Kloppers, 44, who heads the division contributing more than half BHP's profit, succeeds Charles Goodyear on Oct. 1, the Melbourne-based company said in a statement today. He'd been named by analysts and investors as the most likely candidate.
South African-born Kloppers takes over a company that's delivered seven straight half-year record earnings due to soaring Chinese demand and commodity prices. Surging profits spurred more than $79 billion of takeover bids in the industry this year, including Alcoa Inc.'s hostile offer for Alcan Inc.
``Kloppers has been focused on building the revenue end of the company and he is very good at it,'' said Peter Chilton, who helps manage the equivalent of $1.4 billion at Constellation Capital Management, in Sydney. ``Growth and cost control will be very important.''
Shares of BHP have risen 23 percent this year, more than double the 10 percent gain on the benchmark Australian index. The stock rose as much as 75 cents, or 2.4 percent, to A$31.82, and traded at A$31.66 at 12:21 p.m. Sydney time.
Internal Candidates
Kloppers is group president of BHP's non-ferrous materials, which includes the aluminum, base metals and stainless steel materials units. The three units accounted for 57 percent of BHP's earnings before interest and tax. He beat out at least one other internal candidate, Chris Lynch, who runs the company's carbon steel business, for the job.
``We are in a time of considerable change in our industry with the emergence of new markets and sources of supply,'' Don Argus, chairman of BHP, said in the statement to the Australian Stock Exchange. ``Marius has an excellent strategic mind and delivers on his commitments.''
Kloppers also held positions of chief marketing officer and chief commercial officer in BHP. He drove iron ore price talks and contract negotiations with copper smelters, Constellation's Chilton said. He was also involved in BHP's 2005 acquisition of WMC Resources Ltd., then the world's fifth-largest nickel producer, for A$9.2 billion ($7.6 billion).
Since then, BHP hasn't made another major acquisition, while rivals Xstrata Plc and Cia. Vale do Rio Doce spent $34.4 billion between them buying Falconbridge Ltd. and Inco Ltd. respectively last year.
Takeover Focus
``Other companies have been aggressive in the marketplace in trying to build their overall positions,'' said Tim Barker, who helps manage $54 billion of assets at BT Financial Group, in Sydney. ``That's an area BHP needs to focus on.''
BHP could be a possible bidder for Alcan, Canada's largest aluminum producer, and has started ``early stage'' talks, the Globe and Mail said May 23, citing unidentified people. BHP and Alcan denied to comment. Alcan rejected a $27.7 billion bid from rival Alcoa Inc. and has been in talks with other suitors.
Shares of Rio Tinto Group, the world's third-largest mining company, rose to a record on May 9 on speculation of an approach from BHP. Rio denied the speculation.
``Whilst (Kloppers) may push it, I think the logic and reasoning behind any acquisition or purchase will have to meet stringent criteria,'' said John Colnan, senior resources analyst at Shaw Stockbroking Ltd., in Sydney. ``I can't see any change there.''
BHP's pipeline of projects range from iron ore mines in Australia to U.S. oil and gas fields. Goodyear in March said prices of copper, nickel and other metals will remain high for several decades as demand from China and India climbs.
The company may post record profit of $13.9 billion for the year ending June 2007, up from $10.45 billion the previous year, according to the average of 18 estimates compiled by Bloomberg.
Cost Challenges
BHP is struggling with rising costs at its projects as it competes for labor, equipment and materials. It has announced higher costs for its Alumar alumina refinery in Brazil, the Atlantis South oil project in the Gulf of Mexico, and its Ravensthorpe nickel project in Australia.
``The biggest challenge is going to be cost control and the blow out in costs in pretty much every area they are in,'' said Michael McCormick, who helps mange A$380 million at Leyland Private Asset Management, in Sydney. ``They are in a good position as far as demand is coming through from China on iron and copper.''
BHP, the world's largest producer of coal for the steel industry and third-biggest iron ore exporter, mines those products and more in Australia and controls Chile's Escondida copper mine, the world's largest. It also produces oil and gas.
Rivals Anglo American Plc and Rio Tinto Group, the world's second-and third-largest mining companies, also changed top executives this year. Cynthia Carroll becomes Anglo's new chief executive from March, replacing Tony Trahar. Rio's Leigh Clifford was replaced by Tom Albanese, 50, this month.
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