Analyzing Why BHP Billiton's American Depositary Receipts Trade At Different Prices
Caiman Valores • 25 Comments
Caiman Valores • 25 Comments
Tue, Jun. 21, 8:32 AM
- BHP Billiton (NYSE:BHP), a major supplier of thermal coal and the world’s no. 1 exporter of coking coal, signals it will stick with its coal business despite difficult conditions and raise output by working the mines it runs harder.
- In an investor presentation, BHP says the world’s appetite for coking coal - used in steelmaking - and thermal coal - which is burned to generate electricity - will rise as developing economies demand more steel and energy.
- But coal division chief Mike Henry says BHP could not just hope prices would recover, as it will target another US$600M in productivity gains by the end of FY 2017 on top of $3B-plus in productivity gains since 2012.
- Although BHP has trimmed its portfolio through asset sales and the de-merger of South32 over the past year, Henry hints that more divestments could be ahead despite all its remaining operations remaining “cash positive.”
Mon, Jun. 20, 8:01 AM
- BHP Billiton (NYSE:BHP) Vale’s (NYSE:VALE) Samarco mining joint venture in Brazil is exploring ways to restructure ~$1.6B in loans after last year's deadly tailings dam accident halted output, Bloomberg reports.
- While Samarco’s dollar-denominated bonds do not start maturing until 2022, the mine probably will not be able to service all of its obligations as it struggles to resume operations, according to the report; so far, it has not missed any payments.
- On Friday, Brazilian authorities fined Samarco 143M reais for damage to the coastal environment, a wildlife refuge and a biological reserve in Espirito Santo state.
Thu, Jun. 16, 11:27 AM
- A restart date for the Samarco iron ore operation in Brazil jointly owned by Vale (VALE -0.2%) and BHP Billiton (BHP -2.3%) has been delayed until next year, the company's head of human resources tells Reuters.
- Samarco says the lack of clarity of when the company would receive the necessary licenses to restart operations has forced it to begin laying off more than 1,000 workers.
- The delay adds pressure to Samarco’s ability to continue to solely fund the massive clean-up from last November’s tailings dam failure; Vale says would not financially support Samarco if the venture is unable to resume operations this year.
Wed, Jun. 15, 8:42 AM
- Exxon Mobil (NYSE:XOM) and BHP Billiton (NYSE:BHP) say they are studying plans to sell depleting energy assets in Australia, including Kingfish, the largest oil field ever discovered in the country.
- The companies are considering marketing 13 fields, licenses and associated infrastructure held in the Gippsland Basin 50-50 joint venture in Australia's Victoria state, which began operations in 1969.
- BHP’s Bass Strait unit, which includes the miner's stake in Gippsland Basin and a second JV, may be worth ~$1B, but that the unit's liquids production is in decline, Citigroup analysts said recently.
Mon, Jun. 13, 10:20 PM
- Vale (NYSE:VALE) says a Brazilian judge has dismissed a 20B reais ($5.7B) civil lawsuit seeking environmental and property damages for last year's Samarco mine disaster which killed 13 people.
- Brazil's National Humanitarian Society (Sohumana) had filed the lawsuit before a federal judge in Rio de Janeiro in December.
- Samarco and its partners, Vale and BHP Billiton (NYSE:BHP), already had reached a settlement with federal and state governments to pay 20B reais over 15 years to cover and repair damages, which was approved by a court last month.
Fri, Jun. 10, 2:16 AM
- Brazil's police have accused mining firm Samarco, a joint venture between Vale (NYSE:VALE) and BHP Billiton (NYSE:BHP), of willful misconduct in relation to its dam burst last November that killed 19 people and polluted hundreds of miles of rivers.
- "Don't call it an accident," they said, requesting formal charges against eight company officials.
- Federal prosecutors are also carrying out a separate investigation into the human toll after police recommended charges of "qualified homicide."
Thu, Jun. 9, 8:13 AM
- BHP Billiton (NYSE:BHP) is studying an option to develop a massive new iron ore deposit in Australia to replace lost production as operations age and reserves decline, Reuters reports.
- BHP says it is too early to place a cost on any new iron ore mine, which would be designed to help replace nearly a third of BHP's current production, coming from its 80M metric tons/year Yandi mine.
- Any plans are preliminary and do not change BHP's production guidance of 260M metric tons this year and 290M metric tons over time, a company spokesperson says.
Tue, Jun. 7, 12:59 PM
- Iron ore shipments from Australia’s Port Hedland, the world’s largest bulk export terminal, posted the third highest level on record last month, indicating that the global glut is set to persist.
- Exports totaled 39.4M metric tons in May from 37.7M in April and a record 39.5M tons in March; exports came in at 38M tons in May a year ago.
- Ore with 62% content in Qingdao rose 2.8% to $52.54/dry ton today but still well shy of April’s high of $70.46/ton.
- Port Hedland handles cargoes for miners including BHP Billiton (NYSE:BHP), Fortescue Metals (OTCQX:FSUMF) and new entrant Roy Hill Holdings.
Tue, Jun. 7, 11:12 AM
- BHP Billiton (BHP -0.9%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are among final bidders for Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) Australian metallurgical coal assets that may fetch ~$1.5B, Bloomberg reports.
- Yanzhou Coal Mining (YZC +2.9%), Warburg Pincus-backed Anemka Resources and a pairing of Apollo Global Management and Xcoal Energy & Resources also submitted final bids for the Moranbah and Grosvenor mines, according to the report.
- Anglo has said it wants to raise $3B-$4B from asset sales to help reduce debt and refocus itself as a miner of diamonds, platinum and copper.
Tue, Jun. 7, 9:15 AM
- BHP Billiton (NYSE:BHP) agrees to sell its coal interests in Indonesia to its partner PT Adaro Energy, as the miner seeks to narrow its focus to fewer, larger projects.
- BHP does not disclose the price for its 75% stake in IndoMet Coal, but Dow Jones reports that the deal is worth ~US$120M.
- IndoMet holds seven coal contracts of work in central and eastern Kalimantan, including the 1M metric tons/year Haju mine, which began producing last year.
- BHP -0.5% premarket.
Thu, Jun. 2, 10:35 AM
- Iron ore has lost nearly all of 2016's gains, as ore with 62% content fell another 0.5% to $48.18/dry metric ton after posting the biggest monthly loss in about five years in May, which has left prices that topped $70 in April less than $5 above 2015’s year-end level.
- Inventories at China’s ports rose to 100.65M tons last week, the highest since December 2014,and holdings have expanded for eight of the past nine months, just ahead of the period when steel demand usually sees a seasonal slowdown.
- “Demand remains weak and supply is still increasing. There’s a good chance prices will end the year lower,” Shenhua Futures analyst Wu Zhili tells Bloomberg.
- Relevant tickers: VALE, BHP, RIO, MT, CLF, TCK
- Now read Goldman sees iron ore headed back to $35 as glut returns
Thu, May 26, 12:27 PM
- BHP Billiton (BHP -0.6%) aims to devise a way over the next year to increase copper production from its Olympic Dam mine in Australia by up to 40%, while a plan to cut costs in half within two years is on course and should strengthen the case for the ultimate buildout of the mine, project president Jacqui McGill says.
- Olympic Dam is Australia's biggest underground mine, the world's biggest deposit of uranium and one of the biggest known sources of copper and gold, and is at the heart of BHP's strategy to raise its output of copper and petroleum while tacking away from commodities such as iron ore which now face an oversupply in world markets.
- McGill says reduced expenses should make it more attractive for BHP to approve a mega-expansion that would further expand the underground mine - while keeping the option open for a possible pit as well - and raise annual copper output to ~450K tons.
- Now read BHP to boost exploration activity to take advantage of falling costs
Mon, May 23, 2:58 PM
- Iron ore prices sink to 10-week lows, following data showing stockpiles at Chinese ports had reached more than 100M metric tons.
- Stronger steel demand in China and supply disruptions in Australia and Brazil were the initial drivers for this year’s surprise advance, but prices have dropped nearly 25% after reaching nearly $69/metric ton a month ago.
- Morgan Stanley analyst Tom Price points to seasonal restocking, Chinese economic policy and the direction of U.S. interest rates as the key drivers of prices, more so than speculative trading activity.
- Iron ore is a major source of profits for the likes of BHP Billiton (BHP +0.9%), Rio Tinto (RIO +0.6%) and Vale (VALE +1.6%), with every $1/ton move in the price impacting earnings by hundreds of millions of dollars.
- "Both BHP and Rio have downgraded guidance for 2017, and we expect that Vale is likely to disappoint in its delivery of S11D [a new iron ore project] as well as its ongoing struggles with the Southern System mines,” Macquarie analysts say.
Fri, May 20, 2:30 PM
- Iron ore stockpiles at Chinese ports have climbed above 100M metric tons, offering further evidence of increased supplies in the world’s top steel consumer that may hurt prices, Bloomberg reports.
- Port inventories rose 1.6% this week to 100.45M tons, the highest level since March 2015, while expanding 7.9% YTD, and are now large enough to cover more than five weeks’ of imports.
- Iron ore with 62% content gained 2.7% to $54.89/dry ton today but have tumbled 22% since peaking at more than $70/ton in April, paring the YTD gain to 26%.
- Goldman Sachs has warned that supply growth will accelerate this year, potentially feeding a glut and driving iron ore as low as $35 during Q4.
- A BHP Billiton (BHP -1.3%) VP of marketing minerals says port stockpiles in China, which have risen this year even as demand rebounded, may continue to increase through the rest of the year; other relevant tickers include Vale (VALE -2.5%) and Rio Tinto (RIO -1.6%).
Tue, May 17, 11:48 AM
- Brazil's new Environment Minister says he will not allow the reopening of the Samarco iron ore mine without assurances that the causes and damages of last year's deadly tailings dam collapse were fixed.
- The mine, a 50-50 joint venture between Brazil's Vale (VALE +5.6%) and Australia's BHP Billiton (BHP +3.8%), still needs to secure the necessary permits to resume operations.
- Samarco, Vale, BHP and the Brazilian government, including the environment ministry, signed a 20B real ($5.71B) accord in March to clean up the disaster area and compensate victims, and government and company officials said the mine could reopen by the end of the year.
Fri, May 13, 3:46 PM
- Workers at BHP Billiton's (BHP -0.6%) Spence copper mine in Chile have started a 24-hour strike, according to the local union, which blames slow progress in labor talks.
- The action follows another one-day protest at Spence starting 10 days ago, when the union also cited slow progress in ongoing negotiations.
- In April, BHP laid off ~7% of its 1,060 Spence workers, following a trend among copper mines in Chile that have been hurt by low prices and light demand from China.
- Now read Brazil demands $44 billion from BHP and Vale over Samarco disaster
BHP Billiton Ltd. engages in the exploration, development, production and processing of minerals, gas and oil. It operates through the following segments: Petroleum and Potash, Copper, Iron Ore, and Coal. The Petroleum and Potash segment explores, develops and produces oil and gas; plus the... More
Sector: Basic Materials
Industry: Industrial Metals & Minerals
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