21/06/2005 - 22:00

Multinationals exert dominant influence

21/06/2005 - 22:00

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This year’s list of influential executives in the resource sector has two defining characteristics – it’s a long list and it’s dominated increasingly by multinational companies.

This year’s list of influential executives in the resource sector has two defining characteristics – it’s a long list and it’s dominated increasingly by multinational companies.

The length of the list reflects the growing importance of the resource sector in Western Australia’s economy, something that is being reinforced year after year as big mining and oil and gas companies pursue further expansion.

The dominance of multinationals was highlighted by BHP Billiton’s recent takeover of WMC Resources.

Giant companies such as BHP Billiton, Rio Tinto, Alcoa and Chevron – and Perth’s own budding multinational, Woodside – are the dominant producers of iron ore, oil and gas, alumina, nickel and diamonds.

They also account for a big chunk of the billions of dollars being poured into resource projects in WA, in contrast to the relatively static gold sector.

Given the size and importance of these companies, it is appropriate to dig a little deeper into their management structures to identify the real movers and shakers.

Take Rio Tinto, for example.

Perth-based Sam Walsh, who replaced Chris Renwick as chief executive of the iron ore group last year, is a member of Rio Tinto’s 10-member executive committee, reporting direct to group chief executive Leigh Clifford in London.

(Only one other member of the executive committee – Brisbane-based Oscar Groeneveld, chief executive of the aluminium group – is based outside London.)

That clearly makes the quietly spoken Mr Walsh a heavy hitter in one of the world’s biggest mining companies.

The people reporting to him also wield enormous commercial influence, even though they have less public profile than the chief executives of dozens of small, listed exploration companies.

Dave Smith, for instance, is managing director of Pilbara Iron, which manages all of Rio’s WA iron ore interests.

That puts him in charge of nine mines, three ports and the largest privately owned railway in the world.

Warwick Smith is Pilbara Iron’s managing director expansion projects.

That puts him in charge of projects worth $US1.6 billion ($A2.3 billion) and means there are many engineers, steel fabricators and contractors who would like to be his best friend.

With further expansion highly likely, as Rio seeks to cash in on booming demand and soaring prices for iron ore, Mr Smith’s influence will remain undiminished.

BHP Billiton is transferring two of its most senior executives to Perth following the WMC acquisition.

Its stainless steel materials business, which is one of BHP’s seven customer service groups and includes its global nickel operations, will be run from Perth.

Chris Pointon, president of stainless steel materials, will be moving from London next month and will rank as the most senior BHP executive based in Perth.

Also moving to Perth is Jimmy Wilson, who will take up the new post of chief operating officer of Western Nickel.

The top iron ore executive in Perth is Ian Ashby, who took up his current post of chief operating officer, WA iron ore, in March after transferring from Houston.

That followed Graeme Hunt’s transfer last year from Perth to Melbourne, where he has responsibility for BHP’s global iron ore operations.

In the petroleum area, the top BHP executives are Nigel Smith, president, operations, Australia/ Asia, who is moving this month to Perth, and Bill Bloking, president, Australia/Asia, gas.

The top executives at Woodside are managing director Don Voelte, who joined the company last year, and chief operating officer Keith Spence. Mr Voelte says his role is to focus on where the company will be in five years’ time; hence, he is looking at strategic opportunities around the world, including in places such as West Africa, Libya and the Gulf of Mexico.

Mr Spence is focused on running the existing business operations, which are primarily in WA, and include the $14 billion North West Shelf gas project.

US oil company Chevron, run in Australia by Jay Johnson, has substantial interests in WA but its most significant role is sponsor of the $11 billion Gorgon gas project.

If Gorgon proceeds, as expected, it will be the single largest investment decision ever taken in the state – or more precisely in Houston.

Planning for the project has reached an advanced stage only because Chevron convinced the Gallop Government to allow development on Barrow Island.

Another key executive in Perth is Alcoa managing director Wayne Osborne.

His company has extensive operations in WA, with two bauxite mines and three alumina refineries, is currently spending $440 million upgrading its Pinjarra refinery, and is preparing to spend $1.5 billion expanding its Wagerup refinery.

That equals massive commercial influence in anyone’s language.

However, Alcoa has also learned that community concern about emissions and chemical spills at its facilities can put a real brake on its growth plans.

Among the local companies, the most respected and influential executives include Minara Resources managing director Peter Johnston.

He took over the company (formerly known as Anaconda Nickel) at a time of crisis and has strengthened its balance sheet and is slowly improving its operating performance.

Consolidated Minerals’ straight-talking chief executive Michael Kiernan has emerged as a major industry player over the past year.

His company has interests in manganese, chromite and nickel and is keen to expand, particularly in the iron ore sector.

It entertained a bid for Portman Mining last year before deciding to sell its stake and recently held discussions with Gina Rinehart’s Hancock Prospecting about buying into the Hope Downs project.

Andrew ‘Twiggy’ Forrest is a larger-than-life character who defied the sceptics to establish Anaconda Nickel’s Murrin Murrin project, before departing in acrimonious circumstances.

He is trying to defy the sceptics again by developing an ambitious $2 billion iron ore project in the Pilbara but has copped a lot of flack this year for over-promising and under-delivering.

 

RESOURCE COMPANY EXECUTIVES

 

•           Sam Walsh

            Chief Executive, Rio Tinto Iron Ore.


•           Dave Smith

            Managing Director, Pilbara Iron (Rio Tinto).


•            Warwick Smith

            Managing Director, Expansion Projects, Pilbara Iron (Rio Tinto).


•           Chris Pointon

            President, Stainless Steel Materials, BHP Billiton.


•           Jimmy Wilson

            President and Chief Cperating Officer, Western Nickel, BHP Billiton.


•           Ian Ashby

            President and Chief Operating Officer, WA Iron Ore, BHP Billiton.


•           Nigel Smith

            President, Operations Australia/Asia, BHP Billiton Petroleum.


•           Bill Bloking

            President, Australia/Asia Gas, BHP Billiton Petroleum.


•           Don Voelte

            Managing Director, Woodside.


•           Keith Spence

            Chief Operating Officer, Woodside.


•           Wayne Osborn

            Managing Director, Alcoa.


•           Jay Johnson

            Managing Director, Chevron Australia.


•           Peter Johnston

            Managing Director, Minara Resources.


•           Michael Kiernan

            Managing Director, Consolidated Minerals.


•           Andrew Forrest

            Managing Director, Fortescue Metals Group.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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