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.
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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.
