BHP Billiton: Wikis

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BHP Billiton Limited & PLC
Type Public (LSE: BLT)
(NYSEBHP), (NYSEBBL),
(ASXBHP) & (JSE: BIBLT)
Founded Broken Hill Proprietary Company (BHP) 1895;
Billiton plc 1860;
Merger of BHP & Billiton 2001 (creation of a DLC)
Headquarters Melbourne, Australia
London, United Kingdom
Area served Worldwide
Key people Marius Kloppers (CEO)
Jacques Nasser (Chairman)
Industry Materials, Mining
Products Iron Ore, Diamonds, Coal, Manganese, Gold, Petroleum, Aluminium, Copper, Nickel, Uranium & Silver
Revenue US$44,113 million (2009)[1]
Operating income US$12,160 million (2009)[1]
Profit US$6,338 million (2009)[1]
Employees 38,267 (2009)
Website www.bhpbilliton.com

BHP Billiton is the world's largest mining company.[2] It is also the largest company in Australia by market capitalisation. It was created in 2001 by the merger of Australia's Broken Hill Proprietary Company (BHP) and the British-Dutch Billiton. [3] The result is a dual-listed company with head offices in Melbourne and London. BHP Billiton Limited, which is the majority partner in the dual-listed structure, is listed on the Australian Securities Exchange. BHP Billiton Plc is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Contents

History

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Broken Hill Proprietary Company

Former Broken Hill Proprietary Company corporate logo

The Broken Hill Proprietary Company or BHP was incorporated in 1885, operating the silver and lead mine at Broken Hill in western New South Wales.[4] In 1915, the company ventured into steel manufacturing, with its operations based primarily in Newcastle, New South Wales. The company's corporate offices are located in Melbourne, Victoria.[5] It is also known by the nickname "the Big Australian".[6]

The company began petroleum exploration in the 1960s with discoveries in Bass Strait, an activity which became an increasing focus.[7]

BHP began to diversify offshore in a variety of projects. One project was the Ok Tedi copper mine in Papua New Guinea, where the company was successfully sued by the indigenous inhabitants because of the environmental degradation caused by the mine operations.[8] BHP had better success with the giant Escondida copper mine in Chile (57.5% owned) and the Ekati Diamond Mine in northern Canada.[9]

The inefficiencies of what was, by global standards, a small steel operation in Newcastle finally caught up with the company and the Newcastle operations were closed in 1999.[10] The 'long products' side of the steel business was spun off to form OneSteel in 2000.[11]

In 2001, BHP merged with the Billiton mining company to form BHP Billiton, the largest mining company in the world. In 2002, the 'flat products' steel business was spun off to form BHP Steel. In 2003, BHP Steel changed its name to BlueScope Steel.[5]

Billiton

Billiton was a mining company whose origins stretch back to 29 September 1860, when the articles of association were approved by a meeting of shareholders in the Groot Keizerhof hotel in The Hague, Netherlands.[12]

Two months later, the company acquired the mineral rights to tin-rich islands of Banka (Bangka) and Billiton (Belitung) in the Indonesian archipelago, off the eastern coast of Sumatra.[12]

Billiton's initial business forays included tin and lead smelting in the Netherlands, followed in the 1940s by bauxite mining in Indonesia and Suriname. In 1970, Royal Dutch/Shell acquired Billiton and accelerated the scope of progress of this growth.[12] The tin and lead smelter in Arnhem, Netherlands was shut down in the 1990s.

In 1994 Gencor acquired the mining division of Billiton excluding the downstream metal division.[13] Billiton was divested from Gencor in 1997.[14] In 1997, Billiton Plc became a constituent of the FTSE 100 Index.[12]

Former Billiton corporate logo.

Throughout the 1990s and beyond, Billiton Plc experienced considerable growth. Its portfolio included aluminium smelters in South Africa and Mozambique, nickel operations in Australia and Colombia, base metals mines in South America, Canada and South Africa, coal mines in Australia, Colombia and South Africa, as well as interests in operations in Brazil, Suriname, Australia (aluminium) and South Africa (titanium minerals and steel and ferroalloys).

In 2001 Billiton Plc merged with the Broken Hill Proprietary Company (BHP) to form BHP Billiton.[3]

BHP Billiton Mergers and Acquisitions

In March 2005, Billiton announced a US$7.3 billion agreed bid for another mining company WMC Resources, owners of the Olympic Dam uranium mine in South Australia, nickel operations in Western Australia and Queensland, and a fertiliser plant also in Queensland. The takeover achieved 90% acceptance on 17 June 2005, and 100% ownership was announced on 2 August 2005, achieved through compulsory acquisition of the last 10% of the shares.[15]

On 8 November 2007, BHP Billiton announced it was seeking to purchase rival mining group Rio Tinto Group in an all-share deal. The initial offer of 3.34 shares of BHP Billiton stock for each share of Rio Tinto was rejected by the board of Rio Tinto for "significantly undervaluing" the company. It was unknown at the time if BHP Billiton would attempt to purchase Rio Tinto through some form of hostile takeover[16]; however, CEO Marius Kloppers met with many of Rio's shareholders since the announcement and reiterated that the offer for Rio was "compelling" and that BHP Billiton is very "patient." [17] A formal hostile bid of 3.4 BHP Billiton shares for each Rio Tinto share was announced on 6 February 2008.[18] The bid was withdrawn on 25 November 2008 due to a global recession.[19]

On 14 May 2008, BHP Billiton shares rose to a record high of AU $48.90 after speculation that Chinese mining firm Chinalco was considering purchasing a large stake. BHP representatives refused to comment.[20]

On 25 November 2008 Billiton announced that it would drop its $66 billion takeover of rival Rio Tinto Group saying that the "risks to shareholder value" would "increase" to "an unacceptable level" due to the global financial crisis.[21]

In January 2010, BHP Billiton bought Athabasca Potash for $320m, The Economist reported that by 2020, BHP Billiton could produce approximately 15% of the world demand for potash.[22]

Recent history

On 21 January 2009 the company announced that in response to the global financial crisis BHP Billiton would to close the nickel mine at Ravensthorpe, Western Australia, and revert to processing ore only at the Yabulu nickel plant in Queensland Australia. Subsequently the Yabulu refinery was sold to Queensland Billionaire Mr Clive Palmer. Additionally the Pinto Valley mine in the United States was also closed. In total 6,000 employees were laid off, including those laid off with the scaling back at some other projects.[23]

On 9 December 2009, BHP sold its Ravensthorpe Nickel Mine, which it spend A $ 2.4 billion on to built, to Toronto-based First Quantum Minerals for US$340 million. First Quantum was one of three bidders for the mine and actually produced the lowest offer. The Canadian company plans to have the mine back in production in mid-2011. Ravensthorpe cost BHP US$3.6 billion in writedowns when it was shut in January 2009 after less than a year of production.[24]

Operations

The company operates a wide variety of mining and processing operations in 25 countries, employing approximately 38,000 people.

The company has nine primary operational units:

Corporate structure

The Australian BHP Billiton Limited and the British BHP Billiton Plc list separately with separate shareholder bodies but they operate as one business with identical boards of directors and a single management structure. The headquarters are in Melbourne, Australia. The company has other key offices in London, Perth, Johannesburg, Santiago, Singapore, Shanghai, Houston and The Hague.

The company's shares trade on the following exchanges:[25]

Management

After the merger between BHP and Billiton in 2001, Brian Gilbertson of Billiton was appointed CEO. In 2003, after just six months at the helm, he abruptly stepped down, citing irreconcilable differences with the boards.[26]

Upon Gilbertson's resignation, Chip Goodyear was announced as the new CEO. He continued in that role until his retirement on 30 September 2007. Marius Kloppers is his immediate successor CEO.[27]

Angola accident

Inclement weather caused a BHP Billiton helicopter to crash in Angola on 16 November 2007, killing the helicopter's five passengers, including BHP's chief operation officer in Angola, David Hopgood. The helicopter went down about 80 km/50 miles from Alto Cuilo Camp, a diamond mining site the employees wanted to visit. BHP Billiton responded by suspending operations in the country. The company is investigating the incident.[28]

Mines and processing facilities

The United Nations Environment Programme has noted that BHP’s Ok Tedi mine site’s "uncontrolled discharge of 70 million tonnes of waste rock and mine tailings annually has spread more than 1 000 km (621 miles) down the Ok Tedi and Fly rivers, raising river beds and causing flooding, sediment deposition, forest damage, and a serious decline in the area's biodiversity."[29] The resulting devastation caused by the mining of Ok Tedi has included the loss of fish, a vital food source for the local community; loss of forest and crops due to flooding and; the loss of "areas of deep spiritual value for villagers are now submerged in mine tailings."[30]
  • Peru
    • Antamina
  • South Africa
    • Bayside, 100% owned aluminium smelter in Richards Bay
    • Hillside, 100% owned aluminium smelter in Richards Bay
    • Ingwe Coal, comprises several coal mines in the Witbank area in Mpumalanga
    • Manganese Metal Company, largest electrolytic manganese production facility in the world situated in Nelspruit, Mpumalanga
    • Metalloys manganese production facility in Meyerton area in Gauteng
    • HMM (Hotazel Manganese Mines) including Mamatwan and Wessels mines near Hotazel in the Northern Cape
  • Suriname
    • Kaaimangrassie bauxite mine
    • Coermotibo bauxite mine
    • Caramacca bauxite mine
    • Klaverblad bauxite mine
  • Trinidad & Tobago
  • United Kingdom
  • USA
    • New Mexico Coal Company, coal mine in New Mexico consisting of San Juan and Navajo mine
    • Southwest Copper, Arizona
    • San Manuel, Arizona
    • Pinto Valley, Arizona
    • Gulf of Mexico, Oil and Gas field (Shenzi & Neptune fields)
    • Resolution Copper, near Superior, Arizona

Production

Nickel West

In Western Australia, BHP's nickel operations are combined under the Nickel West Operation, which includes the Mount Keith Nickel Mine, the Leinster Nickel Mine, the Kambalda Nickel Concentrator, the Kalgoorlie Nickel Smelter and the Kwinana Nickel Refinery.[31] Production figures published by the company at the end of 2008 are for the whole Nickel West Operations and not broken down to individual mines. In the calendar year 2008 Nickel West produced 85,800 tonnes of nickel. At the time, Nickel West also included the Ravensthorpe Nickel Mine.[32]

See also

References

  1. ^ a b c "BHP Billiton Annual Report 2009" (PDF). http://www.bhpbilliton.com/bbContentRepository/docs/annualReport2009.pdf. 
  2. ^ "Another record profit for BHP". ABC News. 2007-08-22. http://www.abc.net.au/news/stories/2007/08/22/2012367.htm. Retrieved 2007-08-23. 
  3. ^ a b BHP Billiton merger confirmed
  4. ^ Australian Business Records
  5. ^ a b BlueScope Steel
  6. ^ Shrinking the Big Australian
  7. ^ History of Petroleum Exploration in Victoria
  8. ^ The big, ugly Australian goes to Ok Tedi
  9. ^ Discovery of Diamonds in North West Territories
  10. ^ Steel City without the Big Australian
  11. ^ One Steel
  12. ^ a b c d Billiton History
  13. ^ Shell Unit Sells Assets To Gencor
  14. ^ Gencor pops champagne
  15. ^ "BHP Billiton to mop up minority in WMC after taking over 90 pct". Forbes.com. 2005-06-17. http://www.forbes.com/business/feeds/afx/2005/06/17/afx2098254.html. Retrieved 13 August 2007. 
  16. ^ "BHP makes £120bn Rio bid approach". BBC News Online (BBC). 2007-11-08. http://news.bbc.co.uk/1/hi/business/7084946.stm. Retrieved 2007-11-08. 
  17. ^ "BHP won't be drawn on a Rio sweetener". FT.com (Financial Times). 2007-11-28. http://www.ft.com/cms/s/0/fe0b3904-9d88-11dc-9f68-0000779fd2ac.html. Retrieved 2007-11-28. 
  18. ^ "BHP makes bid for Rio". The Age. 2008-02-06. http://business.theage.com.au/bhp-makes-bid-for-rio/20080206-1qgf.html. Retrieved 2008-02-06. 
  19. ^ Keenan, Rebecca (2008-11-25). "BHP Withdraws $66 Billion Stock Offer for Rio Tinto". http://www.bloomberg.com/apps/news?pid=20601087&sid=acb0npgKQrEw&refer=home. Retrieved 2008-11-25. 
  20. ^ "BHP hits record on talk of Chinese buyer". uk.reuters.com. 2008-05-14. http://uk.reuters.com/article/governmentFilingsNews/idUKSYD5330620080514?pageNumber=1&virtualBrandChannel=0. Retrieved 2008-05-14. 
  21. ^ BHP Billiton withdraws $66bn bid for rival miner Rio Tinto
  22. ^ "Mergers in the fertiliser industry". The Economist. 18 February 2010. http://www.economist.com/businessfinance/displaystory.cfm?story_id=15549105. Retrieved 21 February 2010. 
  23. ^ Chambers, Matt. "BHP axes 6000 jobs and cuts projects." The Australian. 22 January, 2009.
  24. ^ Canada's First Quantum wins bid to revive Ravensthorpe nickel mine The Australian, published: 10 December 2009, accessed: 10 December 2009
  25. ^ "SEC Form 20-F, BHP Billiton Limited and BHP Billiton plc, for FY 2007" (PDF). BHP Billiton. 2007-09-26. p. 274. http://www.bhpbilliton.com/bbContentRepository/20fstatement2007.pdf. Retrieved 2008-04-09. 
  26. ^ "BHP chief in shock resignation". CNN.com. 2003-01-05. http://edition.cnn.com/2003/BUSINESS/asia/01/05/australia.BHP.biz/index.html. Retrieved 2007-07-13. 
  27. ^ "BHP Billiton To Appoint Marius Kloppers As New CEO". BHP Billiton. 2007-05-31. http://www.bhpbilliton.com/bb/investorsMedia/news/2007/bhpBillitonToAppointMariusKloppersAsNewCeo.jsp. Retrieved 2007-07-13. 
  28. ^ Macdonald-Smith, Angela (2007-11-18). "BHP Suspends Operations in Angola After Fatal Helicopter Crash". Bloomberg. http://www.bloomberg.com/apps/news?pid=20601080&sid=af60OwUCJix8. Retrieved 2007-11-18. 
  29. ^ United Nations Environment Programme Accessed on 16/12/07.
  30. ^ Australian Conservation Foundation, Leaving the scene of the mine"
  31. ^ Nickel West BHP Billiton website, accessed: 11 December 2009
  32. ^ BHP BILLITON QUARTERLY PRODUCTION REPORT - DECEMBER 2008 Page: 11, published: 21 January 2009, accessed: 11 December 2009

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