BHP is back in favour with the world’s biggest investor, the massive sovereign wealth fund of Norway.
After two months on an observation list while the fund and its managers examined BHP’s exposure to coal, especially thermal or steaming coal (used mostly in power generation), the world’s biggest mining company is now back in favour with the fund revealing an addition to its holding in BHP Plc on Monday.
In what is now probably the largest single portfolio investment in an Australian company, Norway’s sovereign wealth fund has emerged as the owner of 5.1% of BHP Plc’s shares (That’s the London-listed shares in the company).
In a filing to the ASX yesterday before trading opened, Norges Bank, which conducts the buying and selling on behalf of the sovereign wealth fund of Norway said it had lifted its stake from a previous level of 4.06% to 5.1%, or 105,910,183 shares in BHP Plc. At Monday’s closing price of $A38.43 for BHP shares that was worth $A4.07 billion.
The stake is more interesting than just a portfolio investment by a massive global investor. The Norwegian fund is the largest investor in equities globally, with stakes in 9,000 companies, and its fund accounts for around 1.5% of all listed companies.
In May though Norges Bank said the fund has decided to quit some companies with stakes in coal mining especially thermal coal. These included BHP rivals, Anglo American, Glencore (the world’s and Australia’s biggest steaming coal exporter), Sasol of South Africa, AGL, the Australian energy utility, and electricity generator (from coal-fired plants).
Norges Bank said a further group of companies including BHP Group Ltd/BHP Group Plc had been placed on an “observation” list for further assessment.
“In the assessment against the product-based coal criterion, importance shall also be given to forward-looking assessments, including any plans the company may have that will change the level of extraction of coal or coal power capacity relating to thermal coal, and/or increase the income ratio or business share relating to renewable sources,” Norges Bank said in May.
In June it indicated it was not a long term owner of its thermal coal assets and has appointed JPMorgan to run the sale of its huge Mount Arthur mine in the NSW Hunter Valley.
That announcement helped put BHP back in the Fund’s good books.
It is the first time the Norges Bank holding has appeared in either BHP company’s top 20 shareholder lists on its own. Previously the 4% holding looks to have been held under a nominee company.
