The market is already somewhat on edge about Agarwal’s plans for Anglo American, which Bloomberg dubbed "mining’s biggest mystery". In a move that surprised Anglo American, Agarwal emerged as its biggest shareholder last year, and now owns a 21% stake in the miner.
There has been much speculation about Agarwal’s plans for Anglo American – whether he would want to take control, or lead a break-up of the conglomerate’s assets. What is clear is that Agarwal has been upbeat about South Africa’s prospects and President Cyril Ramaphosa’s "business friendly disposition" – which included the axing of unpopular former Mineral Resources Minister Mosebenzi Zwane.
He recently said the SA government welcomed his interest in Anglo American:
While Anglo doesn’t own any shares in AngloGold, the companies have a close association and the market may interpret the poaching of Venkatakrishnan as part of a long-term play for Anglo American, said one analyst, who wanted to remain anonymous.
Another analyst speculated that Venkatakrishnan appointment may in fact be the next step in assuming control of Anglo American. Firstly, Venkatakrishnan, who focused exclusively on gold for 18 years, will now be "trained" in running a mining conglomerate similar to Anglo American.
Also, his relationship with the current Anglo CEO and former AngloGold CEO, Mark Cutifani, could be key. They worked very closely together at AngloGold.
"You can even say that Cutifani groomed Venkat for his current role," the analyst said.
If Agarwal wanted to assume control of Anglo, the two could work together, even as co-CEOs, according to him. "But this could be many years in the future. In the meantime, Argawal has the money and the time to wait until everything aligns."
In the short term, appointing Venkatakrishnan, who has extensive experience in SA, may bode well for Vedanta’s involvement in the country. Vedanta already owns massive zinc operations in the Northern Cape and gas block along the north-western maritime border between South Africa and Namibia.
While AngloGold halved its SA production during Venkatakrishnan’s stint as CEO, he shouldn’t be seen as negative towards South Africa, says Yatish Chowthee, a mining analyst at Macquarie, Australia's biggest investment bank.
AngloGold sold a number of its gold mines, including in a 2017 deal to Harmony, but these assets were either at their end of their economical lives or required a substantial capital investment, in the case of Moab Khotsong deal.
Also, in his current position Venkatakrishnan is restricted to gold, while his new job will allow him to consider other commodities. Apart from zinc, Vedanta is invested in iron ore, copper and aluminium.
"The mining environment in South Africa has much improved in the post-Zwane era and more investment – including from Vedanta - may be expected," Chowtee says. Vedanta’s zinc Gamsberg operation is already the largest mining project in SA.
By early afternoon on Monday, AngloGold’s share price was down almost one percent on the news of Venkatakrishnan’s depature. Analysts say the announcement was a surprise.
Still, he was CEO of the company for five years, which is a respectable tenure for that position, says Arnold van Graan, a gold mining analyst and Nedbank. "Particularly given the fact that he was with the company for 18 years in all." He spent the past five years fixing AngloGold Ashanti, and may be looking for a new challenge, Van Graan added.
While a somewhat smaller company than AngloGold, Vedanta has a large global reach and exposure.
"Its growth prospects could be more exciting than that of the SA company."
AngloGold will be looking for a new CEO who has new ideas, says Van Graan. Someone who can steer the company in a slightly different direction.