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BHP Billiton Limited (BHP)

  • Nov. 24, 2014, 7:53 AM
    • Pending regulatory approval, an iron ore contract is expected to soon be available for action at the CME, giving traders another option as they either hedge their ownership of BHP or RIO, or roll with the brutal bear market, or try and pick a bottom.
    • Source: Press Release
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  • Nov. 23, 2014, 4:26 PM
    • Key points include:
    • Now targeting "at least another $4B of productivity-led gains" from core portfolio, 23% output growth to year-end FY15.
    • Level of investment to decline to $14.2B in FY15, $13B in FY16.
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  • Nov. 20, 2014, 10:40 AM
    • BHP Billiton (BHP -1.5%) CEO Andrew Mackenzie seeks to reassure investors of the company's commitment to boosting cash returns as commodity prices slide, while saying a buyback of shares is not the top priority right now.
    • Mackenzie says his key focus is to keep the company’s balance sheet strong - which includes maintaining what he says is a solid A credit rating - followed by a strong dividend, "then we selectively invest in what we have for growth, and only then if we can see excess cash might we consider [a buyback]."
    • UBS said recently that it did not expect any such buyback until at least the middle of next year given the steep drop in iron ore prices, and Jefferies has said BHP is likely to underwhelm from a capital returns perspective unless commodity prices rebound more than expected.
  • Nov. 19, 2014, 12:26 PM
  • Nov. 18, 2014, 12:49 PM
    • Iron ore extends its tumble deeper into five-year lows as declining home prices in China add to worries that an economic slowdown in iron ore's biggest buyer will deepen and exacerbate an oversupply.
    • Ore with 62% content delivered to Qingdao, China, has retreated 47% YTD to $71.80 a dry ton, and Citigroup thinks prices may drop to less than $60/ton next year as output rises further and demand remains weak; China’s bad loans climbed in Q3 by the most since 2005, while new-home prices declined, adding to speculation the cooling economy will weaken further.
    • VALE -2.9%, RIO -1.9%, BHP -1.1%, CLF -6%, X -1.4%, AKS -1.9%.
  • Nov. 18, 2014, 7:49 AM
    • Tugboat engineers at Australia’s Port Hedland have voted down a proposed agreement on wages and leave, extending the threat of disruptions to iron ore shipments at the world’s largest bulk export terminal.
    • The rejection renews the risk of delaying exports by companies including BHP Billiton (NYSE:BHP) and Fortescue Metals (OTCPK:FSUMF).
    • Iron ore is Australia’s biggest commodity export earner and disruptions could cost suppliers A$100M/day, BHP has said, and shipments through Port Hedland represented ~55% of the country’s iron ore exports last year.
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  • Nov. 14, 2014, 4:56 PM
    • New developments and the expansion of older oil fields are expected to lift deepwater Gulf of Mexico production 18% Y/Y to 1.9M boe/day in 2016, the first new production peak seen since 2009, according to Wood Mackenzie’s latest outlook.
    • However, production is expected to plateau for the remainder of the decade following the 2016 peak due to the depletion of legacy fields and a limited number of new projects coming onstream.
    • Among top Gulf producers: RDS.A, RDS.B, BP, CVX, BHP, APC, APA, HES, E, EXXI.
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  • Nov. 11, 2014, 5:47 PM
    • BHP Billiton (NYSE:BHP) abandons the sale of its Nickel West mining operation in Western Australia, saying it had not been able to find a buyer willing to pay an acceptable price for the asset.
    • BHP had been reviewing its options for the Nickel West business, which includes the Mount Keith, Cliffs and Leinster mines and associated concentrators, the Kalgoorlie smelter, Kambalda concentrator and Kwinana refinery.
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  • Nov. 10, 2014, 8:56 AM
    • Rio Tinto (NYSE:RIO) CEO Sam Walsh tells Reuters he is unfazed by plunging ore prices, believing his company's industry-low production costs of $20.40/metric ton in H1 2014 will help it ride out the storm.
    • Walsh also says he is confident of increasing returns to shareholders at full-year results in February, adding that RIO has no plans to cut its 2015 capital spending target of $8B, announced last year.
    • RIO is on track to increase output 9% to 290M metric tons ahead of a push to 360M metric tons, ranking it second in size behind VALE and far ahead of third-place BHP.
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  • Nov. 10, 2014, 7:58 AM
    • Tugboat masters and deckhands at Australia’s Port Hedland have voted to accept a new labor agreement.
    • While engineers still plan a four-hour work stoppage on Nov. 12, the agreements lessen the risk of disruption to iron ore supplies from BHP Billiton (NYSE:BHP) and Fortescue Metals (OTCPK:FSUMF).
    • Iron ore is Australia’s biggest export earner, and shipments through Port Hedland represented 55% of the country’s iron ore exports last year; more than 80% of the cargoes go to China.
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  • Nov. 7, 2014, 10:58 AM
    • Iron ore prices cap their biggest weekly decline in more than five months and its third straight week of losses amid an expanding global surplus.
    • Ore with 62% content delivered to Qingdao lost 4.7% this week to $75.84/dry metric ton, data from Australia's Port Hedland showed record iron ore exports last month, and steel mill closures ordered by China this week to curb air pollution for a global summit also was seen hurting demand.
    • Iron ore has lost 44% YTD as producers including Vale (VALE +3.2%), BHP Billiton (BHP +3.7%) and Rio Tinto (RIO +2.6%) expanded supplies, and ABN Amro's Ben Cheung does not expect the oversupply situation to be alleviated next year.
    • Vale, which is seeking to boost output by 50%, this week opened its $1.4B port in Malaysia where its Valemax vessels can unload cargoes for onward shipping to clients in Asia in smaller vessels.
  • Nov. 5, 2014, 2:01 AM
    • BHP Billiton (NYSE:BHP) is planning to export ultralight oil from the U.S. without getting formal approval from Washington, testing the waters of exporting the minimally processed oil without a permit.
    • People in the industry say the U.S. Commerce Department, which oversees oil exports, has been encouraging companies to pursue independent exports without having to issue new rulings permitting it, a process being called "self-classification."
    • Pioneer Natural Resources and Enterprise Products Partners surprised oil markets earlier this year when they said they had obtained government approval to export the ultralight oil, known as condensate.
    • BHP Billiton says it has already signed an agreement to sell a 650K barrel cargo to Swiss trader Vitol.
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  • Nov. 3, 2014, 10:35 AM
    • In a WSJ interview, BHP Billiton (BHP -1.2%) CEO Andrew Mackenzie discusses his belief that large resource companies can easily become unmanageable, with too much complexity and conflicting internal cultures.
    • Mackenzie is seeking to sell or spin off a collection of BHP’s unwanted assets, so that he can focus the rest of the company on just four or five key commodities: coal, copper, iron ore, oil and gas, and perhaps potash.
    • BHP is among the rising number of natural resources companies that are slimming down to hone their business and make earnings more predictable, and big deals such as Glencore's recent merger offer with Rio Tinto are “effectively off the agenda," the CEO says.
    • The strategy is not universally loved; "The main beneficiary of the proposed demerger would appear to be the multitude of advisers that will no doubt require significant compensation for helping structure the deal,” says Bernstein analyst Paul Gait.
  • 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.
  • 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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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.