[INFOGRAPHIC] BHP Billiton: Core Assets V.S. Non-Core Assets
Last week BHP Billiton (ASX:BHP) announced it would spin off its non-core assets into a separate company. The news sent shockwaves across the mining industry.
“BHP Billiton is becoming a simpler, more productive company and the demerger we have announced today is an important step forward,” said BHP CEO Andrew Mackenzie.
“With a simpler portfolio we are targeting at least another $US3.5 billion in productivity-related gains by the end of the 2017 financial year.”
The infographic below reveals how BHP Billiton will split its business into core assets and non-core assets.
The demerger, which is expected to be completed in the first half of 2015, will include energy, coal and aluminum assets in South Africa, and bauxite, manganese and alumina in Australia. Apart from NSW coal, the demerger will also include the Cannington lead silver mine in Queensland.
According to BHP’s chairman Jac Nasser, the company is looking to revitalize itself into the company it was in 2001. “For over a century, BHP Billiton has progressively reshaped its business to maintain its industry leadership.”
He added, “We believe the proposed demerger, if implemented will accelerate the simplification of the group’s portfolio, provide investors will choice and unlock value in both companies.”
Barrick profit beats expectations as copper, gold prices up
Barrick Gold has reported a 78% jump in first-quarter profit, beating analyst expectations thanks to rising gold and copper prices, and said it was on track to meet annual forecasts.
Production in the second half is expected to be higher than the first, the gold miner said, thanks in part to the ramp-up of underground mining at the Bulyanhulu mine in Tanzania and higher expected grades at Lumwana in Zambia, reports Reuters
Barrick’s first-quarter gold production fell to 1.10 million from 1.25 million ounces due partly to lower grades at its Pueblo Viejo mine in Dominican Republic.
Adjusted profit surged 78% to $507mn in the quarter ended March 31, from $285mn a year earlier, and Barrick announced a 9 cent per share quarterly dividend.
Stronger prices helped boost Barrick’s revenue from its copper mines in Chile, Saudi Arabia and Zambia by 31% from the fourth quarter. Overall earnings per share were $0.29, ahead of analysts’ estimate of $0.27.
“We expect a positive stock reaction to the earnings beat and strong cash flow,” said Credit Suisse analysts.
Potential for South Africa merger
Barrick CEO Mark Bristow, who has championed mergers across the gold industry, said he backed the idea of South Africa-listed miners Goldfields and AngloGold Ashanti combining.
Speculation has been swirling around the two companies and Sibanye-Stillwater, whose CEO Neal Froneman floated the idea of a three-way merger.
“I’m a South African, and this country has such a great mining history and it would be great to see a real gold business come out of the many failed discussions that we’ve seen,” said Bristow.
Goldfields declined to comment. In a statement, AngloGold Ashanti said it was focused on delivering on its growth plan to unlock value from its portfolio of gold assets.
Bristow also said he had met with the Democratic Republic of Congo’s new mines minister and other officials and was continuing to work on getting $900mn belonging to its Kibali mine joint venture out of the country.
“We have a solution, it just needs to be sanctioned by the appropriate authorities which haven’t been around for a while,” he said, referring to a recent government overhaul by President Felix Tshisekedi.