* Analysts say more reassurance needed after board review
* See no immediate boost for shares
By Clara Ferreira-Marques
LONDON, Sept 29 (Reuters) - Investors will need convincing that mining group ENRC has put recent power struggles behind it, analysts said, after a long-awaited review made little change to its board.
The Kazakh miner launched the review in June, after long-running tensions between the group’s founder shareholders and some board members spilt over into a public spat that saw two well-known independent non-executive directors voted off the board.
Shares in ENRC have been battered as investors fretted over corporate governance, underperforming the market by almost 20 percent since the start of the year. They currently trade at a 13 percent discount to the sector, on a 2012 P/E basis.
ENRC sought to draw a line under speculation over internal power struggles late on Wednesday, with the conclusion of the review which kept both the chairman and the chief executive in their roles and the founding shareholders as silent partners.
Analysts welcomed the end of months of uncertainty and the chief executive’s decision to withdraw his resignation, announced in February. But they warned a board where there was only one new name -- Terence Wilkinson, chairman of Century Aluminium , in which Glencore owns a 44 percent stake -- was unlikely to provide an immediate boost.
ENRC stock was trading down 0.3 percent around 1050 GMT on Thursday, outperforming a 1.4 percent drop in the broader UK mining sector .
“Near-term concerns may have been eased following the review but with only one new member, the board has seen only minimal changes,” RBS analyst Nick Hatch said in a note.
“Longer term fears that the boardroom battles seen in 2011 may be repeated could remain a concern for investors.”
Alexander Mashkevitch, one of the three founders, had been named as a candidate for the chairman’s role. That potential move had been seen by some investors as a backward step but by others as a way of clearing up the issue of who drives ENRC.
Instead, ENRC directors said Mashkevitch and other shareholders were clear they would not be involved in the day-to-day running of the company.
“If Mashkevitch is happy to let this board operate as it should that will be fine, but ... people are going to want (reassurance) that the founders will support the board,” analyst Gavin Wood at Arbuthnot said.
“Investors will want to wait and see, so it may be a gradual recovery of the share price relative to the sector. It is positive, but people will need some convincing.”
Investors will in particular seek reassurance that the decision to keep Mashkevitch off the board was not prompted by the UK regulator, which had been considering whether he was “fit and proper”, a key test for UK company directors.
The company said Mashkevitch had “absolutely not” been turned down by regulators, but said a decision had been made instead to back a fully independent board.
Key to ENRC’s appeal is its portfolio of high-potential, low-cost assets which include Brazilian iorn ore, Mozambican coal and Congo copper.
ENRC has spent more than $2 billion over the past two years on acquisitions that, analysts say, have neither fully fed through to the bottom line nor to its shares. (Editing by David Holmes and Erica Billingham)