Tom Albanese named Vedanta chief executive
Tom Albanese named Vedanta chief executive
By Andy Sharman and James Wilson in London and James Crabtree in Mumbai
Tom Albanese has been appointed chief executive of Vedanta Resources in a high-profile return to the helm of a global mining group a year after he quit as boss of Rio Tinto.
At Rio Tinto, Mr Albanese became a victim of the downturn in mining that claimed the heads of several leading executives in the industry, including Cynthia Carroll at Anglo American and Marius Kloppers at BHP Billiton.
He stepped down in January last year after Rio announced a sharp writedown on one of his key deals: the 2011 purchase of Riversdale’s coal assets in Mozambique. The acquisition was one of two ill-timed deals that he oversaw, alongside the $38bn cash purchase of Alcan in 2007.
Mr Albanese has been working with Vedanta since September as chairman of Vedanta Resources Holding, a subsidiary of the Indian resources group, although he did not sit on the board of the main London-listed company.
Anil Agarwal, Vedanta’s founding billionaire who still owns most of the company, will remain executive chairman of the company, raising questions about the degree of control Mr Albanese will have. He succeeds MS Mehta, who will retire at the end of March.
“This is a CEO role but Anil will be in that executive chairman role when it comes to M&A and strategy,” Mr Albanese said. “This is a business that wants to grow. The chairman and I have a very clear understanding of our vision for the business . . . We want to use this partnership between the two of us to make this business improve.”
Analysts at Citigroup said Vedanta had been perceived by the market as an Indian-centric company and the appointment of Mr Albanese “should help to globalise the business and remove this perception”.
But they added: “A key concern . . . will be whether Mr Albanese would have enough powers, given the controlling stake held by the Agarwal family. It is a step change for the leadership to be handed to someone outside the group, and the market is likely to wait and see if the new CEO is provided with enough cards to play.”
Mr Albanese is expected to have a more operational focus and he faces immediate challenges in turning round the fortunes of the complex mining and resources group. Shares in Vedanta have fallen by more than a quarter in the past year.
Bureaucratic hurdles have long affected the India-focused group in its home market, where Mr Agarwal has suffered testy relations with India’s Congress party-led government and its ruling Gandhi family in particular.
Such political wrangling delayed the group’s purchase of Cairn Energy’s cash-rich Indian oil division in 2011.
Further troubles have resulted in a $6bn investment in a new aluminium refining facility in eastern India being held up by environmental disputes.
Some see the likely defeat of the Congress party in India’s May election – and its possible replacement by the opposition BJP party led by Narendra Modi – representing an opportunity for the group to get back on track.
However, difficulties remain, including a negotiation for the purchase of residual government stakes in Vedanta’s formerly state-owned zinc and aluminium divisions.
Mr Albanese will hope that any future government will find ways to restart India’s iron ore exports from the state of Goa, which have been banned for more than a year, crippling exports and severely damaging Sesa Goa, Vedanta’s ore division.
Shares in Vedanta were up 4 per cent to 892.5p at the London close.
My focus as CEO will be on operational excellence, efficient cost management and sustainability to drive long-term value for all our stakeholders
- Tom Albanese
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