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BHP Billiton Limited (BHP)

  • Sep. 4, 2014, 11:26 AM
    • BHP Billiton (NYSE:BHP) says it expects to join the bidding to develop Mexico’s deepwater oil fields when the country opens its offshore resources to foreign explorers next year.
    • A move into Mexican waters would expand BHP’s interests in the Gulf of Mexico, which includes two platforms it operates and a stake in production from three others; BHP currently produces ~100K boe/day in the Gulf.
    • BHP says it is initially interested in helping develop Mexico’s offshore assets rather than extending its shale expertise onshore; it was high bidder on 14 offshore blocks in a U.S. lease sale last month, including one area along the Mexico border.
    | 1 Comment
  • Sep. 2, 2014, 11:48 AM
    • Australia's conservative government earlier today repealed an unpopular tax on mining company profits, fulfilling a pledge made during last year's national election and handing Prime Minister Abbott a political victory while pleasing the country's big mining companies.
    • Abbott believes the repeal, alongside the scrapping of the Labor Party's carbon tax in July, will convey to overseas investors that Australia would be more amenable to business interests.
    • "This will be a positive step for investment and good for jobs in the mining sector," Rio Tinto (RIO -0.2%) CEO Sam Walsh says.
    • The tax was complicated and focused on iron ore and coal miners of a certain profitability level but certain rules allowed miners to use prior capital spending as a tax deduction; BHP Billiton (BHP -0.5%) paid $200M in mining tax in FY 2013 and $24.8M in FY 2014, but it is believed all payments by Rio were refunded by the tax office.
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  • Sep. 2, 2014, 7:56 AM
    • BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) look to open higher after Deutsche Bank analysts say an upside production surprise is in store at the Escondida copper mine in Chile, in which BHP has a 57.5% stake and Rio a 30% stake.
    • A strategy to run three plants at the mine may be adopted by the companies in 2015, which could increase earnings at BHP and Rio Tinto by 2%-3% in the next couple of years, Deutsche Bank says.
    • BHP +1.2%, RIO +1% premarket.
    | 1 Comment
  • Aug. 29, 2014, 10:55 AM
    • Iron ore prices are falling for a 10th straight day and have dropped 8.4% this month to five-year lows on concerns that global supplies are topping demand just as China’s recovery shows signs of faltering.
    • Iron ore demand seems to be cooling in China, Commerzbank analysts say, adding that the usual seasonal uptick in Chinese demand likely will fail to materialize this year.
    • Supply in the seaborne market also remains plentiful, where output is expected to exceed demand by 72M tons in 2014 and 175M tons in 2015, and prices will average $106/ton this year and $80 next year, Goldman Sachs estimates.
    • Global miners are mostly lower following big losses yesterday: SID -2.6%, VALE -1.6%, CLF -1%, RIO -0.2%, BHP +0.2%.
  • Aug. 28, 2014, 2:25 PM
    • Concerns about falling iron ore prices are sending global miners and steel companies sharply lower: CLF -5.8%, SID -5.7%, VALE -4.4%, RIO -3.9%, X -3.9%, BHP -2.5%, ANR -2.5%, MT -2.4%.
    • There’s too much supply of iron ore and prices will continue to fall further, deepening a slump that has hurt profits at the biggest miners, according to the head of Austria’s largest steelmaker.
    • Iron ore prices fell to their lowest level in five years today to $87.30/ton, the lowest since 2009; Voestalpine CEO Wolfgang Eder sees prices at $90-$100/ton for the rest of 2014 before settling at $80-$90 in the medium term.
  • Aug. 27, 2014, 6:58 PM
    • Commodity trader and miner Glencore (OTCPK:GLCNF, OTCPK:GLNCY) and Chinese nickel producer Jinchuan Group are the front runners to buy BHP Billiton's (NYSE:BHP) Australian Nickel West division, Reuters reports.
    • Estimates of Nickel West's value vary greatly, with some analysts and industry sources saying it's worth up to a $1B while others tag negative figures to the asset that they say is burning cash.
    • Nickel West was not included in BHP's de-merger plans announced last week, but CEO Andrew Mackenzie said shortly thereafter that the company was in talks to sell all or part of the unit.
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  • Aug. 20, 2014, 3:17 PM
    • ConocoPhillips (COP +0.7%) beat out BP (BP -0.1%) to win one of the most contested tracts of today's western Gulf of Mexico lease sale, entering the event's highest apparent bid of $16.7M for Alaminos Canyon block 431.
    • However, BP easily submitted the most bids (32) and was the apparent high bidder on 27, totaling $22.8M, while BHP was next with 14 bids comprising $21,8M; Chevron (NYSE:CVX) submitted just five bids but tallied the highest sum of high bids, totaling $25.8M.
    • Shell (RDS.A, RDS.B) made just one offer in the sale, for territory near its Perdido developments; its $1.75M bid was enough to win Alaminos Canyon block 905, edging out the only other competitor, Stone Energy (NYSE:SGY).
  • Aug. 19, 2014, 6:29 PM
    • BHP Billiton's (NYSE:BHP) move to spin off a raft of assets it deems non-core - businesses that employ ~25% of the company's current workforce but deliver less than 10% of its profits - creates a new midsize metals player that could become a prime takeover target for rivals.
    • WSJ mentions Glencore (OTCPK:GLCNF, OTCPK:GLNCY) as a potential suitor, and Mick Davis, the former CEO of Xstrata who left the company when it merged with Glencore, is on the lookout for acquisitions for his new investment vehicle.
    • On the other hand, the new BHP entity could suffer from dis-synergies after the spinoff, potentially facing higher costs in borrowing funds and procuring supplies.
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  • Aug. 19, 2014, 2:38 PM
    • BHP Billiton (BHP -3.4%) CEO Andrew MacKenzie said prospective partners for its proposed Jansen potash mine in Saskatchewan may be deterred by current market conditions for the crop nutrient.
    • While BHP would like a partner to help develop the project, the CEO said after reporting earnings and a plan to spin off some assets that "we are not in a hurry, and we have to take account of how current market conditions have perhaps made some of the potential partners less interested than they might have been."
    • Analysts say Jansen may cost $16B to develop; BHP has said it is cutting spending on Jansen by ~25%, but MacKenzie said today that construction of a mine shaft at the site is proceeding, albeit at a reduced pace.
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  • Aug. 19, 2014, 7:59 AM
    • Investors were expecting BHP's move to simplify the company to its "four pillars" of iron ore, copper, coal and petroleum, but they also expected a stock buyback in the neighborhood of $5B; they didn't get it, and the stock is -3.6% premarket.
    • BHP had said it was targeting net debt of ~$25B before it would consider returning extra capital to shareholders, but even after reaching that target - net debt at June 30 was $25.8B - it decided it would only go ahead when it could return capital in "a consistent and predictable manner."
    • The share price fall also reflects some concern with the proposed terms of the de-merger: Under the deal structure, shareholders would be given stock in the new spinoff even though it will be listed in Australia and South Africa, but many U.K. shareholders have investment mandates which do not allow them to own overseas companies, so many will be forced to dump their shares in the spinoff.
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  • 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."
    | 1 Comment
  • 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.
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  • 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.
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  • 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.
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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.