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MELBOURNE — BHP Billiton Ltd appointed the head of its non-ferrous business as its CEO to replace Marius Kloppers, the fourth global miner this year to change its top brass as the industry enters a new era of austerity.
Miners are now focusing on squeezing the most out of their best assets after coming under pressure from investors for splashing out on expensive projects and acquisitions and allowing costs to spiral out of control in the boom years.
BHPís appointment of Andrew Mackenzie, 56, as its CEO is a sign that miners are turning to men with strong operational credentials to focus on capital discipline, rather than deal makers, as commodity prices wane. Rival Rio Tinto appointed former iron ore chief Sam Walsh as its CEO last month.
The era where these big mining companies such as BHP go out and engage in these expensive corporate deals is over. Mackenzie and Walsh prove that, said Gavin Wendt, an analyst for MineLife in Australia. They can no longer go out and spend and spend as their investors stand on the side and watch in bemusement. Mackenzie, wooed by Kloppers from Rio Tinto in 2007, will move into the top job in May.
The appointment was announced as BHP reported a 43% slump in first-half profit to US$5.68 billion, its worst profit drop in more than a decade, and took US$3 billion in writedowns on its aluminium and nickel assets, in line with market forecasts.
BHP flagged last November it was looking for a new CEO, but Kloppers, 50, picked his own retirement date after nearly six years in the job and admitted retiring was a tough decision.
BHPís shares rose nearly 1% to a 17-month high of AUS$39.34 after Mackenzie’s appointment before dipping in a slightly firmer overall market.
Analysts said Mackenzie’s appointment was not comparable with the sacking of Rio Tinto chief executive Tom Albanese last month for misjudged deals in aluminium and coal.
CHANGE OF GUARD
Mackenzie, a prize-winning scientist who grew up in an industrial town near Glasgow, worked for oil and gas giant BP for 22 years before he entered the mining industry, giving him crucial experience in the key commodities BHP has targeted for growth as it aims to ease its reliance on iron ore.
For the rest of this article, please go to the National Post website: http://business.financialpost.com/2013/02/20/bhp-billiton-appoints-new-ceo-as-miner-suffers-worst-profit-drop-in-decade/