MELBOURNE Feb 21 Andrew Mackenzie, a low-key
operations man, beat higher profile rivals to the top spot at
BHP Billiton, but his record shows he won't shy away from the
tough calls needed to exit the top global miner's loss-making
BHP is the last of the big miners to replace its chief
executive, at a time when empire builders are being ousted in
favour of more conservative appointments, picking a man
recognised for his political nous and a more common touch than
Mackenzie, who ran some of BHP's toughest assets, is also an
executive virtually handpicked by the miner's previous boss,
Marius Kloppers, and closely linked to the company's mega
projects and deals including an ill-fated tilt for Potash Corp
Where an external appointment would have signalled a shift,
Mackenzie has been read as a steady hand at the tiller.
"I wouldn't say he was an empire builder, I wouldn't say he
was conservative. I'd just say he's a very intelligent chap who
knows how to do business," said a former colleague at oil major
BP, who asked not to be named.
The Glasgow-raised geologist and academic, spent 22 years at
BP and more than three years at BHP rival Rio Tinto
, before jumping ship to head up BHP's base
metals, uranium and potash units, managing 50,000 people across
"There are many things that will not change, most notably
the strategy which has served us well," Mackenzie told
reporters. "My job is to sharpen the focus."
BHP Chairman Jac Nasser was also at pains to stress there
would be more of the same from the miner's new boss, sweating
its best assets as hard as possible and slashing costs,
including capital spending, exploration and operational costs.
It will be third-time lucky in a tilt for the top for
Mackenzie, a former chairman of influential left-leaning British
think tank Demos who left BP after losing out in the race for
the top echelons. He later lost out at Rio too, where he was
overlooked for the chief executive role that went to Tom
Albanese in 2006.
"I think he's not as brash and outspoken as some, that's one
reason he left BP," said one British oil industry executive who
has worked with Mackenzie.
"Some of those who stayed were more brash and outspoken but
without the wisdom of someone like Andrew."
Mackenzie is not afraid of ditching major projects, selling
or shutting down assets, based on tough decisions he has had to
make in the non-ferrous division.
Under him, BHP has shrunk its uranium aspirations in the
wake of Japan's Fukushima disaster.
His division pulled the plug on a long-delayed $20 billion
expansion plan for BHP's Olympic Dam copper and uranium mine
last August, earning the ire of the South Australian state
government and resulting in more than 250 jobs being cut.
BHP also agreed to sell its undeveloped Yeelirie uranium
deposit to Canada's Cameco Corp last year for $430
Those moves suggest he would not hesitate to sell BHP's
aluminium and nickel businesses, which together reported a $285
million loss in the December half and have already been set
aside as "non-core", but only for the right price.
"There are non-core assets, but we won't hoof them out for
nothing," Mackenzie told reporters in London.
Investors are looking for the new chief to cast a fresh eye
over the company's assets to ensure they all meet its long-held
mantra of being large, long-life, low cost and expandable, and
help position the company to return more cash to shareholders.
"I think some decisive action on underperforming assets
would be welcome," said Ben Lyons, who helps manage A$400
million at ATI Asset Management, which owns shares in BHP.
OIL, POTASH FUTURE?
In oil and gas, Mackenzie worked in a range of jobs at BP
from running its oil and gas reservoirs to making plastics, and
said he sees huge opportunities for extracting savings by
marrying the petroleum business more closely with mining at BHP.
But in the wake of BHP's $17 billion foray into shale gas in
the United States just before gas prices slumped, leading to
nearly $3 billion in writedowns, he is unlikely to splash out on
any more energy acquisitions in the sector in the near term.
In general, he said M&A was largely off the agenda.
"You would be wrong to say that M&A is completely excluded,
but it is not central to the strategy that I am shaping up," he
told reporters. "It is about running what we have extremely
Mackenzie may have been picked not just for his oil and gas
expertise but also for his background in chasing potential
growth in potash, a commodity he has been involved in ever since
entering the mining industry.
So far his efforts have been thwarted. His non-ferrous arm
put on hold the $8 billion Jansen potash project in Canada last
year, holding off BHP's expansion into a commodity that he has
been involved in ever since entering the mining industry.
At Rio Tinto he worked on a potash project in
Argentina that was eventually sold to Brazil's Vale.
And in what may have been his biggest disappointment, he was
the point man in Canada, along with BHP's now chief financial
officer, Graham Kerr, on BHP's failed $39 billion bid for Potash
A former co-worker in Australia said while some more
charismatic executives may have missed out on the top job at
BHP, Mackenzie was probably the right man for now.
"Maybe for the times he's the right guy. He'll be pretty
good, very diligent and calm and probably not rock the boat."