BHP Group is preparing to restructure its Western Australia iron ore division, the Perth-based unit that employs more than 16,000 workers and contractors, as the world's biggest listed miner tries to hold down costs while iron ore prices weaken, according to a Bloomberg report published on Thursday. On the same day, BHP named internal candidate Adrian Wood as its next chief financial officer.

The changes matter well beyond Perth. The Pilbara mines are a core supplier to Chinese steel mills, and GMK Center described BHP as the most efficient major producer in the region, so any move to squeeze its costs further puts more pressure on higher-cost rivals selling into the same market. For investors in Asia who hold BHP for its dividend, iron ore margins remain the main driver of cash returns.

What BHP is changing in the Pilbara

Details of the overhaul are still being settled, according to the Bloomberg report as summarized by the trade outlets GMK Center and Mining.com.au. GMK Center said the plan involves flattening the management hierarchy and moving support units and some IT functions out of the central structure and under the mine sites they serve. The next round of job reductions is expected to fall mainly on office staff, it said, and the approach may later be extended to other BHP businesses.

BHP had not issued an exchange announcement on the restructure at the time of writing, and it has not said whether more positions will go, Mining.com.au reported.

The report follows BHP's decision in October to remove about 300 roles across its South Flank, Mining Area C, Jimblebar and Newman operations. Those sites have a combined workforce of about 16,000. Bloomberg linked those cuts to rising mining and shipping costs and weaker iron ore prices, according to Mining.com.au. BHP said at the time that it regularly reviews its operations and would try to move affected employees into other roles. The Western Australia branch of the Electrical Trades Union said it would scrutinize whether the redundancies were necessary.

Rival Rio Tinto is going through a similar exercise, merging duplicate positions and removing management layers to concentrate on iron ore and copper, GMK Center said.

Output targets and costs

The restructure does not change BHP's volume ambitions. The company is aiming for annual Western Australia iron ore production of more than 305 million tons by the end of fiscal 2028 and wants medium-term unit costs below $19 a ton, Mining.com.au reported. Its Western Australia operations produced 71.9 million tons on a 100% basis in the September quarter, and full-year guidance was left unchanged at 286 million to 298 million tons.

On BHP's attributable share, that quarter's output was 66.5 million tons, up 4% from a year earlier but down 2% from the previous quarter, according to GMK Center, which put the attributable guidance range at 260 million to 272 million tons.

The backdrop is a slower China. Consumption there is slowing, production costs across the industry are rising and Beijing has tightened control over raw material purchasing, GMK Center noted. Capital Times reported earlier on the start of shipments from Guinea's Simandou project, a large new source of high-grade ore for Chinese mills that adds to supply over the next few years.

A new finance chief

In a release to the Australian Securities Exchange dated Nov. 12, BHP said Wood will become CFO on Feb. 17, 2027. He succeeds Vandita Pant, who will step down after BHP reports half-year results on Feb. 16 and stay until March 29 to support the handover.

Wood joined BHP in 2015 and is vice president of projects for Minerals Australia, the division that includes the iron ore business. He has previously served as vice president of finance for Minerals Australia and as group investor relations officer, and spent more than 25 years in investment banking and corporate roles in Australia and Britain, including at UBS in London and Macquarie Group, the company said.

Chief Executive Brandon Craig said in the release that Wood has "a strong track record of financial management." Craig credited Pant, who joined BHP in 2016 as group treasurer, with strengthening the company's approach to capital allocation.

Pant is the second senior executive seen as a potential chief executive candidate to leave since Craig took over from Mike Henry in July, Reuters reported. BHP said in September that Chief Commercial Officer Rag Udd would step down at the end of January.

The leadership changes come as BHP also leans harder on China for copper. On Nov. 10, Mining.com.au reported that the miner signed a memorandum of understanding with Shanghai-based Gomount Holdings on copper cathode trade at the China International Import Expo, with no volumes or pricing disclosed. BHP produced 400,700 tons of copper in the September quarter, down 19% from a year earlier, and kept its fiscal 2027 copper guidance at 1.65 million to 1.8 million tons.

The next fixed date for investors is Feb. 16, when BHP reports half-year results, the last set Pant will present as CFO.