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BHP Billiton set to spin off assets

Friday, August 15, 2014 - 01:41

The world's biggest miner BHP Billiton is looking to spin off its unwanted aluminium, manganese and nickel assets, setting the stage for the formation of a separate company. Hayley Platt reports

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It's the world's biggest mining company. But BHP Billiton could become a little smaller. The Anglo-Australian heavyweight would like to spin off its unwanted aluminum, manganese and nickel assets, which don't contribute much to earnings. That sets the stage for a separate company, which one report estimated could be worth $14 billion. The board is expected to decide when it meets next week before it releases its annual results. BHP says a demerger would simplify the company and improve its return on investment. Swaha Pattanaik from Reuters Breakingviews says the deal has pros and cons. SOUNDBITE: Swaha Pattanaik, a Reuters Breakingviews columnist, saying (English): "It's unclear how many people will be willing to hold on to its shares so what happens is the core company that is left may do fine. How far the share price of the other share that you get when a new company forms is not clear." Some analysts predict the spin-off would see BHP unwind its dual listing in Australia and London. The miner is relying on iron ore for the lion's share of its 2014 earnings. It's already mined a record 225 million tonnes of iron ore, beating its own guidance for the year. There are also reports BHP is debating whether to spin off its coal assets in New South Wales, though the firm declined to comment. BHP isn't the only global resources company to shed assets in recent years. In 2012 Rio Tinto sold two small coal assets in South Africa. These moves all part of a strategy to bolster profits amid a downturn in commodity prices. The news about BHP Billiton helped boost European shares - and BHP stock rose 3%.

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BHP Billiton set to spin off assets

Friday, August 15, 2014 - 01:41