MENU

More change at the top: BHP chief quits

BHP Billiton (ASX: BHP) chief executive Marius Kloppers has formally resigned and will be replaced by Scottish-born non-ferrous division head, Andrew MacKenzie from May 10.

The news comes as the world’s largest miner reported a 58% fall in first-half net profit to US$4.2 billion, primarily due to falling commodity prices, and is just over a month since Rio Tinto Limited (ASX: RIO) replaced its CEO, Tom Albanese with its highly respected head of iron ore operations, Sam Walsh.

Management changes at resources companies have accelerated as the sector goes through a period of uncertainty. Another major miner, Anglo American recently announced the appointment of Mark Cutifani as its CEO, replacing Cynthia Carroll. With commodities prices falling, most major mining companies have looked to consolidate their core operations, cut back on exploration expenditure and reduce costs to prop up falling earnings.

South African-born Mr Kloppers has been with BHP for almost 20 years, with 12 of those as a senior executive and six as the CEO. His resignation had been well flagged, with BHP confirming in November 2012 that it was preparing for his departure, on the back of a continual succession process for its senior executives.

Cynics might argue that a string of mistakes had led to an earlier-than-planned departure by Mr Kloppers. Those include the missed merger with Rio Tinto, the failed takeover of Canada’s PotashCorp, the shelved expansion of Olympic Dam and the delayed outer harbour project at Port Hedland, as well as writedowns on its recent purchases of US shale gas assets, not to mention further writedowns at its Australian Nickel operations in Western Australia.

Foolish takeaway

After years of almost “expansion at any cost”, it appears the major resource companies have changed tack and will now be managed through a period of consolidation. Commodity prices are expected to moderate further as China matures following a period of steel-intensive, infrastructure-led growth. That is likely to see the majors focus on increasing volumes of their core products, cutting non-core operations and a heavy focus on cost cutting.

Oil, copper, and gold continue to be in high-demand — and their popularity doesn’t look to be slowing. We’ve uncovered three companies poised to benefit from the rising prices of these commodities. Get our brand-new report — “3 High-Risk/High-Reward Resources Stocks” — FREE!

More reading

The Motley Fool’s purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead.  This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool writer/analyst Mike King owns shares in BHP.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.