If you look back at the history of not just BHP.

Big companies in the sector, one of the lessons is that when a company gets boxed

into a corner where it has to pursue M&A, that leads to all sorts of untold,

uh, problems. I know how bad things can get when

people chase after something. Or if you get worried that failing or

being rejected on a transaction becomes a reputational issue.

You end up in very deep water then and, and and can cause yourself all sorts of

problems. I'm Francine Lacqua and This is leaders,

the podcast that explores what drives the world's most influential people.

This week's guest is Mike Henry, the outgoing chief executive of BHP, the

world's largest mining company. It's a pivotal moment for the industry.

Now, global demand for critical minerals driven by the energy transition and the

AI boom is soaring, and major producers like BHP are finding it challenging to

keep up. Mike Henry has led the company through a

particularly active and transformative period, spinning off its petroleum

business, collapsing its dual listed structure and giving the green light to

the vast Jansen Potash project in Canada.

We spoke in January before he announced he would step down about leading a

mining giant at such a consequential time.

What it's like when big acquisitions don't go your way, and how he's thinking

about succession. Mike Henry, thank you so much for

speaking to Bloomberg. Thanks for saying it's great to be here.

We're in a peculiar moment, uh, for the industry because so much is changing.

Do you feel like you're in a different moment?

A different but good different. But I've spent my whole career in

resources, and for most of that time, nobody really wanted to talk to miners

who, you know, was it was it was not seen as being an industry of of of of

today perhaps. But what we've seen over the past 3 or 4

years is this awakening to the importance of metals and minerals.

You know, you've got policymakers now trying to figure out how do they go

about securing critical minerals, supply chain resilience.

Is there going to be enough copper? How do they go about facilitating that?

And so mining has gone from a back burner industry to now being front and

center of some of the big conversations that are happening globally.

But how do you respond to being in this moment?

Is it a lot of pressure? Do you feel responsibility, or is it

only with hindsight that you realize how how crucial this period will be?

No no no. So so I and others definitely recognize

how crucial this this period is. And to the to the extent that I feel

pressure, it's well more than offset by the opportunity.

If you look at copper, for example, copper demand is going to almost double

over the next 25 years because it's needed for the broader economy.

It's needed for the energy transition, the AI revolution.

And yet copper is becoming harder and harder to find.

People are now clocking onto that and they're saying, well, wow, if we don't

do anything, we're going to see super high copper prices or shortages it at

given times. And so the policymakers now weighing in

with industry to figure out how do we go about ensuring that that's not what

happens. Can you tell me about a meeting where

you felt all of that, you know, coming together.

A fellow CEO and myself were called into the Oval Office to meet with the

president and the Secretary of interior, Secretary Burgum, because we have a

specific corporate project that we're trying to develop in the US.

This project could supply 25% of the US's copper demand for decades to come.

Having that level of attention on our sector, that level of support, and what

that symbolizes then for, for other governments has been, uh, such a big

difference from where we were a few years ago.

And it creates yes, it creates uncertainty, pressures at times.

But big picture, this is a net positive for the for the sector.

Mike, tell me a little bit about how you transform BHP.

First of all I've been with BHP since 2003, became CEO right at the beginning

of 2020, and within three months we were into the middle of Covid.

And so, you know, you were asking earlier about whether I feel pressure,

the pressure of today is nothing compared to the pressure of the big

decisions that we all need to take in the face of the uncertainties that Covid

brought. But as the impact I and the team have

had on the organization over the past, uh, six plus years.

We've reshaped the BHP portfolio. So at the time, we had about 80% of our

EBITDA being generated by a combination of, uh, oil and gas, thermal coal,

coking coal and iron ore. So steelmaking, raw materials in a world

where over the long arc of time, we should expect the world to decarbonize.

And we're going to see peak steel in China, beyond which we'll start to see

the iron ore market shrink. So we we need to make sure that we had a

portfolio that was fit for the future. We've, uh, spun out our oil and gas

division. We've had the size of our coal

portfolio, and I'll only focus on the best coals for steelmaking change

listing. We changed.

We collapsed listing into one. We had a bit of a funny structure, was

called a dual listed company, two primary listings, two head offices and

so on. Collapse that that was a big value

unlock for for for shareholders. And we've grown markedly in copper and

potash. We've grown copper by 30% over the past

few years, where the world's largest copper producer.

In addition to that, we've improved operational excellence.

We've gone from being a laggard in the sector to being best in class and from

an operational perspective. You also sanctioned Jansen

Right. I mean, you know, do you feel the need

to go at speed? Who you were listening to, it was at

your gut or other people. I've learned actually to rely more on

gut over time, but these were all very well thought through.

You don't trigger a, you know, an investment decision the size of Jansen

on gut alone. Did you feel the need to do it in one

year. So when you.

I'm often told that actually when you become chief executive, you have a short

amount of time to make a big difference that people will accept because then it

gets lost. So I've never been one to coast in, in,

in my career. Whatever role I've gone into, you, you

bring you have to bring energy to it. I also believe that coming back to your

point, that there's never a better time to drive change when everything is up in

the air a little bit. I had a very clear view of what was

going to help drive value for the company over the next 20 or 30 years.

We were then able to trigger a series of systems.

Actually, on the same day we announced that we were collapsing the corporate

structure. We were spinning out our oil and gas

division. We were selling down parts of our coal

portfolio and we were investing in Janssen, the first phase alone.

Biggest ever capital project for BHP. A lot of shareholders could have pushed

back against these individually, but by the fact that you bundled them.

Yes. It like everything was like okay.

Is that was that a strategy to communicate?

At the same time, we knew all of the things that we wanted to do.

But I thought we also believed that by being clear with Mark, particularly, we

run the spin out of oil and gas and the investment into potash, that we could

make it clear to our shareholders how we were thinking about the shaping of the

portfolio and why one decision needed to be seen in tandem with the with with the

other decision, for sure. Is that how you get your nickname?

Meticulous, Mike. So sometimes your reputation outgrows

you? You know, I am somebody who pays

attention to detail, high sense of accountability.

And, uh, I think maybe that's what sits behind the, the the moniker.

Do you think when we talk about this new world order, is it being overstated or

understated? Oh, I certainly don't think it's being,

um, Understated.

So things are definitely more uncertain, um, and more volatile.

So it's worth pointing out that in terms of our sector, the decisions that we

take, these are ten, 20, 30 year decisions.

And over that time horizon, we know for sure that demand for some commodities is

going to increase. And that then informs our selection

about which commodities we want to be involved in.

Now, how you operate in that environment, of course, that's informed

by all the turmoil that we see in the world around us.

Can you talk to me about how difficult that is to make decisions where you

actually don't know where this new world order ends up?

Look, it's increased the need for us to be planning through scenarios.

So rather than trying to predict a specific individual future outcome in 20

years time, um, we've, you know, continue to reinforce our ability to,

uh, develop different scenarios. We then test our decisions against.

And one of the things that will allow us to be successful is making decisions

that are as resilient as possible under a range of different, uh, scenarios.

It is an added complexity, uh, you know, creates higher stakes in some instances

to the decisions we take. Um, but this is the world that we have.

And I, as I said earlier on, a kind of net basis.

This is a real opportunity for the for the sector.

The mining industry is in a major consolidation phase, with many players

pursuing M&A to beef up their metals portfolios.

While BHP is no different. Their success has been mixed.

Mike Henry tried and failed twice to acquire Anglo American.

Not only did they say no, but the British mining company is teaming up

with BHP rival tech. Now with all of this happening in the

public arena. I wanted to know how Henry handled the

bid, whether he had any regrets and how he stays focused in the face of

rejection. You tried to buy Anglo American twice.

We did, yes, but failed. What did you learn from those failures?

So why did we pursue Anglo American in the first place?

Is because we like copper. We've grown in copper over by 30%.

We've developed Fig for big internal copper growth options, but we're BHP.

We have the ability to do even more. Uh, we thought that there was a great

opportunity to unlock value for both sets of shareholders through bringing

the two companies together. It wasn't to be the first time around.

Uh, second time around, we were faced with the decision of, well, we, of

course, for all the same reasons as we want to, we we engage that the first

time around. Um, do we're approach see if there's any

more interest now given that they had progressed some of their, uh, strategy

or do we hang back for fear of of being told no again?

I would back us any day of the week to do the bold thing, which is to, uh, to

approach and, and both times we showed discipline.

I know how bad things can get when people chase after something.

Money wise. Money one that you just want if you so

badly that you're prepared to buy it anymore.

If you get worried that you know failing or being rejected on a transaction

becomes a reputational issue, you end up in very deep water then and, and and can

cause yourself all sorts of problems. Um, so we went into both approaches with

a clear sense of we will only do something that we believe creates value

for BHP shareholders. And if we can't say see that, then we'll

we'll step away. How did it feel like at the time you

approach those things with a with a sense of optimism, a sense of, of uh, of

pressure? Um, but coming away from it, you know,

momentary disappointment. But but alongside that, the confidence

that we've done the right thing by way of, of, uh, of shareholders and, you

know, confident we've made the right decision.

How did you manage through it? So you still have staff that you need

speak to morale that you need to boost, or at least keep steady.

We've got such a professional team. And so it's perhaps a little bit less

disruptive inside than, than people might think looking looking outside in.

People are very clear that, uh, they like the boldness.

So the fact that, you know, BHP is willing to back itself and go after

opportunities when, when it when it spots them, that's motivating for

people. They also like the fact that we are

super disciplined and that we're confident enough in ourselves and our

existing strategy and our internal growth options to back away if we don't

think that we can create value for, uh, for shareholders.

How much time do you have to spend on that?

So was it all consuming? No.

Unfortunately, when you run, when you run a, uh, a business like PHP, you have

to be able to walk and chew gum at the same time.

Now, I do have a team that is very high performing.

These are all big leaders in their own right.

As CEO, I don't need to spend a large proportion of my time getting in and

solving day to day business problems. The business is running so smoothly and

when problems do arise, the teams on it on their own.

I continue to need to tend to other relationships outside of that particular

focus, so it increases in the amount of time that you have to take, but it can't

become all consuming for the, uh, for the CEO.

After the first that didn't go through, did you already know that you you'd go

after it a second time if the opportunity was there?

No, not at not not at all. In fact, the, um, the board and I have

been very, very deliberate about crafting a BHP strategy and that would

never be dependent on M&A. If you look back at the history of not

just BHP, big companies in the sector, uh, you know, the one of the lessons is

that when a company gets box into a corner where it has to pursue M&A,

you know, that leads to to all sorts of untold, uh, problems.

And so we've been very deliberate about saying, first and foremost, we have to

be able to get more out of the resources that we have.

And that then enables us to be quite discretionary about whether we want to

pursue an opportunity. So when we backed away the first time,

we said our prime focus is, is this when we

approach spotted a further opportunity or with a question arose for whether we

should we should approach again. It was the same attitude.

We don't have to. But because we believe there's value to

be created for shareholder, it's almost incumbent on us to make an approach.

And if you know, if there's not a meeting of minds, then we know we've got

a great strategy in our own right, great growth ahead of us in the right, uh,

commodities. So we'll stay focused on that.

Do you think there was a way of getting it?

So I don't know whether soft power, you know, the critics say that actually, had

you spent more time, you didn't want the South African operations, right, of

Anglo, but had you spent more time in reassuring them or or spending more time

with the Australian shareholders, maybe something could have moved more in your

direction. Is that fair criticism?

We will never know. Um, the I'm very comfortable with the

way that we attempted the original structure.

If we had of structured it differently, would that have made a difference?

Maybe, but that would have run up against the main objective here, which

is to create value for BHP shareholders. So I don't have any regrets over having

approached the way we approach the first time around or the, uh, second time time

around. What's the right way of approaching

these some of these transformational deals you have to have like a clear

strategy. And I don't know how you would describe

it. So you have to be very clear, clear

thinking. And if you think about the, um, Anglo

deal. It was wholly consistent with the

strategy that we laid out as a as a company.

The commodity that we wanted to grow in, how we thought about, uh, M&A, the sort

of assets that we were willing to acquire.

Where you get into trouble is, if you're not clear on what your strategy is, or

you start chasing after a deal to get a deal done, or because you don't have all

the alternatives. So you almost have to set that strategy

and as soon as you take over. You don't want to be setting strategy in

the middle of a transaction, that's for sure.

Some chief executives change strategy. Do you think?

Why do you think that is? Well, when a business isn't performing

well or when the world is changing, um, in a way that that demands a rethinking

of of strategy, of course, then your CEO should get in and rethink it.

But with ours, you know, we remain confident in the strategy that we, we,

we have in in the commodities that we've chosen.

That's bold, isn't it? It's kind of like a but you put sticking

to the thing you have that you have to be bold in these roles.

It's some kind of an informed boldness. Our sector is such a dynamic, important

sector that if you're not bold, that's where companies go off course or they,

they fall, uh, um, they fail over time. Um, and so when I stepped into role, I

told myself I needed to be bold. But I also like the fact that it's no

regrets, because otherwise I guess you could procrastinate about things that you

could have done differently, or you should have done so.

So we faced I mean, this was a key, key point that we faced in the second

approach to tango. You know, some people would, would,

would say, well, do you really want that to be seen in public in again the second

time around? Of course you don't want it.

But when faced with that choice of, well, do we take that on, but do what we

believe is right by shareholders, by, by, by reproaching and have that level

of boldness and confidence, or do we stay away from it because, you know,

for, for fear of, of, of, of looking like another failure, we back ourselves.

I mean, industry rivals or industry players are now actually coming

together. If you were to be number two mining

company in the world, instead of number one?

Does that make a difference? Makes no difference whatsoever.

It's, uh, you know, I don't worry at all about losing the bragging rights of

being the biggest miner by market capitalization.

Um, both because I don't it doesn't actually lead to greater shareholder

value, in my view. But secondly, I know that the minute

that we get into a headspace that says we have to chase something just to be

number one. That's where things become much, much

riskier. It's never a good idea to pursue a

transaction because somebody else is pursuing a transaction.

When I spoke to Mike Henry in January, there had been rumors circling that

after six years, he was preparing to step down.

Since speaking, those rumors proved to be true, and he plans to hand over the

reins on July the 1st, knowing that his departure could be soon.

I wanted to hear more about how he handles the day to day while also

preparing for succession. What do you hope your successor can

learn from the last six years? My successor is going to have the

opportunity to learn from all of the work, both of my time and role, as well

as from from the long arc of of BHP's history.

I imagine it's difficult, right? Thinking about succession, one of the

most important roles for chief executive is to make sure that you think about

succession, but also it's difficult to figure out the time to go.

Well, it's so interestingly day one, literally day one, as in when the board

made the decision to appoint me into the CEO role, my chair at the time sat down

with me and said, succession starts now. And it was made super clear to me that

one of my biggest accountabilities was developing that next generation of

leaders. So that's always been front and center

for me. It's hard to though, is it hard?

Of course it's hard. If in particular if you become

complacent and take your eye off the ball and you don't continue to invest in

in, in, in, in people in giving them, uh, um, you know, different roles,

expanding roles. And if you're not providing them with

the right, uh, support and, you know, the other part of your questions

Francine was, well, what's the right time to to go if you have the luxury of

making that decision on your own, because there's plenty of CEO's, of

course, that don't make the decision. It's always hard to see it.

You know, I'm sure when that day comes, it'll be a combination of personal, uh,

perspective, but also what we believe is right for the business.

I love BHP. I know that there will come a time where

fresh energy, uh, perspective and so on will also be a positive for the

organization. I'm a big believer in in, in in renewal.

Um, and that applies to, to companies just like it does ourselves.

When you talk to other chief executives, do does succession come up?

So it comes up more regularly than some people would think.

You know, in terms of, of in some cases it's been their own succession.

So as their leaving role. I always like to get their reflections

on things as you have new CEOs, uh, taking up the role.

So, for example, when I first was appointed CEO, one of the very

gratifying, uh, things that I hadn't recognized was it was the case was a lot

of other CEOs reached out and provided a bit of coaching or said, welcome to the

club. And you know, we've all been through

this experience. If there's anything we can ever we can

help you with. And I try to do that with uh, with, with

others as uh, as well. I've had discussions on succession

sometimes prompted by me, sometimes prompted by them about the topic or the

concept of succession, how we go about building capability, and BHP with CEOs

from many other, uh, industries. So what's the guiding thought on

leadership when, I mean, if somebody were to to be appointed chief executive

today and you call them, what do you tell them?

It would of course, be around some of the things we discussed about being

clear on strategy aligned with board, um, keeping your strategy consistent,

don't get blown off course, but I think most people stepping into the CEO role

would know that, um, what I think sometimes CEOs would, would

would be at risk of missing is the importance to long term success of how

you go about engaging and enabling your people and this and, and doing so in a

way that isn't reliant upon the CEO of the day or the management team of the

day, embedding in the company's DNA, an approach, a culture, and an approach to

how you go about leading your people, enabling your people.

That stands the test of time because over a long enough time horizon, the

incremental value, the incremental reliability, which builds trust with

shareholders and other stakeholders, the value of that over time is certainly

well in excess of the value that you're ever going to get through developing an

individual mind or undertaking an individual, uh, M&A transaction.

What's been the most unexpected or surprising thing about leading the

company? Well, probably a couple of things.

One, of course, you know, nobody knew that we were going to to encounter Covid

early on in my CEO-ship. That certainly falls into the unexpected

category. Other unexpected things have been just

how rapidly. As somebody who's spent many, many years

out there talking about the importance of metals and minerals, sometimes

feeling like like our advocacy was falling on deaf ears to see how quickly

the world has pivoted on this issue and how this is now much better understood.

You've also put a stop to pointless meetings.

Was there a pointless meeting where you said enough is enough?

I need to change this. Well, this is the this is probably been

a lifelong passion of mine, so I recognize how valuable time is.

We say to people that we want to engage them better, to make sure that their

work is meaningful, that their time is better allocated, and that day to day

they're able to pursue improvement. It should be no different for senior

management. We have to have impactful meetings, and

that means not holding meetings that we don't need to have.

Not having people in the meetings who don't need to be there because that's

disrespectful to their time. And then for the people that are there,

we have to ensure that the meeting is as efficient, impactful as possible.

And so we have very clearly set out, uh, requirements around meeting objectives,

meeting preparation. You want everybody showing up for the

meeting, having done the reading while inform able to bring their view to the

table. And then we put in place a continuous

improvement process around that, where I get feedback on whether I've done a good

job or a bad job, where I've fallen short in my chairing of that process so

I can then improve. One of the big debates right now is that

do you tolerate tempers and people around you in the business world because

it means passion, or is it something that is not tolerated, a temper if you

if you mean somebody banging on the table and throwing objects clearly not

tolerated. Should people be transparent about, you

know, when others have fallen short or when they, uh, believe that others

aren't upholding the values of the organisation and so on?

Yes. And sometimes there will be a sharp edge

that, but only to a point. But you can't have an effective high

performing company if people are always shying away from being clear about their

views on performance and so on, for fear of being seen to be too passionate,

honestly. So it's a difficult one, Francine, to

answer in a black and white fashion. Certainly, you know, disrespectful

behaviours, no tolerance for that whatsoever.

But being clear with people, look, I don't accept this level of performance.

There has to be space for for that. What do you think defines bad

leadership? Lack of listening.

You know, there's this quandary for leaders in that you get into these

leadership positions because you've got, you know, a certain ability to absorb

information, make decisions, a certain level of boldness carried to the extreme

that can result in arrogance, overconfidence, which will then lead to

poor decisions at some point. You know, there might be a series of

great decisions, but if a leader is always just making decisions on their

own, not listening to others, at some point they won't have the benefit of

either the checks and balances that come through listening to others, or the

improvement of decisions through gaining perspective of others.

That's a very dangerous space to be. So leaders that don't respect the

people, uh, who are overconfident and don't really listen and invite

challenge, that's certainly not going to lead to the best possible, uh,

leadership. Mike Henry, thank you so much for

joining us. Thank you.

Francine