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April 1, 2014

BHP Billiton to sell non-core assets portfolio

Australia-based BHP Billiton has indirectly confirmed it will divest some of the company's non-core aluminium, thermal coal, manganese and nickel assets to simplify its portfolio of assets.

Australia-based BHP Billiton has indirectly confirmed it will divest some of the company’s non-core aluminium, thermal coal, manganese and nickel assets to simplify its portfolio.

The value of the de-merging of non-core assets is around $18.5bn, according to BHP.

The group has sold various petroleum, copper, coal, mineral sands, uranium and diamonds assets in Australia, the US, Canada, South Africa and the UK in the last two years.

"A key factor of the asset disposal is that, with the exception of manganese…they all are under pressure to turn a dollar."

BHP sold its Yeelirrie uranium deposit in Western Australia to Cameco for about $430m, and its diamond business to Dominion Diamond for around $553m.

The diversification will help the company focus on major assets such as iron ore, copper, coal and petroleum, which are expected to generate stronger growth in free cashflow and a higher return on investment.

A key factor of the asset disposal is that, with the exception of manganese in Australia and South Africa, they all are under pressure to turn a dollar due to weak prices, most notably aluminium and nickel.

The company plans to add potash to its remaining assets, to improve the productivity and performance of its largest businesses.

The firm will study the next phase of simplification, including structural options, and will only pursue those that maximise the value for its shareholders.

Energy

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