dividend following a drop in 2008 net profits.
The FT on Friday added that Parker's appointment was likely to prove controversial in South Africa, whose government had reportedly wanted a black chairman.
Parker is currently chairman of British utility company National Grid and South African paper group Mondi.
Parker said in a statement on Friday that he had "deep roots in South Africa" and that he was looking forward to leading the board "through the next stage of the company's development."
In early London stock market trade, Anglo American's share price was down 0.27 percent at 1,646.5 pence. London's benchmark FTSE 100 index, on which Anglo is traded, fell 0.47 percent to 4,138.99 points.
Anglo American's chief executive Cynthia Carroll on Friday said Parker would "bring significant insight and experience to the board" and praised Moody-Stuart for reinforcing the group's "position as a modern and responsible mining company."
The change at boardroom level comes as Anglo American last month rejected a merger bid by Xstrata, snubbing a move that could have forged the two into one of the world's biggest miners.
Xstrata has said a merger could lead to potential annual benefits of more 1.0 billion dollars (713 million euros). However London-based Anglo American has called the merger offer "totally unacceptable."
A potential tie-up between the pair is the latest sign of consolidation pressure in the sector after the recent collapse of a deal by miner Rio Tinto with China.
A merger would create a company worth more than Rio Tinto, which recently cancelled a controversial tie-up with China's aluminium group Chinalco in favour of a joint venture with the world's biggest miner BHP Billiton.
Xstrata has said the combined entity with Anglo American would have sales of 54.3 billion dollars and operating earnings of 17.4 billion dollars even before cost savings were taken into account.
Anglo American is cutting 19,000 jobs this year after posting a 29-percent fall in 2008 net earnings -- a victim in a worldwide slump in demand for raw materials.
Sharp falls in commodity prices brought on by a contraction in the global economy saw its net earnings slump to 5.2 billion dollars last year.
The job cuts include 10,000 at Anglo Platinum, the world's biggest platinum producer and majority-owned by Anglo American.
The total cuts, amounting to 10 percent of Anglo American's global workforce, are part of a drive to save 2.0 billion dollars a year by 2011.
Anglo American, headed by Carroll since 2007, has a 45-percent stake in De Beers, the world's largest diamond company, and is the largest mining group in South Africa, which generates about two thirds of its earnings.