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BHP Begins Hunt For New Chief

Javier Blas and Helen Thomas in London
Tuesday, 6 Nov 2012 | 7:40 PM ET

BHP Billiton has quietly started looking for a successor to Marius Kloppers, chief executive, in what could herald a further shake-up in the leadership of the global mining industry following a five-year period of stability.

Greg Wood | AFP | Getty Images

The process, led by chairman Jac Nasser, is at a very preliminary stage and a succession at the top of the world's biggest mining company by market capitalization could take another 12 to 24 months, according to people familiar with the talks.

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BHP's move could mark a period of significant change in miners' executive suites, after several years in which chief executives of the largest global mining houses have clung on to their jobs despite the industry turbulence in the wake of the 2008-09 global financial crisis.

The four London-listed mining groups that dominate the industry – BHP Billiton, Rio Tinto , Anglo American and Xstrata – last saw major changes at the top in 2007, the year Mr. Kloppers took his job.

But the industry is set to see significant changes next year: Cynthia Carroll has announced she will step down as chief executive of Anglo American as soon as it finds a new head, while Mick Davis, Xstrata's boss, will depart if the merger between the group and Glencore closes later this year. Other international mining groups have seen changes at the top, including Vale of Brazil, Barrick Gold of Canada and Codelco of Chile, in recent months.

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The changes come as miners come under pressure from institutional shareholders to return more money to investors just as the price of metals and minerals from aluminium to iron ore decline, squeezing profitability in the sector.

BHP declined to comment specifically on Mr. Kloppers, but said that succession planning for the chief executive and senior management team was "an ongoing process and one of the most critical tasks of any board". The company added: "BHP Billiton's board has always ensured that it has a well integrated, continual succession process in place for our most senior executives."

Industry executives said it should not come as a surprise that the miner's board had started planning for Mr Kloppers' eventual departure, pointing to the need to avoid a situation similar to that at Anglo American. While Ms Carroll has announced her departure the company has just started to look for a new chief executive.

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"A board should discuss succession the moment they appoint the CEO," an industry executive familiar with BHP said.

Others, however, questioned whether discontent among BHP's shareholders after several setbacks including the failed attempt to take over PotashCorp and a collapse of a merger with Rio's iron business had contributed to the board's decision.

The company, however, highlighted that Mr Nasser praised Mr. Kloppers for his performance only a few weeks ago, saying: "We are very fortunate to have Marius as the CEO of the company, and he has been there for five years, and they've been five very, very successful years for us."