BHP Billiton announces CEO's shock resignation

BHP Billiton, the world's largest mining company, today announced the surprise resignation of Brian Gilbertson only six months after he was appointed chief executive.

The Anglo-Australian mining giant cited "irreconcilable" differences to explain the unanticipated departure of Mr Gilbertson, who is to be replaced with immediate effect by Chip Goodyear, the chief development officer.

BHP Billiton shares fell by over 3% in late morning trade as investors speculated over the reason for the sudden exit of Mr Gilbertson, who built up Billiton, a UK company, through acquisitions and dominated the firm before its merger with Australia's BHP 18 months ago.

Dissatisfied with the initial explanation behind the move, the Australian financial watchdog, the Australian securities and investments commission, asked BHP Billiton to flesh out its announcement. The company later released a second statement saying the resignation was not related to any concerns about financial performance.

Analysts said the sometimes abrasive Mr Gilbertson was probably at odds with a more conservative board led by a strong chairman, Don Argus, once head of Australia's biggest bank, National Australia Bank. Unlike Mr Gilbertson, Mr Argus favours organic growth rather than acquisitions.

"I think Gilbertson was very acquisition-minded and I am not sure the board shared his view," one analyst said. Mr Gilbertson, before taking over as CEO, spelled out the company's strategy in a major speech last April, and pledged to deliver an additional $500m (£310m) in cost cuts over three years, in addition to earlier cost savings from the merger.

There has also been speculation that Mr Gilbertson wanted to move control to London, where he has a home, from Melbourne, where he has spent most of his time. At the time of the merger, Australian authorities insisted that the new company's CEO be based in Australia.

Mr Goodyear, a former Kidder, Peabody and Freeport-McMoRan executive, joined BHP in 1999 as chief financial officer and has been chief development officer for BHP Billiton since June 2001.

In a brief statement, he said he would support targets to build on existing businesses where there was an opportunity to be industry leader across BHP Billiton's global portfolio of oil, coal, iron ore, industrial metals and diamond interests.

BHP Billiton has notched up positive results since the merger, but as recently as November, Mr Gilbertson and Mr Argus still found themselves having to defend the merger, as scepticism lingered about the combination.

Mr Gilbertson's resignation can only reinforce the views of the doubters, who will see his departure as evidence of the culture clash between the formerly separate companies. BHP Billiton's stock has risen just 1.2% since the merger, but has outpaced a 12% fall in the Australian market. Profits have been hit by struggling commodity markets.