BHP Billiton: Investors to Vote on Demerger Plan in May 2015
Australia-based BHP Billiton is expected to hold a vote for investors in May of next year to share their say on the company’s future demerger plan.
The general meeting, which is expected to be held next year in May, will allow shareholders the opportunity to voice their opinions and thoughts on BHP’s plan to split the company into ‘core’ and ‘non-core’ assets. The split will provide BHP to retain its ‘four pillars’ of iron ore, coal, petroleum and copper, with potash as a possible fifth pillar.
According to chief executive Andrew Mackenzie, additional commodities such as silver and Illawarra Coal will spin off into the new company.
"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.”
Despite slumping iron ore prices, BHP confirmed its iron ore division was still one of its most profitable businesses. The company recently came under fire from West Australian Premier Colin Barnett, who questioned their expansion strategies and accused BHP of “seemingly acting in concert” to keep iron ore prices at extremely low levels.
According to Business Review Australia, BHP plans to reshuffle management within the organization, changing roles of many of its highest-ranking executives.
“Mike Henry, former head of marketing, was announced as the president of the company’s coal assets; he takes over for Dean Valla Valle, who practically swapped roles with Henry to become marketing, health, safety and environment boss. Daniel Malchuk, former aluminium boss, is the new president of copper. Peter Beaven, previous copper president is on track to become the CFO, with former CFO Graham Kerr moving to run the demerged entity next year.”
BHP also announced plans to cut costs and accelerate a reduction in investment spending to its core assets. The company’s capital spending will be cut by $1 billion in the 2016 financial year, freeing up more cash for shareholder returns.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.