Cutifani Warns Mining Companies Risk Takeovers if They Fail to Innovate

Mark Cutifani speaking at Anglo American’s 2019 Senior Leadership Conference. (Image: Lukedoddaa Wikimedia Commons.)

Former Anglo American chief executive Mark Cutifani has warned that mining companies risk becoming takeover targets if they fail to accelerate innovation, as deeper deposits, lengthy permitting processes and declining resource replacement create growing challenges for the industry.

Speaking at the International Mining and Resources Conference in Sydney, Cutifani said mines are becoming an average of 40 metres deeper each year, while securing permits for new projects can take up to 20 years. He argued that the industry is not developing the technologies needed to address increasingly complex mining conditions.

“So, we aren’t able to replace the resources that we’re mining,” he said. “On average, in 10 years, you’re going to be 400-500 metres deeper, and the technologies that we’re going to need to be successful with the complexities when we do it, we’re not doing well.”

Cutifani said the industry’s slow pace of innovation could undermine its ability to supply the minerals required by other sectors, potentially encouraging major companies outside mining to acquire established producers.

Innovation gap threatens future supply

Cutifani traced his concerns back to a 2010 conversation with then-General Electric CEO Jeff Immelt, who asked what posed the greatest long-term risk to the mining industry.

Cutifani recalled warning that mining companies might eventually be unable to supply the materials other industries needed because they were not innovating quickly enough. Sixteen years later, he believes the sector has made insufficient progress.

During his time leading Anglo American, the company pursued technological and operational improvements through its FutureSmart Mining programme, which focused on safety, productivity and sustainability.

Cutifani said he regarded investment in projects capable of transforming mining operations as essential. He credited technological advances and operational efficiencies with helping Anglo American deliver an average annual shareholder return of 22% over nine years.

However, he believes major producers remain too focused on short-term performance rather than developing solutions for the industry’s longer-term challenges.

“I think it’s a real issue, and one of the reasons why major players outside the mining industry will start buying large mining companies, because we’re not doing our job,” he said.

Northern Star faces major development decisions

Cutifani’s comments come shortly after he joined the board of Perth-based gold producer Northern Star Resources as a non-executive director. His appointment earlier this month followed a recommendation by activist investor Elliott Investment Management.

Northern Star is navigating several significant developments, including the ramp-up of its expanded KCGM operation in Kalgoorlie, pressure from Elliott and takeover interest from Gold Fields. New CEO Suresh Vadnagra is also settling into the role.

The company is targeting a final investment decision by mid-2027 for its 13.2-million-ounce Hemi gold project in Western Australia. Vadnagra said earlier in October that progressing the development would be a priority.

Cutifani said a thorough understanding of a mineral deposit’s full potential should be central to major project planning. He estimates that fewer than 30% of mining projects worldwide have been designed or are operating at their full potential, indicating that opportunities to maximise resources are frequently overlooked.

He urged developers to assess projects under different commodity price scenarios and ensure they remain viable under less favourable market conditions.

Cutifani also advised companies to consider the long-term potential of deposits when planning infrastructure and community investments, rather than designing projects solely around initial production targets.

Since leaving Anglo American, he has established consultancy Odin Partnership with former Anglo American group director of technical and sustainability Tony O’Neill and several investment bankers.

His appointment at Northern Star places him in a position to bring those development principles to a company weighing major capital commitments while managing shareholder pressure and competing strategic interests.