Cutifani warns mining stagnation invites external takeovers

Mark Cutifani, the former chief executive of Anglo American, has issued a stark warning that the mining industry faces a significant risk of acquisition by outside entities if it fails to accelerate its pace of innovation. Speaking at the International Mining and Resources Conference in Sydney, Cutifani argued that the sector is currently ill-equipped to handle the increasing complexity of modern mining operations. He highlighted that mines are penetrating an average of 40 metres deeper each year, while the permitting process for new projects can extend up to 20 years. This combination of deepening deposits and prolonged regulatory timelines is creating a gap that current technologies are not bridging effectively.

Cutifani stated that the industry is struggling to replace the resources it extracts, a challenge that will become more acute as operations move further underground. He noted that within a decade, the average depth of mining operations could increase by 400 to 500 metres, requiring technological capabilities that the sector has not yet mastered. This lack of progress raises serious questions about the ability of major producers to sustain mineral supplies in the long term. Cutifani believes that this failure to invest in long-term solutions could eventually lead to established miners being acquired by companies from other sectors that possess the necessary capital and technological expertise.

The former executive recalled a conversation from 2010 with Jeff Immelt, then chief executive of General Electric, which first crystallised his concerns about the industry’s trajectory. Immelt had asked what the biggest worry for his business would be in the next 10 to 20 years. Cutifani responded that General Electric would not be able to obtain the materials it needed because the mining sector was not innovating quickly enough. Sixteen years later, Cutifani observes little evidence that the industry has adequately addressed this fundamental problem. He argues that major producers remain too focused on short-term gains rather than balancing immediate operational improvements with longer-term research and development.

During his tenure at Anglo American, Cutifani oversaw the FutureSmart Mining program, which aimed to improve safety, productivity, and sustainability. He credited a combination of technological advances and operational efficiencies with helping the company deliver an average annual shareholder return of 22% over nine years. However, he maintains that the broader industry has not adopted this approach widely enough. He suggested that this stagnation is a key reason why major players outside the mining industry may begin purchasing large mining companies, as the sector is not fulfilling its primary role of securing future resources.

Cutifani’s comments coincide with his recent appointment as a non-executive director at Northern Star Resources, a Perth-based gold producer. He joined the board earlier this month following a recommendation by activist investor Elliott Investment Management. His arrival comes during a pivotal period for the company, which is ramping up its expanded KCGM operation in Kalgoorlie and facing pressure from Elliott alongside takeover interest from Gold Fields. The company is targeting a final investment decision by mid-2027 on its 13.2-million-ounce Hemi gold project in Western Australia, a development that new chief executive Suresh Vadnagra has described as a priority.

In his new role, Cutifani emphasises the importance of understanding the full potential of a mineral resource when planning major developments. He estimates that fewer than 30% of mining projects worldwide are designed or operating at their full potential, suggesting that companies routinely overlook opportunities to maximise their assets. He urges developers to consider a deposit’s longer-term potential when planning infrastructure and community investments, rather than designing solely around initial production expectations. Since leaving Anglo American, Cutifani has also established the consultancy Odin Partnership with former group director Tony O’Neill and several investment bankers, positioning himself to apply these development principles to current industry challenges.