Sep. 8, 2013, 10:14 PM
- The ASX 200 (EWA) gains 0.3% and the aussie (FXA) is little-changed following the booting of the Labor party from power.
- A check of the miners amid new PM Tony Abbot's promise to repeal an unpopular carbon tax finds Rio Tinto (RIO) ahead by 0.35% and BHP Billiton (BHP, BBL) +1% in Sydney action.
- ETFs: EWAS, KROO, AUSE, FAUS, AUD, AUNZ, GDAY, CROC
Sep. 7, 2013, 6:55 PM
- "The sectors that benefit the most would be the materials, particularly mining stocks," one economist said Thursday, regarding the prospect of a Tony Abbott victory in Australia.
- Abbott did indeed emerge victorious and will become the country's 27th prime minister after being sworn in next week.
- Of particular note is Abbott's promise to repeal a mining tax, a move expected to benefit Rio Tinto (RIO) and BHP Billiton (BHP). Also on watch: Newcrest Mining (NCMGF.PK)
- ETFs - Stocks: EWA, EWAS, KROO, AUSE, FAUS Bonds: AUD, AUNZ Currency: FXA, GDAY, CROC
Sep. 4, 2013, 9:59 AM
- The world's biggest miners are set to spend ~$244B on expansions to 2015 - just 2.4% less than the $250B in capex in the previous three-year period, Bloomberg calculates - failing to heed Glencore CEO Ivan Glasenberg’s call for austerity to end an oversupply in mineral markets.
- BHP Billiton (BHP) last month decided to proceed with a $2.6B investment in the Jansen Canadian potash project, which may end up costing $15B, and Rio Tinto (RIO) is planning a ~$5B expansion in Australia.
- "There has been a push for more efficient use of capital, which doesn’t necessarily mean you shouldn’t develop projects,” says a director at Arnhem Investment.
Aug. 26, 2013, 10:28 AM
- BHP CEO Andrew Mackenzie reiterates plans for the Jansen Canadian potash project, driven by expectations of strong investor returns in later decades.
- "We have the best undeveloped greenfield mine on offer to the world... we will be prepared to respond very quickly to the market when it’s needed," Mackenzie says in an Australian interview; potential partners are in "a wider range than just some of our mining peers that would be interested in a project like this."
- BlackRock's Evy Hambro has called the project "misguided," but Mackenzie spins it differently: Hambro says he "can see the value of [Jansen] in the long term, as long as we don’t spend too much on it right now."
Aug. 26, 2013, 7:57 AM
- The shakeup continues at BHP Billiton (BHP), as former ferrous and coal division chief executive Marcus Randolph will retire next week.
- Randolph already was on leave when newly-hired CEO Andrew Mackenzie stripped out a layer of top management and named a new team to help him run the company.
- He was one of four execs seen as possible successors to Marius Kloppers until Mackenzie's appointment in February.
Aug. 23, 2013, 8:25 AM
- In a "more modest approach to remuneration befitting the times," BHP Billiton (BHP) slashes executive pay just days after reporting a second consecutive drop in annual profit.
- New CEO Andrew Mackenzie won't receive 50K BHP shares worth ~$6.2M due to him as part of a bonus for being lured away from rival Rio Tinto.
- The board also cut by 35% the number of shares paid as part of a 2008 long-term incentive plan for execs, including Mackenzie who was boss of BHP's nonferrous metals division at the time.
Aug. 22, 2013, 9:45 AM
- Mosaic's (MOS +1%) takeover prospects suffered a blow when BHP Billiton (BHP +2.3%) renewed its commitment to building its own potash mine, Bloomberg writes; a is now “wishful thinking” on the part of MOS shareholders, a Credit Suisse analyst says.
- The Jansen mine would be the largest single source of potash, with a projected production capacity of 10M metric tons/year; the project may end up costing BHP ~$16B, while MOS' enterprise value has fallen to $14.8B.
- BHP could have used Jansen as a bargaining chip to persuade MOS to sell itself because the project will introduce more competition and supply.
Aug. 22, 2013, 9:29 AM
- Global metals and mining stocks trade higher premarket after encouraging manufacturing data out of China; miners tend to rise on growth indications from China as the country is a major user of natural resources.
- RIO +2.4%, VALE +2.4%, CLF +2.3%, BHP +2.2%, MT +2.2%, ABX +2.1%, TCK +2%, FCX +1.7%, NEM +1.7%, GDX +1.6%.
Aug. 21, 2013, 3:56 PM
- Credit Suisse looks at how lower iron ore prices could impact different companies, and finds Rio Tinto (RIO -2.7%) in a far better position than Cliffs Natural Resources (CLF -1.9%) thanks to its ability to keep costs low.
- Rio is the world’s lowest cost iron ore producer of scale, the firm says, and is expanding production in Australia from ~240 metric tons/year to 290 while targeting a 20% reduction in capex in FY13 and again in FY14 and to achieve it.
- The firm slaps a $10 price target on CLF, implying a drop of more than 50%, as the company’s assets have trouble being profitable without higher iron ore prices.
- Also: BHP -3.1%, VALE -3.1%.
Aug. 20, 2013, 2:35 PM
- BHP's (BHP -1.4%) decision to continue to invest in its massive Jansen potash development in Saskatchewan "add[s] salt to the wound" of potash supply, Scotiabank says, pointing out Jansen could add the equivalent of 18%-20% of the potash market over recent years.
- Jansen’s extra product might come online well after potash prices have already decreased materially, BMO Capital says, but "still, there is only so much incremental potash demand to chase incremental supply."
- POT +0.3%, MOS +0.1%, AGU +0.9%, IPI +1.4%.
Aug. 20, 2013, 10:30 AM
- The latest results for Glencore (GLCNF.PK -1.9%) and BHP (BHP -0.8%) show the good times are over for global miners (I, II), but the outlook is more difficult at Glencore, Andrew Peaple writes.
- Glencore's trading business performed reasonably well in H1 with operating profit up 6.4% despite tough markets, but trading is a low-margin business where it faces tighter regulatory scrutiny amid stiff competition.
- Even excluding the $7.7B writedown from the Xstrata merger, Glencore's EBITDA was down 9% in H1, vs. a 1% gain at BHP over the same period.
- Glencore's outspoken Ivan Glasenberg has criticized peers for wasteful investment and not taming supply growth, but "it is time the physician healed himself," Peaple writes.
Aug. 20, 2013, 8:40 AM
- SocGen sees BHP Billiton's (BHP) FY 2013 results as a net negative, particularly plans to invest $2.6B during the next four years digging shafts at the Jansen potash project; most market participants believe the project is likely to be NPV destructive.
- CEO Andrew Mackenzie: ""The whole basis of the strategy.. is that we want to retain complete flexibility to enter the [potash] market at a timing which we think is right to maximize returns for our sharheolders."
- SocGen continues bearish on BHP shares; if investors were to invest 26% of their portfolio in COP and the remaining 74% in RIO, the firm says they can replicate the commodity mix and asset quality of BHP but pay a 30% lower P/E and receive a 10% higher dividend yield.
- Shares -0.8% premarket.
Aug. 20, 2013, 3:30 AM
- BHP Billiton (BHP) FY profit before items $11.8B vs $17.2B and consensus of $12.7B.
- Revenue $65.97B vs $72.23B.
- Net profit -30% to $10.9B.
- EPS $2.037 vs $2.884
- Pretax profit $17.87B vs $23.02B last year.
- Profit hurt by exceptional items of 922M and a temporarily increased tax rate, while emerging economies experienced lower-than-expected growth in H2.
- Ups final dividend by $0.02 to $0.59, slightly below forecasts for $0.60.
- BHP to cut capex by 26% in 2014 to $16.2B.
- Plans to invest $2.6B in digging shafts and installing infrastructure at its Jansen potash project in Canada over the next few years. However, BHP didn't provide a timetable for when output would begin. The miner could sell stake to partners.
- Shares -3.2% in London. (PR)
Aug. 19, 2013, 10:18 AM
- Acquisitions of North American oil and gas assets in H1 have slumped to their lowest since 2004, as energy companies turn instead to developing current projects as they can't justify buying more property while fields bought during the 2009-12 shale land grab remain below their purchase price.
- The spending slowdown by global firms such as BHP and Shell (RDS.A, RDS.B) comes amid a series of writedowns of oil and gas shale assets, caused by plunging prices and disappointing wells.
- The deal-making slump, which may last for years, threatens to slow oil and gas production growth as companies that built up debt during the shale rush can’t depend on asset sales to fund drilling programs.
Aug. 15, 2013, 7:20 PM
- BHP Billiton (BHP) says the SEC and Department of Justice are stepping up an investigation into potential breaches of anti-corruption laws, including BHP's sponsorship of the 2008 Summer Olympics in China, that could lead to unspecified enforcement actions.
- BHP says an internal investigation launched several years ago found evidence regarding possible bribery of foreign government officials.
Aug. 15, 2013, 1:51 PM
- Workers began a surprise strike today at Chile's Escondida copper mine - the world's largest - to demand improved working conditions and pay; the work stoppage is planned to last 24 hours, but the miners union says the timeframe is being evaluated.
- BHP Billiton (BHP +0.4%) and Rio Tinto (RIO -1.2%) each own 30% of Escondida, which produces ~20% of Chile's annual copper output; workers at BHP's Spence and Cerro Colorado mines also joined the labor action.
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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