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BHP CEO Mackenzie retires, Henry appointed

Alex Druce
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BHP

Mike Henry is replacing the retiring Andrew Mackenzie as boss of the world's biggest miner BHP

Incoming BHP chief executive Mike Henry says concerns about his association with industry groups lobbying against climate change action must be weighed against the company's bottom line.

President of BHP's Australian mining operations for the past three years, 16-year BHP veteran Mr Henry will replace the retiring Andrew Mackenzie as CEO of the world's biggest miner on January 1.

The Canadian has pledged to "unlock even greater value" when he takes the helm, but offered little detail when asked how BHP plans to address concerns - acknowledged by Mr Mackenzie - of climate-conscious investors.

"It's in the company's interest that we consider much more broadly who our key stakeholders are," Mr Henry said in Melbourne on Thursday.

"(But) they will have to be linked back to our business case, whether it's diversity, climate or indigenous (representation)."

More than 27 per cent of votes cast at last week's annual general meeting went in favour of a resolution for BHP to quit all groups involved in lobbying inconsistent with the goals of the Paris climate agreement.

But Mr Henry said on Thursday he plans to maintain his position as vice-chair of the Australian Minerals Council, and lauded BHP's relationships with other industry groups such as Coal21 and the Business Council of Australia.

"Our position on climate change doesn't change; I am fully committed to the goals we have put out there," Mr Henry said.

"We've been clear on industry associations, and the values they bring to the industry and BHP."

Mr Mackenzie, who in a six-and-a-half year tenure oversaw the spin-off of South32 and the sale of BHP's US shale gas assets, said he was leaving the company in a good position.

"We have a simple portfolio, a strong balance sheet and options to grow value and returns for decades to come," he said in a statement.

Mr Mackenzie became CEO in May 2013, replacing Marius Kloppers, who had led the firm through the global financial crisis and into Australia's mining boom.

BHP's share price dropped to a near 11-year low of $14.06 as the boom petered out against a backdrop of falling iron ore prices, but Mr Mackenzie has overseen a three-year share price recovery to more than $36.

The stock dropped by as much as 1.67 per cent to $36.18 after Thursday's announcement but recovered to sit just 0.11 per cent lower at $36.75 by 1450 AEDT.

Mr Mackenzie, 62, guided BHP through the 2014 spin-off of diversified miner South32 and last year's sale of its underperforming US shale oil and gas business, as well as a name change from BHP Billiton.

He will step down as a member of the company's executive leadership team and as an executive director on December 31 before fully retiring from the group on June 30.

The announcement of his departure confirms long-running speculation over a looming transition process and came just a week after Mr Mackenzie fronted investors at the mining giant's annual general meeting.

Mr Henry on Thursday pledged to "unlock even greater value" from the company's ore bodies and petroleum basins, but did not go into further detail.

BHP chairman Ken MacKenzie said Mr Henry's 30 years in the mining industry made him the ideal replacement.

Mr Henry will receive a remuneration package consistent with that of Mr Mackenzie's, including a base annual salary of $US1.7 million ($A2.49 million).

Mr Henry's short-term cash and share bonus could earn him up to 80 per cent of this amount, while his long-term incentive is worth up to three times the value of his base salary.