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2020 vision: new BHP boss for next year

Australia chief Mike Henry to take over world's largest miner on 1 January
November 14, 2019

BHP (BHP) chief executive Andrew Mackenzie will step down at the end of the year after six years at the helm, and will be replaced by the major diversified miner’s Australian boss, Mike Henry.

IC TIP: Hold at 1,675p

Mr Mackenzie’s tenure has included a reshaping of the portfolio, the Samarco dam disaster in Brazil and recently a commitment to cutting its own emissions and those of its buyers. Mr Mackenzie’s past three years have seen the recovery of the business from the share price and dividend lows of 2016, when iron ore bounced between $55 (£43) a tonne (t) and $90/t and back. Since that difficult year, net debt has been pared back two thirds to $10bn and investor payouts returned to strength. 

The new chief executive has run BHP’s Australian business since 2013. The 53-year-old Canadian has worked across the business after joining in 2003, joining the executive team in 2011 as chief marketing officer. Mr Henry now has several major political and operational decisions to make. He will be familiar with the questions posed over BHP continuing to produce thermal coal, as these assets are in Australia, and his position as vice president of the coal-pushing Minerals Council of Australia (MCA) will come under more scrutiny. Mr Henry also has the massive Jansen potash project in Canada to consider. Just last month, Mr Mackenzie said the company would decide whether to build the Saskatchewan mine in 2021. The outgoing CEO has supported the $5bn project since early in his tenure. 

BHP said the “thorough succession process” had identified Mr Henry has the best candidate. There had been speculation that chief financial officer Peter Beaven would take the job – the same move made by former CFO and CEO Chip Goodyear in 2003 – but Mr Beaven reportedly stepped out of consideration in September. Mr Henry will be paid $1.7m a year in base salary. 

BMO analyst Edward Sterck said major changes under Mr Henry were unlikely. “We think he might consider exiting thermal coal given how unpopular it is becoming with investors, that Jansen is probably still going to go ahead (there are no obvious buyers for it), and that the [dual-listing] structure will remain unchanged,” he said.