BHP Billiton is the world’s third-largest aluminium producer at 1,4-m/t a year and its aluminium business has a workforce in Southern Africa of some 3 350 people, excluding contractors. As president and COO of BHP Billiton’s Southern African aluminium interests, Mkhwanazi currently presides over the company’s Hillside, Bayside and Mozal aluminium smelters.
While his early expansionary aims are brownfield – Hillside Three Plus in Kwazulu-Natal and a study into obtaining more power for Mozal Three in Mozambique – potentially he calculates that of the 90-billion tons of bauxite deposits recorded globally, the best 40-billion are in Africa. He adds that he is intent on changing the fact that BHP Billiton does not have a single bauxite refinery in Africa.
Hillside Three Plus could con-tribute up to an additional 1 000 t/y, taking Hillside’s production to more than 800 000 t/y.
Since the Mozal smelters are larger, Mozal Three would require an additional 500 MW of power that could enable the company to produce up to an additional 250 t/y, bringing total Mozal nameplate output to more than 750 000 t/y. Mkhwanazi cites the lack of power availability as the aluminium business’s biggest constraint.
He points out that there is no longer the stranded power that was available when Hillside and Mozal were conceived and, at the other end of the scale, a capacity shortage is now anticipated in South Africa from 2007.
While Mkhwanazi foresees that BHP Billiton might offer itself as a premium bulk electricity customer to independent power-producers once these begin emerging, he emphasises that the company’s future lies, in the main, in maintaining a very close business partnership with Eskom.
For new global ventures, he is identifying batches of stranded power in locations like the Middle East, Russia, Malaysia and Africa, which has no less than six large rivers with hydroelectric potential. He sees great potential in Africa and is excited about the opportunity of dovetailing his initiatives with those of the New Partnership for Africa’s Development.
He is also keen to enter other countries in Africa that have bauxite deposits, reiterating that the continent is the place to be when it comes to the raw material from which alumina is made.
BHP Billiton has had considerable working experience in Africa, particularly in South Africa and Mozambique, the latter where it operates the world’s best smelter using AP 30 technology.
He is encouraged by the fact that the Southern African region is refining its electricity-trading arrangements and he anticipates that international electricity trading could ultimately make it possible for BHP Billiton to have several sources of potential electricity supply. Having a greater number of options would provide important flexibility to the rigid arrangements that prevail, enabling advantage to be taken of overcapacity in other countries.
Mkhwanazi’s frontier sentiment meshes with those expressed by BHP Billiton CEO Chip Goodyear, who, during his last results presentation, in February 2005, let the investment world know unequivocally that the company was willing to enter new-production countries in order to meet voracious current demand.
“Whether that be a coking-coal operation in Indonesia or alumina, bauxite and iron-ore in India, or new mineral resource opportunities in Russia or sub-Saharan Africa, a company of BHP Billiton’s size, scale and customer focus has to be willing to venture out,” he insisted.
BHP Billiton has proved that it can make things work in challenging environments, and Goodyear sees the company’s capacity to manage risk as one of its most significant competitive advantages.
Moreover, he believes that the company must get started early in new-production countries as a consequence of its long-term commitment to the resources business.
The second prong of his four-pronged strategy involves new markets, as in the so-called Bric economies of Brazil, Russia, India and China, which are consuming raw materials at an ever-increasing rate, along with several other developing economies around the world.
Whether it be the Bric economies or others, Goodyear sees it as essential that BHP Billiton is able to serve customers in developing environments.
From a global reach point of view, even at this stage, none of BHP Billiton’s competitors is able to match its geographical footprint.
In the human resource sense, BHP Billiton is increasingly being seen as the General Electric of the resources industry in the manner in which it has groomed top leadership for the sector – and conversely the company has also become a magnet for new talent, as is evidenced by Mkhwanazi forsaking his top position as Bateman Africa CEO to join BHP Billiton.
Even while at Bateman Africa, Mkhwanazi was studying future mining opportunities in Africa.
At that stage, in order to increase Africa’s power base, he was following up several successful power feasibility studies that the World Bank had completed in Africa and using these as a basis for engaging constructively with several African governments.
As a nuclear scientist, Mkhwanazi served at the former Atomic Energy Corporation and the CSIR before helping to restructure South Africa’s electricity supply as its regulator.
He is a former head of the physics department of the University of Swaziland and obtained a PhD from the University of Lancaster, in the UK, in nuclear physics.
He spent four years as an academic refugee in Perth, Australia, after being deported from Swaziland in 1988 for “activities incompatible with his status”.
None of the Southern African countries would give him asylum and he finally chose Australia over Canada to avoid the cold.
He attended university as a research fellow in Australia and returned to South Africa in December of 1992.
He was born in the St Lucia area of Kwazulu-Natal and went into exile as a 16-year-old, in 1971.
He completed his schooling in Swaziland, obtained a scholarship to do a BSc in Botswana – where he met current Eskom CEO Thulane Gcabashe – and then went on to Lancaster to study physics, where he met Eskom chairperson Reuel Khoza.
In his spare time he likes visit-ing schools in the rural areas to encourage pupils to pursue careers in mathematics and science.
On such visits, he is wont to reminisce to pupils that he only put on his first pair of shoes at the age of 13, when he began attending high school.
But things look very different today and when Mining Weekly interviewed him along the corridors of BHP Billiton South Africa power, his expensive-looking shoes, in particular, sparkled.
Full name: Xolani Humphrey Mkhwanazi
Position: President & COO Aluminium Southern Africa
Main activity of the company: Process engineering and project management in the natural resources sector
Date and place of birth: March 25, 1955, Hlabisa, Kwazulu-Natal
Education: PhD (Applied Physics), Lancaster UK, 1984
First job: Bank clerk
Size of first pay packet: R65 a month
First job with present group: President & COO Aluminium Southern Africa
Career history prior to current position: CEO Bateman Africa, CEO National Electricity Regulator; CEO National Science & Technology Forum
Value of assets under your control: Turnover of R12,3-billion in financial year 2004
Number of people under your leadership: 3 350
Management style: Participative, consultative
Personal best achievement: Stopping smoking from 60 cigarettes a day
Professional best achievement: Building NER into a credible regulator in South Africa and Africa
Person who has had the biggest influence on your life: My mother
Person who has had the biggest influence on your career: Mike Groch, former executive vice president, CSIR
Person who you would most like to meet: Bill Clinton
Businessperson who has impressed you most: Herman Mashaba, founder and chairperson Black Like Me
Philosophy of life: Whatever you do, give it your best; you may never have another opportunity
Biggest ever opportunity: To further my education to PhD level
Biggest ever disappointment: Being accused of corruption at NER
Hope for the future: A prosperous nonracial South Africa free of poverty and inequalities
Favourite reading: Economic publications and leadership books
Favourite TV programme: SABC News
Favourite food/drink: Mutton stew & dumplings/red grapetizer
Favourite music: Jazz, classical
Favourite sport: Tennis
Favourite website: Amazon.com (books)
Miscellaneous dislikes: Mediocrity, laziness
Favourite other South African company: Eskom
Favourite foreign company: BHPBilliton/Mitsubishi
Children: Nqobani, 20; Ntokozo, 13; twin boys Andile and Banele, 6