BHP Group named Mike Henry, the head of its Australian operations, as chief executive officer to steer the world’s top miner through looming challenges from slower growth in China and investor pressure over climate change.
Henry will take over as the company debates its exposure to China, “the growth path there and how they can diversify away from that,” said Camille Simeon, a Sydney-based investment manager at Aberdeen Standard Investments, which holds BHP shares and manages about $670 billion in global assets. Henry, who will earn a base salary of US$1.7 million, will tour BHP’s operations for the rest of the year before making any decision on potential changes to the executive leadership team. He plans to update investors at February’s half-year earnings on initial plans for reforms, he told reporters in Melbourne.
“His biggest challenge will be to keep the return on assets going —they’ve had the advantage of growing iron ore over the last 4-5 years, but that’s tapered off,” said David Lennox, a Sydney-based resources analyst at Fat Prophets. “They’ve really now got to look at what’s going to be the next item to grow them.”
The producer will decide in early 2021 whether to press ahead with spending as much as US$5.7 billion to bring the Jansen potash project in Canada into production, adding the fertilizer to its roster. The crop nutrient would add a material with a demand outlook that’s tied to population growth, rather than metals-intensive urbanization in China, according to BHP. Some investors oppose the plan, arguing potash prices are likely to remain weak and projected returns are too low.
Source: Energy Industry News (energyindustrynews.net)
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