analysis
The six burning issues BHP’s incoming chief executive Brandon Craig faces come July 1

Brandon Craig is a few days away from taking the reins of Australia’s most valuable company and he will inherit a sprawling list of fires to fight. When he officially succeeds Mike Henry as BHP chief executive on Tuesday, Mr Craig steps into command with the company’s share price having touched record highs earlier this month. But the former boss of BHP’s Pilbara iron ore division faces deep operational and strategic challenges stretching from the mining giant’s WA heartland to new frontiers on the other side of the globe. Even the corridors of power at BHP’s Melbourne headquarters present an immediate headache for the incoming chief. Slattery dilemma Geraldine Slattery will be one of Mr Craig’s key lieutenants in her role as BHP’s Australia president, where she oversees iron ore, copper, and coal mines that generate the bulk of the company’s revenue. It was an open secret that Ms Slattery was gunning for the top job, and she was viewed by many industry insiders as the natural successor to Mr Henry. Now that she has missed out, how the dynamic with her new boss plays out will be closely watched. Mr Craig on Friday expanded the Australia president role by including the prized South Australian copper assets into her remit. But whether she holds onto that role in the long term remains to be seen. Will Mr Craig want an ambitious executive gnawing at his heels, or will her three decades of deep institutional experience outweigh potential friction? Union heat BHP is on the front line of a co-ordinated union push to reclaim a foothold in the Pilbara’s iron ore operations after decades on the sidelines. The Big Australian faces strike action at its crucial Port Hedland export hub. It’s a bottleneck that, if choked, could bring its sprawling WA iron ore machine to a screeching halt. Mr Craig finds himself between a rock and a hard place to keep the ore moving. Caving to union demands risks setting an expensive precedent, potentially blowing out labour costs across large chunks of BHP’s 15,000-strong WA workforce and jeopardising its status as the world’s most efficient iron ore miner. Conversely, ignoring union demands risks port shutdowns that could erase more than a $100 million in revenue a day. His first few weeks on the job are shaping up to be a baptism by fire. CMRG standoff Mr Craig will begin his tenure with a diplomatic win already under his belt. In April, he led a mission to China that resolved a bitter, nine-month contract standoff with the company’s primary iron ore customer, the state-backed China Mineral Resources Group. However, the thaw in relations may only be temporary. BHP’s WA iron ore boss, Tim Day, recently foreshadowed another round of bruising negotiations next year. “It’s been a tough nine months for the renegotiation of the contract, but we’re through it now, which is the good part. But it will be [tough] again next year,” Mr Day said last month. “That concept of renegotiating and getting more complex will just continue from here on.” Key WA rivals Rio Tinto and Fortescue have issued similar warnings. CMRG’s ultimate mandate is to suppress the price of Australian iron ore, making it an increasingly potent weapon in Beijing’s geopolitical arsenal. Mr Craig will likely spend a significant portion of his CEO tenure at the negotiating table with CMRG’s heavy hitters. Nickel West ultimatum BHP’s self-imposed deadline of February next year to decide the permanent fate of its mothballed Nickel West operation is fast approaching. Hopes of a full or partial asset divestment appear to be fading. With global nickel prices hovering around $US18,000 a tonne — well below Nickel West’s estimated break-even cost of more than $US20,000 a tonne — a restart also looks improbable. Unless Mr Craig can pull a rabbit out of a hat, BHP will soon be committing to a massive, multi-year rehabilitation endeavour. Remediating Nickel West’s Goldfields mines, Kalgoorlie smelter, Kwinana refinery, and the partially built West Musgrave project near the South Australian border is expected to cost significantly upwards of $1 billion. M&A temptation BHP is the world’s top copper producer but remains hungry for the red metal. Mr Henry made that abundantly clear when he launched multiple failed bids for fellow diversified mining giant Anglo American across 2024 and 2025. Anglo has since agreed to merge with Canada’s Teck Resources to create a $140b copper powerhouse. But BHP’s massive $330b market capitalisation gives it the financial muscle to mount an aggressive play for the combined Anglo-Teck entity. Mid-tier copper producers like West Perth-based Sandfire Resources or Toronto-listed Lundin Mining could also emerge as strategic targets. Mr Craig must decide whether to dedicate his energy into pursuing a mega-takeover or knuckle down to focus strictly on organic growth within BHP’s existing copper provinces in South Australia and South America. Big-ticket risks BHP has flagged up to $25 billion in capital expenditure over the next decade to build out its South Australian copper hub. On the other side of the world, the miner is ploughing at least $14b into bringing its Jansen underground potash project in Canada into production by mid-next year. Billions more are earmarked for greenfield territory in Argentina, where BHP plans to develop two massive copper deposits located just over the Andes from its flagship Chilean copper operations. Mega-projects carry mega execution risks. Jansen in the frigid Saskatchewan region has already weathered three multi-billion-dollar cost overruns, the latest coming just over a week ago and wiping nearly $15b off BHP’s record high share price. One or two more chunky capital overruns on these massive global builds would put a major dent in investor confidence, throwing immediate pressure back onto the new CEO.

analysisThe six burning issues BHP’s incoming chief executive Brandon Craig faces come July 1

analysis
The six burning issues BHP’s incoming chief executive Brandon Craig faces come July 1