04-07-2015, 10:19 AM
Peter Beaven: BHP Billiton’s new numbers man
THE AUSTRALIAN JULY 04, 2015 12:00AM
Barry FitzGerald
Resources Editor
Melbourne
Peter Beaven, BHP Billiton's new chief financial officer. Picture: Stuart McEvoy. Source: News Corp Australia
BHP Billiton’s new chief financial officer Peter Beaven learned at a young age how uncertain the world can be.
It should hold the 48-year-old chartered accountant in good stead, given BHP and the rest of the industry must navigate the uncertainties surrounding global economic growth, and its impact on commodity prices.
As a young boy Beaven’s British father, a finance diplomat with Britain’s Colonial Service, had to move the family to South Africa after Portuguese East Africa crumbled in to disarray following Portugal’s withdrawal, leading to the country’s independence as Mozambique in 1975.
It was on a day’s notice, and everything the family owned and treasured had to be left behind for the dash to his mother’s homeland of South Africa.
“That was kind of an interesting exposure at a pretty young age to how uncertain the world can be. Then we lived in what was then Rhodesia (now Zimbabwe), and there was a war on, and that was equally uncertain,’’ he says.
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MOREMore growth to come: Beaven
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Beaven learned from the experience that “you can’t take stuff from one place to the other, but you can always take an education’’.
He got his early education at an English boarding school in the wilds of the Zimbabwean bush, where sport dominated and lessons were an afterthought.
“It’s one of those strange things about the English: they can transplant themselves into the middle of nowhere. We played sport and we used to go to classes in the off time. So we had cricket and rugby and athletics and swimming and hockey and so on,’’ Beaven told The Weekend Australian. Life as one of BHP’s top executives does not allow time for competitive sport. Beaven says now it is a case of trying to stay fit with some running and cycling.
On the latter, working at BHP’s global headquarters in Melbourne’s Collins Street has its benefits thanks to the flat topography. “We tried to cycle a bit in Santiago (where he was previously BHP’s copper boss) but, you know, you’re cycling in the mountains there.’’
Beaven’s tertiary education choice at South Africa’s Natal University reflects a preference for analytical decision-making.
Medicine, engineering and law were ruled out, deemed not as portable as accountancy. “Nobody can stop you from taking your profession,’’ Beaven says.
It’s a decision that’s perhaps more important to the son of a diplomat, and one that is better understood in light of Beaven’s experience of fleeing Mozambique as a child. Little wonder then that he struggles to define where “home” is.
Born in Cascaise in Portugal, but carrying a British passport, Beaven says he doesn’t have a particular sort of nationality, which could also be said about his accent.
“When people ask me, I say I am from a bunch of countries and leave it at that.’’ His wife is a Melburnian, and his two children are Melbourne-born. “It’s been a great place to me, so if Australia will have me, I’ll stay,’’ Beaven quips.
After the seven years it took to become a chartered accountant, Beaven went to London to work as an investment banker with the since consumed Kleinwort Benson. “One of our clients at that point was BHP Petroleum, so I came here for a year on secondment working in 1997, and so I did some deals for them. And then I met my wife in Australia.’’
As it was, the first deal was a doozy — the 1998 sale of BHP’s Hawaiian oil refinery at Barbers Point. When told of the asset and BHP’s wish to exit, Beaven thought BHP was pulling his leg.
Acquired in 1980, Pacific Resources, as it was known, was sold for $275 million. “It was a great deal, and it was a great thing to do as you can imagine,’’ Beaven says. He then stayed on as a contractor for BHP, which by then was well in to “clean-up and fix-up’’ stage under its American chief executive at the time, Paul Anderson.
Beaven worked on the sale of the manganese interests to Billiton, which were subsequently re-acquired in the 2001 merger with the out-of-Africa Billiton, only to be shunted off again with the recent spin-out of South32.
He also worked on BHP’s exit from platinum with the shutdown and sale of the Hartley platinum project in Zimbabwe, and BHP’s sale of its IT business. On the buy side, there was the hostile bid by BHP and partner Mitsubishi of Queensland coal group QCT Resources for $830m in 2000.
“That was kind of fun,’’ Beaven says. He worked on that deal with another future contender to one day become BHP chief executive, BHP’s coal boss Mike Henry, who was with Mitsubishi at the time.
After three years as a contractor, Beaven was to further hone his merger and acquisition, and divestment, skills as head of UBS’s natural resources team in Melbourne. His stint there included advising BHP on the 2001 merger with Billiton.
Beaven became a BHP employee when former CFO Chip Goodyear became CEO, replacing former Billiton boss Brian Gilbertson who had a short stay after the departure of Anderson.
Then came two years for Beaven as chief development officer of the carbon steel materials business, and then five years running the manganese business from Johannesburg, and finally, 4½ years in Santiago to run the global copper business.
It was the departure of former BHP CFO Graham Kerr to South32 that served up Beaven’s chance to become CFO.
Early in his tenure, he is showing an eagerness to talk beyond the standard brief for a CFO of filling in the numbers after the CEO has had his say. The industry has tended to talk about company-specific issues, to shareholder-specific issues, he says. “I think there are community-wide issues that I think we also have a legitimate voice to, and a debate that we should participate in.’’
Like his CEO Andrew Mackenzie, Beaven deconstructs the debate, triggered by Fortescue’s Andrew Forrest, around the cause of the collapse in iron ore prices. “Something very, very obvious occurred, something we called in 2011 because that was the last time we made a substantial investment execution in iron ore. So we knew this was going to happen. It’s basic economics,’’ Beaven says.
He said the bigger and remaining question was: what was Australia going to do about it?
‘The next level of the debate should really be taking place around the competitiveness of the mining industry and what are the causes for the loss in productivity. And it’s not just in the mining industry but it’s across a number of industries here in Australia.”
He acknowledges that the industry itself must accept most of the blame. “We’ve taken our eye off the ball in terms of productivity, the use of human capital, and I think there is a lot of improvement that we have made, but we can continue to make.”
While the heat in the iron ore blame game between Rio Tinto and BHP on one side, and Forrest on the other, has died down, the taxation of multinationals continues to bubble. Again, Beaven does not shy away. “There is a lot of interest, I think rightly, in corporate tax at the moment — how much are companies paying? How much should they be paying? It has to be a debate about what is fair and what is in Australia’s best interest.’’
But he adds that any “real debate about tax has to be about global competitiveness and the role that tax regimes play in that.’’
He says the companies had to be “transparent to ensure people have confidence in the concept of fairness’’. To that end, BHP is to release a global tax and transparency report later this year, including more detail on a country-by-country and project-by-project basis.
THE AUSTRALIAN JULY 04, 2015 12:00AM
Barry FitzGerald
Resources Editor
Melbourne
Peter Beaven, BHP Billiton's new chief financial officer. Picture: Stuart McEvoy. Source: News Corp Australia
BHP Billiton’s new chief financial officer Peter Beaven learned at a young age how uncertain the world can be.
It should hold the 48-year-old chartered accountant in good stead, given BHP and the rest of the industry must navigate the uncertainties surrounding global economic growth, and its impact on commodity prices.
As a young boy Beaven’s British father, a finance diplomat with Britain’s Colonial Service, had to move the family to South Africa after Portuguese East Africa crumbled in to disarray following Portugal’s withdrawal, leading to the country’s independence as Mozambique in 1975.
It was on a day’s notice, and everything the family owned and treasured had to be left behind for the dash to his mother’s homeland of South Africa.
“That was kind of an interesting exposure at a pretty young age to how uncertain the world can be. Then we lived in what was then Rhodesia (now Zimbabwe), and there was a war on, and that was equally uncertain,’’ he says.
Start of sidebar. Skip to end of sidebar.
MOREMore growth to come: Beaven
End of sidebar. Return to start of sidebar.
Beaven learned from the experience that “you can’t take stuff from one place to the other, but you can always take an education’’.
He got his early education at an English boarding school in the wilds of the Zimbabwean bush, where sport dominated and lessons were an afterthought.
“It’s one of those strange things about the English: they can transplant themselves into the middle of nowhere. We played sport and we used to go to classes in the off time. So we had cricket and rugby and athletics and swimming and hockey and so on,’’ Beaven told The Weekend Australian. Life as one of BHP’s top executives does not allow time for competitive sport. Beaven says now it is a case of trying to stay fit with some running and cycling.
On the latter, working at BHP’s global headquarters in Melbourne’s Collins Street has its benefits thanks to the flat topography. “We tried to cycle a bit in Santiago (where he was previously BHP’s copper boss) but, you know, you’re cycling in the mountains there.’’
Beaven’s tertiary education choice at South Africa’s Natal University reflects a preference for analytical decision-making.
Medicine, engineering and law were ruled out, deemed not as portable as accountancy. “Nobody can stop you from taking your profession,’’ Beaven says.
It’s a decision that’s perhaps more important to the son of a diplomat, and one that is better understood in light of Beaven’s experience of fleeing Mozambique as a child. Little wonder then that he struggles to define where “home” is.
Born in Cascaise in Portugal, but carrying a British passport, Beaven says he doesn’t have a particular sort of nationality, which could also be said about his accent.
“When people ask me, I say I am from a bunch of countries and leave it at that.’’ His wife is a Melburnian, and his two children are Melbourne-born. “It’s been a great place to me, so if Australia will have me, I’ll stay,’’ Beaven quips.
After the seven years it took to become a chartered accountant, Beaven went to London to work as an investment banker with the since consumed Kleinwort Benson. “One of our clients at that point was BHP Petroleum, so I came here for a year on secondment working in 1997, and so I did some deals for them. And then I met my wife in Australia.’’
As it was, the first deal was a doozy — the 1998 sale of BHP’s Hawaiian oil refinery at Barbers Point. When told of the asset and BHP’s wish to exit, Beaven thought BHP was pulling his leg.
Acquired in 1980, Pacific Resources, as it was known, was sold for $275 million. “It was a great deal, and it was a great thing to do as you can imagine,’’ Beaven says. He then stayed on as a contractor for BHP, which by then was well in to “clean-up and fix-up’’ stage under its American chief executive at the time, Paul Anderson.
Beaven worked on the sale of the manganese interests to Billiton, which were subsequently re-acquired in the 2001 merger with the out-of-Africa Billiton, only to be shunted off again with the recent spin-out of South32.
He also worked on BHP’s exit from platinum with the shutdown and sale of the Hartley platinum project in Zimbabwe, and BHP’s sale of its IT business. On the buy side, there was the hostile bid by BHP and partner Mitsubishi of Queensland coal group QCT Resources for $830m in 2000.
“That was kind of fun,’’ Beaven says. He worked on that deal with another future contender to one day become BHP chief executive, BHP’s coal boss Mike Henry, who was with Mitsubishi at the time.
After three years as a contractor, Beaven was to further hone his merger and acquisition, and divestment, skills as head of UBS’s natural resources team in Melbourne. His stint there included advising BHP on the 2001 merger with Billiton.
Beaven became a BHP employee when former CFO Chip Goodyear became CEO, replacing former Billiton boss Brian Gilbertson who had a short stay after the departure of Anderson.
Then came two years for Beaven as chief development officer of the carbon steel materials business, and then five years running the manganese business from Johannesburg, and finally, 4½ years in Santiago to run the global copper business.
It was the departure of former BHP CFO Graham Kerr to South32 that served up Beaven’s chance to become CFO.
Early in his tenure, he is showing an eagerness to talk beyond the standard brief for a CFO of filling in the numbers after the CEO has had his say. The industry has tended to talk about company-specific issues, to shareholder-specific issues, he says. “I think there are community-wide issues that I think we also have a legitimate voice to, and a debate that we should participate in.’’
Like his CEO Andrew Mackenzie, Beaven deconstructs the debate, triggered by Fortescue’s Andrew Forrest, around the cause of the collapse in iron ore prices. “Something very, very obvious occurred, something we called in 2011 because that was the last time we made a substantial investment execution in iron ore. So we knew this was going to happen. It’s basic economics,’’ Beaven says.
He said the bigger and remaining question was: what was Australia going to do about it?
‘The next level of the debate should really be taking place around the competitiveness of the mining industry and what are the causes for the loss in productivity. And it’s not just in the mining industry but it’s across a number of industries here in Australia.”
He acknowledges that the industry itself must accept most of the blame. “We’ve taken our eye off the ball in terms of productivity, the use of human capital, and I think there is a lot of improvement that we have made, but we can continue to make.”
While the heat in the iron ore blame game between Rio Tinto and BHP on one side, and Forrest on the other, has died down, the taxation of multinationals continues to bubble. Again, Beaven does not shy away. “There is a lot of interest, I think rightly, in corporate tax at the moment — how much are companies paying? How much should they be paying? It has to be a debate about what is fair and what is in Australia’s best interest.’’
But he adds that any “real debate about tax has to be about global competitiveness and the role that tax regimes play in that.’’
He says the companies had to be “transparent to ensure people have confidence in the concept of fairness’’. To that end, BHP is to release a global tax and transparency report later this year, including more detail on a country-by-country and project-by-project basis.