The world needs more metals, minerals, and natural resources to fuel the global economy, power the energy transition, and feed a growing population. As the CEO of the world’s largest mining company, BHP’s Mike Henry is redefining his business in a competitive industry which is projected to grow to $2.8 trillion by 2028. In today’s episode, Clarke digs into Mike’s leadership lessons and insights, including his career journey, his CEO transition in the midst of two major crises, and the advantages of being a global citizen living and working in multiple countries. Mike shares how he balances growth alongside risk, safety, and respecting communities in the company’s mining efforts. He also talks about the BHP Operating System, which serves as the foundation for how BHP’s 90,000 employees continuously improve and make decisions in the face of uncertainty on a day-to-day basis. Four things you’ll learn from this episode: How BHP is decarbonizing and becoming more sustainable while meeting growing global demand How an Operating System can help ground company culture and drive continuous improvement across the organization How to balance growth with risk, safety, and working with local governments and communities How technology and an internal venture capital arm can power a culture innovation If you enjoyed this episode, you might also like these Redefiners episodes: Talking Transformational Leadership with RRA’s CEO Constantine Alexandrakis AI or Die: A Conversation with Coveo Chairman and CEO Louis Têtu Leadership Lounge: How to develop your personal leadership brand Waste In, Shareholder Value Out: A Conversation with WM President and CEO Jim Fish Putting Sustainability Talk into Action with former Enel CEO Francesco Starace Leadership Lounge: What do top-performing teams have in common? How the Barely Possible Can Overcome the Barely Solvable with First Mode’s Chris Voorhees
Chapter 1: What is the purpose of the mining industry in today's economy?
which was worth almost $2 trillion in 2023 and expected to grow to about $2.8 trillion by 2028. A big part of the mining market includes resources like copper, nickel, iron ore, potash, which are essential to building and powering our world, as importantly to help feed our population as food security becomes even more important.
Several Redefiner guests over the years have talked about the green energy transition, including electric vehicles. Well, resources like copper and nickel are key elements in that transition and critical when it comes to manufacturing EV batteries. Our guest today is a leader in this effort. Mike Henry is the CEO of Australia-based BHP. It's the world's largest mining company.
Mike leads a global workforce of 90,000 people with major operations and projects in Australia, North and South America, and Canada. Prior to becoming CEO in 2020, Mike was responsible for leading BHP's Australian minerals business. So you're probably asking, mining, what does that have to do given the dirty industry it's in and the crazy places in the globe that they are located?
Well, this is truly a redefiner story. Mike has led the strategy to redefine this company. BHP having sold its oil and gas portfolio, focused on the rare earth minerals that are so important to the global economy, And potash, where the effect of the Russian invasion of Ukraine has deeply affected food security around the world.
So today we're going to talk about how does redefining a company impact the stakeholders, the shareholders, the employees, but importantly, how to be a great leader as a company redefines itself. Mike, welcome to Redefiners. We are very excited that you have joined us from Melbourne. We are on opposite ends of the world. Welcome.
Thank you, Clark. Very happy to be here.
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Chapter 2: How did Mike Henry's career path lead him to BHP?
Also, Mike is truly a global citizen, having been born in Canada, spent a significant part of your working life in Asia and Australia. You taught English in Japan right after you finished university and went on to work for Mitsubishi in Canada and Australia. So before we get into supplying the world with more of what it needs and requires, I
How did you find your way from Canada to Japan to back to Canada and now in Australia? What's the personal story about how you ended up in such a global citizen?
So as you said, Clark, I was born in Canada, but I've spent the vast majority of my career overseas between Japan, Australia, Holland, Singapore, then back to Australia. And I've been fortunate enough to have my whole career in the resources sector. So even with Mitsubishi Corporation, I was working in their resources division. And it is just... a spectacular, rewarding industry to be part of.
There's very few industries where it goes right from the ground, the earth, all the way through to high finance, global capital markets, and of course, downstream customers. Now, how did that all play out? As with all these things, it's a little bit of a fortunate meeting of opportunity, timing, interest, and capability.
As you said, I'd worked for a year teaching English just after university in Japan, and partly as a result of that, knew I wanted an international career. Mitsubishi, very well-known and respected company in Japan. I was fortunate enough to get a job with them in the resources division.
That took me on to Japan, ultimately down to Australia here, worked in a joint venture with BHP, and then moved across to BHP back in 2003 and just had this very rewarding career with this global company where I've worked across commercial, technical, operational, and then was given this great opportunity to lead the company back in 2020.
And your industry, as you look at operations in Brazil, Canada, Australia, everywhere, is it a requirement to be a global citizen? Has everyone worked around the world like you have?
I think it's a distinctive advantage. And certainly the CEOs in recent memory have all had global experience.
In order to understand how the world works, to be able to work with the workforce that's spread over all of those jurisdictions, to be able to work with policymakers, to understand their concerns around the world, having global experience, being able to work cross-culturally, I think is a distinctive advantage and a need for anybody stepping into this role.
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Chapter 3: What challenges did Mike face during his transition to CEO?
And that meant us growing in copper, growing in potash, running our world-leading iron ore business even more productively, even more safely across BHP. And then ensuring that we had a steelmaking coal business that had only the best of the best coals that stand to benefit from the steelmakers' efforts to decarbonize.
That required us to spin out our oil and gas business, merge it with another company called Woodside here in Australia. In doing so, we protected value for shareholders and gave them choice. We've optimized our coal portfolio. We've triggered two big investments in potash in Canada.
And we've acquired two copper opportunities, one here in Australia that's allowed us to create a new basin in South Australia when combining those assets with an existing copper business that BHP had. We've acquired an asset in Argentina in partnership with a Canadian company.
And we've created much more copper growth optionality on top of already being one of the world's leading copper businesses globally. with the world's largest copper resources. So we laid this intent out in February of 2020, and we've been executing in line with that intent.
But we've only been able to execute in that way through being operationally excellent and through being clear and consistent in our strategy and building trust with shareholders to doing exactly what we said we would do.
The potash business, which you have made a number of acquisitions and investments, it is what fuels literally food growth in the world. And with Russia and Belarus being one of the biggest suppliers of potash, the war in the Ukraine has affected supply chains and the supply itself. How do you look at that? And did you do these deals previously? As a result of the war or beforehand?
There's two big potash producing regions in the world. One's Canada. The other one is Russia, Belarus. We saw disruption to supply out of Russia and Belarus for a period of time. And that led to a certainly uncertainty in respect of where supply was going to come from in the future and near-term disruption to supply chains. Our first stage or first big investment in potash, over $5 billion US,
or we took that investment decision before the war in Ukraine. The second phase, another $5 billion, was triggered after the war in Ukraine. Both of those are underway currently. Neither of them have been driven by that conflict. It's been driven
by this belief that as the world's population continues to grow, which is going to require more food, rising living standards tend to require food that is less calorie efficient, so you need more agricultural inputs. We're trying to get that increased agricultural production off of a constrained footprint of arable land. It's going to require more fertilizer.
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Chapter 4: How is BHP addressing sustainability and decarbonization?
We spoke earlier about the lack of awareness in some quarters as to what mining is about and its essential nature. I've spent time, as have my team, on the road out engaging policymakers and other stakeholders on trying to build that understanding of mining. Off the back of that understanding, then to talk about what sound policy looks like,
that both enables the industry, but also meets the very valid concerns of policymakers at the national level through to the local level.
So we talk about emotional commitment to a culture in a mining company. We talk about social value. of the mining industry. None of this is what anybody thought when they clued into a podcast about mining and taking things out of the earth, okay?
So talk to me a little bit more about social value and how you embed that in the culture of the company so we believe in what we're doing and that others believe in what we're doing.
So let's think about this, Clark. As a mining company, you think about what we're doing. We're going into some of these remote communities and we're investing billions of dollars in these projects that play out over 20, 30, 40 years, sometimes longer. And we only gain access to those resources in the first place if we have the support of governments and communities.
So we have to have a value proposition for them. Now, social value has been at the center of BHP's thinking for two or three decades. But a couple of years ago, we put in place a refreshed social value framework. It ended The distinctive nature of the social value framework is that it treats social value creation not as something that stands alongside the business, but this is core business.
We need to be thinking about how we can go about creating best possible value for shareholders and best possible value for the range of stakeholders that we have. And in order to enable that, it needs to be something that is owned by all decision makers in the business. And so it's not about us sacrificing economics.
It's about investing discretionary effort in ensuring that we can maximize our economic outcomes, but at the same time, ensure that we're supporting, in this case, local stakeholders by way of local businesses, oftentimes indigenous businesses or First Nations businesses, so that they benefit from our existence as well.
And that's got to be an endless campaign because there are skeptics out there, there are protesters, there's everything. So you've got to tell the story again and again and be authentic in seeing the results, right?
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Chapter 5: What is the BHP Operating System and how does it drive culture?
Chapter 6: How is technology transforming the mining industry?
There's three areas that I would point to in terms of specific innovation efforts within BHP. One is the Ventures Arm that you've called out. We established that from memory back in 2020, maybe 2021. So the explicit intent around the Ventures Arm is to be investing in small startups in the resource finding, extraction, processing, and decarbonization space.
And through that, for us to gain early insight potential to support or disrupt different supply chains across our business. That will help inform strategy. In some instances, it will give us early insight into opportunities that we may wish to pursue. And of course, we want to generate an investment return on these.
And we had a six times return on a carbon capture opportunity that we invested in early. So the track record so far has been pretty strong. In addition to that, we borrowed a concept out of pharma to apply in minerals exploration. So we have an exploration accelerator called Explore, where we engage with 200 plus companies annually. They pitch their ideas to us. We select 10.
We've been doing that for a few years now, where we provide them with some funding and capability building to enable them to pursue their concepts. And again, this gives us greater insight into what's happening in the world around us in the very early stages of exploration.
And then finally, we have an innovation arm within the company that's investing time and effort directly in technologies that may enable the business and in a disruptive way over the long term. Now, in pursuing all of these, there's the direct benefit that we derive from them.
But it's also been part of us trying to stimulate a culture of innovation, excitement around what lies ahead and passion for innovation right across BHP, not just in the people working in those three parts of the company.
Your third point, innovation inside the company to disrupt the elephant dancing versus the startup. Do you find one is a greater challenge? accelerator of change for you as a culture versus the other?
The reality is there's benefit to having your innovation efforts a little bit standalone from the mainstream. And I do think we've made progress on embedding innovation through the fingertips of the organization.
When you've got people who are dedicated to pursuing some of these out there ideas, who are unleashed a little bit and trust and supported by management, either within the company or because they stand outside the company, you do then tend to see an acceleration.
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