BHP Billiton Chairman to Step Down Next Year -- Update

By Scott Patterson 

LONDON-- BHP Billiton Ltd. Chairman Jac Nasser said he plans to step down as chairman of the mining giant, ending a tumultuous six-year run that saw him replace a chief executive, oversee a recent dividend cut and struggle to deal with an environmental disaster in Brazil.

At the company's annual general meeting in London on Thursday, Mr. Nasser said he wouldn't seek re-election as its chairman at next year's meeting. The former chief executive of Ford Motor Co. said he'd planned to announce his retirement last year but decided to stay due to the tailings dam disaster at its Brazilian joint venture Samarco, which it operates with Vale SA, the Brazilian iron-ore giant.

"Now that the basic structure of the Samarco response is in place... I have decided that I will not seek re-election" next year, he said.

Mr. Nasser's tenure at BHP began in 2010 at the height of a global commodities boom driven by voracious demand in China. It ends amid the fallout of the collapse of the boom, which has ravaged the stocks of miners such as BHP and competitors such as Rio Tinto PLC, Anglo American PLC and Glencore PLC.

While mining stocks have rebounded this year amid signs of renewed appetite in China, they largely remain well below the peaks they hit about five years ago. When Mr. Nasser joined BHP, the mining industry, flush with cash, was in the midst of a rapid expansion and voracious merger boom that ballooned miners' balance sheets with debt.

In 2010, the same year Mr. Nasser joined the company, BHP launched a hostile campaign to take over Canadian potash titan Potash Corp. of Saskatchewan Inc. Led by its then-CEO Marius Kloppers, the $38.6 billion takeover battle, seen as one of the most contentious hostile bids in years, failed amid opposition from the Canadian government.

Three year later, Mr. Nasser replaced Mr. Kloppers with BHP's current chief, Andrew Mackenzie, then head of the miner's nonferrous-metals division.

BHP, along with other miners, saw its earnings sag in recent years during a bust in demand for commodities, including the high-grade iron ore that accounts for a large chunk of BHP's sales. But BHP was seen by Wall Street as among the most resilient miners, due to its portfolio of low-cost iron-ore operations in Australia. Buoyed by its iron-ore profits, the company vowed it would maintain its progressive dividend. When asked in August 2015 whether BHP would contemplate a dividend cut, Mr. Mackenzie told analysts: "Over my dead body sounds a little strong, but it is almost right.

But in February, BHP slashed its dividend after recording a $5.67 billion first half loss due in part to a massive write down of its U.S. energy assets. Mr. Nasser at the time said the company now believed "the period of weaker prices and higher volatility will be prolonged."

Much of Mr. Nasser's time in the past year has been spent dealing with the Samarco tailings dam disaster, which killed 19 people and saddled BHP and Vale with billions in reparations payments. He said Thursday that the past year has been "one of the most challenging periods in the long history" of BHP, "none more serious than Samarco."

"We are deeply sorry for all those impacted by this tragedy," he said. Mr. Mackenzie said Thursday that the Samarco disaster has "left a deep scar on our company."

Write to Scott Patterson at [e-mail]

(END) Dow Jones Newswires

October 20, 2016 10:32 ET (14:32 GMT)

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