Tag: BHP

After months of being the easy target for short sellers, hedge fund traders and market know-alls, especially when there’s weak economic news from China, Australia’s big three iron ore miners – BHP Billiton, Rio Tinto and Fortescue Metals Group – are back in the limelight and enjoyed nice rises yesterday.

Here’s a heads up for the new financial year.

Forget the federal budget – much the changes won’t see the light of easy, if at all until after the September 14 election, except the increase in the Medicare levy.

Now, people are fretting about iron ore exports after BHP Billiton said demand for the steelmaking raw material had "flattened".

No buyback, but BHP Billiton remembered shareholders and lifted dividend 20% after a 5.5% dip in first half profits.

Like its rivals, Rio Tinto and Fortescue, BHP Billiton is gung-ho about 2012, despite many commentators being just as gloomy about the outlook for iron ore, Chinese steel and coal.

We had two very different outlooks from companies at opposite ends of the current corporate ladder in Australia.

Like rival Rio Tino, BHP Billiton has reported a cracker of a quarter for its iron ore business in the three months to September.

And still in South Australian copper mining, BHP Billiton has moved a step closer to making a yes or no decision on the huge Olympic Dam project.

No matter which way you look at it, 2010-11 was a record year for BHP Billiton, just as it was last year.

Buried yesterday’s BHP Billiton exploration and development report for the 4th quarter and for all of the 2011 financial year was another major story for the world’s biggest mining company.

Besides the expansion of its Chilean and Peruvian copper resources, BHP also achieved production records in four commodities with production of iron ore posting its 11th consecutive record.

BHP Billiton is facing production and sales problems at its highly profitable Bowen Basin coking coal mines for much longer than previously thought.

BHP Billiton and its partners in iron ore and coal have committed to spending $US13 billion in total on a string of major expansion projects.

BHP Billiton has joined the great American unconventional gas rush, after basically missing the boat in Australia in so far as coal seam methane and other new gas sources are concerned.

BHP Billiton shares fell yesterday because some shareholders were unhappy at the news of the sharply higher interim profit, higher dividend and a new, higher share buyback. 

So what’s BHP Billiton’s outlook on the world economy and commodity markets.

While BHP Billiton says it achieved record iron ore production and shipments in the first half of the financial year, the impact of the wet weather and floods in central Queensland will continue to batter its coal business for the rest of the 2011 financial year.

Muted approval from investors yesterday afternoon for the strong arguments from BHP Billiton in favour of maintaining its current strategy for mergers and acquisitions, even if it has thrown up three failures.

It was an obvious call, but BHP Billiton has withdrawn its $US45 billion bid for Canadian fertiliser company Potash Corporation of Saskatchewan, and restarted its long suspended share buyback, in effect going to option C for a corporate strategy.

Can BHP Billiton CEO Marius Kloppers survive a third failed expansion deal?

Like its iron ore rival and former prospective joint venturer, Rio Tinto, BHP Billiton had solid September quarter in the Pilbara, with production and sales hitting capacity.

While BHP boosted earnings and dividend significantly in the year to June, analysts and investors have to heed the caution expressed in the company’s outlook.

So is the BHP Billiton thrust for control of Potash Corporation of Canada a good thing?

BHP Billiton has made its much rumoured move to grow its fledgling fertiliser business by launching a direct assault at the world’s biggest company in the industry Potash Corp of Canada, which immediately rejected the $US39 billion (A42.3 billion) offer.

BHP Billiton may be ‘cautious’ about the outlook for global growth and demand for its many commodities, but it is at least realistic on China.

BHP Billiton, the world’s biggest mining company, has joined its smaller rival, Rio Tinto, in being implicated in possible corrupt activities.

While BHP Billiton has a problem with possible corruption (see next report), it has made an interesting call in its third quarter production report.

BHP Billiton and Rio Tinto, plus the likes of Fortescue and other iron ore exporters, are in for big profit gains this year.

Hard on the heels of Friday’s deal with a Japanese steel mill for a 50% price rise for hard coking coal, BHP Billiton has revealed the settlement of 2010 deals with other buyers in China, Europe and Japan.

Hard on the heels of news of offers flying to and fro in the steel industry for 2010 iron ore pricing, BHP is reported to have struck an innovative new short term contract with a big Japanese steel mill that contains a 55% price rise for hard coking coal.

It might have been the weakest first half profit in four years, but BHP Billiton did better than analysts had forecast, nudged its US dollar denominated dividend a touch higher and made the right cautious noises about the chances of a sustained global recovery.

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.

As expected, BHP Billiton, had a very good second quarter and first half (to the end of December) in its various mines and commodities.