The BigAustralian is back. Or rather the GlobalAustralian, as BHPBilliton chief executive AndrewMackenzie described his company on Wednesday. After more than a decade of denial, theworld’s biggest resources group is reclaiming itsAustralian identity. BHPwas happy to be knownas the BigAustralian until 2001,when it merged with South Africa’s Billiton group. The marriagewas approved by the Howard government afterBHP agreed to conditions including the maintenance of its headquarters in Australia andAustralian domicile for theCEOand chief financial
officer – conditions that reflected concernsAustralia might lose a corporate icon. But after the mergerBHP quietly retired the term Big Australian. The groupwas nowa
citizen of theworld, factotums argued – but BHP’s fifth successive foreign-born chief executive is revising the script. In his urbane Scottish brogue, Mackenzie told the Asia Society in Melbourne on Wednesday that BHP‘‘is still, and always has been,
a company firmly rooted in Australia’’. He’s right, of course. BHP was incorporated here in 1885 and while it and Billiton merged as equals in 2001, it is the assets BHP brought to the altar that have turned the group into the world's biggest resources company, including iron ore in the Pilbara, coal in Queensland's Bowen Basin and copper in Chile.
Mackenzie noted on Wednesday that in 2011-12 about 70 per cent of BHP Billiton's profits were generated in Australia. About 55,000 of its 125,000 employees are here and it does business with about 9000 local companies.
Its Australian wage bill runs to the equivalent of about $US4 billion a year (BHP sells and reports in US dollars) and in 2011-12 it paid Australian taxes and royalties of more than $US9 billion, more than three-quarters of its global bill.
About 60 per cent of its shareholders are invested through the Australian member of the dual-listed entity, too. Mackenzie said the group's estimate was that about 7.5 million Australian superannuation accounts have BHP exposure.
BHP is less than two weeks away from reporting on its results for the year to June, and Mackenzie was unable to talk about the group's operations or prospects.
What he did say suggested, however, that the reclamation of Australian status is deliberate. Mackenzie's description of BHP as the Global Australian is actually borrowed from one of my Fairfax Media colleagues, Australian Financial Review columnist Matthew Stevens, but the shift itself sets BHP up to be a more active and open participant in national debates, by making its interdependency with Australia more explicit.
BHP was one of the leaders of the successful revolt against the Rudd government's first attempt at introducing a mining super profits tax, and BHP chairman Jac Nasser went on the record last year saying restrictive labour laws and uncertainty about tax in Australia were undermining the resources sector. Mackenzie seems to be looking for less-abrasive relations. He said Australia's role as a key commodity supplier to Asia was not guaranteed and needed to be locked in by productivity gains as new competition emerged, for example from China itself in the production of metallurgical coal, from Chile and Peru in the copper market and from the US, Canada and Africa in liquefied natural gas.
Governments had to provide efficient markets and an industrial environment that encouraged companies and their workers to "sign up for a team that wants to win", he said.
He also said, however, that BHP and the industry acknowledged "that the bulk of the productivity challenge sits at our feet" and said Australia was still in the "pole position" to supply Asia, with "decades of mining experience, a highly skilled workforce, a track record of innovation, proximity ... and great geology and infrastructure".
Crucial issues including productivity were also being intelligently debated here, he said after the speech. With its Australian connections BHP brought a "unique perspective", he added, and it wanted "to sit down with whoever wins this election". It's an offer worth accepting.
The Maiden family owns BHP shares.