BHP’s truce with activist investors led by billionaire Paul Singer won’t last long if the world’s biggest mining company doesn’t pump up returns and deliver on strategic reform in the wake of its expected bumper profit report this week. The naming in June of BHP’s youngest director, 53-year-old Ken MacKenzie, as chairman from next month has helped soothe disgruntled shareholders including Singer’s Elliott Management, while continued demand growth in China for iron ore to coal is boosting prices, swelling earnings’ forecasts and raising expectations for higher payouts. "They’ve got the most breathing space they’ve had in a long time," Peter O’Connor, a Sydney-based analyst with Shaw and Partners, said by phone. "But if they mess up, the activists are going to be back on their jugular." After raising its stake in BHP’s London-traded shares to 5%, Elliott on Wednesday expressed confidence MacKenzie will heed investors’ calls to exit US shale and tighten the producer’s approach on capit...
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