‘There is no end game’: Inside BHP’s strategy

It feels as if BHP just finished its integration of OZ Minerals and the company is off on its global odyssey once again, with an eye now firmly on Anglo American.

A BHP under Mike Henry doesn’t sit still, something made clear by the company’s growing devotion to ‘future-facing’ minerals such as copper and potash. The Big Australia is also not afraid to launch inorganic growth bids when it feels the time is right.

And evidently to BHP, now is the time to combine two of the world’s biggest miners, for the benefit of, you called it, each companies’ shareholders.

Henry spoke at the Bank of America Global Metals, Mining and Steel Conference on the same day Anglo America revealed it would be shaking up its portfolio by divesting and demerging some of its assets, something which Anglo indicated had already been in the works prior to BHP’s takeover bid.

So what did Henry have to say?

He responded to questions regarding the Anglo deal with a straight bat, suggesting shareholders had the power.

“At the end of the day, it’s going to be up to shareholders,” Henry said.

“They’ve got to look at the respective plans, decide which one they believe is going to create the greatest value soonest, and they have to make a determination as to the likelihood of execution of those plans, including which team they believe is more capable and has a better track record of execution. It’s that simple.”

When asked by an audience member whether a revised offer would see BHP back off on its requirement to spin-out Anglo American Platinum and Kumba Iron Ore, Henry remained firm in the company’s plan.

“Platinum is not a commodity for BHP,” Henry said. “When it comes to iron ore, I’ve been clear iron ore is not the commodity that we’re looking at for major growth, we’ll look for incremental growth, low capital investment and so on in the existing (iron ore) business, but it’s not a business that we see as being one of the core growth pillars for us going forward.

“The path towards spinning businesses out is relatively clear, and there’s a long track record of being able to do that successfully.”

Closing out the Q&A session, Henry was asked, considering the clear growth measures BHP has put in place in recent years, whether the company was reaching its end game.

“There really is no end game,” Henry said. “And what I mean by no end game is, shareholders have a right to expect that I in the team show up every single day looking for how we can go about creating and unlocking more value for shareholders.

“Today, we believe that there’s an opportunity ahead of us to create value not only for BHP shareholders, but also for Anglo shareholders in the proposal for Anglo.

“But there’s a whole bunch of other things that we’re doing today within our existing assets and businesses when it comes to operational excellence, progressing organic options, greenfields exploration, some of these smaller early-stage entry plays that we have, it’s all geared towards creating more shareholder value.”