BHP restructures for ‘agility’

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 24 Feb 2016   Posted by admin


By Samantha James

ON the back of a multi-billion net loss for the second half of 2015, BHP Billiton will implement a new operating model to “create a more agile company”.

BHP Billiton chief executive officer Andrew Mackenzie said changes to executive ranks and operating units, including the restructure of BHP’s minerals production operations, would be a continuation of the company’s “simplification journey”.

“[The changes] are made possible by the recent demerger of South32 and well-timed asset divestments, and reflect our continued commitment to improve productivity,” he said.

“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.

“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.”

The changes, to be implemented on 1 March, would see BHP’s mineral production assets organised into two regional units – Minerals Australia and Minerals Americas.

Its oil and gas exploration and production units would continue to be housed within a global Petroleum unit.

To reflect the changes, several mineral section president roles would be reassigned to the wider minerals units, and two presidential roles – one in petroleum and one in WA iron ore – would no longer be required.

Several marketing and technology functions would also be consolidated and a representative appointed to lead the company’s response to the Samarco dam failure in Brazil.

“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,” Mr Mackenzie said.