After 25 years working in and around the mining industry, Mike Henry has been given his first major role managing operations. And it’s a beauty.
In January, the former BHP Billiton marketing boss was made coal president, heading the mining giant’s lowest-margin business at a time when forecasts and prices for the commodity seem to be getting relentlessly worse and in which chief executive Andrew Mackenzie says he will not allocate capital.
But the 48-year-old Henry, who is regarded by company-watchers as a potential internal candidate to succeed Mackenzie, sees plenty of positives.
“I like a challenge and there’s lots to like here,” Henry tells The Weekend Australian from BHP’s coal headquarters on the Brisbane River. “In the first half (of 2014-15), we generated a 2 per cent return on capital and 2 per cent of BHP’s earnings before interest and tax,” he says, explaining coal’s current limited prospects for investment funds.
“My job is to take what we have and make sure that we’re getting the most we possibly can out of it. If we are a business that’s generating good returns in low prices, and I want to get there very quickly, it becomes a fantastic business when prices are higher.”
BHP’s coal unit it is focused on its 10 high-quality coking coal mines in Queensland’s Bowen Basin, which make it the world’s biggest exporter of the steelmaking ingredient.
While prices are languishing near 10-year lows and BHP’s 20 per cent coking coal profit margin is much lower than that of its iron ore, the other major steel ingredient, BHP feels the outlook for coking coal demand growth is more positive.
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