Acquisitions not central to BHP plans, says Ken MacKenzie
Ken MacKenzie has played down the prospect of BHP using its strengthening balance sheet to dip into the market to grow the company’s asset base.
BHP chairman Ken MacKenzie has played down the prospect of BHP using its strengthening balance sheet to dip into the market to grow the company’s asset base, saying acquisitions will not be “central” to the company’s strategy.
Speaking to shareholders at BHP’s annual Australian meeting on Wednesday, Mr MacKenzie said BHP would continue to sharpen its portfolio to focus on commodities most in demand as the world looked to a lower carbon future, such as nickel and copper, but told reporters BHP was unlikely to splash cash on the market through mergers and acquisitions.
“M&A can be part of our forward value creation plan, but it’s not central to our forward value creation plan,” he said.
“We believe that value is created at the bottom of the cycle. We’re focused around future facing commodities. So in terms of growth and where we want to add to our portfolio – copper, nickel and possibly potash are very much top of our list.”
BHP chief executive Mike Henry also told shareholders BHP planned to gradually shift its portfolio in the long term to refocus the company on copper, nickel and other so-called “future facing commodities” such as potash.
“Global trends such as the electrification of transport, decarbonisation of power, population growth and rising standards of living are expected to drive demand for copper, nickel and potash – future facing commodities – even as growth in demand for iron ore, metallurgical coal and oil and gas slows,” he said.
“We are actively managing our portfolio to protect and grow value.”
The BHP boss recently reshaped his leadership team to include the appointment of chief development officer Johann van Jaarsveld, flagging a greater emphasis on exploration and the acquisition of early stage development assets.
“We will create and secure more options through innovation, exploration, early stage entry and well-timed acquisitions of attractive resources and assets,” he told shareholders.
“We have already made some progress here, adding copper and nickel options to our portfolio earlier in the year, and we are progressing towards a final investment decision on our potash project in Canada next year.”
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