BHP Billiton has named copper unit head Andrew Mackenzie as chief executive to succeed Marius Kloppers, who failed to deliver on $200 billion (R1.8 trillion) of potential takeovers.
Mackenzie would take over in May, the Melbourne-based mining house said yesterday, as it posted a 58 percent decline in first-half profit. Deals that were aborted or rejected under Kloppers, who took the helm in 2007, included hostile bids for Rio Tinto and Potash Corporation of Saskatchewan.
Kloppers is the third head of a global mining firm to step down since October last year as producers struggle with project write-downs, escalating costs and the aftermath of failed deals. The appointment of Mackenzie, a former veteran at BP who joined from Rio Tinto in 2007, would not change BHP Billiton’s strategy, chairman Jac Nasser said yesterday.
“Mackenzie is… well regarded, quite an experienced executive, but perhaps he [will] be a little bit more focused on running the operations,” said Paul Xiradis, the chief executive at fund manager Ausbil Dexia. “That’s going to be the focus rather than expanding.”
BHP Billiton fell 0.9 percent to close at A$38.65 (R355) in Sydney yesterday, trimming its gain for the past six months to 17 percent. It outperformed Fortescue Metals, which lost 5 percent, and Rio Tinto, down 1.6 percent. The JSE-listed shares, however, fell 4.1 percent to R296.88.
“There are… powerful synergies that you can unlock between mining and petroleum,” Mackenzie said. “Petroleum has a fundamental part to play in our company and we’re… possibly the only company that can create value through unlocking those synergies.”
Kloppers, who has a doctorate in materials science from the Massachusetts Institute of Technology, gave up his fiscal 2012 bonus after booking a $2.84bn charge last August to write down the value of shale gas assets in the US.
BHP Billiton’s decision to abandon the bid for Rio Tinto during the depths of the financial crisis had laid the foundations for the group’s growth since then, Kloppers said, adding that its returns to shareholders had “dwarfed” its peer group of global mining companies.
Nasser said the firm had returned $36bn to shareholders in the past five years – more than any of its peers.
BHP Billiton had started looking for a successor as soon as Kloppers joined, with the process stepping up in the past six months, a person close to the selection process said.
Nasser, who backed Kloppers after the August result, said yesterday that the appointment of Mackenzie was a result of a planned process.
Mackenzie, who grew up near Glasgow, holds a doctorate in chemistry from the University of Bristol and pioneered extraction techniques in the North Sea for BP. He joined Rio Tinto in 2004 and as chief executive of industrial minerals he oversaw the building of a $5bn titanium mine in Madagascar.
BHP Billiton’s net income in the six months to December was $4.2bn, including $1.4bn in one-time charges, down from $9.9bn a year earlier. This missed the $5.6bn median estimate of five analysts surveyed. BHP Billiton joined Rio Tinto and Anglo American in reporting a drop in earnings as waning global growth last year prompted lower commodity prices and some global mining groups to slow expansion.
Kloppers, who holds a bachelor’s degree in chemical engineering from the University of Pretoria, sold $4.3bn of assets in the half and put $68bn of projects on hold. – Bloomberg