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BHP Billiton Limited (BHP)

- NYSE
  • Oct. 27, 2014, 6:25 PM
    • Cliffs Natural Resources (NYSE:CLF) -0.2% AH after reporting Q3 earnings that beat expectations and a 16% Y/Y drop in revenues that nevertheless met estimates.
    • CLF swung to a loss in the quarter, dragged down by a $6B writedown related to its purchase of a Canadian iron ore mine as well as 32% lower iron ore prices and 17% lower met coal prices.
    • CLF says Q3 costs at its eastern Canadian operations were $81.71/ton, and it expects costs to remain at $80-$85; the big three miners - BHP, RIO and VALE - control massive mines, ports and railroads, which allows them to produce iron ore at $50/ton or lower.
    • Iron ore pellet sales volume totaled 6.8M tons (+8% Y/Y) for the U.S., 3.1M tons (+11%) for Asia Pacific, and 2.3M tons for eastern Canada (-12%); North American coal sales volume was 1.9M tons (+15%).
    • Gross margin narrowed to 9.8% from 22.5% a year earlier.
    • "Despite continued cost cutting progress at Bloom Lake, Phase I is not feasible. By the end of this year, we will have a solution for Bloom Lake," CEO Lourenco Goncalves says.
    | 7 Comments
  • Oct. 27, 2014, 7:57 AM
    • BHP Billiton (NYSE:BHP) offers further details about how it plans to meet its cost reduction and productivity improvement targets, and says it may sell some or all of its Fayetteville shale acreage in the U.S.
    • BHP expects a minimum $3.5B in annualized productivity gains by the end of FY 2017, with more than $2.3B to come from cash cost savings, which should help the company generate a 20%-plus nominal rate of return based only on its core portfolio of assets, according to CEO Andrew Mackenzie.
    • BHP also says it is planning to divest its Fayetteville acreage, as it has decided to concentrate on the development of its high quality Haynseville gas field.
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  • Oct. 22, 2014, 10:43 AM
    • BHP Billiton (BHP -1.1%) is the latest company to report record output of metallurgical coal, as extra supply far outpaces demand in countries such as China and Japan, which produce much of the world’s steel.
    • BHP says it produced a record 12.8M metric tons of met coal in Q3 - including output from the major new Caval Ridge mine in Australia - up 7% Q/Q and 25% Y/Y, and Anglo American’s (OTCPK:AAUKF, OTCPK:AAUKY) H1 2014 met coal production jumped 21% Y/Y.
    • The willingness to dig up more coal (NYSEARCA:KOL) despite lower prices mirrors a similar push in iron ore, where global miners miners are investing and producing more in a bet that their efficiencies of scale will allow them to profit, but critics say the strategy risks creating supply gluts that will take years to clear.
    • The price for Australian premium hard coking coal has dropped 16% this year to $110/ton, near the lowest level in more than seven years and well below the $300/ton fetched in early 2011.
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  • Oct. 21, 2014, 7:28 PM
    • BHP Billiton (NYSE:BHP) reports Q3 production numbers showing the iron ore and coking coal divisions performed as well as or better than expected, as overall production rose 9% Y/Y with records achieved for eight operations and four commodities.
    • The 62M metric tons produced by BHP's Pilbara iron ore division means the business is ahead of schedule on its target to produce 245M metric tons in FY 2015.
    • Produced a better than expected 13M tons of met coal, a 25% increase, as Queensland Coal achieved record quarterly production and sales volumes.
    • Petroleum production gained 7% to 67.4M boe, as onshore U.S. liquids volumes jumped 49% to a record 11.5M boe.
    • Full year production guidance remained in line with prior guidance for iron ore, copper, petroleum and both types of coal.
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  • Oct. 21, 2014, 3:13 PM
    • Jefferies lowers its commodity price forecasts, cuts 2015 earnings estimates for mining companies it covers by an average of 21%, and downgrades BHP Billiton (BHP +0.6%) to Hold from Buy but maintains a Buy rating on Rio Tinto (RIO +1.5%) and a Hold on Vale (VALE +1.1%).
    • The firm expects BHP to outperform over the very long-term but sees limited upside potential over the next 6-12 months, with shares now trading at a premium on price/NPV; BHP also has limited scope to materially grow its dividend over the next year.
    • Jefferies maintain its Buy rating on RIO based on relative valuation as well as capital return potential, high return on capital invested and strong free cash flow even in a weaker iron ore price environment.
    | 1 Comment
  • Oct. 16, 2014, 7:32 AM
    • BHP Billiton (NYSE:BHP) confirms it will pursue a secondary listing in London for a new spinoff company it plans to create from its less-favored assets.
    • BHP had been under pressure from shareholders unhappy with its original plan to have the spun-off company’s primary listing in Australia and a secondary listing in South Africa only.
    • But because the new company's primary listing would still be in Australia, it would not be eligible for inclusion in the benchmark FTSE 100 index, meaning funds that track the index would not own the stock.
    • BHP -2.2% premarket.
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  • Oct. 13, 2014, 2:18 PM
    • Cliffs Natural Resources (CLF +14.1%) shares are surging as iron ore prices posted their biggest intraday gain since May after falling steadily in recent weeks.
    • Investors covered short positions on expectations prices may have hit bottom; sentiment also was boosted by data showing China's overall exports rose more than forecast and imports unexpectedly gained in September.
    • The big gain occurs despite a J.P. Morgan downgrade to Neutral from Overweight with a reduced price target of $5 from $13, as the firm cites CLF's lower iron ore price deck and sum-of-the-parts valuation.
    • Other iron ore producers also are up: VALE +8%, RIO +5.3%, BHP +4.2%.
    | 3 Comments
  • Oct. 13, 2014, 8:47 AM
    • BHP Billiton (NYSE:BHP) and Mitsubishi say they expect their newest coal mining operation in eastern Australia to be able to ride out a prolonged market slump, even amid concerns raised by new Chinese import tariffs.
    • The companies today officially open their $3.4B Caval Ridge joint venture coking coal mine in Queensland state; the operation, designed to produce 5.5M metric tons/year, first started began coal earlier this year.
    • The price of Australia’s premium coking coal has fallen more than 15% YTD to ~US$112/ton, prompting widespread cost-cutting and workforce cuts, including the BHP Billiton Mitsubishi Alliance joint venture, which is the world’s biggest exporter of coking coal.
    • BHP +3.1% premarket.
    | Comment!
  • Oct. 10, 2014, 8:37 AM
    • Former Xstrata chief Mick Davis, now running natural resources focused P-E firm X2 Resources, approached BHP Billiton (NYSE:BHP) earlier this year with an offer to buy several mines from BHP before the company instead spun off unwanted assets into a new listed company, FT reports.
    • It is unclear whether Davis bid for all the assets that BHP ended up including in the new company, which analysts believe could be worth ~$14B, or why BHP decided to reject the bid.
    • The assets BHP is proposing to spin off include nickel, manganese and coal mines spread across countries including Australia and South Africa.
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  • Oct. 9, 2014, 10:49 AM
    • Rio Tinto (RIO -1%) is defending its plans to expand iron ore production in Australia at a time of sharply falling prices, as the head of its iron ore division says "if we don't fill that void, somebody else will."
    • Rio Tinto is pouring billions of dollars into expanding iron ore mines and infrastructure in Australia's Pilbara region, betting that its huge efficiencies of scale will allow it to increase profits even though iron ore prices have fallen more than 40% this year.
    • Earlier this week, BHP Billiton (BHP -0.5%) also said it planned to increase its output by nearly 30% by making its operations more efficient; Vale (VALE -0.8%) also is planning increases in output.
    | 6 Comments
  • Oct. 6, 2014, 10:14 AM
    • Glencore (OTCPK:GLCNF, OTCPK:GLNCY) CEO Ivan Glasenberg criticizes rival miner BHP Billiton (BHP +1.2%), claiming the latter company's plans to further expand iron ore output will hurt the development of one of Africa’s poorest areas.
    • Glasenberg says the huge amount of iron ore being produced by the world’s three biggest miners - Vale, Rio Tinto and BHP, already is impacting prices and that further expanding output, as BHP said today it intends to do, would make investing in African iron ore a less appealing prospect.
    • Iron ore prices have plunged 40%-plus this year to below $80/ton, their lowest level since 2009, exacerbated by the top iron ore miners ramping up production in the hope they can profit from economies of scale.
    | 1 Comment
  • Oct. 6, 2014, 2:43 AM
    • BHP Billiton (NYSE:BHP) plans to raise its iron-ore capacity by nearly 30% without building any new mines, to become the world's most profitable producer of the steelmaking commodity.
    • By increasing the efficiency of existing operations, BHP intends to boost production, while lowering production costs to less than $20 a ton (more than 25% lower than its average in the year through June 2014).
    • The miner has already slashed hundreds of positions across its operations, and will likely cut hundreds more to make the goal a reality.
    | 5 Comments
  • Oct. 3, 2014, 4:13 AM
    | 2 Comments
  • Oct. 2, 2014, 12:58 PM
    • Exxon Mobil (XOM -0.4%) and Pemex, Mexico's state-owned oil producer, sign a three-year cooperation agreement to exchange academic, scientific and technical knowledge in analyzing exploration, drilling and refining opportunities.
    • XOM joins a growing list of major oil producers including Chevron (NYSE:CVX), Noble Energy (NYSE:NBL) and BHP Billiton (NYSE:BHP) in expressing interest in entering Mexico’s energy industry, which is ending a 76-year state oil monopoly.
    | 1 Comment
  • Oct. 2, 2014, 8:25 AM
    • Walter Energy (NYSE:WLT) +5.7% premarket after The Guardian says BHP Billiton (NYSE:BHP) or Rio Tinto (NYSE:RIO) may be interested in buying the coal company for $5/share.
    • Clarkson Capital is out with a note saying the paper has passed along many rumors on U.S. coal activity over the years and none have proven true (Briefing.com).
    | 6 Comments
  • Sep. 29, 2014, 2:22 PM
    • BHP Billiton (BHP -1.1%) has sent its top project manager to run the Jansen potash development in western Canada, a move the potash market will scrutinize for clues to BHP's plans for its Canadian mine.
    • If Jansen were to begin producing today, experts say it would increase global potash supply by nearly 15%, which would worsen an oversupply problem for the fertilizer ingredient.
    • BHP already has committed ~$3.8B to a project it says has no fixed completion date, but analysts aren't expecting anything before 2020.
    | Comment!
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Company Description
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.