New chairman Kalidas Madhavpeddi. (Image courtesy of Dundee Precious Metals.)
Miner and commodity trader Glencore (LON: GLEN) has chosen non-executive director Kalidas Madhavpeddi to replace Tony Hayward as the company’s new chairman, completing a leadership overhaul at the company.
Madhavpeddi, a US citizen, joined the board of the Swiss firm in February 2020. He had previously led China Molybdenum International (CMOC) for almost a decade, until 2018.
During his time at the Chinese company, Madhavpeddi made a series of key acquisitions, including Freeport-McMoRan’s (NYSE: FCX) majority stake in the Tenke copper project in the Democratic Republic of Congo for $2.65 billion and Anglo American’s (LON: AAL) niobium and phosphates business in Brazil.
Madhavpeddi, 65, also spent more than 25 years at US miner Phelps Dodge, and is currently a non-executive director at Novagold Resources (TSX: NG).
Kalidas Madhavpeddi led China Molybdenum International (CMOC) for almost a decade, until 2018.
The announcement comes just one week after Gary Nagle replaced billionaire Ivan Glasenberg as chief executive officer and marks a shift to new leadership for the company, which is facing pressure from investors to cut carbon emissions.
“As the world transitions to cleaner forms of energy and mobility, our portfolio of commodities will allow Glencore to play a key role in helping us achieve the goals of Paris and play a key role in the ongoing energy and mobility transition,” Madhavpeddi said in the statement.
“I am very pleased that the board has appointed Kalidas as my successor,” departing chairman Tony Hayward added. “His history of working in the resources industry and familiarity of operating across the globe provides excellent experience for this appointment.”
Hayward, former chief executive of BP, joined Glencore’s board in 2011. He should have left the company at the end of a nine-year term, in line with a UK governance code. Yet, the board extended his stay to oversee the wider management changes.
Analysts had expected Glencore to appoint an internal candidate as its next chair although the timing may come as a surprise.
Focus on cobalt and copper
The appointment of Madhavpeddi highlights the weight Glencore is placing on its giant cobalt and copper operations in Congo, which are crucial to the electric vehicle and green energy revolution.
Instead of exiting coal, Glencore has committed to run down its assets by 2050, which will allow it to reach its net-zero emissions goal. That pledge includes so-called scope 3 emissions, produced when customers burn or process the materials the company mines.
The company, which has also set a short-term emissions reduction target of 15% by 2026 from 2019 levels, acquired last week Anglo American and BHP’s (ASX, LON, NYSE: BHP) stakes in the Cerrejón thermal coal mine in Colombia.
Glencore is currently the world’s No. 1 cobalt producer, thanks to its Katanga mine in Congo. It has spent billions of dollars developing cobalt and copper assets in the African country and plans to reopen a second operation in the country next year.
Madhavpeddi will start as Glencore chairman at the end of this month.