The CEO Who Wants to Change How People Think About Mining

By Chip Cutter 

In his six years at the helm of mining giant BHP Group Ltd., Andrew Mackenzie has tangled with an activist investor, faced a fatal mining disaster and made moves aimed at streamlining the company's business.

The result, he says, is a more transparent, less bureaucratic BHP.

The company's operations range from vast iron-ore pits in Western Australia to copper mines in Chile and offshore oil fields in the Gulf of Mexico. While his predecessors chased deals, Mr. Mackenzie, a geochemist who speaks five languages, has spun off assets, cut spending and dealt with an environmental crisis.

Last year, BHP sold the majority of its U.S. onshore oil-and-gas unit to BP PLC for $10.5 billion, ending a costly bet on U.S. shale. Activist hedge fund Elliott Management Corp. had lobbied BHP to sell the business after building up a stake of more than 5% in its U.K.-listed shares.

The company also has worked through the fallout from a November 2015 dam collapse at an iron-ore joint venture in southeast Brazil that BHP owns with Brazilian mining company Vale SA. The collapse killed 19 people and polluted hundreds of miles of rivers. The Brazilian government later sought billions in damages, and BHP and Vale agreed to settle some claims.

Now, Mr. Mackenzie sees other changes ahead. He wants to add technology to more of the company's processes and says employees' jobs are bound to evolve, among the reasons BHP recently appointed a chief transformation officer.

He recently sat down with The Wall Street Journal. Here are edited excerpts:

The Wall Street Journal: How has automation changed mining, and how do you see it evolving?

Mr. Mackenzie: I would say the changes have so far been quite small, but I think they're going to get a lot bigger. The whole future of work is one of our top challenges to figure out, because clearly there are opportunities for us to make our operations more productive or environmentally friendly and safer through embracing all of those things.

WSJ: What roles go away, and what does the workforce look like a decade from now?

Mr. Mackenzie: I think we'll have some of our more basic tasks like driving trucks, operating drills and some back-office work done more automatically, using bots or fully autonomous machines, and therefore it'd be a lot safer. We'll be much better at planning, and planners probably would have a bigger role. But the big change that will happen in my view, in a decade's time, is that we will be approaching a 50-50 male and female [workforce].

We've set this as a target, as a company. We really believe in gender balance, and we've worked at it very hard. It's tough. There's a lot we have to do to get there. We have to make ourselves accessible to a wider group of people.

WSJ: Mining is a male-dominated industry. Are new technologies changing that?

Mr. Mackenzie: It's not just automation that's allowing that. We've had to really shift our culture. You can't get away from the fact that there are a lot of unconscious biases, I would say in the world, but particularly in an industry that has been so male-dominated, where all the rules had been written by predominantly males, and predominantly white males. A lot of things we've had to change. You don't realize until you tackle a tiger like 50-50 [gender representation] as to how much discrimination exists and how much naysaying there is and how much you have to tackle head on.

WSJ: Tell me about a specific role and how it might be different a decade from now because of technology.

Mr. Mackenzie: We employ a lot of people as truck drivers. You'll have some truck drivers who have so much more information that they'll be much more flexible and creative, and their trucks will be maintained in a way that they will operate for a much higher level of uptime.

For the more routine jobs of just shuttling back between the mine face and where the ore is processed, that will increasingly be done by fully autonomous trucks. Some of the people who are driving these trucks might find that they actually end up controlling those trucks from a remote location.

WSJ: As a leader, how do you explain to employees that roles will change going forward without freaking them out?

Mr. Mackenzie: It's hard to completely calm individuals down if they like a particular role and don't want it to change. How we communicate is that we say a number of these jobs will just allow you to be much more effective at what a human does, and therefore you will have a more enjoyable job. You'll have machines to do the things machines do better.

In some cases where we have a lot of manual labor, we're likely to make the work easier. So you can do that work later in your career. You don't get timed out by age as much. It's much more accessible, for example, for women to do jobs.

WSJ: When you became CEO, I don't think you had a lot of experience with activist investors. How have they changed your management style?

Mr. Mackenzie: I do feel there were aspects of having an activist shareholder coming to me that I didn't fully appreciate. They're a big shareholder, they've got some good ideas. So, I said: Let's bring them on board and listen to them. We did listen to them hard. The challenge for me was that much of what they were telling me I knew, and we were doing things about. So the big learning I got was that in this modern world, we just have to be super transparent, and we have to accept that the world demands that.

Write to Chip Cutter at [e-mail]

(END) Dow Jones Newswires

May 08, 2019 09:13 ET (13:13 GMT)

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