FT : Rio Tinto & Anglo American are in the right hands



Rio Tinto and Anglo American: two diversified miners that need stability at the top.

Execution ability is everything when there is upheaval in commodity markets and such change in the mining business.

In their current Aussie CEOs, the miners seem to have both.

First to Rio, which today confirmed that iron ore enthusiast Sam Walsh's existing three-year contract has been turned into an open-ended one. Not that Mr Walsh would have needed much persuasion.

That should put paid to persistent leadership succession doubts and could reduce the urge for Glencore to return with its shelved plan to create GlenTinto.

More to the point, he has become investors' guarantee that Rio will stick to the straight and narrow - and not go off overpaying for assets or lavishing too much capital expenditure on projects that don't warrant it.

It's good too that Rio has given finance director Chris Lynch an open-ended contract.

At Anglo, third-quarter production data earlier today suggest that CEO Mark Cutifani is pulling all the levers he can as he raised full-year output guidance for everything except platinum - its most demanding operational challenge.

Like Rio in Australia, Anglo ramped up its own production at Kumba Iron Ore in South Africa – in its case by almost two-fifths. That was mostly down to a Cutifani-induced rethink of its Sishen pit operations, and also on increased output from its Kolomela mine.

Mr Cutifani has laid the groundwork to shift platinum production away from its more labour-intensive deep-level mines in Rustenberg to lower-cost output at Mogalakwena. Now it just needs to find investors to stump up the cash for the Rustenberg assets.

As with number-three platinum producer Lonmin, production is recovering relatively swiftly from the five-month strike that crippled the entire sector. As expected, however, platinum output is still nearly a third lower than a year ago.

There was reassurance too in copper.

Although production fell 15 per cent from a year ago on lower grades in its Chilean mines, Anglo steered investors to higher output for the full year. Pump up that volume.

Anglo is the sector turnround par excellence – not that any of the big miners is exempt from the need for diligent execution as commodity prices languish and costs rise.

But, just as Rio has attracted the attention of a rampant Glencore, so Anglo cannot afford to put a foot wrong - talking of which, as the year draws to a close, watch its upcoming third-quarter update for detail of progress on its flagship Minas-Rio iron ore project in Brazil.