Archive | BHP Billiton

BHP Billiton set to reap benefits of favoured status with Donald Trump – by Robert Gottliebsen (The Australian – January 13, 2017)

Suddenly almost everything is going right for the world’s largest mining company, Australia’s BHP. Not only is cash pouring into its coffers because of higher iron ore, oil and coal prices but, thanks to CEO Andrew Mackenzie and his team, much lower costs mean profits will skyrocket at a rate well above the estimates of most analysts.

In the past BHP would have been expected to shower shareholders with dividends but now the company is among an elite group of non-US companies—-it has been chosen by president-elect Donald Trump to help “make America great again”.

I do not think Australia and even BHP fully comprehend the US potential being opened up for the Big Australian. Continue Reading →

[Australia] Would-Be Kingmaker Calls Out Iron Giants in Ore Tax Battle – by Rebecca Keenan (Bloomberg News – January 12, 2017)

The world’s biggest mining companies producing iron ore from Australia aren’t paying their fair share in taxes, according to a lawmaker who wants a 20-fold raise in a state levy that’s been unchanged since the 1960s and the era of imperial pounds, shillings and pence.

The proposal has “overwhelming” support and Rio Tinto Group and BHP Billiton Ltd.’s objections don’t stack up, according to Brendon Grylls, Western Australia’s Nationals party leader. Grylls, a farmer and one-time baker turned politician, is championing the drive to raise the lease rental payment, levied on ore from the two companies, to A$5 a metric ton ($3.68) from 25 Australian cents.

“It is quite clear to me that Western Australia is not receiving a fair recompense for making our iron ore available,” Grylls said in an interview from his office in West Perth on Tuesday. “It was 2 and 6 converted to 25 cents when decimalization came in.” Continue Reading →

BHP Billiton chiefs meet Donald Trump in New York – by Daniel Palmer (The Australian – January 11, 2017)

BHP Billiton’s most prominent executives have met with Donald Trump in New York just two months after the company warned the US president-elect to back away from a 45 per cent trade tariff on China.

The controversial policy was flagged through a heated election campaign that saw Mr Trump consistently hit out at Beijing. At BHP’s meeting with Mr Trump and vice president-elect Mike Pence were chief executive Andrew Mackenzie, chairman Jac Nasser and chief legal counsel Geoff Healy.

In a brief statement, the mining giant said the discussions had been “productive” but declined to elaborate on the specific details of the talks. Continue Reading →

Tough labor talks could lead to strike at Escondida copper mine: union – by Anthony Esposito and Antonio De la Jara (Reuters U.S. – January 4, 2017)

SANTIAGO – Workers at BHP Billiton-owned Escondida, the world’s biggest copper mine, could go on strike in February if collective contract talks with the company are unsuccessful, union spokesman Carlos Allende told Reuters on Wednesday.

The warning came after the company rejected all the workers’ demands, Allende said. He said the proposal the company presented would cut the benefits workers receive in their current contract.

“With this attitude the only thing the company is doing is creating an open conflict because the demands were agreed on by the workers,” said Allende. Continue Reading →

Miners sharpen marketing strategies in hunt for marginal gains – by Barbara Lewis and Gavin Maguire (Daily Mail/Reuters – December 20, 2016)

LONDON/SINGAPORE, Dec 20 (Reuters) – The world’s big mining groups are sharpening their marketing strategies in a post-crisis scramble for even tiny increases in profit, seeking marginal gains much like cycling teams in the Tour de France or Olympic velodrome.

Anglo American, BHP Billiton and Rio Tinto are using varying tactics to boost profitability on commodities such as copper, iron ore and coal, as the traditional model of simply producing more is under strain and the recovery from a deep downturn remains tentative.

The one thing in common is a philosophy championed by cycling coach Dave Brailsford: achieve marginal gains in as many areas as possible and the overall performance of the rider – or in this case the business – will improve significantly. Continue Reading →

BHP boss Andrew Mackenzie a rarity in big business – by Will Glasgow and Christine Lacy (The Australian – December 8, 2016)

All agree that BHP Billiton boss Andrew Mackenzie’s response to the Samarco dam disaster just over a year ago was close to flawless. He was on the first flight to Brazil, spent days on the ground meeting staff, inspecting the damage and briefing the media, and he’s made sure to return to see the recovery operation himself.

It was textbook disaster management — a stark contrast to the blundering performance of the then Neil Balnaves-led ­Ardent Leisure in the days after the Dreamworld tragedy.

But what hasn’t emerged until now is the action the humble Scotsman took to make sure he personally felt a financial penalty for Samarco. In the weeks before the Carolyn Hewson-chaired BHP remuneration committee was due to consider his 2016 pay, Mackenzie quietly approached Hewson and requested he get no bonus. Continue Reading →

Vale-BHP’s Samarco expects preliminary license in first quarter – by Marta Nogueira and Stephen Eisenhammer (Reuters U.S. – December 7, 2016)

RIO DE JANEIRO/BRASILIA – Brazilian iron ore miner Samarco Mineracao expects to receive a preliminary environmental license in the first quarter, an important step in its effort to resume operations by mid-2017, Chief Executive Officer Roberto Carvalho said in an interview on Tuesday.

This would be the first of three environmental licenses needed by the company, which is jointly owned by Vale SA and BHP Billiton. Samarco’s operations were suspended in November 2015 after the collapse of a dam holding mining waste, or tailings, killed 19 people and caused Brazil’s worst environmental disaster.

“They are deep discussions, slow discussions, but they are advancing,” Carvalho said, referring to the process of getting the licenses approved by Semad, the environmental body for the state of Minas Gerais, where Samarco’s mine is located. Continue Reading →

BHP Billiton chairman warns of global ‘trauma’ if Trump puts tariffs on China – by Joshua Robertson (The Guardian – November 17, 2016)

Executives from the world’s largest mining company have urged Donald Trump to uphold the Paris climate pact, while warning the “whole world will be in trauma” if the incoming US president follows through on tariffs against China.

BHP Billiton chief executive Andrew McKenzie told shareholders in Brisbane that he hoped Trump maintained US support of the Paris agreement and built on crucial cooperation with China on climate action begun by his predecessor.

BHP Billiton chairman Jac Nasser said Trump’s pledge to apply 45% blanket tariffs on Chinese imports would trigger a damaging trade war but predicted this was part of his election campaign “rhetoric” which would not materialise. Continue Reading →

World’s Top Miner Expects Iron Ore, Coal Price Surge to Cool – by David Stringer (Bloomberg News – November 17, 2016)

BHP Billiton Ltd., the world’s biggest miner, expects soaring prices of iron ore and coking coal to moderate even as China pushes ahead with efforts to restructure its steel sector.

Prices have been supported in recent months by restocking and short-term supply disruptions, Chief Executive Officer Andrew Mackenzie told reporters Thursday in Brisbane following the company’s annual meeting. Iron ore has jumped 66 percent this year to rebound from three straight annual declines, while coking coal has surged about 295 percent.

China’s determination to push through with restructuring in its steel and coal sectors, and the nation’s increasing willingness to favor imports over domestic material, has buoyed prices alongside other short-term catalysts, according to Mackenzie. Continue Reading →

BHP Said to Seek Samarco Restructure as Vale Wants More Time – by R.T. Watson and David Stringer (Bloomberg News – November 15, 2016)

BHP Billiton Ltd. is pushing to restructure debt at its Samarco venture as joint owner Vale SA prefers a grace period on payments until it secures licenses to resume mining, people familiar with the matter said.

While the owners have said they don’t intend to cover Samarco’s more than $3 billion in debt, they’re at odds over how the Brazilian iron miner should approach banks and bondholders after a year-long halt in output, the people said, asking not to be identified because talks are private. BHP’s preference for restructuring now would mean a haircut for creditors, the people said.

Samarco Mineracao SA, as the joint venture is formally known, has been shut since a tailings dam ruptured a year ago. The accident, described by the government as Brazil’s worst ever environmental disaster, killed as many as 19 people and polluted waterways in two states. The venture has already missed two bond coupon payments. Its bonds due 2022 are trading at about 35 cents on the dollar, down from 39 cents at the end of last month. Continue Reading →

Iron-ore tax to shrink Australia’s economy, cost it thousands of jobs – report – by Esmarie Swanepoel ( – November 14, 2016)

PERTH ( – The National Party of Western Australia’s proposed new tax on iron-ore could cost Australia about 13 500 jobs and will shrink the economy by about A$2.9-billion a year.

Commissioned by the Minerals Council of Australia (MCA), a research study by Deloitte Access Economic has found that the proposed tax will cost 2 900 jobs in the Pilbara, 3 400 in the broader West Australian economy and 7 200 jobs nationally.

Western Australian Nationals leader Brendon Grylls has proposed the tax, which will impose a A$5/t levy on iron-ore production from the Pilbara, with the aim of raising A$7.2-billion in state funds. Currently, iron-ore miners pay 25c/t. Continue Reading →

Ecuador Says BHP, Billionaire Rinehart Join Metals Chase – by David Stringer (Bloomberg News – November 8, 2016)

BHP Billiton Ltd., the world’s largest miner, and billionaire Gina Rinehart’s Hancock Prospecting Pty. are among commodity producers to have held talks over a potential entry into mining and exploration projects in Ecuador, according to the nation’s government.

Both producers had discussions with officials on the prospects of making investments or securing exploration leases, Mining Minister Javier Cordova Unda said Tuesday in an interview in Melbourne. Cordova has met with BHP personally, he said.

BHP has shown interest in a number of copper projects, including in a potential partnership with state-owned miner Enami and Chile’s Codelco in their joint Llurimagua copper and molybdenum project, Cordova said. Fortescue Metals Group Ltd. Continue Reading →

Major mining assets change hands after commodity rout (Reuters U.s. – November 8, 2016)

Major miners are selling assets after a global commodities rout last year left them with high levels of debt. A recovery in raw materials prices has taken away some of the pressure to sell, however, and deals have slowed.

China, whose stimulus package spurred this year’s commodities rally, is the biggest potential buyer. Following is a list of the main mining companies, some of the biggest sales so far and what assets are on offer:


Market capitalization: 72.7 billion pounds ($90.3 billion)(Reuters data)

Net debt: $26.1 billion (company reported in August) Continue Reading →

BHP Billiton one year on from the Samarco Fundão dam disaster – by Peter Ker (Australian Financial Review – November 2, 2016)

Andrew Mackenzie was rushing towards South America when he took a call from an old friend. A dam failure had killed scores of people at a BHP site in Brazil just days earlier, and there was little time for social calls.

But the BHP chief executive made an exception for Tony Hayward’s call. The two men had been friends for more than two decades, having spent a significant part of their careers at BP, where Hayward was the much-maligned chief executive who wished he could “get his life back” during the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

Upon hearing of the dam collapse at BHP and Vale’s Samarco iron ore business, Hayward felt there were messages his friend had to hear. Mackenzie had already won plaudits for fronting the media in Melbourne within 12 hours of the dam spill on November 6, 2015, despite confusion reigning at the time amid the darkness of night in Brazil. Continue Reading →

There’s an $8 Billion Iron Ore Quandary Ahead for Top Miners – by David Stringer (Bloomberg News – November 2, 2016)

The world’s biggest iron ore miners are warning that prices are set to decline — just as they need to begin spending as much as $8 billion developing new mines to keep their best cash machines ticking over.

Over the next five-to-10 years, the miners need new production to replace almost 170 million tons of capacity that’ll be lost as exhausted pits are closed and grades decline at aging operations, according to Global Mining Research Ltd. Even with forecasts that demand for seaborne supply will peak in 2018 and prices may drop below $40 a ton that year, new iron ore projects are seen offering better returns than some alternative investments.

“Economically, it still makes a lot of sense to invest that level of capex, given the returns that these mines are likely to generate,” said Michelle Lopez, a Sydney-based investment manager at Aberdeen Asset Management Ltd., which holds BHP Billiton Ltd. and Rio Tinto Group shares and globally manages $403 billion. Continue Reading →