Kloppers faces axe as BHP seeks replacement

Marius Kloppers, once viewed as the boy wonder of the world's mining industry, now seems set to get the axe as BHP Billiton boss.

A BHP Billiton spokesman this week confirmed that the company was on the lookout for a replacement for Kloppers after the Financial Times reported that "the company was actively seeking to replace Kloppers within a year to two years".

Since Kloppers took the reins from Chip Goodyear in October 2007 his biggest sins have been his inability to pull through large mergers and acquisitions and his micro-managing ways.

Kloppers has a reputation for being controlling, even when it comes to shareholders and fund managers who have had to forget about capital payouts or higher dividends.

Nevertheless, South Africa-born Kloppers has managed to hold on to the top job longer than his three predecessors and to do "less-badly" than his rivals by running a tight ship.

BHP is the largest mining company in the world with a market capitalisation of almost $112-billion and Kloppers managed to keep share prices relatively stable during a very difficult period.

This compares to Vale and Rio Tinto, both companies with a market cap just above $88-billion, Xstrata at $46.84-billion and Anglo American at $37.24-billion.

Cadiz fund manager Peter Major said Kloppers had "done a darn good job - by basically doing nothing - especially compared to all the other large international mining companies. BHP outperformed all the other large mining houses because it did the fewest deals."

Pengana Global Resources Fund director Tim Schroeders said Kloppers had done well navigating the world's largest mining group during a very difficult period for most companies.

He said the subsequent failed merger of BHP Billiton's and Rio Tinto's Pilbara iron ore operations was a big "loss of face" for the company and would have been an enormous coup if BHP Billiton had been able to execute the deal.

However, Schroeders said the failed bid by Kloppers for $39-billion acquisition of Potash Corporation of Saskatchewan highlighted problems for BHP Billiton and its inability to conclude deals.

Recently, BHP also had to write down $2.8-billion after Kloppers overpaid for shale gas assets in the US.

Meanwhile, Rio Tinto chief Tom Albanese has been playing catch-up, managing to grow his company to almost 60% of BHP's market cap through a couple of acquisitions.

A difficult commodities space has resulted in a change of the guard at some of the biggest mining companies in the world. Anglo American CEO Cynthia Carroll announced her resignation a month ago and a merger of Xstrata and Glencore will see the exit of Mick Davis as Xstrata CEO.

Last year Vale kicked out its CEO Roger Agnelli. He has subsequently teamed up with six other ex-Vale executives and Brazilian billionaire Andre Esteves to create a mining company that will look for investments in Latin America and Africa.

Key internal BHP candidates to replace Kloppers are petroleum head Michael Yeager, aluminium and nickel head Alberto Calderon, coal head Marcus Randolph and non-ferrous metals head Andrew Mackenzie.

External appointment possibilities include former Rio Tinto chief financial officer Guy Elliott, South African Davis or even The Dow Chemical Company CEO Andrew Liveris, according to Schroeders.

From Helpmekaar to top

Marius Kloppers (50) was born in Cape Town in 1962 and raised in Johannesburg.

He matriculated at Hoërskool Helpmekaar, where he met his wife-to-be Carin. Kloppers obtained a BSc (chemical engineering) at the University of Pretoria and a PhD at Massachusetts Institute of Technology.

After stints at Sasol and Mintek he decided he did not want to be a chemical engineer. He did an MBA at Insead, France, and worked at management consultant McKinsey & Co in the Netherlands before joining Billiton in 1993.

Kloppers was instrumental in the Billiton/BHP merger and held posts such as chief marketing officer and chief commercial officer before becoming group president and an executive director of BHP Billiton Limited and BHP Billiton plc in January 2006.

At 46, he became CEO of BHP Billiton. Kloppers and his wife live in Melbourne with their three children Noni, Reuben and Gabriella.