New BHP chief executive, the ‘affable’ Andrew Mackenzie, has different style to prdecessor Marius Kloppers.
Photo: BHP Billiton
BHP has taken pains to highlight chief executive Marius Kloppers’ role in recruiting his successor Andrew Mackenzie – by pointing out that Kloppers recruited the Scottish executive into the company in the first place. But observers see the two men in completely different lights.
“He’s affable,” says one analyst who met Mackenzie during a visit he made to Australia last year. “He’s less of a cold fish than Marius. Maybe Marius is very cut and dried but Andrew is slightly more human. He could be a softer touch and more diplomatic inside the group and outside.”
“That’s not to say Marius was bad,” he adds.
The 56-year-old chief executive of BHP’s non-ferrous operations will take over from South African-born Kloppers on May 10, the world’s largest diversified minerals company said on Wednesday. He joined BHP in 2008 from rival Rio Tinto, where he was chief executive of its industrial minerals and diamonds operations.
BHP shares, which have gained 7 per cent over the past 12 months, were trading down 1 per cent on Wednesday after the announcement, which coincided with the company’s reporting of a 43 per cent fall in interim underlying earnings to $US5.683 billion, in line with expectations.
Neither analysts - nor the company itself - predict any change in strategy.
“We’ve chosen a new leader but that’s not to say we’ve chosen a new strategy,” chairman Jac Nasser said in a press conference introducing Mackenzie.
Mackenzie himself was certainly singing from the same song sheet.
“We have a very good strategy,” he said. “If you want to look for something on me, it’s an even more laser-like focus on execution of that strategy.”
As head of non-ferrous operations, Mackenzie is responsible for mining operations such as Escondida, the world’s largest copper mine, in Chile. The decision to shelve the company’s planned $20 billion expansion of the Olympic Dam copper and uranium mine in South Australia – one of a number of cutbacks in capital spending Kloppers had earlier outlined and was forced to cancel – also came under him.
Mackenzie’s promotion did not reflect any role he may have played in cancelling the plans, however, as BHP’s decisions to spend - and to cancel spending plans - were made as a team, the analyst said.
“When times are bullish, as a team they determine strategy,” he said “But when it’s a time of change, they do that as a team. He (Mackenzie) wasn’t the Robinson Crusoe who said ‘Let’s do this’.”
Mackenzie, who had a 22-year career at oil giant BP before joining Rio, also said BHP’s petroleum operations would continue to benefit the company.
“I believe that there are some quite powerful synergies you can unlock between mining and petroleum,” he said. “Petroleum has a fundamental part to play in our company and we are one of the few companies, possibly the only company, that can create value through unlocking those synergies.”
The company said it will disclose Mackenzie’s remumeration before he takes up the post. Last year he earned a salary of $US1.18 million, along with a bonus of $US629755 and pension payments of $US426000. Last year Kloppers took a salary of $US2.2 million, with pension payments of $880400.
Mackenzie, who is married and has two daughters, will move to Melbourne to take up the post. Kloppers, appointed chief executive in January 2006, replacing Chip Goodyear, will leave the company on October 1.