MELBOURNE, March 18 (Reuters) – BHP’s new CEO Brandon Craig takes the reins at the world’s largest listed miner as competition heats up for copper, geopolitical tensions escalate and relations with top customer China threaten to disrupt its strength in iron ore.
The South African-born engineer-turned-manager is a 25-year veteran with the company who only recently emerged as potential pick for the top job, but had been seen by many industry watchers as a rising star in the business.
Rather than focusing on wholesale organisational change or immediate big-ticket acquisitions, his early priorities are likely to centre on applying his operational expertise to firm up global weak spots.
Just hours after his appointment was announced, Craig took questions from media on issues from how the business would grow, whether it would spin out its coal or iron ore units, to opportunities arising from a Western push to realign global minerals supply chains.
He said BHP would put its head down to deliver on organic growth, adding any buyout options would have to be compelling.
“What’s going to be really critical is to continue to focus on building really strong relationships with both governments and customers,” he said.
As part of a global tour that leadership will embark on, flying to London later on Wednesday, they will also visit top customer China in coming weeks.
He noted that BHP is well experienced in managing geopolitical risk over multiple decades.
MORE EVOLUTIONARY THAN TRANSFORMATIONAL
A naturalised Australian with two sons, Craig holds a Master’s in Business Leadership and a Bachelor of Engineering (Mechanical) from the University of Natal, in South Africa.
People who have worked with him say he enjoys fishing and is a fan of heavy metal band Metallica.
Seen as generally low-key, he is nonetheless a charismatic and engaging leader, they say.
Along with its Americas division, which oversees its mainstay copper, the 53-year-old also led BHP’s Western Australia iron ore business, giving him top level experience across its two most important businesses amid growing geopolitical challenges.
“What comes to mind for me is the time I probably spent in the iron ore business, where you can forge really close relationships across the board with customers and governments that gives you pretty unique insights into how they’re thinking about the world,” he said. “That helps the company, like BHP to navigate very effectively.”
The leadership change allows an opportunity for BHP to reset relations with its top customer CMRG, with which it has been locked in a protracted battle over annual supply terms that has seen China ban its mills from buying some of BHP’s products.
Craig was selected for the job after a global and internal search by BHP, following outgoing CEO Mike Henry’s resignation, Chairman Ross McEwan said.
“It was pretty exciting, I have to say. I wasn’t quite expecting it,” he said, of McEwan’s phone call.
As recently as November, Henry said that he was energised by the top job and speculation grew that he would stay on, before he launched a failed attempt to capture Anglo American.
“BHP’s CEO transition appears more evolutionary than transformational,” RBC Capital Markets analyst Kaan Peker said in a note.
Craig’s appointment also comes as BHP’s focus shifts towards the Americas for growth, with incentives in Argentina, Chile, the U.S. and Canada more competitive than those in Australia, he said.
“We really want to see Australia be a successful nation…But I think it is very clear that when you engage across countries in different parts of the world, that a lot of these countries are putting in place very, very attractive incentive regimes to attract investment, and ultimately, Australia has to compete,” he said.
As companies retreat from ESG-linked issues like net zero, Craig said his commitments to those issues would not change, although BHP would apply a cost overlay.
“We will continue to pursue those but we want to pursue them with a level of economic discipline,” he said.
(Reporting by Melanie Burton; Editing by Sam Holmes)
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