BHP weighs divestment options
PERTH (miningweekly.com) – Mining giant BHP Billiton on Tuesday said it was “reviewing” and “assessing” its divestment options, after media outlets in Australia reported that the company was considering a $20-billion demerger plan.
Reports in The Australian and The Sydney Morning Herald stated that the major would divest of its noncore aluminium, manganese, thermal coal and nickel assets.
“As we have said previously, the simplification of our portfolio is a priority and is something we have pursued for several years,” BHP said in response to the market speculation, adding that in the last two years, the company had completed a number of divestments in Australia, the US, Canada, South Africa and the UK.
Divestments included petroleum, copper, coal, mineral sands, uranium and diamond assets.
“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 free cash flow and a superior return on investment,” BHP added.
The miner had previously also flagged its potash assets as areas of possible growth.
“By increasing our focus on these four pillars, with potash as a potential fifth, we will be able to more quickly improve the productivity and performance of our largest businesses.”
BHP told shareholders that the company would actively continue to study the next phase of simplification, including its structural options, but noted that it would only pursue those avenues that maximised value for the company’s shareholders.
BHP CEO Andrew Mackenzie has previously said that Australia would remain a focal point for the company, pointing out that the country accounted for about 70% of its profits.
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