May 12, 2014, 9:54 AM
- BHP Billiton (BHP +1.6%) says potential strike action by tugboat workers at Australia's Port Hedland would cost iron ore exporters A$100M/day (US$94M) in lost sales.
- The warning follows a strike vote by the Maritime Union of Australia after an agreement couldn't be reached with employers over a new pay deal.
- Port Hedland, in the Pilbara region of northwest Australia, has grown into one of the world's largest iron ore export terminals in recent years; it exported 34.8M metric tons last month, a 33% Y/Y increase.
May 9, 2014, 6:27 PM
- ArcelorMittal (MT) is in deep discussions with BHP Billiton (BHP) to acquire the latter's stake in the Mount Nimba iron ore deposit in Guinea for as much as $500M, WSJ reports.
- BHP has been trying for months to find a buyer for its 41.3% stake in the rich deposit located close the Liberian border, as it seeks to exit west Africa and focus its investments elsewhere in the world.
- Other partners in the project include Newmont Mining (NEM) and Areva (ARVCF).
May 6, 2014, 12:48 PM
- Fortescue Metals (FSUMF) says it wants to restart talks on a proposed iron ore export port in the Pilbara region of Western Australia that could allow smaller miners to compete more effectively with giant rivals such as BHP and Rio Tinto (RIO).
- Infrastructure in the Pilbara - from which two in every five tons of iron ore shipped globally by sea are sent - is tightly held by the major miners, and Fortescue CEO Nev Power says building a port at Anketell Point would support his company's its plans to develop iron ore reserves in the western corner of the Pilbara, but iron ore prices weakened by oversupply would mean risks for developers.
- Power's comments come a day after Baosteel and Aurizon Holdings said they wanted to acquire Aquila Resources, the company spearheading development of the port.
Apr. 27, 2014, 4:04 AM
- Former Xstrata boss Mick Davis, who has set up a new venture called X2, is believed to have made an offer to acquire BHP Billiton's (BHP) thermal coal division, the U.K.'s Sunday Times reports.
- X2 has raised $3.7B (£2.2B) from investors and is understood to have appointed JPMorgan to provide as much as $8B in debt.
- Earnings at BHP's thermal-coal operations have plummeted by two-thirds in the past three years, the Sunday Times notes.
Apr. 21, 2014, 9:43 AM
- India's Supreme Court ends a 19-month ban on the mining of iron ore in the state of Goa, allowing mining to begin again but at a restricted level of 20M metric tons/year.
- The additional supply from Goa would add to an expected surplus of iron ore this year, as big mining companies such as Rio Tinto (RIO -0.4%) and BHP Billiton (BHP +0.1%) boost production while demand from top consumer China slows.
- Goa, India's largest producer of iron ore, accounted for about half the country's iron ore exports until the ban was imposed.
- Shares of Sesa Sterlite (SSLT +2.9%), India's largest private iron ore miner, open higher on news that the ban had been lifted.
Apr. 17, 2014, 12:37 PM
- A potential spinoff of BHP Billiton's (BHP +0.2%) most unloved assets - likely including its nickel, manganese and aluminum operations - probably would not boost profit at either the new or old entity, as profit margins for the unfavored business have evaporated at the bottom of the commodity cycle, according to a Bloomberg analysis.
- CLSA Asia-Pacific Markets says such a spun-off company may be valued at $7.5B, just 4% of BHP’s market value.
- BHP now trades at ~6.6x analysts’ EBITDA forecasts for the year ending in June, a spun-off entity would have to command a multiple of more than 9x to generate value for shareholders, a J.P. Morgan analyst calculates - "a bit too ambitious," he says.
Apr. 16, 2014, 7:47 AM
- BHP Billiton (BHP) raises its outlook for iron ore output for the second time this fiscal year, citing a strong performance from its new Jimblebar mine in Australia, and productivity improvements across its operations.
- BHP now expects to produce 217M metric tons of iron ore from its Australian mines in the year through June, vs. previous guidance of 212M tons and an initial estimate of 207M tons and 187M tons last financial year.
- For the March quarter, BHP's share of iron ore production rose 23% Y/Y to 49.6M metric tons; oil output rose 10% Y/Y to 60.9M boe.
- Reports a 28% Y/Y rise in production of met coal and an 11% gain in thermal coal, and increases full-year guidance for met coal production to 43.5M tons from 41M.
- BHP +0.9% premarket.
Apr. 15, 2014, 8:36 AM
- Potash (POT) +2.3% premarket on speculation that BHP Billiton (BHP) may make another run at acquiring the fertilizer company after failing in a prior buyout attempt in 2010, according to the Globe & Mail.
- The report says industry speculation is "intense" because "the numbers work, the personalities are closer to working, [and] even the politics are not insurmountable because the landscape has shifted," but it adds that "there is no sign that any potential deal is underway."
Apr. 11, 2014, 12:37 PM
- Mining companies in Guinea such as BHP Billiton (BHP), Newmont Mining (NEM) and Sable Mining, who need a means to begin exporting iron ore, will have to wait years to make use of an existing rail link through Liberia, railway operator ArcelorMittal (MT) says.
- While steelmaker MT is open to sharing the railway, it says it will not have any spare capacity even after it expands the line to an annual capacity of 20M metric tons by the end of next year.
- The export route is vital for mines to be profitable at current prices.
Apr. 2, 2014, 3:58 PM
- Coal stocks are higher after the head of BHP Billiiton's (BHP +0.9%) coal division said he expects world demand for coal to increase for decades to come, and that most demand growth for coal will come from outside China, which has been the primary driver of global commodity prices in recent years.
- The BHP exec also noted that coal demand in Europe is rising as nuclear plants are set to shut down and countries reduce their imports on Russian energy.
- The Market Vectors Coal ETF (KOL +0.7%) has gained 3.2% over the past week and is trading above its 200-day moving average, but the ETF is still down 4.2% YTD.
- JRCC +20.5%, OXF +4.5%, WLT +2.2%, CNX +2.1%, CLD +2%, ANR +1.9%, BTU +1.4%, YZC +0.6%, ACI -0.2%, WLB -1.2%.
Apr. 2, 2014, 9:18 AM
- BHP Billiton (BHP) coal president Dean Dalla Valle expects little near-term improvement in coal prices (KOL), believing the market likely will remain oversupplied for some time, but remains optimistic about long-term demand.
- Dalla Valle expects most demand growth to come from outside China, which has been the primary driver of global commodity prices in recent years and now accounts for about half of the world's coal consumption.
- "These recent drops in prices should be viewed in perspective," given prices still remain well above historic lows, Dalla Valle says, while not ruling out selling some coal mines, such as mines in South Africa and its stake in the Cerrejon mine in Colombia.
Apr. 1, 2014, 10:40 AM
- J.P. Morgan cuts its 2014 iron ore price forecast by 6% to $118/metric ton, expecting demand from China will grow more slowly to 3.5% from 5% previously, while the likes of Rio Tinto (RIO), BHP and Fortescue (FSUMF) are expected to add ~100M metric tons of supply this year, adding pressure on pricing.
- Iron ore climbed 4% in Shanghai to $116.8/ton yesterday, trimming the quarterly decline to 13%, meaning JPM basically is expecting iron ore prices to be at the current spot level this year.
- The firm still likes Brazilian iron ore producer Vale (VALE), saying it will generate positive cash flow even at the lower iron ore price.
Apr. 1, 2014, 10:25 AM
- BHP Billiton (BHP +1.9%) opens higher on news it is considering simplifying its portfolio of assets to focus on its four key commodities - iron ore, copper, coking coal and oil - but Heard on the Street's Helen Thomas advises investors to treat suggestions of a lofty valuation with caution.
- To hit the A$20B number being talked about would require BHP's non-core assets such as thermal coal, aluminumto be valued at a premium of ~20% to BHP itself, which would require a bullish view on beaten-down commodities such as aluminum; these markets face structural issues of excess supply.
- There are pros and cons to all of BHP's options: A spinoff of its unloved assets could create a tax liability for current shareholders, an offer of BHP’s unwanted assets in an IPO isn't exactly the most enticing pitch, and an asset sale could prove almost as time-consuming as continuing to run the assets.
Apr. 1, 2014, 3:07 AM
- BHP Billiton (BHP) has said it is considering structural options as part of the "simplification" of its portfolio. The company was responding to reports that it could spin off non-core operations into a new A$20B company. Alternatively, BHP may sell assets individually.
- Any spin-off could list in Australia, London and/or South Africa. The assets it would receive could include BHP's aluminium, nickel and bauxite businesses. The problem for the spin-off would be that many of the assets it would receive are struggling due to weak commodity prices. (PR)
Mar. 26, 2014, 9:10 AM
- Australia is cutting its iron ore price estimate for this year and predicts a further drop in 2015, as mining companies including Rio Tinto (RIO) and BHP Billiton (BHP) increase output and cause a glut.
- Spot prices will average ~$110/ton this year from $119 forecast in December and $126 in 2013, and may average ~$103 next year, according to the Bureau of Resources and Energy Economics.
- Morgan Stanley analysts specify H2 as when supply growth picks up and outpaces demand; in H1, demand growth and supply growth are evenly matched.
Mar. 19, 2014, 10:45 AM
- BP (BP +0.4%) is bidding on new drilling rights in the Gulf of Mexico for the first time in nearly two years, submitting 13 bids in the Interior Department’s sale of tracts in the central Gulf of Mexico set to begin today in New Orleans.
- Eight of BP’s bids are for blocks in the Mississippi Canyon leasing area, near the site of the company’s infamous Macondo well.
- Last week's deal between BP and the EPA to lift the company's 16-month suspension from bidding in the previous three U.S. government auctions of the area cleared the way for BP's participation.
- Beyond BP, other major oil companies including Exxon Mobil (XOM), ConocoPhillips (COP), Chevron (CVX), BHP Billiton (BHP), Royal Dutch Shell (RDS.A, RDS.B) and Statoil (STO), as well as smaller independents, are vying for central Gulf acreage in the sale.
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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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