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UPDATE 2-World's biggest miner BHP names Mike Henry as CEO, replacing Mackenzie

(Adds background on Andrew Mackenzie and Mike Henry)

Nov 14 (Reuters) - BHP Group Ltd named Mike Henry to replace Andrew Mackenzie as the world's biggest miner's new chief executive officer next year.

Mackenzie will retire on Dec. 31, ending nearly seven years in charge of the global miner, and over a decade with the company.

Henry, BHP's current president of operations minerals in Australia, will take over from Jan. 1, the miner said.

Under Mackenzie's tenure, BHP has grappled with investor pressure to consider drastic changes in management to tackle challenges like cutting costs, a return to lower iron ore prices, and reputational damage after a Brazil dam disaster.

Earlier this year, Reuters reported that some institutional investors in Australia were pushing BHP to consider external candidates to replace Mackenzie as CEO.

"Fresh leadership will deliver an acceleration in the enormous potential for value and returns that will come from BHP's next wave of transformation," Mackenzie said in a statement.

His replacement, Henry, has been with BHP since 2003, and has spent 30 years in the industry. He takes over at a time where global economic risks, such as softer demand and volatile prices, could hurt future results of the dual-listed miner.

"I think (investors) will be quite comfortable with his broad experience across the whole company," said Fat Prophets analyst David Lennox.

His experience should "enable him to steer BHP through the next five to six years that are going to be extremely challenging for big miners," Lennox added.

"We will unlock even greater value from our ore bodies and petroleum basins," CEO-elect Henry said, adding that BHP must operate safely and reduce its impact on the environment.

Shareholders are intensifying pressure on companies, especially in the resources sector, to show urgency in combating climate change, given the impact of their core operations on the environment.

According to the statement, Henry will earn a base salary of $1.7 million a year.

"Mike Henry's deep operational and commercial experience, developed in a global career spanning the Americas, Europe, Asia and Australia, is the perfect mix for our next CEO," said BHP's Chairman Ken MacKenzie.

(Reporting by Nikhil Kurian Nainan in Bengaluru and Sonali Paul in Melbourne; Editing by Marguerita Choy and Lisa Shumaker)