Oct. 21, 2014, 3:13 PM
- Jefferies lowers its commodity price forecasts, cuts 2015 earnings estimates for mining companies it covers by an average of 21%, and downgrades BHP Billiton (BHP +0.6%) to Hold from Buy but maintains a Buy rating on Rio Tinto (RIO +1.5%) and a Hold on Vale (VALE +1.1%).
- The firm expects BHP to outperform over the very long-term but sees limited upside potential over the next 6-12 months, with shares now trading at a premium on price/NPV; BHP also has limited scope to materially grow its dividend over the next year.
- Jefferies maintain its Buy rating on RIO based on relative valuation as well as capital return potential, high return on capital invested and strong free cash flow even in a weaker iron ore price environment.
Oct. 16, 2014, 7:32 AM
- BHP Billiton (NYSE:BHP) confirms it will pursue a secondary listing in London for a new spinoff company it plans to create from its less-favored assets.
- BHP had been under pressure from shareholders unhappy with its original plan to have the spun-off company’s primary listing in Australia and a secondary listing in South Africa only.
- But because the new company's primary listing would still be in Australia, it would not be eligible for inclusion in the benchmark FTSE 100 index, meaning funds that track the index would not own the stock.
- BHP -2.2% premarket.
Oct. 13, 2014, 2:18 PM
- Cliffs Natural Resources (CLF +14.1%) shares are surging as iron ore prices posted their biggest intraday gain since May after falling steadily in recent weeks.
- Investors covered short positions on expectations prices may have hit bottom; sentiment also was boosted by data showing China's overall exports rose more than forecast and imports unexpectedly gained in September.
- The big gain occurs despite a J.P. Morgan downgrade to Neutral from Overweight with a reduced price target of $5 from $13, as the firm cites CLF's lower iron ore price deck and sum-of-the-parts valuation.
- Other iron ore producers also are up: VALE +8%, RIO +5.3%, BHP +4.2%.
Oct. 13, 2014, 8:47 AM
- BHP Billiton (NYSE:BHP) and Mitsubishi say they expect their newest coal mining operation in eastern Australia to be able to ride out a prolonged market slump, even amid concerns raised by new Chinese import tariffs.
- The companies today officially open their $3.4B Caval Ridge joint venture coking coal mine in Queensland state; the operation, designed to produce 5.5M metric tons/year, first started began coal earlier this year.
- The price of Australia’s premium coking coal has fallen more than 15% YTD to ~US$112/ton, prompting widespread cost-cutting and workforce cuts, including the BHP Billiton Mitsubishi Alliance joint venture, which is the world’s biggest exporter of coking coal.
- BHP +3.1% premarket.
Oct. 10, 2014, 8:37 AM
- Former Xstrata chief Mick Davis, now running natural resources focused P-E firm X2 Resources, approached BHP Billiton (NYSE:BHP) earlier this year with an offer to buy several mines from BHP before the company instead spun off unwanted assets into a new listed company, FT reports.
- It is unclear whether Davis bid for all the assets that BHP ended up including in the new company, which analysts believe could be worth ~$14B, or why BHP decided to reject the bid.
- The assets BHP is proposing to spin off include nickel, manganese and coal mines spread across countries including Australia and South Africa.
Oct. 9, 2014, 10:49 AM
- Rio Tinto (RIO -1%) is defending its plans to expand iron ore production in Australia at a time of sharply falling prices, as the head of its iron ore division says "if we don't fill that void, somebody else will."
- Rio Tinto is pouring billions of dollars into expanding iron ore mines and infrastructure in Australia's Pilbara region, betting that its huge efficiencies of scale will allow it to increase profits even though iron ore prices have fallen more than 40% this year.
- Earlier this week, BHP Billiton (BHP -0.5%) also said it planned to increase its output by nearly 30% by making its operations more efficient; Vale (VALE -0.8%) also is planning increases in output.
Oct. 6, 2014, 10:14 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg criticizes rival miner BHP Billiton (BHP +1.2%), claiming the latter company's plans to further expand iron ore output will hurt the development of one of Africa’s poorest areas.
- Glasenberg says the huge amount of iron ore being produced by the world’s three biggest miners - Vale, Rio Tinto and BHP, already is impacting prices and that further expanding output, as BHP said today it intends to do, would make investing in African iron ore a less appealing prospect.
- Iron ore prices have plunged 40%-plus this year to below $80/ton, their lowest level since 2009, exacerbated by the top iron ore miners ramping up production in the hope they can profit from economies of scale.
Oct. 6, 2014, 2:43 AM
- BHP Billiton (NYSE:BHP) plans to raise its iron-ore capacity by nearly 30% without building any new mines, to become the world's most profitable producer of the steelmaking commodity.
- By increasing the efficiency of existing operations, BHP intends to boost production, while lowering production costs to less than $20 a ton (more than 25% lower than its average in the year through June 2014).
- The miner has already slashed hundreds of positions across its operations, and will likely cut hundreds more to make the goal a reality.
Oct. 3, 2014, 4:13 AM
- Gold miners have the greatest exposure to the Ebola outbreak, Deutsche Bank says. Iron ore and aluminum miners, and oil drillers also have some exposure.
- Randgold's (NASDAQ:GOLD) exposure is most acute, with 100% of its NPV in the affected region.
- AngloGold (NYSE:AU) has 53% NPV exposure.
- ArcelorMittal (NYSE:MT) has some exposure through its iron-ore mine in Liberia (6.5% of its output).
- BHP Billiton (NYSE:BHP) and Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) aren't exposed to the region.
- Related: Exxon delaying some west Africa drilling work because of Ebola (Oct. 2)
- Related: ArcelorMittal contractor moving workers out of Liberia (Aug. 8)
Oct. 2, 2014, 12:58 PM
- Exxon Mobil (XOM -0.4%) and Pemex, Mexico's state-owned oil producer, sign a three-year cooperation agreement to exchange academic, scientific and technical knowledge in analyzing exploration, drilling and refining opportunities.
- XOM joins a growing list of major oil producers including Chevron (NYSE:CVX), Noble Energy (NYSE:NBL) and BHP Billiton (NYSE:BHP) in expressing interest in entering Mexico’s energy industry, which is ending a 76-year state oil monopoly.
Oct. 2, 2014, 8:25 AM
- Walter Energy (NYSE:WLT) +5.7% premarket after The Guardian says BHP Billiton (NYSE:BHP) or Rio Tinto (NYSE:RIO) may be interested in buying the coal company for $5/share.
- Clarkson Capital is out with a note saying the paper has passed along many rumors on U.S. coal activity over the years and none have proven true (Briefing.com).
Sep. 29, 2014, 2:22 PM
- BHP Billiton (BHP -1.1%) has sent its top project manager to run the Jansen potash development in western Canada, a move the potash market will scrutinize for clues to BHP's plans for its Canadian mine.
- If Jansen were to begin producing today, experts say it would increase global potash supply by nearly 15%, which would worsen an oversupply problem for the fertilizer ingredient.
- BHP already has committed ~$3.8B to a project it says has no fixed completion date, but analysts aren't expecting anything before 2020.
Sep. 26, 2014, 3:13 PM
- BHP Billiton (BHP -0.3%) and Mexico's state-run oil company Pemex have signed a deal to share knowledge of their deepwater operations.
- The partnership comes as Mexico is poised to open up oil production to foreign companies for the first time in decades, largely because Pemex is seen as lacking the technical expertise capitalize on reserves in the country’s shale basins and deepwater.
- BHP operates two fields in the Gulf of Mexico and has non-operating interests in three other Gulf fields; last year, it was the fourth-biggest producer in the Gulf.
Sep. 25, 2014, 2:54 PM
- Former Rio Tinto (NYSE:RIO) CEO Tom Albanese says the world's biggest mining companies are behaving rationally by digging out more iron ore even as prices continue to fall.
- "If you look at the forward curve two years ago, if you look at the estimates of supply and demand, there are no real surprises in the present market place that had not been anticipated," Albanese says.
- Iron ore prices have plunged 41% YTD to below $80/ton, their lowest level since 2009, exacerbated in large part by the world's three top iron ore miners - Rio, BHP and Vale (NYSE:VALE) - ramping up production in the hope they can profit from efficiencies of scale.
Sep. 25, 2014, 12:39 PM
- BHP Billiton (BHP -3.3%) says in its annual report that it may be close to resolving a U.S.-led investigation into possible violations of anti-corruption laws, some of which relate to its sponsorship of the 2008 Olympics in Beijing.
- BHP also says it will cut capital spending in its petroleum division by $279M in FY 2015 to ~$5.6B, down from nearly $5.9B in 2014 and $7.1B in 2013.
- Meanwhile, CEO Andrew Mackenzie earned an $8M package in his first year at the helm of the company, significantly less than predecessor Marius Kloppers had been receiving.
Sep. 24, 2014, 5:24 PM
- The Russian Arctic is not the only offshore region generating a potential political problem for Exxon Mobil (NYSE:XOM), as Forbes' Tim Threadgold thinks XOM also faces the possible loss of the giant Scarborough gas field off the coast of western Australia.
- The ultra-deepwater Scarborough is a difficult field to develop, not just because of its location but also because of Australia’s high domestic costs and the gas contains limited amounts of high-profit liquids.
- Threadgold says a recent statement from partner BHP Billiton (NYSE:BHP) that the company was focusing on North American oil and gas opportunities because they offer higher rates of return on investment could play into the hands of an Australian company - Fortescue Metals (OTCPK:FSUMF) - which would like to own Scarborough, and theoretically could do so without paying XOM and BHP a dollar under Australia's “use it or lose it” laws.
BHP Billiton Ltd is a natural resources company. The Company is engaged in the producing commodities, including iron ore, metallurgical and energy coal, conventional and unconventional oil and gas, copper, aluminium, manganese, uranium, nickel and silver.
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