BHP Billiton's Spin-Off Company to be Named South32
Australian mining company BHP Billiton (ASX:BHP), which announced earlier this year it would split its “core” and “noncore” assets into separate companies, has finally announced the name of its new company.
South32 will include a majority of selected assets located in the southern hemisphere with two regional centers in Australia and South Africa. The name, South32, represents BHP’s footprint and its regional approach to managing its operations.
“The naming of South32 is a major step in the setup of our company,” said newly elected Chief Executive Officer, Graham Kerr.
“Our heritage and the places in which we operate are an important part of our identity. While South32 is grounded in the southern hemisphere, we will retain our global reach and ambition as we seek to exceed the expectations of a global shareholder base. The diversity of our employees, commodities, customers and communities will give the new company great strength, which is represented by the woven pattern of our logo.”
With its head office in Perth, the company’s regional head office and global share services center will be located in Johannesburg. South32 will be an Australian incorporated company and is intended to have a primary listing on the Australian Securities Exchange, with a secondary listing on the Johannesburg Stock Exchange and a standard listing in London.
“Many of our assets are among the most attractive in their respective commodities and all have benefited from BHP Billiton’s structured approach to improving safety and performance,” said Kerr.
“As we move to a regional model and develop a fit-for-purpose strategy, we have the potential to further improve performance. This would enable South32’s assets to reach their full potential and benefit our shareholders, employees and communities.”
Once all necessary third-party approvals are secured on satisfactory terms, a final Board decision on the proposed demerger will be made. BHP Billiton is expected to release all shareholder documentation with full details by March 2015 with shareholders voting in May.
Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”