Metals & Mining News

BHP’s Mike Henry: core values are the leadership bedrock for mining boss

When Mike Henry took the helm of BHP a year ago he was planning to spend the first quarter of 2020 on the road meeting key customers and suppliers. Covid-19 put pay to all that. By late February it was clear to the Canadian-born executive that BHP, the world’s biggest mining company by market value, needed to prepare for the worst.

“I recall being in Miami and speaking to our medical expert and hearing exactly what he was picking up from global experts,” says Mr Henry, speaking over a video call from Melbourne, where BHP is headquartered. “It was pretty apparent then . . . there was no way [of] stopping this. So that was the point at which it was . . . OK, it’s game on now. This is going to be a really serious thing for the world.”

Bracing for the worst, Mr Henry’s top team sprung into action, putting in place the controls needed to navigate the pandemic. These included crisis management teams for each of its regional assets and hiring 1,500 temporary workers to support its Australian operations.

A BHP freight train transports iron ore in Western Australia. An early priority in the pandemic was to keep BHP’s 80,000 staff and contractors safe and its operations running © Ian Waldie/Bloomberg

“I think we were very quick off the mark in making the priorities clear to the rest of the organisation,” says Mr Henry. In the early stages of the pandemic, a priority was to keep BHP’s 80,000 staff and contractors safe and its operations running. A key challenge came in the shape of BHP’s Australian iron ore business — an operation Mr Henry used to run.

Consisting of five iron ore mines, four processing hubs and a port — linked by more than 1,000km of rail — Western Australian Iron Ore (WAIO) produces enough of the key steelmaking ingredients each year to build 3,300 Sydney Harbour Bridges. It is also the company’s biggest source of income, generating 65 per cent of BHP’s total earnings before interest, tax, depreciation and amortisation of $22bn last year.

Like many mining operations in Australia, WAIO is sustained by a fly-in fly-out (FIFO) workforce who commute thousands of kilometres to remote mining sites for shifts that last weeks at a time. As travel restrictions tightened it became clear that BHP would need to relocate thousands of FIFO workers from the eastern states of Queensland and New South Wales to Western Australia to keep the company’s cash machine up and running.

“So the call went out . . . ‘here’s the risk to the business’ and something like a thousand people over the course of one weekend elected to up stumps and move all the way across the country, in some instances with their families, in order to keep things going,” he says.

“It was incredible. But it really gave you a feel for the sense of purpose that existed through the company . . . there was a real understanding that if we could keep going as a business then we would maintain employment, continue to support communities,” he says.

“That was just one of the things that saw people step up and do some extraordinary things without a lot of top down directional push,” adds Mr Henry. “Once people understood the risks that we were facing and what was needed, they were right there.”

Mr Henry, who has a degree in chemistry from the University of British Columbia, joined BHP in 2003 after starting his career in the 1990s at Mitsubishi, the Japanese trading house. The 55-year-old passed through a series of jobs, including head of marketing and running BHP’s Australian operations, before he was appointed CEO late in 2019, replacing Andrew Mackenzie.

Mr Henry says a real understanding of what “goes on at the coal face” helped him steer the company through the pandemic, although he reckons BHP would have done a good job without him, “because we have great people in the company”. A “deep belief” in people and teamwork is a hallmark of his management style. “One of the things I have learnt over time is that you can be the smartest man in the room but . . . if you don’t have great people in place and you are not providing the space and the conditions for them to contribute, the capacity of your organisations will be limited,” he says.

However, that doesn’t mean you can just appoint a “bunch of hard chargers” because a group of ambitious high achievers aren’t “necessarily going to be a good team”, says Mr Henry. “Of course, as a leader you also have to be clear on what the ambitions or the aspiration is for the business. I believe I have got the ability to see what the possibilities are for us.”

For him that means a starting point of “exceptional operational and financial performance” and a gradual reshaping of BHP’s portfolio so that it has greater exposure to commodities such as copper and nickel that will be needed in the shift to cleaner forms of energy. To that end, Mr Henry has added a chief technical officer and a chief development officer to BHP’s executive leadership.

As the head of the world’s biggest mining company, Mr Henry also recognises the broader role he and his senior executives have to play in shaping how the industry is perceived by the public.

Three questions for Mike Henry

Who is your leadership hero?

There’s no one person I’d call out as a hero per se. I think that all leaders, no matter how renowned, have both good and bad qualities. Best to simply watch, reflect, learn and constantly strive to improve.

If you were not a CEO, what would you be?

I love working with people, supporting others and working on big things. At one point I was intending to become a doctor but I’m fascinated by the world and the opportunities and challenges it presents. So if not a business leader, then perhaps I’d be in a multilateral institution like the UN or government policy, or a global NGO. I’m very lucky to be where I am though, in an industry which is essential to the world and where there’s such opportunity to make a difference and to create some great value while doing so.

What was the first leadership lesson you learnt?

That leadership isn’t a position, it’s an act. And everyone has the capacity to demonstrate leadership, every day. I’ve seen people in positions of authority who don’t lead and, conversely, some of the biggest leadership comes from people without authority.

Although the modern world would not be able to function without the metals and minerals produced by the mining industry, it has a reputation as a dirty, exploitative sector that puts profits before safety and the environment. That perception has been reinforced by a series of incidents, including a deadly breach at a dam owned by Vale in its home country of Brazil in 2019 that killed more than 270 people, and more recently the destruction of a 46,000-year-old sacred Aboriginal site by rival Rio Tinto.

“How the industry is perceived needs to start with actual performance. But that alone might not be enough. And so there is an effort that I and other BHP leaders need to invest in terms of getting out there and engaging with stakeholders, so that the essential nature of the industry is understood,” he says. “If we all accept that the commodities we produce are essential for the world, then really the only questions are how do those commodities get produced in the most sustainable way possible and who is best placed to do that.”

Mr Henry refuses to be drawn on Rio’s handling of the Juukan Gorge rock caves blasts, which has been widely criticised. Rio’s former CEO Jean-Sébastien Jacques was silent for weeks after the incident, only to resign following an investor backlash.

However, Mr Henry says he has reflected many times on the tragedy at Samarco, an iron ore business BHP jointly owns with Vale. Samarco was responsible for Brazil’s biggest environmental disaster five years ago when a dam collapsed and a torrent of mining waste sludge cascaded through villages in the south-eastern state of Minas Gerais, killing 19 people.

His predecessor Mr Mackenzie won plaudits for his handling of the crisis by ignoring the advice of lawyers and public relations experts and immediately flying to Brazil to apologise unreservedly and front local media. This left an imprint on Mr Henry. “[Sometimes] in situations you have to rely on values and gut instinct because you don’t have the time to analyse lots of things,” he says. “Maybe that’s the leadership lesson, which is when in doubt revert to values . . . go with gut, do what is right.”

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