BHP's newly appointed CEO says to focus on Americas in new age for mining

By Melanie Burton

MELBOURNE, March 18 (Reuters) - BHP Group BHP.AX on Wednesday named senior executive Brandon Craig as its next CEO as the mining industry undergoes a generational shift amid a rush for copper, with Craig saying he would be "bringing to life" the development options bequeathed to him.

Craig, who has more than 25 years at the Big Australian under his belt and will succeed Mike Henry who has spent six years at the helm, noted that a lot of the potential for BHP's future lay in the U.S., Chile and Argentina.

While the appointment followed a worldwide search, BHP traditionally picks internal candidates. Until last year, BHP's head of Australia Geraldine Slattery had been widely viewed as a shoo-in to become its first female CEO, with Craig, now 53, yet to prove his mettle across different parts of the company.

But Craig has seen his star quickly rise, impressing with his leadership of BHP's Americas division and before that, its Western Australia iron ore business for three years.

"He's run the iron ore business, and the Americas is probably the most important business for BHP in the years ahead," said Andy Forster of Sydney-based Argo Investments. "I reckon he's super impressive."

M&A WOULD HAVE TO BE COMPELLING

Craig told a press conference he planned to keep BHP a diversified miner and would be focusing on organic growth for its four main assets - copper, iron ore, potash and coal, though he did not rule out mergers or acquisitions.

Any M&A opportunities "would have to be incredibly compelling to compete with that set of options that we have," he said.

He noted that Andrew Mackenzie, BHP's CEO before Henry, had winnowed BHP to its best core assets while Henry embarked on their development. His job, Craig said, would be to make those assets flourish in a new age for the mining industry.

The sector now has far more support from Western governments amid tensions with China, with the development of mining for minerals critical to new forms of energy and defence industries.

"The importance of mining to the economic ambition of security of nations around the world has never been more important or so well understood," he said.

He cited U.S. government support for the Resolution Copper mine, where BHP is a minority partner and Rio Tinto RIO.AX, RIO.L is the majority partner, as an example. On Monday, the companies gained control of acreage in Arizona needed to build the mine - a project slated to become a major U.S. source of the mineral but one that Native Americans have opposed for more than 20 years.

GENERATIONAL SHIFT

A key focus for the world's top miner will be improving relationships with governments and customers, he said.

BHP has been locked in a pricing battle with its biggest customer, China's Mineral Resources Group, which banned its steel mills from buying several of its products as the two hammer out annual supply terms.

"I do think it's really, really important that we continue to strengthen the relationships with our customers, particularly in China," he said, adding that senior BHP leadership would be visiting the top commodity consuming nation in the next few weeks.

Craig will step into the role on July 1 amid a generational refresh of leadership in the industry. In the past six months, gold miners Barrick Mining ABX.TO and Newmont Corporation NEM.N have replaced their CEOs, as has BHP spin-off South32 S32.AX, while Rio Tinto's new CEO Simon Trott is less than a year into the top job.

Australia's largest oil and gas producer, Woodside Energy WDS.AX, also named a new CEO on Wednesday, appointing interim chief Liz Westcott to the job.

HENRY'S LEGACY

Under Henry's stewardship, BHP became the world's top producer of copper, the most cost-effective conductive metal that is key to the energy transition. Copper accounted for the majority of BHP's profits for the first time in its most recent half-year results.

"He leaves behind now a vision for copper South Australia, a whole new copper precinct in Argentina and a pathway back to a million tons a year at Escondida," said analyst Glyn Lawcock of Barrenjoey in Sydney, referring to the copper mine in Chile that is the world's largest.

Henry also oversaw the company's exit from petroleum, the scrapping of its second listing in the UK, a greater emphasis on potash as well as several failed attempts at buying Anglo American AAL.L to expand BHP's long-term copper exposure.

That said, over his tenure, BHP has had slightly weaker total annualised returns of 17% than its peers Rio Tinto and Glencore which had 19%, while Fortescue FMG.AX had 29%.

Shares in BHP were up 0.9% in Wednesday afternoon trade after the announcement of Craig's appointment.