Iron ore chief out of BHP after multibillion-dollar loss

BHP Billiton will conduct a major shake-up to its leadership group after it announced a US$5.7bn (A$7.8bn) loss in the first half of the 2015/16 financial year.

The mega-miner announced the significant after-tax loss off the back of a revenue figure of US$15.7bn, which was down 37% year-on-year.

The miner cut its dividend from 62 to 16 US cents per share.

Upon making its results announcement, the company also announced “a new operating model”; the key element of which sees the departure of current iron ore president, Jimmy Wilson.

BHP will shift its current president of coal, Mike Henry, to become “President Operations, Minerals Australia,” putting him in charge of the company’s coal and iron ore operations Down Under.

It will also move its current copper president, Daniel Malchuck, to the head of its Minerals Americas operations, and will appoint Steve Pastor as president of its petroleum operations globally.

The changes will be effective from March 1.

BHP chief executive Andrew Mackenzie said the changes were “a continuation of our simplification journey,” following the spin-off of a number of the company’s non-core businesses in 2015.

“At the core of the new model will be assets dedicated to safety, volume and cost enabled by functions integrated globally and largely co-located with the assets,” Mackenzie said.

“Both assets and functions will have fewer layers and hence fewer people required to lead and run the organisation.

“This closer connection between management and operations will promote greater efficiency, rapid sharing of best practice and adoption of new technology to improve safety, productivity and learning – as well as management of risk.

“Our focused portfolio of tier one assets will now be managed through a vastly simplified operating model, positioning BHP Billiton to create new opportunities for value and growth into the future.”

Mackenzie said he was sincerely thankful for the services of Wilson, and his “exceptional leadership”.

“Jimmy Wilson has transformed Western Australia Iron Ore into one of BHP Billiton’s most important businesses and has led the way in introducing a simpler, more effective organisational model which continues to drive significant value for our shareholders,” he said.