Today, 5:05 AM
- BHP Billition (NYSE:BHP) -6.6% premarket after Brazilian authorities threatened a 20B reais (roughly $5.2B) legal suit over the company's mine disaster in the south-eastern state of Minas Gerais.
- The amount comes on top of 250M reais ($66.2M) by Brazil's environmental agency for the dam burst, which covered the flood plain in mud for 80 kilometers as well as polluting a major river valley.
- BHP has also confirmed that the death toll from the disaster had risen to 13, with six people still unaccounted for.
- Previously: Brazil to file $5.3B suit against Vale, BHP over mining disaster (Nov. 27 2015)
- Previously: BHP sinks after UN dam spill accusations (Nov. 27 2015)
Fri, Nov. 27, 4:47 AM
- BHP Billiton (NYSE:BHP) shares came under fresh pressure on Friday over its recent dam collapse in Brazil after the UN said the mine waste released in the accident contained toxic chemicals and efforts to protect people were "clearly insufficient."
- Twelve people died and many more went missing following the dam burst, which sent millions of tons of mine waste cascading through villages and into Brazil's river system.
- BHP -3.4% premarket
Wed, Nov. 11, 3:18 PM
- BHP Billiton (BHP -3.2%) sinks to seven-year lows on speculation about a potential dividend cut in the wake of the Brazilian dam failure, Financial Times reports.
- "A reduction in the otherwise sacrosanct dividend may prove a pragmatic response to this tragic accident," says analysts at Investec, which places a $2B net present value on BHP’s Samarco share and forecasts annual earnings of $220M, equivalent to ~5% of the group total.
- Deutsche Bank forecasts Samarco would restart production within 18-36 months and expects insurance to cover clean-up costs, though possibly not loss of income; assuming BHP freezes its dividend to 2018, Samarco would "not be a decisive issue” on the payment policy, the firm says.
- Earlier: WSJ: Samarco may not shield BHP, Vale from Brazil dam breach cost
Wed, Nov. 11, 10:39 AM
- It is too soon to quantify with certainty the financial toll of the Brazilian dam disaster for BHP Billiton (BHP -2.4%) and Vale (VALE -2.9%), but Deutsche Bank estimates the companies’ bill could top $1B and Morgan Stanley says the costs could be anywhere from "tens of millions to hundreds of millions."
- The limited liability company, Samarco, the two companies set up years ago for protection from litigation does little to shield its parents from big fines, cleanup and legal costs, Brazilian authorities and lawyers say; BHP and Vale say Samarco - not them - are responsible for the mine’s operations.
- If Samarco itself can’t cover the cleanup and legal costs, the Brazilian government can “go after the assets of the shareholders, Vale and BHP,” according to an environmental lawyer who has represented people affected by pollution in Minas Gerais, the state where the dam breach occurred.
- Earlier: Prosecutor cites negligence in Brazil dam failure
Mon, Nov. 9, 10:56 AM
- Iron ore prices likely will hold near $50/metric ton by year-end rather than tumble to $40, as prices may be helped by the Brazilian supply disruption at the BHP Billiton (BHP -2.3%) venture with Vale (VALE -1.8%), Citigroup says.
- The loss of 25M-30M tons/year of supply from the Samarco JV will coincide with cuts in Chinese production, lifting prices of pellets and lumps, but prices may resume their decline to below $40 when sizable cuts to China’s steel output occur next year after the Lunar New Year, Citi says in a new report.
- Samarco, which accounts for more than 20% of global pellet exports, produced 25M tons last year, mostly pellets, Citi estimates.
- Also: RIO +0.3%, CLF +1.6%.
Mon, Nov. 9, 8:18 AM
- BHP Billiton (NYSE:BHP) -5.6% on the Australian stock exchange to its lowest since the global financial crisis in 2008 after saying it might cut its iron ore output in the wake of the Brazilian dam disaster which has left up to two people dead and dozens still missing.
- BHP says the Samarco company it owns together with Brazil's Vale (NYSE:VALE) is responsible for the "entirety" of operations at the mine where a deadly dam break last week unleashed several million cubic feet of water and mineral waste.
- The cost to the companies, including for cleanup and rebuilding, could top US$1B, says Deutsche Bank's Paul Young, who estimates the mine could be closed until about 2019.
- BHP says CEO Andrew Mackenzie and the head of its iron ore business, Jimmy Wilson, are going to Brazil to assist Samarco, Vale and local authorities.
Fri, Nov. 6, 8:29 AM
- BHP Billiton (NYSE:BHP) -5.3% premarket and -5.7% in London as investors worried about the damage to a Brazilian iron ore operation it jointly owns caused by a major dam burst.
- At least 17 people reportedly have died, with more than 30 injured and dozens missing, after a tailings dam at an iron ore mine in the Minas Gerais region of Brazil burst and devastated a nearby rural village with mudslides.
- Samarco Mineração, the JV between BHP and Vale (NYSE:VALE), says it has not established what had caused the dam to burst; Vale -3.2% premarket.
- The incident is shaping up as the most deadly incident in BHP's long history in mining and a "devastating stain" on the company's international reputation.
Thu, Oct. 29, 10:39 AM
- Iron ore prices tumble below $50/metric ton, sinking to their lowest levels since July, as concerns resurface about demand from the world’s No. 1 steelmaker, China.
- China's steel demand is weakening at "unprecedented speed" and nationwide output may eventually slump 20%, according to a recent outlook by Boasteel chairman Xu Lejiang.
- According to WSJ, traders and analysts believe fears are intensifying again on the supply side as well, as Australia-based miners such as Rio Tinto (RIO -1.7%) and BHP Billiton (BHP -2.6%) continue to pump out record amounts of iron ore.
- A surge in low-cost supply likely will further push prices lower towards the end of the year and next, Goldman's Katie Hudson tells the Australian Financial Review, saying "the major producers are adding incremental volume at around $US20 a ton, that gives you a sense of where the vulnerability is."
- Last week, top producer Vale (VALE -2.1%) announced record Q3 shipments of 88M metric tons despite idling 13M metric tons worth of high cost operations, and the miner said it had reduced cash costs to an industry-leading $12.70/metric ton.
Thu, Oct. 22, 8:43 AM
- BHP Billiton (NYSE:BHP) may consider taking on debt in the short run to ensure its ability to continue to increase dividend payouts each year but not to the extent of compromising its finances, Chairman Jac Nasser tells investors at its annual shareholders meeting.
- Nasser declines to say whether BHP is borrowing now to pay its dividend, but he says the payout for FY 2015 that ended June 30 was covered by earnings.
- Nasser says BHP's balance sheet is strong and that the company remains committed to a solid A credit rating.
- Andrew Mackenzie touts cost cuts at the meeting, saying BHP's average unit costs have dropped more than 30% from the peak; he says annual capex costs have been cut by 24% to US$11B and will be reduced further to US$8.5B in the current fiscal year.
- BHP +1.9% premarket.
Tue, Oct. 13, 7:12 PM
- BHP Billiton (NYSE:BHP) plans to sell ~$3B of U.S. dollar hybrid bonds this week, as well as corporate hybrid bonds denominated in euros and sterling, Dow Jones reports.
- The average yield on debt issued by metals and mining companies hit a six-year high of 6.4% in late September, according to Barclays, compared to a recent low of 3.3% in April, but the average yield has since dropped to 5.3% following a bounce in commodities prices.
- BHP says the proceeds from the sales will be used for general corporate purposes, including refinancing other near-term debt, and adds that the low interest rate environment offers an opportunity to consider issuing the bonds.
- BHP +1.5% AH.
Mon, Oct. 12, 10:24 AM
- Rio Tinto (RIO -2.1%) again warns that it will not cut copper production even though current prices of the metal do not reflect fundamentals, saying it would be illogical to hold back output and leave space in the market for higher-cost rivals.
- The comments from Jean-Sebastien Jacques, Rio's head of copper and coal, come just days after Glencore said it would cut its zinc output by a third after the price of the metal fell to five-year lows.
- Jacques says concerns about weak demand from China are overblown and that the second half of the year was shaping up to be better than the first half.
- He also says copper prices are not likely to recover in the near term because hedge funds are using the commodity as a way to place bearish bets on China.
- BHP -1.3%, VALE -3.8%.
Wed, Oct. 7, 9:14 AM
Wed, Oct. 7, 7:58 AM
- Rio Tinto (NYSE:RIO), BHP Billiton (NYSE:BHP) and Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) soar near the top of U.K.'s FTSE 100 after Morgan Stanley upgraded the metal and mining sector to Attractive, saying valuations are at historically attractive levels.
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) also is higher after saying it closed its Eland platinum mine in South Africa, resulting in 970 job losses.
- Stanley sees commodity prices rising 19% by 2017, which would be "a sharp reversal from the experience in the last 18 months," and believes the recent acceleration of financial and administrative stimulus policies in China "will start to feed through in both actual activity levels and equity market expectations."
- The firm raises its recommendation for Rio and to Overweight from Equal Weight and for Anglo to Equal Weight from Underweight.
- In the U.S. premarket, RIO +8.7%, BHP +4.1%.
Mon, Sep. 28, 2:48 PM
- It isn't just Glencore (OTCPK:GLCNF, OTCPK:GLNCY) who is tanking, as at least one measure of raw materials producers plunges to seven-year lows following the company's woes and data that showed weakening Chinese industrial profits.
- Shares of Glencore plunged 29% to close at just 69 pence, an all-time low, exaggerated by a damning report that said future earnings are so uncertain that the company may need to direct all of its efforts to repay debt.
- Freeport McMoRan (FCX -10.2%) is hit hard after breaking below support at $10/share, and global mining peers Rio Tinto (RIO -4.1%), BHP Billiton (BHP -4.5%) and Vale (VALE -9.4%) also are smacked down.
- A number of other firms also are in situations not that much different from Glencore, says DTN analyst Darin Newsom, noting that Caterpillar (CAT -2.2%) and Deere (DE -1.6%) have been struggling and adding that pressure on Glencore may “create a vacuum those other struggling companies could get sucked into."
- Along with oil and gas producers and precious metals miners, even financial stocks are affected, with Morgan Stanley (MS -3.6%) and Goldman Sachs (GS -3.4%) underperforming their banking peers, perhaps as investors grow nervous about the potential for any of Glencore's problems possibly blowing back on other commodity trading operations.
Wed, Sep. 23, 12:57 PM
- BHP Billiton (BHP -1.6%) reveals a plan to alter its dividend funding policy to ensure a promise on payouts to its British shareholders, but the move could come at a cost to its Australian shareholders.
- Under the proposal, BHP's Australian company would effectively make payments to the British company to enable dividends to be paid, but the payment would mean BHP's Australian shareholders lose out on getting tax benefits, or franking credits, on the amount.
- BHP says it does not expect any impact on its ability to pay fully-franked dividends in future, given the $25.4B franking credits available on its books.
- The British and Australian sets of shareholders will vote on the proposal in October and November, respectively.
Wed, Sep. 23, 11:49 AM
- BHP Billiton (BHP -1.5%) CEO Andrew Mackenzie saw his total compensation fall 43% in the past fiscal year to June 30, feeling the pain from sharply lower commodity prices that sent the stock ~20% lower and underlying profits cut by 52% during the period.
- BHP says Mackenzie earned US$4.6M in cash and stock options, in addition to other benefits such as pension contributions, for the fiscal year, vs. the $8M pay package he received a year earlier, which was his first as the head of the company.
- BHP also will cut pay to its chairman by 13% and reduce fees for non-executive directors in response to the weak outlook for commodities.
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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