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%

(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 !!