BHP is seeking environmental approval to clear 2K-plus acres to dig two new open pit mines to extend the life of its Nickel West unit in Western Australia state.
Nickel West gets much of the concentrated ore it uses to feed its 100K metric tons/year Kalgoorlie nickel smelter from its nearby Mount Keith mines, and has contracted with other miners operating in the region for additional feed.
Nickel West produces ~5% of the world's nickel metal, and BHP has earmarked ~$2M per month during 2016-17 for making improvements at the site.
Elliott Management says yesterday's meeting with BHP (BHP +1.8%) CEO Andrew Mackenzie in Barcelona to discuss potential strategic changes at the mining company was "constructive."
Elliott says it had a private meeting with Mackenzie but does not provide further details; it was the first time BHP had met with Elliott since the fund went public with a $46B overhaul proposal on April 10.
Elliott is about half way to achieving its goal of extracting better returns out of BHP simply by putting pressure on the company's management and board to do more in the name of shareholder value, Reuters' Clyde Russell writes.
BHP CEO Andrew Mackenzie is expected to meet today with representatives from Elliott Management, the activist investor pushing for the company to dump some of its oil and gas assets.
The talks are set to take place at a mining conference in Barcelona, a day after the CEO told an audience there that BHP was confident a strategy of cutting costs and unlocking latent production capacity could boost the value of the company by up to 50%.
Elliott has been seeking support among other shareholders for its proposals and claims broad support for a restructuring of BHP’s petroleum business and general agreement that there should be a renewed focus on capital returns.
BHP spent ~$20B buying U.S. shale assets earlier in the decade and has since written off more than half the value of the acquisitions, and Mackenzie admits "the acquisitions that took us into this business were poorly timed, that we paid too high a price."
A rising tide of analysts and investors are backing the sale of the shale assets, with Deutsche Bank saying BHP could receive ~$9B based on recent deals in the sector; divesting the assets would provide “additional capital to focus on the higher returning conventional assets and minerals portfolio," the firm says.
Reps from BHP and Elliott are scheduled to meet tomorrow on the sidelines of a conference in Barcelona, Bloomberg reports.
Elliott Management refines its attack on BHP, proposing the company retain a main stock listing in Australia in an attempt to tamp down opposition by the Australian government to a main listing in London, which Treasurer Scott Morrison said would be considered a criminal offense.
Elliott now calls for BHP to remain incorporated in Australia and to retain full Sydney and London listings, as well as Australian headquarters and a full Australian tax residence.
Elliott has been pushing for BHP to spin off its U.S. oil and gas assets, and now wants an independent review of the company's petroleum business.
BHP CEO Andrew Mackenzie fires back, outlining plans he says could lift the value of the company by 50% and double its return on capital; he also defends the petroleum business, saying more value can be extracted via advances in shale technologies and exploration in places like the Gulf of Mexico.
BHP Billiton (NYSE:BHP) is launching a global rebranding that will include dropping "Billiton" from its name and changing its logo, as it seeks to improve its public image.
Company officials say that since the global financial crisis, BHP has encountered rising skepticism over the role of big companies in the economy, as well as the public debate over the Australian government's introduction of a mining resource tax, and more recently the Samarco dam failure in Brazil.
The campaign comes in the wake of a push by activist investor Elliott Management to force BHP to collapse its dual listed structure and to spin off some of its North American assets, although company officials say rebranding plans have been in the works for 18 months.
Elliott Management is willing to back a board member of BHP Billiton (NYSE:BHP) to become chairman upon the retirement of Jac Nasser despite its reservations about top management, Reuters reports.
Elliott blames Nasser and BHP management for what it sees as BHP's bad investments, particularly in U.S. shale gas, but believes "there are personalities on the board that are talented and capable" with the "potential for someone to be selected from the existing board," according to the report.
Elliott, which holds slightly more than 4% of BHP shares, has been meeting with major BHP shareholders since going public with its restructuring proposals on April 10 to gauge support for change at the company.
A second BHP Billiton (NYSE:BHP) shareholder is pressing for strategic changes at the miner, with Sydney-based Tribeca Global Natural Resources Fund joining Elliott Management to push for a sale of U.S. shale assets and an overhaul of the board and senior management.
Tribeca wants BHP to consider selling its U.S. assets but should maintain its current dual-listed structure, differing its from Elliott's view that BHP should move its primary listing to London, a move Australia's Treasurer has said he would not allow.
Tribeca estimates BHP could fetch $10B for its shale assets, based on recent deals done in the Permian and Eagle Ford shale regions that implied prices of $30K-$40K per net acre.
BHP has said it wants to hold on to its Permian acreage, where it has been consolidating its position by acquiring high grade acreage and is looking to trade acreage or work with companies with adjoining acreage to raise production.
Chinese metals prices tumble amid fears that expected demand for infrastructure and construction projects in China may not materialize as expected.
Iron ore futures plunged 8% - as far as China's market regulators allow in a single day - at 485 yuan/ton ($70.32), extending losses after a four-day rally was reversed yesterday, hot-rolled coil futures also dropped by the daily maximum of 7%, while steel rebar futures plunged 6.2% to wipe out last week’s gains.
Iron ore and steel rebar prices are now down ~20% from four-year highs reached in March.
Already weak sentiment is exacerbated after six Chinese government agencies pledged to curb runaway local government debt by stricter oversight of projects.
In premarket trading: BHP -1.4%, RIO -0.5%, VALE -1.5%, CLF -1.2%.
Australia's government would block any attempt to move BHP Billiton’s (NYSE:BHP) main market listing to the U.K. as proposed by Elliott Management, the country's treasurer says.
If BHP implements Elliott’s proposals, “it may commit a criminal offense and could be subject to civil penalties,” as they would run counter to the national interest, Treasurer Scott Morrison says.
Elliott, which owns a 4.1% stake in BHP, is meeting with BHP investors this week in Australia to pitch its proposals for a corporate overhaul, higher shareholder returns and a spinoff of U.S. oil assets.
The Goonyella coal rail system in Queensland Australia has reopened after cyclone damage halted operations in late March, cutting off much of the world's sea-traded coking coal used in steelmaking, operator Aurizon says.
Goonyella, used extensively by BHP Billiton (BHP -0.9%), is the last of Aurizon's four systems in the Central Queensland Coal Network to re-open to coal trains, although they are operating under reduced capacity.
BHP Billiton (NYSE:BHP) says it has put its Fayetteville shale gas assets in the U.S. back up for sale, as it seeks to focus on more lucrative opportunities in oil.
In its latest operations review, BHP says the Fayetteville field in Arkansas is under review and that it is "considering all options, including divestment."
In its decision to revise the sale, BHP denies any link to Elliott Management's call earlier this month for it to spin off its petroleum division.
Meanwhile, BHP cuts its guidance for full-year copper production by 17% to 1.33M-1.36M metric tons following a six-week strike at the Escondida mine, the world's biggest copper mine, that ended in late March.
BHP also reduced its coking coal guidance by 9% to 39M-41M metric tons and trimmed its iron ore output guidance to 268M-272M metric tons.