The new chief executive of mining giant BHP Billiton PLC says mergers and acquisitions will not be a major part of his strategy.
Andrew Mackenzie, who is taking over as chief executive officer from Marius Kloppers, said during a media conference call Wednesday that his main priority will be to “run our very impressive ore bodies extremely well.” He added that while BHP won’t completely rule out mergers, they are “not central to my strategy.” Instead, he plans to concentrate on cutting costs and improving the company’s “capital discipline.”
BHP announced late Tuesday that Mr. Kloppers will resign in May after a near 20-year career at the miner including nearly six as CEO. He had come under pressure recently for sharp writedowns of some assets and a couple of failed takeovers including a $40-billion (U.S.) bid for Potash Corp. of Saskatchewan Inc. in 2010 which was thwarted by the Canadian government.
Mr. Kloppers, 50, said during the conference call Wednesday that the decision to leave was difficult but he that he felt “the time is right to pass the baton to Andrew.” He added that he was leaving with pride at what he had accomplished at BHP. And he said he has no plans after leaving BHP beyond returning to his native South Africa for a while.
His departure comes as BHP reported a 57-per-cent drop in profit for the first half of it fiscal year, the period ending December 31, 2012. Net profit fell to $4.24-billion (U.S.) from $9.94-billion in the same period a year earlier. Revenue decreased by 14 per cent to $32.20-billion, mainly due to plummeting prices for many commodities. BHP mines a wide variety of minerals but its biggest sources of revenue now come from iron ore, oil and gas.
Company chairman Jacques Nasser said the board considered some outside candidates for the CEO post but it preferred to promote an internal person. He said companies only “go external” if they are looking to change strategy or if they are in trouble.
Mr. Mackenzie, 56, grew up near Glasgow and trained as a geologist and geochemist. He worked for several years as a scientist and then joined BP PLC in 1983, where he worked largely on extraction techniques in the North Sea. He left in 2004 for Rio Tinto PLC and was recruited by Mr. Kloppers to BHP in 2007 to run the company’s non ferrous operations.
Mr. Mackenzie led BHP’s bid for Potash Corp. but on Wednesday he declined to discuss the failed takeover in detail, saying only that “there are always things that you take away” from unsuccessful bids. “We desperately wanted to acquire [Potash Corp.] but it was a regulatory issue,” he said. BHP is planning a $14-billion potash mine in Saskatchewan although the project is still subject to board approval.
Mr. Kloppers is the third CEO of a major mining company to leave in the last few months. Rio Tinto’s CEO Tom Albanese announced he is stepping down last month after the company posted a $14-billion write down from two failed acquisitions. And Anglo American PLC’s CEO Cynthia Carroll is leaving as well amid mounting pressure from investors about over spending at a mining project.