Company is the worlds largest diversified resources group. It has seven divisions: Petroleum, Aluminium, Base Metals, Carbon Steel materials, Diamonds and speciality products, Energy coal and Stainless steel materials.

            Red = 25 day moving average.           Green = 200 day moving average.

SALES PER ACTIVITY (Data as of 30/06/2006)

Carbon steel:   28%
Oil:                18%
Aluminum:       15%
Basic metals:   15%
Coal:               9%
Stainless steel: 9%
:                    3%
Diamonds,
minerals, etc:   3%

HI

Could some one please tell me whether minors are in Bull run or just making a bubble?

Ram

I sold BLT Wednesday ;)

buy our sold

The best advise

bhp had a bad oil spillagge from one of their unmanned platforms off Formby,merseyside at the weekend. Clean up operation underway. A crack in a pipe is to blame! coastline oily!! tourism down. bhp in for a court battle??????????

Copper stopper threat to BHP

Jun 20, 2006 (The Australian - ABIX via COMTEX) -- Industrial action seems possible by the over 2,000 staff at the Escondida copper mine in Chile. The union has finalised a claim for wage rises and improved conditions with the workers and will present it to management soon. The operation's main owner is Australian-listed resources group BHP Billiton, which is reaping the benefits of an increase in copper prices by some 400% since pay rises were last granted in 2003. It is also facing possible strikes at the Ekati diamond mine it operates in Canada. Experts warn that up to 20% of all copper production globally could soon be affected by industrial disputes.

Publication Date: 21 June 2006

BHP buyback plan could aggravate miners' strike

Marianne Barriaux
Monday August 21, 2006
The Guardian

BHP Billiton, the world's biggest mining group, is expected to announce a share buyback of at least $2bn (1bn) this week, as it battles with striking workers at its copper mine in Chile over demands for higher salaries.

Soaring commodity prices have generated huge amounts of cash for mining groups and most have channelled some of the money back to shareholders through dividends or share buybacks.

Anglo American, for example, announced $5bn would be returned to shareholders at its interim results presentation two weeks ago, and BHP itself has already given back $2bn. Rio Tinto, the world's second-biggest miner, is conducting a $2.5bn share buyback, and has returned $1.5bn in a special dividend.

Article continues
But some workers are feeling aggrieved that the money is not being used to increase their wages, and BHP is locked in a battle at its Escondida copper mine in Chile, which accounts for 8% of global output. On Friday, it closed the mine after employees blocked all road access. Prior to that, Escondida had been running at 40% of its capacity.

Negotiations between BHP and the union, which had been taking place intermittently for 12 days since the strike started on August 7, were broken off.

The Chilean government subsequently began to mediate and persuaded the workers to lift their blockades. Talks started again on Saturday, and BHP has reopened the mine and is in the process of bringing in contract workers to restore production to the previous 40% level.

The expected announcement of the share buyback at BHP's full-year results on Wednesday is likely to anger union workers at Escondida, whose demand for a pay rise of 10 percentage points above inflation, and a bonus of 15,355, has been rejected by the company. It has offered a three percentage point increase and a bonus of 8,215.

The news will be further amplified by BHP's actual results, which are expected to be record-breaking. Analysts expect the group to post a $10bn net profit for the year, up from $6.43bn, as commodity prices have soared. The price of copper, for example, has more than doubled this year on the back of booming industrial demand, particularly from China.

But, increasingly, rising costs are having an impact in an industry where a big truck tyre can now cost as much as $100,000. BHP has had to re-evaluate new projects as a result.

Its Ravensthorpe nickel mine in Western Australia, for example, has seen costs go up 30% from initial predictions, and BHP is reviewing its timing and budget.

Investors will be looking to see exactly how much of an impact rising costs have had, and how they will affect the group.

Crude oil is also a sore point for BHP, with its production down 10% during the year due to a hurricane and the cyclone season in the US and Australia.

Total petroleum product output for the year has remained unchanged.

The Times August 23, 2006

Business in Brief - Escondida miners reduce demands


The striking union at Chiles Escondida, the worlds biggest copper mine, has agreed to reduce its wage and bonus demands on the sixteenth day of a strike that has rattled copper markets. The union trimmed its demand for a rise to 8 per cent from 10 per cent and its demand for a special copper-price-linked bonus to $19,000 (10,000) per worker, from $30,000. The mine is owned by BHP Billiton and Rio Tinto, the worlds biggest mining groups.

BHP cautious on growth
MoneyAM
BHP Billiton said this morning net profit for the year to June rose to $10.45bn from $6.39bn

The miner said rising numbers were based on strong commodity prices, largely driven by China's demand for raw materials. The result was in line with market expectations.

The world's largest diversified resources group said it remains optimistic about further earnings growth because of China's demand for its products.

It said, overall global growth may slow because of rising raw material prices, particularly oil.

BHP Escondida Mine Union Ready to Hold Out 30-60 Days (Update4)

By Jeb Blount

Aug. 23 (Bloomberg) -- Striking BHP Billiton miners in Chile said they are ready to extend their walkout at the world's biggest copper mine by another six weeks unless the company improves its contract offer.

Miners at BHP's Escondida, who have been on strike since Aug. 7, are ready to hold out for 30 to 60 days after yesterday lowering their wage and bonus demands, said Luis Troncoso Munoz, president of the Escondida miner workers union.

Prices for copper, Chile's biggest export, have quintupled in four years on surging demand for the metal from China, prompting mine workers to seek a larger share of mining profits. BHP today announced second-half profit of $6.1 billion, a record for any Australian company. The Melbourne-based company plans to buy $3 billion of its own stock from shareholders.

``The company will lose if they try to break off dialog and hire outside workers,'' said Toncoso Munoz in an interview at his office in Antofagasta. ``We really don't understand why they are taking such a tough line when they are making such large profits; the amount we are asking is nothing compared with the amount they are giving back to shareholders.''

Workers are seeking a wage increase of 8 percentage points above inflation, down from a previous demand for a 10-point increase, union spokesman Francisco Aedo said yesterday in a phone interview from Antofagasta. Workers also seek a bonus of 10 million pesos ($18,792), down from 16 million pesos, he said.

BHP Australian-traded shares fell 36 cents, or 1.3 percent, to A$28.39.


Precedent

The demands at Escondida are going to be repeated in contract negotiations under way or expected to begin before the end of the year, Troncoso Munoz said. His union and those representing workers at BHP's Spence Mine in northern Chile and at mines owned by Codelco, plan to use any Escondida agreement as a benchmark for their own, he said. Chile's government-owned Codelco is the world's No. 1 copper producer.

``We fully back the Escondida workers in their fight,'' said Andres Ramirez, head of the union at BHP's Spence copper mine. Workers at the mine, expected to begin production later this year, are in their first contract talks. ``We want a share of the extraordinary profits too.''

The union at Escondida is ready to renew talks at any time, Troncoso Munoz said.

Copper futures for December delivery fell 1.05 cents, or 0.3 percent, to $3.4675 a pound on the Comex division of the New York Mercantile Exchange. Prices have more than doubled in the past year.


Grievance

BHP has been calling workers, seeking to rehire them as allowed under Chilean labor law, said Mauro Valdes, vice president of corporate communications with BHP in Santiago. There have been no talks between the union and BHP since the union rejected BHP's last offer Aug. 21.

The union said Escondida management has tried to undermine workers' resolve to continue the strike in the phone calls to them and their family members.

``They are trying to scare the wives and children of workers into thinking that the strike will lead to the loss of their jobs,'' Troncoso Munoz said, as he left the union offices to file a grievance over the issue.

``They do have the right to try to hire new workers or talk to strikers, but we consider their tactics improper and unconstitutional,'' he said.

Thu Aug 24, 2006 7:29 AM

M&S replaces BHP on ING focus list


Aug 24 (Reuters) - ING said Marks & Spencer Group plc replaced the world's biggest miner, BHP Billiton plc, on its focus list.

In a research note, the brokerage said it believes the British retailer, for which it has a "buy" rating, will continue to generate like-for-like sales growth ahead of the U.K. sector for the next two years.

BHP Billiton, for which ING has a "hold" rating, may face a U.S. slowdown, which could reduce the premium to net present value at which the stock has traded recently, the brokerage said.

ING said it raised its earnings-per-share forecasts for 2007 and 2008 by 4 percent and 10 percent respectively for Marks & Spencer, as it sees ongoing positive newsflow for the retailer and expects strong estimate momentum.

ING has a price target of 670 pence for Marks & Spencer and 1,243 pence for BHP Billiton.

The upgrade below borrowed from the Traders Thread here on AM


0606 GMT [Dow Jones] JP Morgan ups BHP Billiton (BLT.LN) target to 1251p from 1222p and reiterates overweight rating following FY 06 results. Believes BHP should undertake substantial share buybacks in the future to maintain a geared balance sheet. Predicts a US$7B programme in 07 but forecasts a share buyback of $20B if current share prices hold over the financial year. But notes BHP's indication commodity prices could be unsustainable and believes it is worried by the volatility of the market. Shares closed at 1014p.

08.24.2006, 03:26 PM - AFX News Limited

Chile copper mine workers accuse BHP Billiton of union-busting


ANTOFAGASTA, Chile (AFX) - Striking Chilean miners today sued BHP Billiton, accusing the Anglo-Australian company of union-busting, polarizing the sides on day 18 of a strike at the world's largest copper mine.

The suit accuses the mine's management of 'anti-union practices,' union leader Luis Troncoso said, citing alleged company pressuring of strikers to accept individual contracts.

Company officials have lured some strike-breakers to accept individual contracts, as permitted under Chilean law after day 15 of the strike, local media reported.

Rising copper prices helped trigger the strike on Aug 7, with the expiration of a union contract negotiated three years ago when copper brought 0.80 usd a pound; it now brings 3.0 usd.

Two thousand workers struck Minera Escondida, the world's largest copper mine, and analysts Fitch Ratings warned in Paris said high prices may prompt workers in any country to strike while copper is hot.

The Escondida mine is owned 57.5 pct by BHP Billiton, with Rio Tinto holding 30 pct and the Mitsubishi Corp-led Japanese consortium owning 10 pct.

Negotiations between management and the strikers at Minera Escondida ground to a halt late Monday after the miners overwhelmingly rejected the company's latest pay and bonus offer.

However, Troncoso said, the union is ready to talk: 'The company has not answered our invitation to return to talks, but we are still hopeful.'

'Now, waiting has its limits. Our people are getting impatient and we won't rule out tougher measures,' he said.

Late last week, BHP sweetened its offer, proposing a 4.0 pct salary increase for a four-year contract and a 18,000 usd one-time signing bonus to end the conflict. The union turned down that proposal.

The 2,052 workers have reduced their demand to a 10 pct, from 13 pc, and would accept a 30,000 usd bonus.

Mauro Valdes, BHP Billiton's vice president of public affairs, has warned that the company would not budge on its latest offer.

Management will continue to hire 'substitute' miners, as authorized under Chilean law, the company's corporate affairs chief, Pedro Correa, made clear: 'Workers who want to rejoin the Minera Escondida workforce have that legal right, which is undeniable and that we are going to respect.'

BHP Billiton closed the Escondida Minera for several hours last week, citing safety concerns over actions taken by striking workers, and said it would pursue legal action against union workers who blocked access roads to the mine to keep out non-union workers.

In London, BHP Billiton said Monday that operations had resumed at the mine after talks with the strikers were revived over the weekend, and that Escondida production stands at between 40 and 60 pct of normal output.

The union says their wage demand reflects a tripling in global copper prices since the previous collective bargaining agreement.

The mine is located in the Atacama desert some 1,300 kilometres north of the capital Santiago.

It produces 8 pct of the world's copper, or 1.3 mln tonnes. That is roughly one-fifth of Chile's total production and 2.5 pct of Chile's entire economic output.

Each unproductive day costs the company some 16 mln usd.

newsdesk@afxnews.com

Business - The Times - August 25, 2006

Stop press

Chilean miners sue BHP Billiton

Striking Chilean miners launched a legal action against BHP Billiton, accusing the Anglo-Australian company of union busting. The lawsuit comes on the eighteenth day of a strike at the worlds largest copper mine. It accuses the mines management of anti-union practices, claiming that the company pressurised strikers to accept individual contracts.

Dow Jones - 25 Aug 2006 - Copper Smelters Must Adjust To New Mkt Conditions


SYDNEY --The world's biggest miner BHP Billiton (BHP) said Friday copper smelters need to make "strategic adjustments" if less favorable commercial terms for processing the metal restrict their profitability.

"If their cost structure is one that doesn't work for them, then strategically they have to make some adjustments," BHP Billiton chief executive Chip Goodyear told reporters in Sydney Friday.

BHP Billiton, one of the world's largest producers of copper concentrates, is locked in negotiations with Japanese smelters to settle midyear treatment and refining charges against a backdrop of tight mine supply and high prices.

One of the smelters, Sumitomo Metal Mining Co. Ltd.(5713.TO), said last month that BHP's plan to scrap a key profit-sharing arrangement could cripple the industry.

But Goodyear said surging copper prices and the development of low cost smelters in China and India, "which don't need a price participation element to make sense," means the market has changed.

"We've been trying to talk to our customers about that for quite some time with not much success of reaching an outcome there," he said.

Last year BHP Billiton shelled out an additional US$144 million due to an increase in treatment and refining charges and price participation, which gives smelters a 10% share of metal prices over US$0.90, Goodyear said.

"That's a high number (and) nobody anticipated copper at US$3.50...we think it's out of balance particularly with the change of industry structure moving to places with a lower cost base - it's a tough situation."

Asked what BHP Billiton is offering smelters in return from accepting less favorable terms, Goodyear said information and advice about how the market is changing and "how they should strategically adjust their portfolio."

"With a few exceptions, (we've had) not much success. Some of them put in investments in China but that's basically what we offer, and ultimately continued supply," he said.

Besides Sumitomo, Pan Pacific Copper Co., Japan's biggest copper refiner, also has rejected BHP's proposed changes, leading the way for other refiners to voice their opposition to the changes.

Meanwhile, BHP has declared force majeure on its contractual obligations to smelters in Japan and elsewhere due to an ongoing strike at the Escondida copper mine in Chile.

Analysts said the Escondida strike - set against an already critically tight concentrates market - strengthens BHP's position at the negotiating table with smelters.

MarketWatch - 25 August 2006

Top BHP copper exec: Escondida strike hurting economy


The now 19-day-old strike at the BHP Billiton (BHP)-controlled Escondida copper mine in Chile will hurt the local economy as the mine accounts for 2.5% of the country's gross national produce, the company's chief copper executive said in Friday's El Mercurio newspaper.

The mine is also the country's largest private tax payer, contributing more than $1 billion in the first half of the year.

"The total or partial shutdown of Escondida will undoubtedly affect the Chilean economy," BHP Billiton Base Metals President Diego Hernandez told the newspaper.

While the company has been open to talks at every step, the union's attitude in these negotiations has been less the responsible, the executive said.

"The country saw the union leaders' smiling faces on the evening news, after they left negotiations Sunday, and a few minutes later their calls to vote against the offer on the grounds that it was a joke," Hernandez said in reference to the company's sweetened fourth offer presented Sunday, hours before the union held a general assembly.

At that general assembly, the union told workers to cast their ballots against the proposal at a Monday vote.

The union rejected the offer with a 98% vote against, and prolonged the strike. Talks broke down since that vote and have not resumed since.

"No one can, responsibly, call the historic and attractive offer a joke," Hernandez is quoted as saying in La Tercera newspaper Friday.

Market analysts agree that the Escondida talks will set a precedent for upcoming contract negotiations at several of Corporacion Nacional del Cobre de Chile's, or Codelco, mines.

"It's part of the information that future negotiators will have on hand," Hernandez said in La Tercera.

MarketWatch - 25 August 2006 - Fewer than 20 Chile Escondida strikers back at work


Less than 20 of the striking workers at Chilean copper mine Escondida have abandoned the strike, negotiated contracts individually and returned to work, a union source said Thursday.

"It's about half of those we thought would abandon the strike," said a union representative, who asked not to be named.

On Monday, 38 of some 1,900 voting union members cast their ballot in favour of abandoning the strike. The other 98% of workers voted to reject the company's fourth, sweetened, offer and continue the strike.

With the strike in its 18th day, talks are currently at a stalemate, according to both the company and the union.

"They are at a dead point," the union source said, echoing a similar comment made earlier Thursday by Escondida.

The mine is producing at between 40% and 60% of capacity, a company spokeswoman said, with the company maintaining output using non-union and subcontracted labour.

At the same time, Escondida has not yet decided whether to hire replacement workers as it is entitled to do at this stage, in keeping with Chile's labour laws.

"We're evaluating this as we work to normalize output at the mine," with the decision hinging on the duration of the strike, the spokeswoman said.

A company source laughed the idea off suggestions that the mine, controlled by BHP Billiton (BHP), would bring workers in from its operations in other countries, including neighbouring Peru.

Workers would have to secure work visas, which is not necessarily a speedy process, the source said.

"The speculation can get a little crazy at this point in the strike," he added.

When the strike began, the union secured bank loans for each worker, which would allow them to continue the strike for another month or so, union leaders have said.

The union has also received financial and material support from other mining unions as well as the CUT national umbrella union group.

"Representatives from a Codelco Norte union visited the strikers today, and they've provided food and other goods," the union source said.

Strikes and other work stoppages in the copper mining industry have played a major role in driving the red metal's price higher over the past three years, bolstered by strong demand.

BHP Billiton controls Escondida with a 57.5% stake, while Rio Tinto PLC (RTP) holds 30%, a Mitsubishi Corp. (8058.TO)-led Japanese consortium 10% and International Finance Corp. 2.5%.

Escondida miners camp down in desert for long struggle as Chilean workers become increasingly militant in their battle with BHP Billiton

Mining Weekly - 28 August 2006

BHP to increase production at Escondida copper mine


BHP Billiton will seek to increase production in Chile at its Escondida copper mine, the biggest in the world, as more than 2 000 workers extend a strike that's cut output in half into a fourth week.

The mine may try to hire more replacement workers this week, adding to the 50 already employed, Alejandra Wood, a spokeswoman for the Melbourne-based company said late yesterday from Santiago. Neither BHP nor the labor union have plans to restart talks, which have been frozen since the union rejected the company's August 21 offer.

The goal is to produce as much as possible, given the situation, Wood said. Production is now at 50% of pre-strike levels. Output at the cathode plant, where copper ore is refined into a metallic form, is at 15%, Wood said.

Workers at the mine, which accounted for about 8,5% of the world's mined copper last year, began striking August 7 in pursuit of increased pay and benefits. They are seeking a bigger share of the company's profits after copper prices surged to a record this year.

BHP, which owns 57,5% of the mine, reported a 63% jump in full-year profit to a record $10,45-billion last week. Escondida's owners, which include London-based Rio Tinto Group and Tokyo-based Mitsubishi Corp., have said the strike is erasing about $16-million a day in profit.

Copper prices in Shanghai rose for the first day in four on concern rival copper mines may also face strikes. Labor talks are scheduled later this year at Chile's state-owned Codelco, the world's biggest producer.

Copper for October delivery on the Shanghai Futures Exchange gained as much as 570 yuan, or 0,8%, to 68 050 yuan ($8 537) a metric ton. The contract traded at 67 910 yuan a ton at 1:59 p.m. in Shanghai.

Copper supply in the medium term remains tight, Yu Mengguo, metal analyst at Jinpeng Futures Co., said by phone from Beijing. Stories of labor unrest in such a market make people more nervous about supply.

The Escondida union's lawyers are reviewing company plans to use subcontractors in new areas of the mine to increase production and may file a claim against the practice, union spokesman Pedro Marin said in a phone interview from Antofagasta, 1 200 km north of Santiago.

BHP's Wood said Chile's labor inspector in Antofagasta has approved of how the company is using subcontractors at the mine.

(AP Online via COMTEX) - SANTIAGO, Chile, Aug 28, 2006

Striking Miners Seek Share of Profits


The world's largest mining company has had a very good year, something not lost on its miners in Chile. Some 2,000 miners at BHP Billiton's Escondida mine in Chile have been striking since early August, demanding a larger slice of what one worker called "the cake" being enjoyed by the Anglo-Australian company in the form of record profits from soaring world metal prices.

The strike has roiled world copper markets, often setting off buying and selling waves. Copper from Escondida represents about 8 percent of world production, and the strike has brought about half that production to a halt - stoking fears of a shortage in an already tight market.

The strike is being closely followed across Chile, the world's largest copper producer, where the government is under pressure to spend more of its copper windfall and unions are waiting to see what kind of concessions the Escondida strikers gain.

But executives of BHP Billiton Ltd and other mining companies are wary of being locked into contracts that will mean significantly higher labor costs just as metal prices may be peaking.

There's no doubt, however, these are bonanza days for BHP Billiton. The Melbourne-based company reported it earned $10.45 billion for the year through June, an Australian corporate profit record.

When the Escondida miners' union last negotiated a contract with BHP Billiton three years ago, copper sold for about 80 cents a pound. Mines were mothballed. The industry was near the bottom of a bust cycle.

Since then, demand from fast-growing economies such as China and India have helped drive the price of copper to about $3.50 today. Strong demand, supply constraints and a broader rally in the commodities market pushed the price of copper to an all-time high of $4.08 a pound in May.

This time around, the workers want their share of the boom times. About 800 workers have been camped in tents in a sports center the company owns in the port city of Antofagasta since Aug. 7, having refused the company's contract offers.

The copper mine cuts a deep bowl into Chile's Atacama Desert, bordered by the Andes on the east and the Pacific Ocean on the west, outside of Antofagasta, 870 miles north of Santiago.

Oscar Moreno, 44, has worked 17 years at Escondida, where he drives the heavy-duty trucks and tractors used in mining operations. He lives with his wife and two of their children, in a house partly paid for with a loan from the company, in Antofagasta, about 125 miles away.

Moreno said he and the other workers generally work four 12-hour days, sleeping and eating at the mine, then have four days at home. He earns about $1,490 a month, plus quarterly bonuses.

"I feel my situation is good, compared to the general situation of workers in Chile," he said in a telephone interview from the strike camp. "I cannot complain, really, and I do not complain about my situation. My complaint is about the money that the company makes. We are asking for just one percent of the 'cake' it gets."

In reporting its annual profit - up 63 percent from the prior year - BHP Billiton noted the Escondida mine produced record volumes for the company.

But costs are on the rise, too. Labor is the company's third-largest cost, behind energy and mining expenses, according to the company's latest annual report.

BHP has offered workers a four-year contract that includes a 4 percent wage raise plus bonuses, up from an initial 3 percent offer. The workers want 8 percent plus bonuses, after initially asking for 13 percent.

"Our work force at Escondida is some of the highest-paid in Chile, and this is essentially the most attractive package that has been offered to the work force in that region," said Chief Executive Chip Goodyear, in a conference call.

Although the mine's name means "hidden" in Spanish, Escondida is now the center of attention for copper traders in New York and London. The slightest news or speculation will set off a flurry of buying or selling in the New York Mercantile Exchange, where millions of dollars in copper contracts change hands daily.

"Everyone is focused on Escondida," copper trader John Hanemann said.

The result of the Escondida walkout will have repercussions throughout the industry, traders and analysts say.

Contract talks at a number of copper mines - mainly in Chile - are due to expire in coming months, including Chile's state-owned Chuquicamate, the world's largest open pit copper mine. If workers at all six of the mines with expiring labor contracts opt to strike, 18 percent of world copper supply could be at risk, Merrill Lynch commodities strategist Francisco Blanch said in a recent report.

Chile represented about 36 percent of world copper production in 2005, well ahead of second-placed producer the United States, with about 8 percent of world output, according to the U.S. Geological Survey.

The country's leftist government has not intervened in the strike, although the impact on the economy is strong. Escondida paid $1 billion in taxes during the first half of this year alone, BHP Billiton's chief executive in Chile, Diego Hernandez, told the daily El Mercurio.

Other Chilean labor groups are also calling for some of the copper windfall, including powerful government-employee organizations representing school teachers and health workers.

And voices are emerging from inside President Michelle Bachelet's center-left coalition to increase government spending, especially in social sectors. The Christian Democratic Party, the largest in the four-party coalition, asked Bachelet for a double-digit increase in the 2007 budget now being drafted. Bachelet said the budget increase will be below 10 percent.

The Escondida miners, meanwhile, say they only want BHP Billiton to share a little of the bounty.

Carlos Munoz, a 45-year-old metallurgic plant operator, said the $1,080 he earns each month covers his family's basic expenses but not the needs of his 10-year-old daughter, Camila, who suffers from a chronic medical condition and needs an ear operation.

"Not even the bonuses are enough for me to give her everything she needs," he said. Bottom line, he said, "we live very tight."

BHP Workers to Return to Work at Largest Copper Mine Tomorrow

By Heather Walsh


Sept. 1 (Bloomberg) -- Striking workers at BHP Billiton Ltd. in Chile are scheduled to return to work tomorrow at the world's largest copper mine after agreeing to a new labor contract.

Workers will return to the Escondida mine in northern Chile at 8 a.m. New York time Sept. 2, Alejandra Wood, a spokeswoman for BHP said yesterday by phone. BHP, the world's largest mining company, plans to sign the contract today, ending a strike which began Aug. 7 and halved mine output. ``It takes a week to normalize production,'' Wood said in an interview from Santiago.

Chile, the world's biggest supplier of the metal, may face further strikes in coming months that may hamper production, Nevenko Diaz, a director of the Escondida union, said yesterday. Codelco, BHP's Cerro Colorado mine and Falconbridge Ltd.'s Collahuasi mine are scheduled to hold wage talks this fiscal year as workers seek a share of record mining company earnings.

``You can see that expectations are high because of profitability levels,'' said Pedro Diaz, treasurer for the union at Collahuasi, in an interview from the city of Iquique. ``There will be various conflicts. That possibly will happen with us.''

Copper for three-month delivery fell as much as $85, or 1.1 percent, to $7,615 a metric ton on the London Metal Exchange, and traded at $7,701 at 12:02 p.m. Beijing time.

Management at Collahuasi, which produces about 450,000 metric tons a year of copper, expects to avoid a strike, said William Gysling, a mine spokesman, by phone from Santiago. The union's contract expires in June, he said.



Rio, Mitsubishi

At Escondida, workers yesterday approved an offer for a pay rise of 5 percentage points above inflation, more than triple the increase under their prior contract, and a bonus of 9 million pesos ($16,667) per worker. Chile's inflation rate was 3.8 percent in July.

Melbourne-based BHP owns 57.5 percent of Escondida, while Rio Tinto Plc owns 30 percent. A group led by Mitsubishi Corp. owns 10 percent. The International Finance Corp. owns the rest.

Net income at Escondida, which accounts for 24 percent of copper exports from Chile, jumped to $2.92 billion in the first half of the year from $936.9 million a year earlier.

State-owned Codelco also faces wage negotiations this year in Chile at its Andina mine, where unions went on strike in 2003, and at Chuquicamata, its largest copper mine. The company owns 20 percent of the world's copper reserves.

Hector Roco, a director at Chuquicamata's largest union, said he expects workers and management to avoid a strike there.

``I'm confident we won't end up with a conflict,'' Roco said in a telephone interview.

Codelco reported Aug. 14 that profit more than doubled in the second quarter after rising demand pushed copper prices to a record. Net income jumped to $1.07 billion from $418 million a year earlier.

Herald Sun - September 04, 2006

Chile strike costs BHP $200 million


A THREE-WEEK strike at the Escondida copper mine in Chile has cost BHP Billiton and its partners more than $200 million in lost sales, according to a spokesman for BHP.

Mauro Valdes, a representative for BHP in Santiago, said workers returned to the mine at the weekend after approving a new pay deal.

Processing plants at the mine will return to normal production levels in one to two days, and extraction of ore at the mine is expected return to normal in about a week, Mr Valdes said.

He said the strike, which began in August 7, resulted in about 45,000 tonnes of lost production at a cost of more than $200 million.

Chile, the world's biggest supplier of the metal, may face further labor disputes that disrupt production this year and in 2007 as unions demand higher wages after copper prices more than doubled in 12 months.

Codelco, the world's biggest copper producer, BHP's Cerro Colorado mine and Falconbridge's Collahuasi mine are among companies scheduled to hold wage talks.

BHP owns 57.5 per cent of Escondida, while Rio Tinto has a 30 per cent stake.

report BEIJING (XFN-ASIA) - 04 september 2006

BHP settlement at Chile's Escondida may raise other mines' labor costs - - The labor settlement at BHP Billiton's Escondida copper mine has made its workers the best paid in Chile and may raise costs at competitors' mines in the country, the Financial Times reported.

The report said Xstrata, Falconbridge, Antofagasta and Anglo American may be affected by the Escondida settlement but the most imminent impact could be on Codelco, which has pay negotiations by the end of the year at units Codelco Norte and Andina.

It said the Escondida salary hike was 8 pct with a cash bonus of 17,000 usd, putting pressure on Codelco, which has some of the lowest paid workers in Chile

"I think Codelco will be very worried about the increases at Escondida, because the unions will see that they are already paid less than other mine workers and they will want to narrow the gap," the FT quoted one person familiar with Codelco as saying.

The FT said Antofagasta will start renegotiating wages at its largest mine, Los Pelambres, in September next year, and at its smaller mines, El Tesoro and Michilla, in 2009 and late 2007.

Anglo American said there has been no significant industrial action at its copper mines in Chile for several years.

Business (smh.com.au) - September 6, 2006

BHP and Rio Tinto hot to trot with India - The big two have noted how fast this economy is growing - and acted, Jamie Freed reports.


IF INVESTORS were to place bets on the fastest-growing market for BHP Billiton's commodities, it seems likely that nearly all would place China at the top of the list.

After all, for the past few years Australians have heard endless stories about the China-led resources boom which has proven a huge boon to miners.

But as BHP chief executive Chip Goodyear noted after reporting a record-breaking $US10.5 billion profit last month, the Indian market is growing faster than that of China.

"We haven't talked about India in the past, but it is a growing percentage of our sales," he said. "It's growing faster than China, actually, but it's coming off a much lower base.

"Economic growth has been progressing solidly in India and it is continuing to outperform the expectations we see."

BHP sold $US1.24 billion of products into the Indian market last year - primarily coking coal and copper concentrate - which was nearly triple the $US425 million it sold the previous year. That's still only about one-sixth the amount it sells to China, but given that India's population is expected to be higher than China's by about 2030, the subcontinent is proving to be an increasingly important market for BHP.

And for BHP, India is more than just a destination for its products. The company has three offices in India and is exploring there for commodities including diamonds, bauxite and iron ore. There are also reports it might bid in India's latest petroleum block offering.

"We see India as a good opportunity for us," BHP spokeswoman Samantha Evans said.

Rio Tinto has taken a similar view. India has long been a huge market for rough diamonds from the company's Argyle mine in Western Australia. About 250,000 workers in the Mumbai and Gujarat areas are directly employed in cutting or polishing diamonds from Rio's mines.

But Rio isn't content to just ship diamonds to India anymore. Since 2001, the company has spent about $US21 million ($27 million) on diamond exploration in the country, and it is also looking for iron ore.

"We believe the Indian minerals sector has a bright future ahead of it," said Rio chief financial officer Guy Elliott in a speech to the UK-India Business Leaders' Forum in London in June. "With the right business environment and in partnership with experienced global mining companies, India can unlock its wealth and the country could be a major player in the world minerals markets.

"This sets it apart from China, whose intensity of minerals use is in any case very different and whose mineral resources are less abundant."

A PricewaterhouseCoopers report on the world mining industry this year said India had the potential to be an excellent investment destination.

"When compared to other competing emerging mining markets, the expenditure outlay in India seems low compared to its prospects," the report said. "This gap is likely to be met by the private sector, providing exceptional opportunities for those who are bold enough to invest."

But although India might be more prospective from an exploration point of view, there are some steep hurdles to overcome before a company can build a world-class mining operation.

Austrade's senior trade com-missioner for India, Mike Moignard, says it now takes a "long, long time" to receive government approvals and few mining leases had been granted in the last few years. For example, Rio has been working for about a year to gain a prospecting licence to accelerate its evaluation work in diamonds, so far without success.

Following a recent Indian Government review of the nation's mining policy, the timetables could be sped up.

"That review is with the prime minister and we are hopeful the Government will put forward some changes to make the going easier for foreign investment," Moignard says.

"I think that India is awake to the realisation they've got to expand their mining sector, which a few years ago they really weren't."

It's understood BHP and Rio both made submissions to the government committee reviewing the mining legislation, and that the Australian Government provided some informal advice.

But even if it becomes easier to gain exploration and mining licenses, challenges will persist.

Unlike China, India's recent economic boom has been based more on services and technology rather than manufacturing and infrastructure.

The New York Times last week noted that China invests $7 on roads, ports, electricity and other infrastructure for every $1 spent by India. So obtaining the power, water, and supplies needed to build a large-scale mining operation on the subcontinent could prove especially difficult.

"In short, investing in large resource projects in India is not for the faint-hearted," Rio's regional vice president of India, Nik Senapati, said earlier this year.

Austrade's hope is that Australian companies such as BHP and Rio - but also engineering, construction and contracting firms - can provide some of the expertise needed to improve India's infrastructure. The government agency is sponsoring the International Mining & Machinery Exhibition in Kolkata in November and has also arranged a tour of Indian iron ore and coal mining operations for interested Australian business leaders in tandem with the conference.

BHP is exploring the possibility of providing raw materials and infrastructure to a proposed steel plant which would be built by Korea's Posco.

As Moignard notes, India's gross domestic product is expected to grow by about 9 per cent a year for the next several years, and a lot of that will be dependent on steel production.

"The Government has to look very seriously at both its mining policy and infrastructure program to enable that growth do occur without bottlenecks," he says.

India has large reserves of iron ore - it even exports some to China on the spot market - but it lacks high-quality coking coal and is forced to import some of it from Australia.

Rio and BHP are both interested in helping out the burgeoning Indian steel industry, but they would prefer to remain upstream suppliers. Unfortunately, some states are trying to require miners to build downstream operations to provide additional jobs to aid economic growth.

BHP says it is willing to investigate downstream "value additions" where applicable, but Rio's Elliott thinks the requirement - along with a huge amount of bureaucratic red tape - has proven a disincentive for foreign mining investment.

"In my job, a great many investment proposals cross my desk," he said.

"Attracting mining investment is a competitive business. As a result its of administrative processes, India may be missing out on a potential boom.

"This is certainly the risk it runs in the minerals sector."

how low can blt go, why the big drop??

Dow Jones Newswires - Tuesday, September 26, 2006

UBS Lowers Iron Ore Forecast


UBS cuts its iron ore forecasts and reduces earnings for BHP Billiton and Rio Tinto as result. Now expects 5% drop in iron ore prices in 2007, where previously forecasting 10% rise. Lowers Rio earnings forecast for CY07 by 6% and BHP by 3%. Cites growing iron ore production in China as well as slowing materials consumption.

Toya .... this is a first class company, no question about it ...... it's not one i have ever followed, and i am not sure if i would buy "today" purely because sp is now in uncharted waters ...... however, if you believe, as i do, that commodities still have a long way to travel, though there will be inevitable lurches, then BLT is as good if not better place to put your money than most

Hi Cynic - yes, I reckon commodities will lurch but with a general upward tendency. In particular, I believe that developments in the Far East will have a bearing long term - there seems to be so much going on in that part of the world.

Well is this near the point to get in or is it too early, wish I new. Philip Manduca & Hugh........ his surname escapes me, have stated that commodities and BLT in particular is the place to be.
2517

Hi 2517George,

I reckon BLT is fine for the longer term whatever time you join. However, you can also make money on this one by jumping in and out - I am currently out as I wanted to buy shares in some smaller companies recently. What has worked for me was to buy a large-ish number of shares (1,000) and wait for the price to travel upwards by 1; then sell. It had occurred to me to just keep doing that, as the sp yoyos quite a bit, but then I get all excited about other opportunities and get tied up elsewhere!

I agree long term looks exciting, discipline needed for range trading, and regards to other opportunities I suspect many of us are in the same boat, always something greener elsewhere. Good luck all.
2517

Another big market correction, such as the august dip, would take the sp down to the 1400-1500p range. If the banks are all reporting this month on their exposure to sub-prime debt, another dip may be likely, imo.

So what happens if the UK banks report minimal sub prime impact?

"If" being the operative word H.

Countrywide Financial, DeutscheBank, BNP Paribas, Citibank have all reported heavy exposure to sub-prime. It would seem reasonable to assume that the main U.K. banks will not escape unscathed. Lots of 'Ups' & 'downs' to come.
Sorry to have got 'off topic' on this thread. BLT sitting comfortably on the 1700p support level. Lets hope it holds.

BHP Billiton confirms approach made to Rio Tinto, Rio Tinto rejected proposal
AFX


LONDON (Thomson Financial) - BHP Billiton PLC said it approached the board of Rio Tinto about a possible combination of the two companies but that Rio Tinto rejected the proposal.

BHP Billiton said it has again written to Rio Tinto and intends to continue to seek an opportunity to meet and discuss its proposal.

BHP Billiton said it made the announcement following recent speculation in relation to a potential offer for Rio Tinto at a premium.

& the sp went from 1730p to 1850p in nano seconds!

It was quick, makes one think !!

BHP to keep oil, gas business despite Rio bid: analysts
Mon Nov 12, 2007 7:10 AM GMT
Email This Article | Print This Article | RSS [-] Text [+] By Fayen Wong

SYDNEY (Reuters) - BHP Billiton Ltd/Plc (BHP.AX: Quote, Profile , Research) (BLT.L: Quote, Profile , Research) was unlikely to offload its lucrative petroleum division to help fund a $140 billion takeover bid for rival Rio Tinto (RIO.AX: Quote, Profile , Research) (RIO.L: Quote, Profile , Research), analysts said.

BHP is poised to reap major returns from the business, with some of its biggest oil and gas projects due to come onstream in the next two years.

"Selling the assets right now, ahead of completing major developments, means they won't be able to realize the maximum value," said Warren Edney, a resource analyst at ABN AMRO.


Analysts said BHP's strong balance sheet meant it should easily be able to secure the financing needed for such a deal without having to sell the petroleum business to raise funds.

British newspapers reported over the weekend that BHP may look to sell its oil and gas arm for $40 billion to help fund a bid for Rio, which is not in the oil business.

A BHP spokeswoman declined to comment on the report.

BHP has so far proposed an all-scrip bid to Rio, which has rejected the offer, and fund managers have suggested it may need to sweeten the offer with a cash component. Continued...

© Reuters 2007. All Rights Reserved. | Learn more about Reuters

The chart would suggest we are heading down to the 1400 - 1500p range, but with the possible merger rumour I can't make my mind up which way the sp is heading. In the long term this has got to be a good investment (Falkland Isles etc), imo.

Source ABC News:
"BHP Billiton says it is planning to scale back some of its South African aluminium operations because of the country's power emergency.

South Africa's state power company, Eskom, is forcing major firms to reduce their energy use by 10 per cent because it cannot meet demand.

BHP says it has begun talking to its employees about closing part of its Bayside smelter on the country's east coast.

It is also reducing output at another two of its South African smelters and says in total, aluminium production will fall by about one third."

So, production will fall, thus reducing BLT revenue, but the shortage should push up the price of Aluminium, so...........??? Who knows?

SYDNEY, Nov 18 Reuters) - "BHP Billiton Ltd/Plc says it wants to develop one of Australia's largest untapped uranium deposits, after the state government where the deposit is located lifted a ban on mining the nuclear power feedstock.

The 10-kilometre-long (6 miles) Yeelirrie deposit, located about 1,000 km north of Perth in west Australia, is estimated to contain about 52,000 tonnes of uranium.

That's 7 percent more than total world production last year, according to figures from the World Nuclear Association.

Prices have fluctuated widely in recent years, with uranium currently selling for about $48 a pound.

BHP said it had notified the Western Australia government it was initiating a drilling exploration program to confirm the amount of uranium at the long-dormant Yeelirrie deposit, discovered in 1972.

Western Australia on Monday officially ended its ban on uranium mining, paving the way for miners to step up exploration inside its borders.

The state's newly-elected Leader Colin Barnett ran a successful campaign on support for uranium mining, predicting new mines could be dug within five years to meet international demand, in turn generating millions of dollars in royalties for the state.

A BHP spokesman declined to provide a timetable for developing the project."

Information is to be released regarding a joint venture with Bhp billington and Cambridge Minerals resources. As this company is started to exstract big amounts of Gold in Columbia and makes this company worth buying into CMR price in region of 8p.

RNS 05.06.09 - Rio Tinto and BHP Billiton announce West Australian Iron Ore Production Joint Venture

Rio Tinto and BHP Billiton today signed a non-binding agreement to establish a production joint venture covering the entirety of both companies' Western Australian iron ore assets. The joint venture will encompass all current and future Western Australian iron ore assets and liabilities and will be owned 50:50 by BHP Billiton and Rio Tinto.

The joint venture is expected to unlock significant value from the companies' overlapping, world-class resources. Both companies believe the net present value of these unique production and development synergies will be in excess of US$10 billion (100 per cent basis). These substantial synergies are anticipated to come from:
*Combining adjacent mines into single operations;
*Reducing costs through shorter rail hauls and more efficient allocations of port capacity;
*Blending opportunities which will maximise product recovery and provide further operating efficiencies;
*Optimising future growth opportunities through the development of consolidated, larger and more capital efficient expansion projects;
* Combining the management, procurement and general overhead activities into a single entity.

The joint venture will operate as a cost centre and deliver iron ore, in equal volumes, to ships designated by BHP Billiton and Rio Tinto to sell independently through their own marketing groups. In order to equalise the contribution value of the two companies, BHP Billiton will pay Rio Tinto US$5.8 billion for equity type interests at financial close to take its interest in the joint venture from 45 per cent to 50 per cent.

Senior management of the entity will be determined jointly on the basis of the 'best person for the job' with broadly equal participation from Rio Tinto and BHP Billiton. The initial Chairman of the non-executive owners' council will be Sam Walsh, currently Rio Tinto Chief Executive Iron Ore, and the initial CEO of the production joint venture will be BHP Billiton Iron Ore President, Ian Ashby. Future CEOs will be appointed by mutual consent."

Final results wednesday 12th Aug '09.

Business Financial Newswire
"Mining giant BHP Billiton reported full year revenues fell 15.6% to $50.211bn and an attributable profit before expectionals down 30.2% at $10.72bn. The miner said this was a strong financial result, despite challenging market conditions.

Billiton said it had record net operating cash flow of $18.9bn, underlying EBIT margin 40.1% and underlying return on capital of 24.6%.

The group said it maintained a strong balance sheet, with net debt of $5.6bn, gearing of 12.1% and underlying EBITDA interest cover of 57 times.

Full year dividend was raised 17.1% to 82 cents per share.

Capital and exploration expenditure amounted to $10.7bn in the year.

The group said lower sales volumes (predominantly in Base Metals and Manganese) reduced Underlying EBIT by $2.523bn. Copper sales volumes were impacted by lower ore grade and reduced output from milling operations at Escondida (Chile). Manganese sales volumes decreased significantly due to weaker demand.

This was partially offset by stronger volumes, predominantly in Iron Ore, which increased Underlying EBIT by $158m.

Costs increased by $2.528bn compared to the corresponding period last year. This included the impact of higher non-cash costs of $153 million. The bulk of the cost increases took place in the first half of the financial year. "

Goes ex-divi wed 2nd sept '09. (24.9p)

Business Financial Newswire
"BHP Billiton downgraded to neutral from buy at Barclays Wealth, fair value 1950p"

Sp already back to pre-credit crunch level.

Broker note from Merrill Lynch:
"BHP has announced that it will acquire Athabasca Potash for C$341 mn (US$320 mn). Athabasca is a Toronto listed junior that owns the Burr Potash project and various exploration properties in Saskatchewan, Canada. The Burr project is Adjacent to BHPs Jansen project. We think the transaction underlines BHPs interest in Potash. We also believe that the transaction makes sound strategic sense; BHP is (once again) consolidating a mineral district to eventually benefit from economies of scale and synergies from optimising contiguous assets.
No big deal for BHP this time. We think this acquisition needs to be taken in context. US$320 mn for a US$190 bn market cap company is a rounding error. Will it impact BHPs ability to pay a dividend or buy back shares? Absolutely not. In our opinion, one of the biggest problems facing BHP is how to redeploy the strong cashflows from its tier one asset base and how to gear up an almost completely unlevered balance sheet. We believe that large scale M&A is one path to this end. We have previously written research contemplating a merger between BHP & POT for example.
We are bullish and thus prefer more geared names. Recent market gyrations notwithstanding, we are bullish on the global economic outlook. BHP has world class assets and a best in class balance sheet. As a less operationally and financially geared player, we think that BHP is unlikely to outperform the wider sector in a period of rising commodity prices. We estimate BHP is trading on 13x 2010E CY earnings, 10x CY2011E earnings."

PERTH, March 1 (Reuters) - BHP Billiton Ltd, Australia's largest oil and gas producer, has started oil production on schedule from its A$1.7 billion ($1.07 billion) Pyrenees project, off western Australia, it said on Monday.

Following are some facts about the Pyrenees project:

* The Pyrenees project comprises the Crosby, Ravensworth and Stickle fields, which were discovered in the WA-12-R permit off Western Australia in July 2003 and have total estimated recoverable oil reserves of between 80-120 million barrels.

* The project, approved for development in 2007, will produce 96,000 barrels per day (bpd) of oil at its peak, processed through a floating production storage and offtake vessel. It has an estimated production life of 25 years.

* Pyrenees is the second project operated by BHP, after the Stybarrow field, to start production from the Carnarvon Basin off Western Australia since 2007.

* BHP said in January it is on target for 10 percent annual growth in petroleum output this year. The firm's petroleum output in the first half rose 17 percent to 79.6 million barrels of oil equivalent.

* The project will add to Australia's new heavy and sweet oil stream. Pyrenees crude is heavy with an American Petroleum Index of 18 and a sulphur content of 0.30 percent.

Broker nore from Liberum:
"BHP Billiton has reported slightly weaker 3Q10 production numbers, with oil, thermal coal and manganese the main performers in our view. Like Rio, Australian based operations suffered from weather related disruptions and whilst headline iron ore appears strong at +11% YoY this compares to Rio last week reporting iron ore +41% YoY. Weaker production in base metals are mainly due to well flagged operational issues at Olympic Dam therefore should come as no surprise. BHP is undoubtedly cheap; on spot prices it is trading at 5.9x PER 2011 and 3.1x EV / EBITDA 2011, but we continue to prefer cheaper Rio (4.3x PER 2011 and 2.0x EV / EBITDA) which we believe comes with lower downside risk if regulators block the proposed BHP / Rio iron ore JV."

hali and i got to discussing BLT on the RKH thread a little earlier.
hali made the very good point that BLT is the only major company that currently has a presence through its holding in FOGL - imo, a questionable investment, but no matter.

anyway, for those interested, herebelow a 3 month chart - it's really not very pretty with 200 dma firmly broken and 25 dma now being challenged

StockMarketWire.com
BHP Billiton is taking a $3.29bn hit on its US shale gas and Australian nickel assets following a full-year assessment.

The company said low US gas prices due to a short term over supply of gas have resulted in an impairment of $2.84bn (before tax) against the carrying value of the Fayetteville shale gas assets acquired from Chesapeake Energy in February 2011.

The company will also recognise a $450m (before tax) charge against the carrying value of its Nickel West assets as a result of margin deterioration.

Both impairments will be recognised as exceptional items.

Chief executive Marius Kloppers and head of petroleum Mike Yeager will forgo their bonuses for 2012 following the impairments.

Kloppers said: "Our decision to enter the North American shale hydrocarbon business about 18 months ago was taken after extensive deliberation and due diligence.

"Our work convinced us that this significant, low-carbon fuel source would play a meaningful role as the world makes its future energy choices.

"We are still of this view, particularly given the ongoing positive technological advancements in the shale industry.

"We believe that our dry gas assets are well positioned for the future given their competitive position on the industry cost curve. In the short term, the accelerated development of our liquids rich shales will continue to complement investment in our traditional project pipeline given the high rates of return on offer and the rapid payback on incremental investment."

Results Year Ended 30 June 2012

· Our strategy to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity, geography and market remains a major point of differentiation, particularly in the current, more challenging economic environment.

· Underlying EBIT(1)(2) decreased by 15% to US$27.2 billion and Attributable profit excluding exceptional items(3) declined by 21% to US$17.1 billion. Exceptional items totalling US$1.7 billion contributed to a 35% decline in Attributable profit to US$15.4 billion.

· Underlying EBIT margin(3) remained at a robust 39% while Underlying return on capital was 23%.

· Strong momentum established with annual production records achieved at 10 operations. Our low risk, largely brownfield projects in execution are expected to create substantial shareholder value.

· Net operating cash flow(4) of US$24.4 billion reflected the strong cash generating capacity of the business throughout the economic cycle. Gearing of 26% remains within the parameters defined by our solid A credit rating.

· An 11% increase in the 2012 financial year dividend takes the compound annual growth rate of our progressive dividend to 26% over the last 10 years.

Note from Merrill Lynch today:
"We downgrade BHP to Underperform from Neutral, with a new price objective of GBp1900 (-16%). Post the recent share price rally, we believe BHP is expensive, both relative to its own historical valuation range, and relative to the other diversified miners (10% premium on PER, 30% premium on P/NPV). This valuation suggests that BHP is over-owned and we believe many investors currently favour BHP, as it is seen as safe, high quality and a quasi-oil stock. BHP will, in our view, underperform in a continuing sector rally, whilst also being exposed on the downside in the event that iron ore/oil prices roll over. Post the recent strength in iron ore prices, the BHP share price is up +30% off its 2012 lows and trading toward the top of its recent trading range. On P/NPV, the current multiple of 1.25x is also toward the top end of historical ranges.
Despite its valuation premium, BHP currently has the least volume growth of the big diversified miners (chart 2). We see the group as struggling to grow. The recent record of capital allocation at BHP has been patchy, in our view, with the group taking some write-downs in its recently acquired Shale Gas assets. As discussed in our November “Big Miners” report, we see further write-down risks in businesses such as Alumina and Nickel. Absent growth, we think the stock also looks expensive on a dividend yield basis vs. big oil companies (3.4% 2013 DY vs. average 5.1% for oil majors)."

chart starting to look interesting with sp just nudging through 200 dma

i bought in early today at 1788
for logic etc, go to FTSE thread and read posts 13912+link / 13926 / 13927

Citigroup comment on the sector:
"A Bullish Stance — We move our 12-month sector stance to Bullish, from Neutral, our first bullish call in three years; key picks are BHP Billiton, Rio Tinto and Glencore-Xstrata. While we remain concerned about the potential long-term structural demand story for commodities in China, and we are cognisant of a potential seasonal slowdown in the first quarter of this year, our move to bullish reflects better bottom-up fundamentals, particularly from the major miners. We would rather be too early than too late in making this call.
We have Sell ratings on Antofagasta, First Quantum, Nyrstar, New World Resources, African Barrick, Assore, Fresnillo, Hochschild, Petropavlovsk and Randgold Resources. We remain underweight the gold and base metals stocks, and our least favoured large-cap miner is Anglo American."

OPERATIONAL REVIEW-HALF YEAR ENDED 31 DEC 2013

BHP BILLITON OPERATIONAL REVIEW FOR THE HALF YEAR ENDED 31 DECEMBER 2013

· Strong operating performance in the December 2013 half year with production records achieved across 10 operations and three commodities. Full year production guidance maintained for our Petroleum, Copper, Iron Ore and Coal businesses.

· Western Australia Iron Ore achieved record production of 108 million tonnes (100% basis) for the December 2013 half year as the operation benefited from the early delivery of first production from the Jimblebar mine.

· Queensland Coal achieved record production for the December 2013 half year as several productivity initiatives increased annualised production to 68 million tonnes (100% basis) in the December 2013 quarter.

· Petroleum liquids production increased by 9% to 50 million barrels of oil equivalent in the December 2013 half year, underpinned by a 72% increase at Onshore US.

· Another two major projects delivered first production in the December 2013 quarter and all remaining projects are on schedule and budget.

· BHP Billiton's share of capital and exploration expenditure for the 2014 financial year is expected to be US$16.1 billion(i), as planned.

BHP BILLITON RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2013

§ A substantial improvement in productivity and additional volume from our low risk, largely brownfield investment program contributed to a significant increase in profitability in the December 2013 half year.

§ Underlying EBIT(1) increased by 15% to US$12.4 billion and Underlying attributable profit(1)(2) increased by 31% to US$7.8 billion.

§ The commitment we made 18 months ago to deliver more from existing infrastructure at a lower unit cost is delivering tangible results with annualised productivity led volume and cost efficiencies totalling US$4.9 billion(3) now embedded.

§ This sustainable increase in productivity supported a 9% increase in the Group's Underlying EBIT margin(2) to 38% and a strong improvement in the Group's Underlying return on capital(2) to 22%(4).

§ A 65% increase in net operating cash flow and a 25% reduction in cash outflows from investing activities led to a US$7.8 billion(5) increase in free cash flow(2).

§ Our progressive base dividend, which increased by 3.5% to 59 US cents per share, is comfortably covered by internal cash flow.

§ Proceeds of US$2.2 billion(6) from portfolio simplification further strengthened the Group's solid A balance sheet.

§ With strong free cash flow projected, net debt(2) of US$27.1 billion is expected to approach US$25 billion by the end of the 2014 financial year.

§ We are well placed to extend our strong track record of capital management.

BLT
a strong looking signal, and not without reason

Summary from the UBS note today:
"Diversified miners: we prefer BHP Billiton and Rio Tinto over Anglo American and Glencore. In our opinion, BHP and Rio Tinto are well positioned to improve free cash flow by cutting capex/ costs and delivering high quality volume growth. We expect BHP to be the first diversified miner to increase returns though a buy-back (expected in Aug-14), while, in our opinion, Rio Tinto offers a more attractive free cash flow profile medium-term. We also see potential for BHP to crystallize some hidden value by spinning out its non-core assets over the next 12 months. We are attracted by the restructuring potential at Anglo American, in particular in the Platinum division, and believe that Minas Rio is finally on track to start up at the end of 2014. In our opinion, Glencore has the most dynamic management team, though we maintain a Neutral rating on the stock due to valuation and our cautious outlook on its key commodities (copper, coal). We see the sale of Las Bambas as a potential positive catalyst near-term, as well as the improving outlook for nickel/ zinc.
Mid-caps: we remain cautious on all the UK mid-cap bulk/ base metal producers mining companies under coverage due to valuation (Antofagasta), free cash flow and restructuring uncertainty (Kazakhmys), and the political risk in the Ukraine (Ferrexpo). We prefer the low-cost precious metal producers (Fresnillo, Randgold) and those which will improve free cash flow by cutting capex and improving operational performance (Polymetal)."

worth a punt i think as sp pops back up through 200 dma ...

so popped back in at 1881.5

Never traded this one before cynic, MACD needs to turn up sharpish but hopefully that will occur with volume if your right. In @ 1887.9 tight stop (27 pips)

That's me stopped out cynic, back on watch list till back above 200DAM.

rarely do stops so i'm happy to stay put

what do i know about charts?
bugger all, but others who do may have something to say

They are big big in Iron ore - Iron ore price is weak at moment - I think no rush to buy BLT just yet _ FXPO also down massively with Ukraine problem and weak iron ore price demand. Suppose BAO is down also, but have not checked - no world shortages of iron ore. Be wary "Beware the ides of March".

the good thing about BLT is that it has a very wide portfolio, which is why it has appeal to me

Still sitting on my hands cynic, new to me. If or when volume improves may have another dabble.

That's the 200DMA banjaxed, if it doesn't bounce from here 1800ish would be a tempting entry point.

That's the 200DMA banjaxed, if it doesn't bounce from here 1800ish would be a tempting entry point.

i trade this rather than hold long term, and so far it has always treated me well - more than can said for some other little gems

StockMarketWire.com
BHP Billiton reports a strong operating performance with a 9% increase in group production and annual records achieved across 12 operations and four commodities.

Western Australia Iron Ore achieved a 14th consecutive annual production record as volumes increased to 225 Mt (100% basis), significantly exceeding initial full-year guidance. We now expect production of 245 Mt (100% basis) from the Pilbara in the 2015 financial year.

· Metallurgical coal production of 45 Mt exceeded full-year guidance as Queensland Coal achieved record production and sales volumes.

· Copper production increased to 1.7 Mt as an improvement in mill throughput and concentrator utilisation offset grade decline at a number of operations.

· Petroleum production increased by 4% to a record 246 MMboe with an 18% increase in liquids volumes underpinned by significant growth at Onshore US and Atlantis.

· Six major projects were completed and another two projects achieved first production, including the Caval Ridge coal mine which was completed ahead of schedule and under budget in the June 2014 quarter.

Chief executive Andrew Mackenzie said: "Our focus on productivity has resulted in a significant improvement in operating performance at each of our major businesses this year, with a nine per cent(1) increase in Group production and record output at 12 operations. Western Australia Iron Ore and Queensland Coal annual production exceeded guidance, with both rising by more than 20 per cent as we delivered more tonnes from existing infrastructure and growth projects ahead of schedule.

"At Escondida, an increase in mill throughput and concentrator utilisation offset copper grade decline, while our Onshore US business delivered a 73 per cent increase in petroleum liquids production.

"We expect to maintain strong momentum and remain on track to generate Group production growth of 16 per cent(1) over the two years to the end of the 2015 financial year. In Petroleum, we are investing in our highest-return acreage while a broader improvement in productivity is expected to underpin stronger iron ore, copper and metallurgical coal volumes. We will remain focused on value over volume as we prioritise our brownfield development options and consider the next phase of portfolio simplification."

(Reuters) - Diversified mining company BHP Billiton declared its preference for a demerger of its aluminium, manganese and nickel assets on Friday, setting the stage for the formation of a separate business that could be worth at least $12 billion (7 billion pounds).

BHP (BHP.AX) (BLT.L) said its board was considering a spin-off at meetings ahead of its annual results announcement next week. An Australian newspaper said those plans were well advanced and would include the Nickel West business that the world's biggest miner has been trying to sell.

"A demerger of a selection of assets is our preferred option," the company, which has a market capitalisation of $185 billion, said in a statement to the Australian stock exchange.

BHP has long aimed to sell or spin off its manganese, aluminium and nickel assets, which contribute little to its earnings. Simplifying the company would "generate stronger growth in cash flow and a superior return on investment", it said on Friday.

Some of the largest shareholders in BHP welcomed the announcement.

"It’s good to see BHP taking the lead in the sector on this. It reassures you as a shareholder. It makes me more willing to have it as a significant bet within my fund," said Christopher Moore, portfolio manager of Fidelity Global Industrials Fund.

"Really we should see more of this in the mining sector. I would expect others to take BHP’s lead. Rio Tinto, Anglo American could also follow suit in doing this."

BHP's rivals Anglo American (AAL.L) and Rio Tinto (RIO.L) (RIO.AX) have both said they would focus on the parts of their portfolio that can deliver higher return.

BHP is likely to offload between $1.0-2.7 billion of its debt to the new vehicle, according to analysts. Any more than that could be challenging to handle for a company that relies on assets whose profitability can be volatile.

Its net debt as of Dec. 30 was $27.1 billion.

BHP BILLITON RESULTS FOR THE YEAR ENDED 30 JUNE 2014

· BHP Billiton reported a record low Total Recordable Injury Frequency of 4.2 per million hours worked and we suffered no fatalities during the period. While this is an encouraging result, our efforts to protect the health and safety of our people will be unrelenting.
· A significant improvement in productivity underpinned strong financial performance as Underlying attributable profit(1)(2) increased by 10% to US$13.4 billion. We embedded productivity-led volume and cost efficiencies(3) of US$2.9 billion, exceeding our target by 61% or US$1.1 billion. This means we have now delivered more than US$6.6 billion of sustainable productivity-led gains over the last two years.
· By further improving productivity and reducing our capital and exploration expenditure(4) by 32% to US$15.2 billion we delivered a substantial US$8.1 billion increase in free cash flow(2), despite weaker commodity prices. As a result, our balance sheet continued to strengthen and we finished the period with net debt(2) of US$25.8 billion.
· We have also announced plans to create an independent global metals and mining company via a demerger. With a simpler portfolio(5), we are targeting at least another US$3.5 billion of productivity‑related gains(6) by the end of the 2017 financial year.
· Capital and exploration expenditure(4) is expected to decline to approximately US$14.8 billion in the 2015 financial year and be no more than US$14 billion should the proposed demerger be implemented. By maintaining an internal focus and concentrating investment in our major basins we believe an average rate of return of greater than 20% is achievable for our favoured development options.
· With robust volume growth and further productivity gains expected, we remain confident in the outlook for the Group. On this basis, we increased our full-year progressive base dividend by 4% to 121 US cents per share for an Underlying payout ratio(7) of 48%. We will seek to steadily increase or at least maintain the dividend per share in US dollar terms at each half-yearly payment following the demerger, implying a higher payout ratio.
· We will return excess cash to shareholders in the most efficient way. By ensuring that we start from a position of strength, we will be well placed to implement an enduring program that can be managed in a more consistent and predictable manner.

StockMarketWire.com
BHP Billiton's group production increased by 9% during the three months to the end of September with records achieved for eight operations and four commodities.

The group says it is on track to deliver production growth of 16% over the two years to the end of the 2015 financial year and its guidance remains unchanged.

Metallurgical coal production increased by 25% to 13 Mt as Queensland Coal achieved record quarterly production and sales volumes.

Western Australia Iron Ore production increased by 15% to a quarterly record of 62 Mt (100% basis) as the ramp-up of Jimblebar continued ahead of schedule and the group improved the availability, utilisation and rate of its integrated supply chain.

Petroleum production increased by 7% to 67.4 MMboe as Onshore US liquids volumes rose by 49% to a record 11.5 MMboe.

Total copper production decreased by 1% to 389 kt as lower ore grades, a power outage throughout northern Chile and industrial action offset strong underlying operating performance at Escondida.

BHP Billiton chief executive Andrew Mackenzie said: "Robust operating performance across our diversified portfolio in the September 2014 quarter delivered a nine per cent increase in production with records achieved for eight operations and four commodities. With production guidance maintained across all operations and businesses, we remain on track to generate Group production growth of 16% over the two years to the end of the 2015 financial year.

"Our relentless focus on productivity continues to yield strong results. At Western Australia Iron Ore, we have completed our major supply chain investments and, for the first time in a decade, we have no major projects in execution.

With our focus now on maximising the value of existing infrastructure, we plan to reduce costs and invest judiciously in very low capital cost debottlenecking initiatives. These plans are expected to increase total supply chain capacity to 290 Mtpa by the end of the 2017 financial year and reduce unit costs by at least 25% to less than US$20 per tonne. When combined with other initiatives across our portfolio we are very well positioned to reduce cash costs by more than US$2.3bn and deliver volume-related productivity gains of at least US$1.2bn by the end of the 2017 financial year."

of the major mining companies, this is definitely my fave
however, though it is a low cost ore producer, the current slowdown in china remains a major concern

Deutsche Bank reiterates buy on BHP Billiton, target cut from 2500p to 2400p.

Deutsche more optimistic than the rest, it seems:


29 Oct Credit Suisse 2,000.00 Neutral
28 Oct Credit Suisse 2,000.00 Neutral
28 Oct Jefferies... 1,700.00 Hold
28 Oct JP Morgan... N/A Neutral
28 Oct Charles Stanley N/A Accumulate

BLT Interesting. Right on a Support line going back to Aug 2012. Res levels 2100p and 2200p. Had a dabble. Ex Hedge fund manager at weekend was saying this is the next FTSE 100 LEADER along with BP....?

of the mining stocks, this has long been my fave ..... don't hold at the moment, but shall have another look

personally, i would go near bp .... as an individual stock, it seems to be stumbling from one disaster to another, and oil stocks in general are well (bad pun!) out of favour

Yep this guy runs this site and makes some very good calls.

He always buys down and out stock.

http://www.financialorbit.com/

Operational Review Half Year Ended 31 Dec 2014

BHP BILLITON OPERATIONAL REVIEW FOR THE HALF YEAR ENDED 31 DECEMBER 2014

- Group production increased by 9% during the December 2014 half year with records achieved for eight operations and five commodities. Production guidance remains unchanged and we are on track to deliver Group production growth of 16% over the two years to the end of the 2015 financial year.

- Metallurgical coal production increased by 21% to 26 Mt in the December 2014 half year as Queensland Coal and Illawarra Coal both achieved record half year volumes.

- Western Australia Iron Ore production increased by 15% to a record of 124 Mt (100% basis) in the December 2014 half year as the ramp-up of Jimblebar continued and we improved the availability, utilisation and rate of our integrated supply chain.

- Petroleum production increased by 9% to a record 131 MMboe in the December 2014 half year supported by a 71% increase in Onshore US liquids volumes to 24.4 MMboe.

- Copper production (1) decreased by 2% to 813 kt as strong underlying operating performance across the business was offset by lower grades at Antamina.

- Record manganese ore and alumina production was underpinned by strong performances at both Hotazel and the Alumar refinery.

BHP BILLITON RESULTS FOR THE HALF YEAR ENDED 31 DECEMBER 2014


§ The tragic loss of two of our colleagues is a stark reminder that the health and safety of our people must always come first.

§ Underlying EBIT(1) of US$9.2 billion and an Underlying EBIT margin(2) of 32% for the December 2014 half year results demonstrate the strength of BHP Billiton's strategy and the resilience of our portfolio in weaker markets.

§ Improved productivity and reduced capital expenditure allowed us to generate US$4.1 billion of free cash flow(2) and strengthen the balance sheet despite lower prices.

§ We are extending our productivity gains faster than initially anticipated with US$2.4 billion(3) achieved in the period. We expect over US$4.0 billion of productivity gains by the end of the 2017 financial year(4).

§ Our cost competitiveness continues to improve in all our major businesses, with unit cash costs reduced by 29% Western Australia Iron Ore, 15% at Queensland Coal, 13% at Escondida and 8% at Onshore US.

§ We reduced capital and exploration expenditure(5) by 23% to US$6.4 billion in the half year and plan to invest a total of US$12.6 billion in the 2015 financial year and US$10.8 billion in the 2016 financial year.

§ We will remain disciplined. Our plans are flexible and we continue to expect an average investment return(6) of greater than 20% for our portfolio of high-quality development options.

§ Our balance sheet is strong. Net debt(2) at period end fell to US$24.9 billion for a gearing ratio of 22.4% and our A+ credit rating was recently reaffirmed.

§ The Group's interim dividend increased by 5% to 62 US cents per share, representing and Underlying payout ratio(7) of 62%.

§ Should the proposed demerger of South32 be approved, we do not plan to rebase our progressive dividend downwards, implying a higher underlying payout ratio, and South32 will adopt its own dividend policy.

CitiBank summary:
"BHP Downgrade to Neutral — Diversity has previously saved BHP, but we are bearish on the 3 biggest earnings drivers in iron ore, coking coal and oil. With net debt rising in FY15 & 16, and rising further after South32 demerger, we expect further cuts to capex will likely be required. We downgrade BHP to Neutral, previously Buy."

StockMarketWire.com
Equity research analysts at Goldman Sachs have moved to a 'neutral' rating (from 'conviction buy') on mining group BHP Billiton (LON:BLT), stating that it sees limited catalysts for the stock in the near future.

The City heavyweight added: "Our reasons for downgrade are threefold: 1) our commodities team downgrade of iron ore implies BHP's average earnings (EBITDA) for 2015-17E fall by 7%. 2) On our commodity price deck we believe BHP will not be able to cover its dividend from FCF (FY16/17E dividend yield is forecast to be 6.3%/6.7% while FCF yield is 2.9%/4.9%). And 3) South32 catalyst played out."

Goldman also cut its price target to 1,400 pence a share (from 1,600 pence), implying 4 per cent downside based on yesterday's closing price.

StockMarketWire.com
BHP Billiton's group production increased by 9% for the 2015 financial year. Over the past two years, production from its core portfolio grew by 27%.

Petroleum production increased by 4% to a record 256 MMboe, supported by a 67% increase in Onshore US liquids volumes to 56 MMboe.

Copper production was unchanged at 1.7 Mt as strong operating performance at Escondida offset the impact of a mill outage at Olympic Dam.

Western Australia Iron Ore production increased by 13% to a record 254 Mt (100% basis), underpinned by productivity gains across the integrated supply chain.

Metallurgical coal production increased by 13% to a record 43 Mt.

Three major projects achieved first production during the 2015 financial year, including the Escondida Organic Growth Project 1 which was completed in the June 2015 quarter.

The demerger of South32 from BHP Billiton was successfully completed during the June quarter.

Underlying attributable profit in the June 2015 half year is expected to include additional charges in a range of approximately US$350 million to US$650 million.

Chief executive Andrew Mackenzie said: "Our businesses performed well over the 2015 financial year. We have improved the performance of our equipment, reduced costs, and increased volumes despite a significant reduction in capital spend. Our simpler portfolio following the demerger of South32 will help us maintain the pace of operational improvement, further supporting cash generation, margins and returns. "Better productivity will be the sole source of volume growth at Western Australia Iron Ore in the 2016 financial year with production forecast to increase by seven per cent and unit costs are expected to fall to US$16 per tonne. "In Petroleum, through improved recoveries and lower drilling costs, we expect to maintain production in the Black Hawk and Permian in the 2016 financial year despite cutting annual shale investment by over 50 per cent. Although our decision to cut spending in the Onshore US will mean deferring gas volumes in the near term, we expect to realise greater value by developing our acreage later.

"We remain confident that our focus on best-in-class performance together with our unrivalled asset quality, optimal diversification and continued investment in high-return projects, will create long-term value through the cycle and deliver superior returns to our shareholders."

BHP BILLITON RESULTS FOR THE YEAR ENDED 30 JUNE 2015

· The health and safety of our people is our first priority. After no fatalities in the 2014 financial year, we tragically lost five colleagues this year. It is our ongoing goal to have a workplace free from fatalities and serious injury and we have implemented a company-wide program to improve performance.
· Underlying EBITDA(1) of US$21.9 billion and an Underlying EBITDA margin(2) of 50% for the 2015 financial year demonstrate the quality of our portfolio and its resilience in challenging markets. Underlying EBIT(1) declined by 46% to US$11.9 billion.
· Our focus on best-in-class performance delivered productivity gains of US$4.1 billion(3), two years ahead of target. We expect further cost reductions in the 2016 financial year across all businesses.
· Capital and exploration expenditure(4) decreased by 24% to US$11.0 billion in the period and is expected to decline to US$8.5 billion in the 2016 financial year and US$7.0 billion in the 2017 financial year.
· Improved operating and capital productivity combined with the flexibility of our investment program supported free cash flow(2) of US$6.3 billion.
· We maintained our solid A credit rating(5) and finished the period with net debt(2) of US$24.4 billion, a decline of US$1.4 billion.
· Our commitment to the progressive dividend is unchanged. Our full-year dividend increased by 2% to 124 US cents per share.

Jefferies note:
"If commodity prices stabilize as we expect, highly leveraged miners should take advantage of the opportunity to strengthen their balance sheets via asset sales and equity issuances. Miners with financial flexibility are best positioned to buy high quality assets at a very weak point in the cycle. BHP and Rio - two of our top picks - have strong balance sheets but should change their dividend policies to capitalize on opportunities.
Recent share price recovery has been dramatic and has created opportunities: The Glencore share price collapse from last week dragged most of the sector down with it. Fears about a funding issue for Glencore have subsided, and mining equity valuations have re-rated as a result. The delay to a Fed rate hike has also helped the sector, and the demand outlook for China has arguably modestly improved due to property market strength and potential targeted fiscal stimulus. We expect mining share prices to be supported in the near-term as macro headwinds have eased. As we discuss in this note, miners with leveraged balance sheets should take advantage of the recovery as downside tail risks have not disappeared. We expect M&A activity to materially increase over the next year, and leveraged miners will continue to be under pressure to recapitalize their balance sheets via asset sales and equity issuances. It is increasingly likely that higher quality assets will be made available. Miners with strong balance sheets and financial flexibility have the opportunity to create long-term value via asset purchases at what is still a very weak point in the cycle.
BHP and Rio have progressive dividend policies which limit their financial flexibility: BHP Billiton and Rio Tinto have rock solid balance sheets, but almost all of their free cash flow is being used to pay dividends. Based on our analysis, they are therefore limiting their ability to create value via opportunistic investment during the current downturn. Their dividend yields (7.2% for BHP and 5.9% for Rio) are high enough to indicate that the market already expects a dividend cut at some point. However, they are unwilling to cut their dividends because they have progressive dividend policies.
BHP and Rio should scrap their progressive dividends and go to a payout ratio instead: A shift to a dividend payout equal to 50% of free cash flow would imply a still respectable 3.3% dividend yield for BHP and for Rio. Most importantly, dividend cuts to these levels would save BHP $3.5 billion and Rio $1.8 billion per year. This would give these companies significant financial flexibility to buy good assets at what is clearly a weak point in the cycle. We would expect them to be most interested in large, long reserve life, low risk copper assets since the NPV of acquiring these assets would likely be higher than the NPV to build. Anglo American, Freeport, First Quantum and some other major miners have high quality copper assets that could be sold. An opportunity to drive share prices higher even if commodity prices do not recover: Buying high quality assets on the cheap would create more shareholder value than using all FCF to pay dividends, based on our analysis. This acquisition strategy would likely drive BHP's and Rio's share price higher over time, even if the strategy is accompanied by a lower, payout-based dividend. Dividend payments that absorb all of a company’s free cash flow may support share prices in the short-term, but we do not believe they create longterm shareholder value."

StockMarketWire.com
BHP Billiton remains on track to meet full-year production and cost guidance after a solid operational performance in the three months to the end of September.

Highlights:
· Petroleum capital expenditure of US$2.9 billion now planned for the 2016 financial year, a 6% decline from prior guidance of US$3.1 billion. · Four major projects under development are tracking to plan. · The Group continues to pursue high-quality oil plays with additional prospective acreage acquired in the Beagle sub-basin in Western Australia and the Western Gulf of Mexico. · Approval received for the extension of operational permits for Cerro Colorado until 2023. · In October, BHP Billiton priced multi-currency hybrid notes in the Euro, Sterling and US Dollar markets.

Chief executive Andrew Mackenzie said: "BHP Billiton remains on track to meet full-year production and cost guidance after a solid operational performance this quarter. In Petroleum, we continue to reduce costs in both our Onshore US and Conventional businesses, and will meet our production targets with US$200 million less capital investment. We successfully acquired prospective oil acreage in Western Australia and the Western Gulf of Mexico and will continue to invest through the cycle to create value for shareholders."

StockMarketWire.com
BHP Billiton's iron ore production guidance for the 2016 financial year is under review following a dam collapse at a Brazilian iron ore mine co-owned by the company.

The Samarco operations include a three tiered tailings dam complex. Within this complex, the Fundão dam failed and the downstream Santarém dam has been affected. This resulted in a significant release of mine tailings, flooding the community of Bento Rodrigues and impacting other communities downstream. The third dam in the complex, the Germano dam, is being monitored by Samarco. At this time, there is no confirmation of the causes of the tailings release. BHP Billiton's chief executive, Andrew Mackenzie, will go to Brazil this week to understand first-hand the human, environmental and operational impacts of the incident. Meanwhile, BHP Billiton has offered its full support to help the immediate rescue efforts and to assist with the investigation. BHP Billiton's immediate priority is the welfare of the Samarco workforce and the local communities. Details are still emerging in relation to the Samarco employees and contractors impacted by the incident. At this stage, Samarco has advised that there is at least one confirmed fatality with a further 13 members of the workforce missing. The number of people in the communities impacted by the incident is yet to be confirmed, but the local authorities have reported that, at this stage, there are at least 15 people from the communities unaccounted for. BHP Billiton will continue to work with Samarco (operator), Vale, the local communities, local authorities, regulators and insurers to assess the full impact of this tragic incident. Further updates will be provided as soon as more information becomes available. The Samarco operations have the capacity to produce 30.5 Mtpa of iron ore pellets and to process 32 Mtpa of concentrate. In the 2015 financial year, BHP Billiton's share of production was 14.5 Mt and the contribution from Samarco was approximately 3 per cent of the BHP Billiton Group's Underlying EBIT. Following this incident, BHP Billiton's iron ore production guidance for the 2016 financial year is under review.

Cazenove note today:
"We believe the Samarco tailings dam failure will prove to be the straw that breaks the camel’s back on BHP’s progressive dividend. At spot, assuming $500m costs related to Samarco and aggregate FY’16-17E capex $2bn below guidance, we estimate a ~$8bn shortfall to comply with A- credit metrics by the end of CY’17E. With the risk of further downside to base metals, we believe pressure will grow on BHP’s Board and we now forecast a 50% cut to the progressive dividend at FY’16 results. Against that backdrop, we do not believe 8% YTD underperformance vs RIO and +30-35% vs AAL/GLEN adequately reflects the risk investors, particularly those with an income focus, and we downgrade to Underweight with a revised Dec’16 PT of £7.50/sh.
 Material cash/capital shortfall: On spot prices and assuming no change to the US$6.6bn pa progressive dividend we estimate BHP faces a $16-20bn capital shortfall to sustain its A+ credit rating and a cumulative ~$9bn deficit of FCF vs dividend commitments for CY'16-17E. Even assuming management is willing to tolerate an A- rating, which they have indicated is below their definition of “solid A”, we estimate an $8bn capital shortfall, despite our capex forecast sitting $2bn below guidance for FY’16-17E.
 Factoring in a 50% dividend cut: In that context, with downside risk to copper prices and with management commentary increasingly equivocal on the trade-off between capital returns and investment in growth, we believe BHP will ultimately rebase the dividend 50% lower (to ~US$3.3bn pa) at FY’16 results next August. In combination with further reductions in working capital, opex and capex, this should allow the company to manage its balance sheet effectively, whilst still offering a ~4.5-5.0% yield.
 Removing Samarco: We have removed Samarco from our model. While NPV analysis suggests a likely justification for a restart, we believe the environmental, political and social dimensions mean there is no certainty that Samarco will regain its licence to operate. We make a preliminary estimate of US$0.5bn (BHP share) in rehabilitation/fines over three years.
 Downgrade to UW: We reduce our EPS by 7%/9%, respectively, for FY’16/17E and NPV by 4%, with the company now on spot EV/EBITDAs of ~10.5x, a ~5% premium vs RIO and a base case P/NPV of 0.69x (~25% prem. to diversified peer group). We recalibrate our price target methodology to a blended average of our base-case and spot valuation, which reduces our Dec'16 PT to £7.50/sh (previously £13.00/sh). We cut our recommendation to UW and retain our preference for RIO."

sorry to say, but i fear this goliath still has a long way to fall
underlying commodity prices apart, the cost of the disaster in brazil has yet to be played out

UPDATE: SAMARCO

the tailings are composed of materials that are not hazardous to human health, based on the hazard classification of the material under Brazilian standards

the implication being that international standards could well say otherwise!

Have a look at photo 5 here.

Chart of the week: Odds favour a sharp rally soon

Are you prepared to guarantee that?

StockMarketWire.com
BHP Billiton expects to take a hit of approximately USD4.9 billion post-tax (or approximately USD7.2 billion pre-tax) against the carrying value of its onshore US assets.

This charge will be recognised as an exceptional item in the financial results for the half year ended 31 December. The impairment follows the bi-annual review of the company's asset values and reflects changes to price assumptions, discount rates and development plans which have more than offset substantial productivity improvements.

The impairment will reduce onshore US net operating assets to approximately USD16 billion.

The group said the oil and gas industry had experienced significant volatility and much weaker prices. It says the US gas price remains low as industry-wide productivity improvements have resulted in higher than expected supply at lower cost. BHP Billiton has previously suspended development of its dry gas acreage. The company has now also reduced its medium and long-term gas price assumptions. It adds: "In addition, the oil price has fallen by more than 30 per cent over the last three months following the disruption of OPEC and stronger than anticipated non-OPEC production. Although we expect prices to improve from their current lows, we have reduced our oil price assumptions for the short to medium term. Our long-term price assumptions continue to reflect the market's attractive supply and demand fundamentals." The increased volatility in prices has also increased the discount rates applied by BHP Billiton, which has a significant flow through impact on the Company's assessment of its Onshore US asset value. The group will reduce the number of operated rigs in its Onshore US business from seven to five in the March 2016 quarter. This will comprise three rigs in the Black Hawk and two rigs in the Permian. Beyond this, investment and development plans for the remainder of the 2016 financial year are under review, with a focus on preserving cash flow. The oil and gas industry has recently experienced significant volatility and much weaker prices.

Chief executive Andrew Mackenzie said "Oil and gas markets have been significantly weaker than the industry expected. We responded quickly by dramatically cutting our operating and capital costs, and reducing the number of operated rigs in the Onshore US business from 26 a year ago to five by the end of the current quarter. "While we have made significant progress, the dramatic fall in prices has led to the disappointing write down announced today. However, we remain confident in the long-term outlook and the quality of our acreage. We are well positioned to respond to a recovery."

StockMarketWire.com
BHP Billiton is maintaining its full year production guidance for petroleum, copper and coal.

Guidance at Western Australia Iron Ore (WAIO) is also maintained at 270 Mt (100% basis) as continued productivity is expected to offset one-off operational issues from the December quarter. But total iron ore guidance is reduced by 10 Mt to 237 Mt due to the suspension of production at Samarco following the dam collapse.

It says four major projects under development are tracking to plan. The North West Shelf Greater Western Flank-A petroleum project was completed under budget and ahead of schedule. The Greater Western Flank-B project was approved during the period.

Underlying attributable profit in the December 2015 half year is expected to include additional charges in a range of approximately US$300 million to US$450 million.

Chief executive Andrew Mackenzie said: "Our operated assets continued to perform well over the last six months. The strong performance of our conventional petroleum assets has offset lower shale volumes following a reduction in investment to preserve the value of our acreage in current market conditions. Increased throughput at Escondida helped mitigate the impact of expected grade decline and better productivity supported production at Queensland Coal. These efforts have allowed us to maintain production guidance for Petroleum, Copper, Coal and Western Australia Iron Ore.

"Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector. We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business. In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term."

Half year results, big loses and big cut in divi http://www.moneyam.com/action/news/showArticle?id=5218077

Jefferies comment today:
"BHP reported 1H FY16 EBITDA that was 11% lower than we had anticipated. More importantly, the company announced a new management structure, capex reductions, planned productivity gains, a new dividend policy, and clear capital allocation priorities. These changes are aimed at freeing up cash and should therefore be a positive for BHP shares. We expect the company to use its financial flexibility to acquire an asset (most likely in copper) in the near term.
Management shakeup: In an effort to simplify and in some ways decentralize its structure, BHP announced that it will now group its mining assets into two segments - Minerals Australia, to be run by Mike Henry, and Minerals Americas, to be run by Danny Malchuk. Global Petroleum will be run by Steve Pastor. BHP President of Iron Ore, Jimmy Wilson, and President of Petroleum, Tim Cutt, are leaving the company. We expect this to all be a relatively seamless transition, and the end result should be further cost cutting as redundant functions throughout BHP are eliminated. Tough times call for tough measures.
More productivity gains and capex reductions: BHP expects to deliver $2.1bn of productivity gains in FY '16. These gains will be partially offset by a $1.5bn negative impact due to lower grades at Escondida. The company has lowered its capex guidance from $8.5bn to $7.0bn for FY16 and from $7.0bn to $5.0bn for FY17. Lower costs and lower capex will give BHP additional financial flexibility, as will its new dividend policy (see below).
An end to the progressive dividend, as expected: BHP has lowered its interim dividend by 74%, from $0.62/sh to $0.16/sh (implies an annualized dividend of $1.7bn and dividend yield of 2.8%). We had expected at least a 50% cut to the dividend. The announced $0.16/sh 1H dividend is covered by FCF. Going forward, BHP's dividend will be based on a payout ratio (rather than a progressive policy), with the dividend equal to a minimum of 50% of Underlying attributable profit. This implies a minimum FY17 dividend of $0.18/sh (1.6% yield) if we assume current spot commodity prices and FX. The new policy will ensure that capital returns from BHP are linked to the cyclicality of the business.
Clear capital allocation priorities: BHP's capital allocation priorities will be to 1) spend maintenance capital, 2) maintain a strong balance sheet, and then 3) pay the new minimum dividend. Excess free cash flow will then be allocated to either debt reduction, additional dividends, share repurchases, growth investment, or M&A. At spot prices, BHP would generate excess free cash flow over the next two years (with average FCF before dividends of more than $4bn per year at current spot commodity prices, on our estimates). We do not expect debt repayments (reported net debt of $25.9bn would be 2.2x annualized 1H FY16 EBITDA of $6.0bn), share buybacks, significant additional dividends, or growth investment (better to buy than build now) to be higher priorities than M&A over this period as compelling opportunities may arise. M&A may be on the near-term agenda: BHP believes that "depressed asset values and falling share prices provide opportunities" for mining companies with financial strength.
The company is most constructive on the outlook for copper and oil. If we assume no change in dividend from 1H FY16 to 2H FY16 and from FY16 to FY17, the company's annual dividend payment would fall by $4.9bn relative to FY15. This reduction combined with the announced capex and opex cuts gives BHP significant financial flexibility to buy an asset. We would not rule out an acquisition of a world class copper asset in the $5bn range, if the opportunity emerges."

Another note from Jefferies:
"Even after yesterday’s carnage, BHP’s share price is above our target as commodity prices have been stronger than expected, sentiment regarding mining has improved, and shorts have covered. While the Chinese demand outlook may be slightly better than it was two months ago and more metals intensive stimulus may be coming, our analysis indicates that most commodity prices will go lower in the near term. We downgrade to Hold.
BHP’s mark-to-market valuation is reasonable: The mining sector is coming off its biggest six week rally in 30+ years, with the FTSE Mining Index up 70% from Jan 20 Mar 7 versus the FTSE All-Share Index up 9% over that period. Commodity prices have also significantly increased, with iron ore up 46%, oil up 9%, and copper up 6% YTD (iron ore, oil and copper account for more than 90% of BHP’s NPV, on our estimates). At current spot commodity prices, BHP is on a FY16E FCF yield of 5.9% and EV/EBITDA of 6.4x and a FY17E FCF yield of 11.1% and EV/EBITDA of 5.2x. If we assume a 50% payout ratio (consistent with guidance), BHP’s FY17E dividend yield at spot would be 3.0%. Based on these valuations, we would buy BHP shares only if we were confident that the recent recovery in commodity prices is sustainable.
Commodity prices to go lower: Based on our analysis, the recent strength in prices of iron ore, copper and other mined commodities will at least partially reverse over the next 3-6 months. In the case of iron ore, supply growth from Roy Hill and a seasonal increase in supply following what has been a period of typical weather-related supply disruptions should pressure the price, especially if demand stays weak. We expect the iron ore price to fall to below $40/t this summer (versus current spot of $64/t). In the case of copper, a wave of supply growth (Cerro Verde, Las Bambas, Buenavista, Sentinel, Grasberg, Bozshakol, Antucoya and others) should more than offset any improvement in demand and lead to lower prices. Based on our commodity price forecasts rather than current, higher spot prices, BHP’s valuation is stretched (FY16E FCF yield of 2.5% and EV/EBITDA of 8.1x and a FY17E FCF yield of 7.2% and EV/EBITDA of 6.9x, with an implied FY17E dividend yield of just 1.0%).
BHP’s strategy is a risk: In addition to a fairly expensive valuation (on our estimates) and the likely negative momentum of lower commodity prices in the near term, there are also still questions regarding BHP’s recently announced strategic overhaul, which includes major changes to divisional management and a regrouping of segments. There is also a relatively high risk that BHP pursues M&A opportunities, especially in copper and possibly conventional oil. An acquisition of a tier-1 copper asset would not be cheap (greater than 10x spot EBITDA), and the winner of what would likely be a bidding war would be at risk of overpaying. We would prefer to see BHP use cash flow to pay down debt rather than compete to buy high quality copper assets from the likes of Freeport or Glencore. All else equal, we prefer sellers of good assets over buyers.
Downgrading BHP shares after the recent rally: We have downgraded BHP shares from Buy to Hold (but not changed our target prices) as we cannot identify likely near-term positive catalysts, the company’s strategy is still a risk, commodity prices should go lower in the near-term following the recent strength, and BHP’s valuation based on our estimates is no longer inexpensive. BHP is well positioned for the long term, but the Buy case is not evident for now."

Chart of the week: Huge upside for BHP and Tesco?

i wouldn't touch tesco, but bought a few BLT for my sipp about 10 days ago

All of the reputable miners have bounced strongly, but I still prefer to use the 200 MA as my trigger point. Definitely all worth watching and building a stake over the next 6 months. I think last year was a 'go away in may' year, so.......who knows?!!!

have a look at ANTO then

Yes, I agree. ANTO & AAL a stronger signal, imo. But, reading Jefferies above, they expect commodity prices to reverse over the next few months, so not a long term hold yet.

Nomura today downgrades its investment rating on BHP Billiton PLC (LON:BLT) to neutral (from buy) and cut its price target to 850p (from 950p).

Deutsche Bank today reaffirms its hold investment rating on BHP Billiton PLC (LON:BLT) and cut its price target to 900p (from 950p).

Deutsche Bank today reaffirms its hold investment rating on BHP Billiton PLC (LON:BLT) and cut its price target to 880p (from 900p).

StockMarketWire.com
Brazil's Federal Public Prosecution Service is seeking BRL155bn - $43bn at current exchange rates - compensation from the BHP Billiton Brasil-Samarco joint venture for the failure of the Fundao tailings dam in November.

BHP Billiton says the Federal Public Prosecution Service has announced it has started proceedings for social, environmental and economic compensation.

BHP Billiton says it has not received formal notice of the claim and adds that it remains committed to helping Samarco to rebuild the community and restore the environment affected by the failure of the dam.

Macquarie today reaffirms its underperform investment rating on BHP Billiton PLC (LON:BLT) and set its price target at 700p.

Barclays Capital today reaffirms its equal weight investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 925p (from 875p).

Tailings Dam - surely this was a design agreed with the local government AND National Government - were their Inspectors asleep on the job - OR - was there a geo-fault that went un-noticed?
Still, I guess If BHP-Billiton wants to remain operational there - then they have to bend to ..... whatever is thrown at them.
The Legal Costs/Fines are probably "Bad enough" - but when it comes to repairing the Dam the construction cost is likely to be much greater, allowing for more-detailed investigations + Safety provisions, etc.
+ Strikes me that this will be Damn costly . . . . .

Jefferies International today reaffirms its hold investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 900p (from 800p).

Credit Suisse today reaffirms its outperform investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 1150p (from 1050p).

StockMarketWire.com
BHP Billiton posts losses from operations of $6.2bn for the year to the end of June compared with a profit of $8.7bn in 2015.

The company said it had been a challenging 12 months for the company and the industry.

It said response efforts at Samarco continue with good progress being made on community resettlement, community health and environment restoration.

The company said there were no fatalities at its operated sites in the 2016 financial year.

It reports underlying EBITDA of US$12.3 billion (down from $11.9bn) and an underlying EBITDA margin of 41%, despite weaker commodity prices which had a negative impact of US$10.7 billion.

Productivity gains of US$437 million were achieved for the period and the company says it remains on track for US$2.2 billion of gains over the two years to the end of the 2017 financial year.

Conventional petroleum, grade-adjusted Escondida, Western Australia Iron Ore and Queensland Coal unit cash costs(4) declined by 30%, 22%, 19% and 15% respectively.

Other highlights:
- Capital and exploration expenditure declined by 42% to US$6.4 billion and is expected to decrease further to US$5.0 billion in the 2017 financial year (BHP Billiton share). On a cash basis, capital and exploration expenditure was US$7.7 billion and is forecast to decline to US$5.4 billion in the 2017 financial year.

- Reduction in operating costs, it says the "flexibility in our investment programme and a targeted reduction of working capital supported free cash flow of US$3.4 billion".

- Balance sheet remains strong, with net debt of US$26.1 billion broadly unchanged from December 2015.

- The Board has determined to pay a final dividend of 14 US cents per share, which is covered by free cash flow generated in the current period. In accordance with the Group's dividend policy, this comprises the minimum payout of 8 US cents per share and an additional amount of 6 US cents per share, reflecting continued balance sheet strength and strong free cash flow during the period.

Chief Executive Officer, Andrew Mackenzie, said: "The last 12 months have been challenging for both BHP Billiton and the resources industry. Nevertheless, our results demonstrate the resilience of our portfolio and the diverse ways in which we can create value for shareholders despite low commodity prices. Unit cash costs across the Group declined 16 per cent and with increased capital efficiency, supported free cash flow generation of US$3.4 billion despite weaker commodity prices.

"Next year, we expect another US$1.8 billion of productivity gains as our new Operating Model helps sustain momentum, delivering more than US$7 billion of free cash flow based on current spot prices and a forecast reduction in net debt.

"The strength of our cash flow generation and balance sheet is reflected in the final dividend of 14 US cents per share, which comprises the minimum implied by our payout ratio and a top up from excess cash in line with the capital allocation framework. We continue to pursue capital-efficient latent capacity opportunities which will support volume growth of up to four per cent next year, excluding our Onshore US assets where we continue to defer activity to maximise value. In addition, we have progressed high-return growth projects, with investment decisions on the Mad Dog 2 and Spence Growth Option projects expected by the end of next calendar year.

"Over the past five years we have actively reshaped our portfolio, and we are confident we have the right mix of commodities, assets and opportunities to create substantial value over time. While commodity prices are expected to remain low and volatile in the short to medium term, we are confident in the long-term outlook for our commodities, particularly oil and copper."

In relation to Samarco, he added: "All of us at BHP Billiton remain deeply saddened by the Samarco tragedy. The Company is fully committed to the Framework Agreement and its programs to remediate and compensate for the impacts of the Samarco dam failure. Good progress is being made on community resettlement, community health and environment restoration."

Liberum Capital Sell 1,071.00 665.00 665.00 Reiterates

Jefferies International today upgrades its investment rating on BHP Billiton PLC (LON:BLT) to buy (from hold) and raised its price target to 1250p (from 1100p).

StockMarketWire.com
BHP Billiton says all production and unit cost guidance remains unchanged for the 2017 financial year.

But guidance for Olympic Dam is under review following a state-wide power outage in South Australia.

An operation review says good progress continues on the group's capital-efficient latent capacity options with the ramp-up of the Spence Recovery Optimisation project and additional capacity at Jimblebar during the period, and first production from the Los Colorados Extension project anticipated late in the 2017 financial year.

Other key points:

- All four major projects under development are tracking to plan.

- In Petroleum, positive drilling results were reported following the discovery of oil in multiple horizons at the Caicos exploration well in the Gulf of Mexico.

- The group continues to optimise its portfolio of high-quality assets with the announced sale of 50 per cent of its interest in the undeveloped Scarborough area gas fields and completion of the IndoMet Coal and Navajo Coal divestments. It also entered into an agreement with the New South Wales Government to cease progression of the Caroona Coal project.

Chief executive Andrew Mackenzie, said: "Full year production and unit cost guidance remains unchanged. Safety and productivity continue to improve with our new operating model helping us identify and replicate best practice more quickly.

"We have seen early signs of markets rebalancing. Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months.

"Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term. Together, the combination of steadier markets, continued capital discipline, improved productivity and increased volumes in copper, iron ore and metallurgical coal should further support strong free cash flow generation this financial year."

Exane BNP Paribas today reaffirms its neutral investment rating on BHP Billiton PLC (LON:BLT) and set its price target at 1268p

StockMarketWire.com
BHP Billiton submitted the winning bid to acquire a 60% participating interest in and operatorship of blocks AE-0092 and AE-0093 containing the Trion discovery located offshore Mexico.

PEMEX Exploration & Production Mexico will retain a 40% interest in the blocks.

Pemex estimates the gross recoverable resource to be 485 MMboe. Subject to satisfaction of conditions (including the obtaining of government approvals), it is anticipated that the relevant agreements would be finalised and signed within 90 days.

BHP Billiton's bid for Trion includes an upfront cash payment of US$62.4 million and a commitment to a minimum work programme (estimated to be up to a maximum of US$320m).

If BHP Billiton and Pemex agree to progress the project beyond the minimum work programme, BHP Billiton would be required to invest the remainder of the US$570m minimum work contribution (which includes the minimum work programme spend) and a US$624m cash contribution (which comprises the upfront cash payment of US$62.4m already paid and the balance of US$561.6 million as a future carry for Pemex).

BHP Billiton's bid also includes a commitment to an additional royalty of 4%.

BHP Billiton president operations petroleum, Steve Pastor, said "We see attractive potential in Trion and the Perdido trend, and we are pleased to have the opportunity to further appraise and potentially develop this prospective frontier area of the deepwater Gulf of Mexico.

"This opportunity aligns with our strategy of owning and operating Tier-1 assets and provides an opportunity for BHP Billiton to leverage its industry leading deep-water drilling, development and operational expertise to create value in Mexico."

Jefferies International today reaffirms its buy investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 1750p (from 1700p).

Barclays Capital today (09/01/17) reaffirms its equal weight investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 1385p (from 1175p).

StockMarketWire.com
BHP Billiton has maintained full year production guidance for petroleum, iron ore and coal and said record production for the half year was achieved at Western Australia Iron Ore.

But production guidance for copper has been reduced to approximately 1.62 Mt, 2% below prior guidance, reflecting lower volumes now expected at Olympic Dam.

The group said all major projects under development were tracking to plan.

The Bass Strait Longford Gas Conditioning Plant project achieved initial gas sales in the December 2016 quarter and mechanical completion was achieved at the Escondida Water Supply project with first water expected in the March 2017 quarter.

Chief executive Andrew Mackenzie said: "We have performed well during a period of higher prices, with record iron ore volumes achieved at WAIO.

"Our simpler organisational structure has freed our assets to focus on what matters most and to deliver safer and more productive operations.

"Our consistent delivery of operating and capital productivity, and strict adherence to our capital allocation framework have positioned us to maximise shareholder value.

"In Petroleum, we will accelerate our counter-cyclical oil exploration efforts this year.

"Our successful Trion bid leaves us in a leading position to develop the newly opened Mexican acreage in the Gulf of Mexico, where we can leverage our core expertise.

"We are encouraged by recent positive drilling results at the LeClerc well in Trinidad and Tobago and the Caicos well in the Gulf of Mexico.

"After the first successful rig, our Onshore US gas hedging programme will also be expanded to secure attractive returns."

StockMarketWire.com
BHP Billiton's board has approved expenditure of US$2.2bn for its share of the development of the Mad Dog phase 2 project in the Gulf of Mexico.

BHP Billiton holds a 23.9% participating interest in the Mad Dog field. BP, the operator, holds a 60.5% participating interest, and Union Oil Company of California, an affiliate of Chevron USA Inc., holds the remaining 15.6% participating interest.

During the fourth quarter of 2016, BP sanctioned the Mad Dog Phase 2 project.

Mad Dog Phase 2, located in the Green Canyon area in the Deepwater Gulf of Mexico, is a southern and southwestern extension of the existing Mad Dog field.

The project includes a new floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day from up to 14 production wells.

Production is expected to begin in the 2022 financial year.

Haitong Securities today reaffirms its sell investment rating on BHP Billiton PLC (LON:BLT) and raised its price target to 1110p (from 1050p).

StockMarketWire.com
BHP Billiton's underlying earnings before interest, tax, depreciation and amortisation rose by 65% to US$9.9bn in the six months to the end of December.

The group posts a profit from operations of $6,057m against a loss of $7,030m last time and an attributable profit of $3,204m against a loss of $5,669m in 2015.

The interim dividend of 40 US cents per share is is up from 16.0 cents in 2015.

Chief executive Andrew Mackenzie said: "This is a strong result that follows several years of a considered and deliberate approach to improve productivity and redesign our portfolio and operating model.

"Our steadfast commitment to this plan has positioned us to take full advantage in a period of higher prices with Underlying EBITDA up 65 per cent to US$9.9 billion.

"The demerger of South32 and over US$7 billion of asset sales have shaped a portfolio that is now true to its strategy.

"Our assets are large, long-life and low-cost and provide exposure to a diverse mix of commodities with an attractive outlook.

"Our new operating model has sharpened the focus of our operations on the things that matter most: safety, volume and cost.

"A decline in unit costs at our major assets supported US$1.2 billion of productivity gains in the half, which follows the US$11 billion of annualised gains embedded over the last four years.

"Greater productivity and increased capital efficiency supported strong free cash flow generation of US$5.8 billion. Strict adherence to our capital allocation framework has maximised the use of this cash.

"We have strengthened our balance sheet, with net debt falling sharply to close the period at US$20.1 billion.

"As we further strengthen the balance sheet our ability to invest counter-cyclically will only be enhanced. Our minimum 50 per cent dividend payout policy equates to 30 US cents per share.

"In recognition of the importance of shareholder returns and confidence in the Company's performance, the Board has determined to pay an additional amount of 10 US cents per share, taking the overall interim dividend to 40 US cents per share.

"We are confident in the long-term outlook for our commodities, particularly oil, with markets expected to rebalance in the near-term, and copper where we expect a deficit to emerge in the early 2020s.

"We have the right settings in place to substantially grow shareholder value.

"The health and safety of our people and the communities in which we operate always come first.

"Health and safety are core to our values and we are committed to providing a safe workplace. BHP Billiton reported a record low Total Recordable Injury Frequency of 3.9 per million hours worked in the December 2016 half year.

"Despite the improvement in safety performance indicators, tragically one of our colleagues died at Escondida in October 2016."

BHP Billiton also announced today that the board has approved a bond repurchase plan of up to US$2.5 billion.

The plan will target 2018, 2019, 2021, 2022 and 2023 US dollar denominated notes and be funded by BHP Billiton's strong US$14 billion cash position.

Early repayment of these bonds will extend the Group's average debt maturity profile and enhance BHP Billiton's capital structure.

Macquarie today reaffirms its outperform investment rating on BHP Billiton PLC (LON:BLT) and set its price target at 1590p.

StockMarketWire.com
BHP Billiton has warned that all shareholders would lose if it replaced its dual listed company structure with a single UK incorporated company as proposed by Elliott Associates and Elliott International.

The company said the board and management regularly reviewed the DLC structure and its portfolio of assets so as to optimise long-term value for all shareholders and the company had simplified its business in recent years.

Chief executive Andrew Mackenzie said: "BHP Billiton is now a stronger, simpler company, well-positioned for future economic conditions.

"We are confident we have everything in place to increase returns and significantly grow shareholder value."

BHP Billiton said Elliott's proposals were not new to the group and it had assessed in detail many times over the past years options to unify the DLC structure and enhancements to its portfolio, including divestment of Petroleum.

A statement said: "Consistent with our capital allocation framework, we regularly consider buybacks as an alternative use for our excess cash.

"Management has been engaged in discussions with Elliott over many months on its proposals and is familiar with the views expressed by Elliott.

"The elements of Elliott's proposal have also been considered by the board.

"Against the background of the ongoing assessment by the board and management of our DLC, our portfolio of assets and the capital allocation framework, we have provided detailed feedback to Elliott on the challenges inherent in their proposals.

"The board and management have concluded that the costs and associated disadvantages of each element of Elliott's proposal would significantly outweigh the potential benefits.

"We believe that Elliott materially overstates the potential value that could be created by its proposals."

It said that unifying the DLC structure in the manner proposed by Elliott could destroy at least US$1.3 billion in value to save less than US$2.5 million a year - for no identifiable material or strategic benefit.

It also said that petroleum remained core to the group's strategy and had the potential to create significant long term value at high returns.

It added: "With our strong business plan, our view is that the Petroleum business as a part of the BHP Billiton portfolio currently offers more value to shareholders than if it were a separate entity."

It continued: "Share buybacks are a core element of our capital allocation framework.

"We have returned to shareholders approximately US$23 billion in buybacks, and approximately US$56 billion in dividends since the formation of the DLC.

"Decisions on buybacks need to consider the cyclical nature of the resources industry and returns available from other uses of cash."

StockMarketWire.com
BHP Billiton achieved record production at Western Australia Iron Ore and five Queensland Coal mines for the nine months to the end of March but it has lowered copper guidance.

The group said that following 44 days of industrial action at Escondida, copper production guidance had been reduced to between 1.33 and 1.36 Mt.

It said the commissioning of the Escondida Water Supply project and the planned ramp-up of the Los Colorados Extension project were now expected in the September 2017 quarter.

And it said that as a result of damage to third party rail infrastructure caused by Cyclone Debbie, metallurgical coal production guidance had been reduced to between 39 and 41 Mt.

Other highlights:

- Full year production guidance maintained for petroleum and energy coal. WAIO production guidance narrowed to between 268 and 272 Mt (100% basis).

- At Queensland Coal, the high-return Caval Ridge Southern Circuit latent capacity project was approved and would enable full utilisation of the 10 Mtpa wash-plant with ramp-up early in the 2019 financial year.

- In Onshore US, development activity was increasing with the approval of two additional rigs in the Haynesville, with gas prices hedged to deliver attractive rates of return.

- Divestment of non-core Onshore US acreage was progressing, with the sales process well advanced for up to 50,000 acres of the southern Hawkville. The Fayetteville field was currently under review and the group was considering all options including divestment.

- The Mad Dog Phase 2 Conventional oil development project was approved and a contract was executed with PEMEX Exploration and Production Mexico (Pemex) following the winning bid to acquire a 60% participating interest in, and operatorship of, Trion in Mexico.

- Commercial evaluation of the LeClerc gas discovery in Trinidad and Tobago was ongoing. Drilling of the Wildling appraisal well in the Gulf of Mexico was continuing, which would assist with establishing the scale of the Caicos oil discovery.

Chief executive Andrew Mackenzie said: "Everything we do at BHP Billiton is designed to create value for all of our shareholders, today and for the long term.

"We have fundamentally restructured BHP Billiton to increase returns.

"The demerger of South32 and US$7 billion of divestments has reduced the number of assets in the portfolio by over a third and our new organisational structure has removed layers of management.

"Our more focused portfolio has enabled us to lower unit costs by over 40%. And we have improved our approach to capital management which has strengthened the balance sheet and increased the discipline with which we invest and return cash to our shareholders.

But we have more to do and we are not standing still.

"A simpler portfolio allows us to improve safety and operational performance more quickly with maintenance, project and geoscience centres of excellence spreading petroleum and minerals expertise across the group.

"We have significantly reduced the capital intensity of our growth options and changed our approach in shale to improve returns and lower risks on new investments.

"Our more focused approach in exploration is delivering results with three discoveries over the last 12 months and our new technology function will unlock further value.

"This quarter we have added value to the portfolio across each of our six focus areas.

"We continued our targeted high-return investment in shale with the approval of two more rigs in the Haynesville supported by our hedging strategy.

"Plans to monetise a portion of our non-core acreage for value, such as parts of the southern Hawkville, are under way.

"In the Eagle Ford, we are increasing recoveries by testing staggered wells and larger frac jobs.

"In the Permian, we are exploring opportunities to consolidate and optimise our acreage position so that we can drill longer lateral wells to lower costs.

"We have approved the Mad Dog Phase 2 project and investment in Caval Ridge to enable full utilisation of its 10 Mtpa wash-plant."

Deutsche Bank today reaffirms its hold investment rating on BHP Billiton PLC (LON:BLT) and cut its price target to 1450p (from 1460p).

StockMarketWire.com
BHP Billiton swung into the black in the year to the end of June with an attributable profit of $5.9bn against a loss of $6.4bn last time and announced plans to sell its onshore US assets.

Underlying EBITDA rose by 64% to $20.3bn with an underlying return on capital employed of 10% (after tax) for the 2017 financial year.

Other highlights:
- Productivity gains(iv) of US$1.3 billion achieved for the period, with more than US$12 billion accumulated over the last five years. The group said it expected to deliver a further US$2 billion by the end of the 2019 financial year, with gains weighted to the second year.

- Net operating cash flow of US$16.8 billion and free cash flow of US$12.6 billion were underpinned by higher commodity prices, strong operating performance and improved capital productivity.

-Capital and exploration expenditure reduced by 32% to $5.2 billion, as it focused on capital efficient latent capacity projects and exercised flexibility in our Onshore US plans. It said capital and exploration expenditure was expected to increase to US$6.9 billion in the 2018 financial year as it focus on its suite of low-risk, high-return latent capacity projects, progress Mad Dog Phase 2 and the Spence Growth Option and ramp-up drilling activity in Onshore US.

- Capital and exploration expenditure expected to remain below US$8 billion per annum for the 2019 and 2020 financial years.

- Strengthened our balance sheet, with net debt of US$16.3 billion reflecting strong free cash flow generation and a favourable non-cash movement in net debt of US$0.6 billion.

- The Board has determined to pay a final dividend of 43 US cents per share which is covered by free cash flow generated in the current period. Total dividends of US$4.4 billion determined for the 2017 financial year include US$1.1 billion in additional amounts over and above the 50% minimum payout policy.

Chairman, Jac Nasser said: "Over the last five years, we have laid the foundations to significantly improve our return on capital and grow long-term shareholder value.

"We have reduced unit costs by over 40 per cent and achieved over US$12 billion in productivity gains. Our capital allocation framework provides flexibility at the bottom of the cycle and discipline at the top.

"We have shifted our focus to low-cost, high-return latent capacity projects which has allowed us to reduce capital expenditure by over 70 per cent.

"We strengthened our balance sheet and changed our dividend policy to make sure we have stability and flexibility to create value and reward shareholders in a more volatile environment.

"And we have reshaped our portfolio so that we focus on large, long-life, low-cost assets that will support shareholder returns for decades to come.

"At the end of this month, I leave my role as Chairman knowing these strong foundations, proven strategy and core values position BHP well for the future."

StockMarketWire.com
BHP Billiton has maintained all production and unit cost guidance for the 2018 financial year.

It said good progress had been made on its latent capacity projects, with first production from the Los Colorados extension project and the Olympic Dam southern mining area achieved in the September quarter and the Caval Ridge southern circuit project progressing to plan.

It said all major projects under development were tracking to plan.

An operation review for the quarter said: 'In Onshore US, our operated rig count increased from five to nine during the September 2017 quarter.

'Divestment of a small portion of the Hawkville acreage was completed during the quarter, with work underway to exit our remaining Onshore US assets for value.

'In Petroleum exploration, evaluation of the positive drilling results from Wildling-2 is continuing, with a sidetrack also encountering oil in multiple horizons which will assist with establishing the scale of the discovery.'

StockMarketWire.com
BHP said it expects to recognise an income tax expense of US$1.8bn following the lowering of US Federal corporate income tax rate from 35% to 21% as well as other measures introduced by the recently enacted US Tax Cuts and Jobs Act.

The company said that the tax expense will be treated as an exceptional item and would include two main components: a non-cash re-measurement of deferred taxes as a result of the reduction in the US Federal corporate income tax rate of US$898m and a non-cash impairment of foreign tax credits due to reduced forecast utilisation of US$834m.

Over the longer term, however, the company said that US tax reform will have a positive impact on US attributable profits mainly due to the lower corporate tax rate.