London: Vedanta Resources Plc chief executive officer (CEO) Tom Albanese will leave the $2.7 billion Indian resources giant by the end of August after three years in the job, with billionaire chairman Anil Agarwal leading the search for his replacement.
Albanese, 59, has headed Vedanta since 2014 and was previously CEO of Rio Tinto Group, the world’s second-biggest mining company. His contract was due to expire 31 March, but has been extended by five months while Agarwal searches for candidates with “appropriate global experience,” the London-based company said in a statement Thursday.
The former Rio CEO took the reins of Vedanta just before an industry downturn that savaged the stock prices of even the biggest miners. He then steered the zinc, copper and aluminium producer through a recovery from depressed prices and sagging demand that had focused investor attention on bulging debt positions built up during the boom years.
Albanese “played a major role behind the cost cutting and cost optimization initiatives,” Goutam Chakraborthy, an analyst at Emkay Global Financial Services, said by phone from Mumbai. “The company is at a turnaround point and the commodities market is going to do better going forward.”
News of Albanese’s departure comes as Vedanta’s billionaire founder Agarwal lays out a more expansionary strategy for the business along with his web of Indian resources companies including the $19 billion Hindustan Zinc Ltd.
Earlier this month, Agarwal’s closely held Volcan Investments Ltd said it would invest $2.5 billion in Anglo American Plc, gaining a 13% foothold and making the buyer Anglo’s second-biggest investor.
Mining industry veteran Albanese headed Rio Tinto in 2008 when it fended off a hostile takeover offer from rival BHP Billiton Ltd., at the time the largest proposed deal in the world. In response, Rio undertook under Albanese’s leadership two deals totaling more than $40 billion that would later sour, resulting in his departure from the company.
More recently, Albanese has been caught up in a probe involving his former employer and the giant Simandou iron ore mine in Guinea. A 2011 email exchange involving Albanese showed executives discussing the merits of a $10.5 million payment to a consultant, a friend of Guinea’s president Alpha Conde, who offered “very unique” services thanks to his “closeness to the president.” Albanese has previously declined to comment on the fee.
Following an internal probe, Rio has referred the payment to regulatory authorities in the US, UK and Australia. Earlier this month the Australian Federal Police confirmed they were investigating the payment. Rio Tinto fired senior executive Alan Davies for his role in negotiating the payment with the consultant in November.
News of Albanese’s departure from Vedanta comes a day after Chairman Agarwal said former Anglo American CEO Cynthia Carroll had left as chair of Indian unit Vedanta Resources Holdings last month.
Vedanta Resources shares advanced 4.2% to 823.50 pence by 3:56pm in London, outperforming the 0.8% gain in the 14-member FTSE 350 Mining Index.