This news came as the company reported its first-half results. On the coal front, the news was not good, with earnings from its Queensland and New South Wales metallurgical coal mines plunging 106.6%. The company met coal division recorded a loss of $US101 million ($A97.6 million) for the six months to December 2012.
It would be unfair to suggest the two items are linked. So far, the sentiment has been that Kloppers is stepping down for personal reasons. After being at the helm of the major miner for six years and having to navigate the wild economic swings in that time, the South African-born executive probably needs a break.
Kloppers is to be replaced by BHP’s chief executive non-ferrous Andrew Mackenzie.
The 56-year-old Scot has more than 30 years experience in oil and gas, petrochemicals and minerals.
On the results front, record sales volumes at Illawarra Coal and a strong recovery in production that followed the conclusion of the BHP Billiton Mitsubishi Alliance enterprise agreements was largely offset by planned wash plant outages at its South Walker Creek and Goonyella mines, the closure of Gregory and Norwich Park and longwall moves at Illawarra Coal.
A respective 39% and 37% fall in hard coking coal and weak coking coal prices reduced underlying earnings before interest and tax by $1.6 billion, net of price-linked costs.
Revenues were down by 35.8% to $2.8 billion.
“A stronger Australian dollar and inflation reduced underlying EBIT by a further $183 million, although this was more than offset by controllable cash cost savings achieved in the period,” the company said in a statement.
It is hoping its focus on supply chain improvement across its Queensland operations and the completion of longwall moves at its Illawarra coal mines will mean the second half of the financial year will be stronger.
At the end of the first half, Queensland Coal production was approaching full supply chain capacity.
“The associated increase in productivity, broader economies of scale and the closure of high-cost capacity is expected to deliver a substantial reduction in unit costs in the second half of the 2013 financial year,” it said.
“The group’s five major metallurgical coal projects remain on schedule and budget.
“The Daunia development is forecast to deliver first production in the first half of the 2013 calendar year, while commissioning of the Caval Ridge mine is expected to commence the following year.”
Together the projects will add 10 million tonnes of metallurgical coal production capacity by the end of 2014.
Turning to BHP Billiton’s energy coal division, a 7% increase in production in the half year to December 2012 was underpinned by record production at New South Wales Energy Coal, which continued to benefit from the ramp-up of the RX1 project.
However, underlying EBIT for the first half of FY2013 declined by $541 million to $246 million.
BHP said a 21% reduction in export coal prices, inflation and a stronger Australian dollar reduced underlying EBIT by $515 million, net of price-linked costs.
“In contrast, a higher proportion of export coal sales associated with the accelerated expansion of New South Wales Energy Coal, together with controllable cash cost savings achieved in the period, increased underlying EBIT by $151 million,” it said.
