Ex-Anglo boss to head $4bn gold float

Philip Baum bounces back from boardroom ousting to land top job at the Russian steelmaker Severstal ahead of FTSE-100 listing
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The Independent Online

Russian steelmaker Severstal has hired former Anglo American boss Philip Baum to lead the spin-off of its gold unit into the FTSE 100.

The move is a stunning turnaround in fortune for Mr Baum, who was ousted as head of the ferrous metals business ast Anglo a little over a year ago, when a layer of management was removed. An Anglo lifer, he was thought to be a potential future chief executive, but will now take that role at Severstal Gold instead.

Severstal intends to list a significant minority stake of around 35 per cent of the gold division in London during the first half of this year.

It is believed that Severstal is looking to sell the shares at a price that would value the gold unit at more than $4bn (£2.6bn), which would comfortably place it in the FTSE 100 index of biggest listed companies.

Severstal and Mr Baum have been in discussions for some months, but it is under stood that the contract was recently signed-off by the Russians.

A mining industry source said: "Baum has the kind of experience Severstal was looking for. He had been in a big mining house [Anglo] where he worked a lot in Africa, which will be a big part of the future for Severstal Gold."

As well as the domestic and neighbouring markets of Russia and Kazakhstan, Severstal Gold has assets in Burkina Faso. Last year, Severstal bought Crew Gold, which has a big mine in Guinea, West Africa.

The original plan was to list Severstal Gold in 2010, but the volatile equity markets meant that the Russians could not be certain of getting their desired price. However, Severstal is keen to press ahead should the markets prove less choppy, as this is a good time to cash in, given that gold reached a record $1,431.30 per ounce last month.

Such a major flotation would be a boon to the London Stock Exchange. Although money raised from listings in 2010 broke £10bn for the first time in three years, this is still well down on the pre-credit-crunch boom years.

Alexei Mordashov, the Russian billionaire who controls Severstal, has ambitious expansion plans. Severstal is trying to buy the Australia- and London-listed Berkeley Resources, which explores for uranium in Spain, though the parties have so far been unable to agree terms.

A Severstal spokesman declined to comment on Mr Baum's appointment.