Last week was a busy one for BHP: there was a board meeting to examine the interim results (due for release the week after next) several deals and spending plans for given the greenlight and two board appointments (and retirements were revealed) and announced in a flurry of announcements on Friday.
First off BHP said it had approved the $US1.93 billion expansion of its Western Australian iron ore business, to lift production capacity to 240 million tonnes a year by 2013.
BHP also wants to expand this further to around 300 million tonnes a year by 2015.
It is finishing off spending on the RPG5 part of the expansion plan. Total cost is well over $US7 billion, at the moment.
BHP Billiton said its share of the expansion cost would be $US1.73 billion and the investment represented early spending in its Rapid Growth Project 6 (RGP6).
"The funding will allow early procurement of long lead time items and detailed engineering to continue the expansion of the inner harbour at Port Hedland, progress rail track duplication works and expand the Jimblebar mining operation," the company said.
BHP Billiton President, Iron Ore, Ian Ashby said the investment was part of the miner’s long-term strategy of adding capacity in iron ore, "to support our confidence in the longer term demand for iron ore globally".
"By the time RGP6 is completed, we will have more than tripled installed capacity at our Western Australia Iron Ore operations since we first invested in our accelerated growth program in 2002," Mr Ashby said in the statement.
The approval for the balance of the RGP6 capital will be considered during the second half of the 2010 calendar year.
Fellow miner Rio Tinto Ltd will have the option to join in the RGP6 program, once the two miners establish their proposed WA iron ore joint venture, expected by them in the second half of 2010.
BHP also confirmed its long awaited move into the global potash industry on Friday with an acquisition in Canada.
The company agreed to buy Athabasca Potash Inc. for around C$341 million (US$320 million, $A356 million) on a fully diluted basis.
In a statement BHP said API owns the Burr Project and various potash exploration properties in Saskatchewan, Canada.
"API holds one of the largest exploration permit areas in the Saskatchewan basin, covering approximately 6,900 square km.
"The Burr Project is located adjacent to BHP Billiton’s Jansen Project and some of API’s exploration properties neighbour BHP Billiton’s potash permit areas.
"Acquiring API will give BHP Billiton access to a total of more than 14,000 km2 of prospective exploration ground in the world-class Saskatchewan potash basin."
BHP Billiton Diamonds & Specialty Products President Graham Kerr said: "Today’s announcement is consistent with BHP Billiton’s strategy of building a strong potash resource position. We continue to pursue opportunities that fit within our portfolio and are aligned with our strategy of developing Tier 1, long life, low-cost, expandable assets.
"This acquisition fits well with our existing projects and land positions in the Saskatchewan potash basin."
According to Wikipedia "About 93% of world potash consumption is used in fertilisers, with small amounts used in manufacturing soaps, glass, ceramics, chemical dyes, drugs, synthetic rubber, de-icing agents, water softeners and explosives. Other main potash fertilizer products include potassium sulphate and potassium nitrate."
And, finally BHP announced some significant changes on the board that coincide with the changing of chairman from Don Argus to Jac Nasser, the former Ford boss.
Paul Anderson, the former BHP boss and driving force behind the Billiton merger a decade ago and Dr Gail de Planque retired from the board yesterday (January 31, 2010) and will be replaced by Malcolm Broomhead and Ms Carolyn Hewson as non-executive directors from March 31, 2010.
Mr Anderson has accepted an invitation to become a director of BP plc and Dr de Planque will retire due to a current illness that needs special treatment.
BHP Billiton Chairman, Don Argus, said both Mr Anderson and Dr de Planque had made extremely valuable contributions to the company and he wished them both good health and success in their future endeavours.
"On behalf of the Board I wish both Paul and Gail all the best and, whilst we are saddened to see them leave, they do so with the good will and gratitude of the Board." Mr Argus said.
Malcolm Broomhead is currently the chairman of an Australian infrastructure company, Asciano Limited and was previously Chief Executive Officer of Orica Limited and North Limited.
Mr Broomhead also held various roles with Energy Resources Australia, Peko Wallsend and MIM Holdings Limited. He is also a non-executive director of Coates Group Holdings Pty Ltd.
Ms Hewson is a former investment banker with Schroders Australia and is a non-executive director of Westpac Banking Corporation, BT Investment Management Limited and Stockland Corporation Limited. She has previously been a non-executive director of AGL, AMP and CSR Limited.
BHP chairman elect Jac Nasser said, "The Group’s established process of continually reviewing the mix of skills and competencies of directors will continue to ensure that the Board is made up of members best able to promote shareholder interests and effectively govern the Group."
The appointment of Mr Broomhead and Ms Hewson will bring the number of BHP Billiton directors to 12.
