Aug. 19, 2014, 7:14 AM
- After announcing the creation of its new global metals and mining company, BHP Billiton (NYSE:BHP) says it is now in talks with potential buyers for all, or part, of its Nickel West division in Australia, which was excluded from the company's major restructuring.
- "We continue to talk to interested parties," says CEO Andrew Mackenzie. "This is a matter of commercial discussions with several potential buyers."
Aug. 19, 2014, 3:40 AM
- BHP Billiton (NYSE:BHP) has announced its plans to form a new global metals and mining company based around its aluminium, coal, manganese, nickel and silver assets. The new company will be listed on the Australian stock exchange, with a secondary listing in South Africa.
- "With a simpler portfolio, we are targeting sustainable, productivity-led gains of at least $3.5B per annum by the end of the 2017 financial year," says CEO Andrew Mackenzie.
- The demerger will leave BHP Billiton focused on its long-life iron ore, copper, coal, petroleum and potash basins.
Aug. 18, 2014, 9:57 AM
- BHP Billiton (BHP -0.2%) may spin off assets estimated to be worth as much as $12B as soon as this week, as directors meet to consider a structure to focus the mining company on its four main products - iron ore, petroleum, copper and coal.
- A de-merged company probably would be based mainly around former Billiton assets acquired in the 2001 purchase, with the intention of raising free cash flow, helping boost production growth and delivering stronger return on investment.
- A spinoff that included nickel, manganese and aluminum operations which span Australia, South Africa and Colombia, a South African coal unit and the Cannington lead and silver mine may be worth as much as $12B, according to a valuation from CLSA Asia-Pacific Markets.
Aug. 15, 2014, 7:44 AM
- BHP Billiton (NYSE:BHP) +2.1% premarket after saying it may pursue a de-merger of the company, spinning off various mining assets into a separately listed entity or entities in an attempt to simplify its portfolio.
- BHP says it wants to focus on its major iron ore, copper, coal and petroleum assets, and potentially its potash business, which would indicate that assets such as nickel, aluminum and bauxite may be spun off.
- A demerged entity could be valued at ~$8B and generate ~$1.6B in earnings in FY 2015, UBS estimates; the total does not include BHP’s Australian Nickel West operation, valued at $340M, which UBS believes would be sold separately.
Aug. 13, 2014, 12:43 PM
- Vale (VALE -1.7%) is sharply lower after a key batch of Chinese economic data for July showed some slowing growth; Vale is more dependent on iron ore prices staying high than Rio Tinto or (RIO -1.6%) BHP Billiton (BHP -0.6%).
- Cowen reiterates its Market Perform rating and $16 price target on Vale, saying that while there’s much focus on the cost for Vale to expand its mines, investors may be ignoring the value of some new projects.
- Over the longer-term, investor sentiment could begin to shift as continued strength in iron ore results from higher volumes and improved product mix as well as improving non-ferrous, Cowen says.
Aug. 13, 2014, 8:59 AM
- Iron ore prices sink to their lowest levels in nearly eight weeks as a credit gauge in China plunged, adding to worries about slowing demand.
- China’s broadest measure of new credit slumped in July to the lowest level since the global financial crisis; prices already had tumbled 31% YTD as mining companies increased output, pushing the market into a glut.
- BHP -0.8%, RIO -3.5%, VALE -0.2% premarket.
Aug. 6, 2014, 9:53 AM
- BHP Billiton (BHP +1.1%) says it will pursue all means to avert proposed strikes at Australia's Port Hedland export hub in the coming days, labeling the planned walkout unlawful and detrimental to the economy.
- The union representing tugboat engineers at the port have told contractor Teekay Shipping that workers would conduct four-hour strikes on Saturday, Monday and Wednesday in a dispute over wages.
- BHP says the proposed strikes would violate Australia's workplace relations laws as they fall outside a time period set for balloted industrial action.
Aug. 1, 2014, 7:59 AM
- ArcelorMittal (NYSE:MT) -6.3% premarket after reporting below consensus Q2 earnings and warning it will miss its target for full-year earnings, as shipments are being hit by lower commodity prices.
- MT says FY 2014 EBITDA likely would total more than $7B, below a previous forecast of ~$8B, reflecting a probable average iron ore price of $105/metric ton for this year vs. prior expectations for $120.
- While the softening of iron ore prices may hurt MT's relatively small mining segment, the result could be countered by stronger demand for the steel that makes up most of the company’s business.
- Also, MT agrees to acquire a near 50% effective stake in Guinea's Mount Nimba iron ore project, buying out shareholders BHP and Areva for an undisclosed sum; the high-quality deposit is 40 km from MT's existing Liberian iron ore mine, which means the steelmaker could take advantage of its existing rail and port infrastructure in Liberia to lower development costs.
Jul. 24, 2014, 8:34 AM
- Tugboat workers at Australia's Port Hedland are again threatening to strike, raising the prospect of disruptions to shipments of iron ore, which is the country's biggest export earner.
- Deckhand members of the Maritime Union of Australia have voted to take industrial action after failing to reach an agreement on pay and conditions with the contractor that runs tugboats on behalf of BHP Billiton (NYSE:BHP) and other major exporters.
- BHP has warned a strike could cost A$100M/day (US$94.5M) in lost sales for the port's iron ore exporters, which include Fortescue Metals (OTCPK:FSUMF).
Jul. 23, 2014, 4:36 PM
- BHP Billiton (NYSE:BHP) and Anglo American (OTCPK:AAUKF, OTCPK:AAUKY) are in talks to sell their jointly owned portfolio of manganese assets in South Africa and Australia, WSJ reports.
- The assets include two mines in South Africa, one in Australia, and processing plants in both countries; BHP owns 60% and Anglo 40% of the operations, which analysts have valued at ~$1.33B.
- Manganese is a key alloy ingredient in the production of stainless steel but it is only a niche business for the big miners; global trade in manganese totals ~$3B/year, 2.5% of the equivalent figure for iron ore.
Jul. 23, 2014, 8:15 AM
- BHP Billiton (NYSE:BHP) says it exported more iron ore than expected from mines in Australia's northwest last fiscal year, and plans to continue ramping up production in the current year despite tumbling prices and a global supply glut.
- BHP reports record iron ore production of 225M metric tons from its Western Australian mines during H1 2014, up 20% from the prior-year period and above the level investors had been expecting.
- BHP forecasts total iron ore production from the Pilbara to reach 245M tons this fiscal year, up 8.9% Y/Y.
- The record production result comes a week after rival Rio Tinto (NYSE:RIO) said it hit an all-time high in production in its own fiscal H1 and is aiming to boost its Australian iron ore output by a further 20% to 350M by 2017.
Jul. 17, 2014, 10:44 AM
- Australia repeals pro-environment carbon laws that put a price on greenhouse gas emissions, the first time a developed nation has made such a U-turn.
- Australia is one of the world's largest per capita greenhouse gas emitters due to its reliance on coal-burning power stations to power homes and industry, but the country's voters blame the climate laws for rising energy bills and living costs.
- The tax was voted out even as it appeared to be working in reducing carbon emissions, according to The Guardian.
- BHP CEO says repealing the "mis-designed" carbon tax would be important in increasing Australia's competitiveness; J.P. Morgan analysts have estimated that the removal of the carbon tax, together with repeal of the government's mining levy, would boost its valuation on companies such as BHP and Rio Tinto (NYSE:RIO) by as much as 6%.
- Australia's repeal may reverberate internationally ahead of global climate talks next year, when major economies like China, India and the U.S. will consider global greenhouse targets beyond 2030.
Jul. 7, 2014, 5:44 PM
- Vale (VALE) is an attractive mining investment as the cheapest of the three largest global iron ore producers, which include Rio Tinto (RIO) and BHP Billiton (BHP), Bernstein said in a report out today.
- Three reasons to like Vale, according to the Bernstein analysts: Shares are cheap at 4x 2014 EBITDA vs. 5.7 for RIO and 6.7 for BHP; pellets likely will gain more traction in the pollution conscious world, and 15% of Vale’s iron ore output is sold as pellets; and Vale's Zambia mine is expected to reach full capacity by 2015, giving the company a foothold in one of the world’s best new frontiers for copper production.
- The Bernstein bunch says they prefer Rio as the way to play iron ore, but Vale has leverage to nickel price appreciation.
Jul. 2, 2014, 10:43 AM
- BHP Billiton (BHP +1.2%) is playing down fears that a probe into commodity-backed loans in China would have a lasting effect on the mining industry, as its marketing president says jitters about the investigation are overblown and that it hadn't affected BHP or the broader industry in any serious way.
- Metal traders have warned China's commodity imports could face an extended fall from near-record rates as banks withhold credit and customs officials tighten checks on incoming shipments following allegations a Chinese trading company illegally pledged metals as collateral to more than one lender.
- BHP also says a squeeze on credit in China wasn't a worry for the company, as it would help set up the country for more sustainable growth in the longer run.
Jun. 27, 2014, 2:39 PM
- Glencore (GLCNF, GLNCY) has told the government of Guinea that it is interested in rights to develop the northern concession of the Simandou project, one of the world's most sought-after iron ore deposits, WSJ reports.
- BHP Billiton (BHP) and Arcelor Mittal (MT) also reportedly have notified Guinea that they could be interested in taking part in a tender.
- Glencore has little exposure to iron ore, but has said it isn't seeking out the kind of long-term investment required by Simandou, which would require billions of dollars in investment before making a profit.
- Earlier this year, the government revoked the license previously held by Vale (VALE) and BSG Resources, alleging BSG obtained the rights through corruption; Simandou's southern concession is being developed by a consortium led by Rio Tinto (RIO).
Jun. 27, 2014, 12:52 PM
- Rio Tinto (RIO) and Russian fertilizer producer Acron are moving ahead with development of the Albany potash prospect in Saskatchewan, Acron says.
- In its first disclosure of the size of the discovery, Acron says the project area contains 1.4B metric tons of inferred resources within the mining caverns at an average grade of 31% potassium chloride, with 329M metric tons recoverable.
- Rio’s rival BHP has invested in the larger Jansen potash project in Canada, but has pushed back production until at least 2020, looking for the right time to enter the currently oversupplied market.
BHP vs. ETF Alternatives
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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