Photo by: Bloomberg
PERTH (miningweekly.com) – Mining giant BHP Billiton said on Friday that it was targeting further productivity gains, with the company operating more like an advanced manufacturer than a traditional resource company.
“By the end of the 2017 financial year, we are targeting at least $3.5-billion of additional annualised productivity gains beyond those already reported,” CEO Andrew Mackenzie told shareholders at a meeting in London.
Earlier this year, BHP announced that it had embedded more than $6.6-billion of sustainable, annualised productivity-led gains over the last two years.
“The demerger proposal is an important step forward to go beyond this promise and further strengthen your already financially strong company,” Mackenzie added.
BHP’s plans to spin off its aluminium, coal, manganese, nickel and silver assets into an independently listed company were advancing.
“The new company’s assets, which are spread across the southern hemisphere, form a portfolio that, in the 2014 financial year, generated almost $1.8-billion of earnings before interest, tax, depreciation and amortisation. The new company will be the world’s largest producer of manganese ore, will own the world’s largest producing silver mine, and be a substantial producer of alumina, aluminium, nickel and coal,” said Mackenzie.
Company chairperson Jac Nasser noted that BHP’s strategy post the demerger, would remain unchanged.
“We will focus on what we do best. We will continue to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market. We will continue to provide the energy and minerals that support global economic growth and development.”
The new venture would likely be listed on the ASX, the JSE and on the London exchange.
A final board decision on the demerger would be made only once the necessary government, regulatory and third-party approvals had been secured.