BHP names insider to replace Kloppers

Andrew Mackenzie, right, will replace Marius Kloppers, far left, as BHP Billiton CEO as company chairman Jac Nasser speaks in Sydney on February 20.

Story highlights

  • BHP Billiton has named non-ferrous metals division head Andrew Mackenzie as CEO
  • Replaces Marius Kloppers, who will step down in May as head of the mining giant
  • Comes as the world's biggest resource company reported a 40% slide in underlying profits
BHP Billiton has named the head of its non-ferrous metals division Andrew Mackenzie as its chief executive, replacing Marius Kloppers, who will step down in May.
The appointment of Mr Mackenzie, a Glaswegian who joined BHP in 2008 from rival Rio Tinto, came as the world's biggest resource company reported a 40 per cent slide in underlying profits.
Mr Kloppers' decision to leave BHP after a career spanning 20 years is the latest senior management change in the mining sector, which is under pressure from institutional shareholders to shun big acquisitions and projects and return more money to investors.
The four London-listed mining groups that dominate the industry -- BHP Billiton, Rio Tinto, Anglo American and Xstrata -- have all announced management changes at the top of their organisations in recent months.
The appointments reflect a more conservative outlook in the global mining industry, which is grappling with cost pressures and a weaker outlook for big commodity prices.
BHP chairman Jac Nasser said Mr Kloppers had left BHP a "safer and stronger company".
"Despite an exceptionally difficult economic environment during his tenure, Marius and his team have delivered for shareholders, significantly outperforming our peers in terms of total shareholder returns," said Mr Nasser.
However, Mr Kloppers is likely to be remembered for failed deals for Rio Tinto and PotashCorp of Saskatchewan and overpaying for shale gas assets in North America.
BHP started the search for a chief executive last year. Mr Mackenzie, who speaks five languages and held senior positions at Rio Tinto and BP, was one of four internal candidates seen as frontrunners for the job.
Mr Kloppers said the decision to retire had not been easy.
"I've been very fortunate to lead one of the world's great resource companies. Deciding the right time to retire was never going to be easy," he said.
"However, after almost 20 years with BHP Billiton, 12 as a senior executive and nearly six as chief executive, I believe now is the right time to pass the leadership baton."
News of his retirement came as BHP reported a 43 per cent fall in underlying earnings to $5.68bn in the six months to the end of December, in line with market expectations. BHP, which lifted its interim dividend 3.6 per cent to 57 US cents a share, blamed the fall on weaker commodity prices.
Shares in the company were down 1.1 per cent midday Wednesday in Sydney.
Mr Mackenzie, who has a doctorate in chemistry and a first-class degree in geology, said it was a privilege to be asked to lead BHP. He indicated there would no change to the company's strategy of investing in and owning large, low-cost, long-life assets.