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Mining giant BHP flags demerger plans

Global mining giant BHP Billiton said that it could spin off unwanted assets to focus on top tier commodities such as iron ore, copper, coal and petroleum.

The world’s biggest mining company did not said that which businesses could be demerged, but reports this year said its aluminium, bauxite and nickel assets could be spun off into a single entity worth about AUD 20 billion.

BHP Billiton has been simplifying its portfolio for over a decade and is pursuing options to make the company simpler and more productive. It signalled in April it may sell some assets but did not said that how this would be achieved.

It said that since then, the board has continued to study various structural alternatives including at its meeting this week. A demerger of a selection of assets is our preferred option.The board expects to consider this, and other matters, when it reconvenes next week.

BHP said that we believe that a portfolio focused on our major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in cash flow and a superior return on investment

It said that by increasing our focus on these four pillars, with potash as a potential 5th, we will be able to more quickly improve the productivity and performance of our largest businesses.

Source – Channel NewsAsia


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