Mark Cutifani, the CEO of London-based diversified mining and metals conglomerate, Anglo American, was recently in India to assess the potential for investments in the country.
Mark Cutifani, the CEO of London-based diversified mining and metals conglomerate, Anglo American, was recently in India to assess the potential for investments in the country. Speaking to Surya Sarathi Ray of FE, he explains his company’s strategy for India. Excerpts:
Iron ore prices have been very volatile in the recent past. How do you see the prices going forward?
As we look at the market today, demand for iron ore is still reasonable and growing, particularly for the higher quality ore that we produce. In the last five years, there has been a lot of investment in iron ore projects. So, there is a lot of supply in the market. Today, the price is around $57/tonne; it has been as low as $44 recently. Mind that the price went up to around $200 per tonne a few years back. In all likelihood, the prices will settle nearer to today’s level for some time to come. I think iron ore will be a tough commodity market for some more time.
Are you looking at investing in India?
In the last five years, we have invested in new iron ore mines, new coal mines in Brazil and Australia. We are also investing in diamond mines in South Africa, Botswana and Canada. So, we will look at the Mines Act of India, the prospectivity on the ground that is available and compare that with other geographies. But, in the next 12 to 18 months, we will be very diligent in assessing the information, that is, the quality of information on the deposits. Although we are encouraged by the possibilities in India, it is still premature to talk about investments. We are the number one supplier of diamonds and iron ore to India; the number two supplier of metallurgical coal to India. We also send copper to India. We are in a continuous process of relationship-building with India.
If at all you plan to participate in the forthcoming bidding for iron ore mines in India, what markets would you be mainly looking at – domestic or the export markets?
We will clearly be very sensitive towards India’s needs. We may focus on the local market, but could also look at the export markets. We must always remember that it is a globalised market; if the market mechanisms are respected, then we are open to both domestic and export opportunities.
Indian government encourages value-addition of iron ore domestically over exports of the raw material from the country. So there is a 30% export duty. What’s your take on that?
We look at all the conditions in any country and our decisions are based on the total package – it is a holistic approach. We have a very good reputation as a development partner, particularly in the fields of enterprise development, education and healthcare, so we look at all these fields. Our focus is on ensuring that we understand the government’s priorities and the needs of local communities.
Sections of the local industry alleges that India is a highly-taxed country. Will it come in the way of your investment decisions?
We look at all jurisdictions and make decisions based on the relative attractiveness; tax is just one element. What is most important for investment is regulatory stability and general certainty.