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Elliott willing to back BHP board candidate as next chairman: source – by James Regan (Reuters U.S. – May 11, 2017)

http://www.reuters.com/

SYDNEY – Elliott Management is willing to back a board member of BHP Billiton (BHP.AX) (BLT.L) to be its chairman upon the retirement of Jac Nasser despite deep reservations about its top management, a source close to the activist shareholder said on Thursday.

Elliott, founded by billionaire Paul Singer, is pushing for a $46 billion overhaul at BHP that includes spin offs, dismantling a corporate structure built on dual listings in London and Sydney and returning more money to shareholders. The Anglo-Australian miner has rejected the demands.

The activist investor blames Nasser and BHP’s top management for what it sees as bad investments by the world’s biggest mining house, particularly in U.S. shale gas, the source said. But Elliott believes “there are personalities on the board that are talented and capable”, with the “potential for someone to be selected from the existing board”, the source said.

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How to Stop CEOs Chasing Harebrained Ideas – by Chris Hughes (Bloomberg News – May 8, 2017)

https://www.bloomberg.com/

Pay out cash to shareholders and that will stop bosses wasting it on empire-building deals. This is activism-101 and it’s a big component in the dual-fronted assault on Anglo-Australian miner BHP Billiton Ltd. The snag is that, in this industry at least, siphoning out cash to the max is a counterproductive way of keeping managers in check.

Hedge fund Elliott Advisors thinks BHP will generate $31 billion of excess cash flow in the next five years. It wants $33 billion returned to shareholders in a five-year buyback program to thwart management doing bad M&A.

Sydney-based Tribeca Investment Partners is just as concerned about misguided capital spending coming after bad M&A — throwing good money after bad. It cites BHP’s foray into the U.S. onshore energy business, calculating that this has delivered a cumulative cash outflow of $26 billion and substantial impairment charges, which may not be over. It wants the operation sold and part of the proceeds returned to investors.

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Australia to Block Any Attempt to Move BHP Billiton Listing – by Perry Williams and Matthew Burgess (Bloomberg News – May 3, 2017)

https://www.bloomberg.com/

Australia would block any attempt to move BHP Billiton Ltd.’s main sharemarket listing to the U.K. as proposed by activist investor Elliott Management Corp., Treasurer Scott Morrison said.

“It is unthinkable that any Australian government could allow this original Big Australian to head offshore,” Morrison said in a statement Thursday. If BHP implemented Elliott’s proposals “it may commit a criminal offence and could be subject to civil penalties,” he said.

New York-based Elliott is meeting with BHP investors in Australia this week to outline proposals it made public last month for a corporate overhaul, higher shareholder returns and a spinoff of U.S. oil assets. BHP, which held about eight months of discussions with Elliott, has rejected the plans, saying the costs and risks outweigh any potential benefits. Elliott didn’t immediately respond to a request for comment.

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BHP Billiton’s stalker Elliott lands in Australia – by John Kehoe (Australian Financial Review – May 2, 2017)

http://www.afr.com/

Elliott Management executives have jetted to Australia to lobby BHP Billiton shareholders on the activist hedge fund’s campaign for the miner to shake up its business structure and return billions of dollars more in cash to shareholders.

Elliott’s investment director from Hong Kong, James Smith, arrived in Sydney on Monday to begin the charm offensive with Australian owners of the dual-listed miner. He will travel to BHP’s home city of Melbourne later this week to speak with shareholders about the hedge fund’s proposals, a source close to the New York headquartered firm said.

Mr Smith – an Englishman who splits his time between Hong Kong and London – was offering shareholders any clarity being sought on Elliott’s three main proposals for BHP and “listening for feedback”, the person said.

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Goldman Sacks advises ‘sell’ in BHP Billiton downgrade – by Matt Chambers (The Australian – April 26, 2017)

http://www.theaustralian.com.au/

Goldman Sachs has turned ­increasingly negative on the mining sector, downgrading BHP Billiton to “sell” and slashing its target price for Rio Tinto in the face of falling iron ore prices and what it sees as China’s potential to restrict credit.

In a report out of London yesterday, Goldman analysts led by Eugene King told investors they should sell BHP and London-­listed miners Antofagasta and Kumba.

The bank kept its neutral rating on Rio but still slashed its target price for the miner’s London shares by 20 per cent to £28. It cut its target price for BHP’s London shares by 21 per cent to £11.

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BHP Billiton, Rio Tinto at risk in Donald Trump’s steel crackdown – by John Kehoe (Australian Financil Review – April 21, 2017)

http://www.afr.com/

Australian iron ore producers BHP Billiton and Rio Tinto are at risk of becoming collateral damage in US President Donald Trump’s move to stamp out the “dumping” of cheap steel by foreign producers such as China.

President Trump ordered the Commerce Secretary to prioritise an investigation into whether steel imports into the US “threaten to impair national security”, by drawing on an obscure provision in a 1962 trade law.

The move opens up a path for the Trump administration to potentially impose tariffs on subsidised steel from a broad range of countries that Australia exports the steel-making ingredient iron ore to.

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BHP-Vale Mine Restart Hinges on Deal With Small-Town Mayor – by R.T. Watson (Bloomberg News – April 13, 2017)

https://www.bloomberg.com/

A 34-year-old mayor of a small Brazilian city stands between a giant mine and its plans to resume operations after a disastrous dam collapse.

By refusing to sign off on the use of river water, Leris Braga is delaying permit approvals that would allow the BHP Billiton Ltd.-Vale SA iron venture to rehire thousands of workers and start generating cash again for debt repayments. While that makes Braga a villain for bondholders and unemployed locals, he says he’s only trying to get the company to meet its responsibilities.

“The city of Santa Barbara isn’t going to receive one cent,” he said in an interview from his offices in the more than 300-year-old mining town. “I’m not trying to make some exchange for the document they need.”

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Big miners have trouble joining technology revolution – by Barbara Lewis and Zandi Shabalala (Reuters U.S. – April 6, 2017)

http://www.reuters.com/

SANTIAGO/LONDON – Mining companies chasing the kind of technological breakthroughs made long ago in the manufacture of cars and mobile phones have unveiled eye-catching innovations ranging from vast drills and remote-controlled trucks to second-by-second data analysis.

Behind the scenes, however, there has so far been limited progress towards a transformation the companies say is more and more vital to their survival. They are being jolted into action by volatile commodity prices and the increasing difficulty and danger of accessing remaining reserves in hot, narrow seams several kilometers below ground.

“There’a a big awakening in mining. The time is ripe for things to begin to change,” Anglo American’s head of technology development Donovan Waller said by telephone. A major obstacle is the massive upfront cost for innovation that firms such as Anglo, BHP Billiton and Rio Tinto <RIO.AX must pay off over the life of a mine in contrast to incremental upgrades common to mobile phones.

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Mining Giant BHP Wants to Banish the Boys’ Club – by David Stringer and Matthew Winkler (Bloomberg News – April 5, 2017)

https://www.bloomberg.com/

BHP Billiton Ltd., the No. 1 mining company, is taking diversity lessons from banks and law enforcement to achieve a gender-balanced workforce by 2025 and promote women into top executives.

The miner has held talks with companies including Australia & New Zealand Banking Group Ltd. on policies to boost female recruitment and retention, Laura Tyler, Melbourne-based BHP’s chief of staff and head of geoscience, said Wednesday in an interview at Bloomberg’s Sydney office.

“Banking had also been seen as a boys’ club and the high street banks, the retail banking sector, has made a huge turnaround,” said Tyler, 50, who was appointed last year to BHP’s 10-strong executive team, one of three women to hold a top leadership post. “We are talking with them about how did they change things.”

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Chile copper industry urged to adopt sweeping changes – by Barbara Lewis and Mitra Taj (Reuters U.S. – April 4, 2017)

http://www.reuters.com/

SANTIAGO – The world’s biggest copper producer Chile needs to adopt new technologies and improve labor and community relations in order to maintain its global standing, industry leaders said on Tuesday.

Chile’s copper industry is grappling with falling productivity because much of the country’s best-quality ore has already been mined, although it still accounts for 30 percent of the world’s supply of the metal.

This week Chile hosts the CRU World Copper Conference in Santiago, where the nation’s declining ore grades and a dispute at its biggest mine, Escondida, are offsetting relief that copper prices have recovered from the lows of around $4,300 a tonne a year ago. They remain below $6,000.

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Threat of Cyclone Disrupts Mining in No. 1 Met Coal Exporter – by Ben Sharples and Perry Williams (Bloomberg News – March 27, 2017)

https://www.bloomberg.com/

BHP Billiton Ltd. and Glencore Plc are halting some production in the world’s largest exporter of coal used in steel-making, as the biggest cyclone since 2011 to hit Australia’s Queensland nears the state.

South Walker Creek metallurgical coal mine operations will be suspended from the end of day shift on Monday and preparations are under way to manage increased rainfall throughout the week, BHP said in a statement. Glencore is preparing to temporarily halt output from the Collinsville and Newlands mines, the company said in a separate release.

Severe tropical cyclone Debbie is forecast to cross the coast Tuesday morning with wind gusts up to 260 kilometers (162 miles) per hour, according to the Bureau of Meteorology. Previous storms in Australia have flooded mines, swamped machinery and led to price spikes.

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Escondida workers to end strike as they opt for old contract – by Felipe Iturrieta (Reuters U.S. – March 23, 2017)

http://www.reuters.com/

ANTOFAGASTA, CHILE – The strike at Chile’s Escondida, the world’s largest copper mine, is ending after workers decided to invoke a rarely used legal provision that allows them to extend their old contract, the union said on Thursday.

Hours earlier, talks between the two sides failed, and Escondida, which is operated by BHP Billiton, said it would attempt to restart production. The workers said they would present their decision to the government on Friday and return to work on Saturday.

A swift restart of Escondida, which produced about 5 percent of the world’s copper last year, may bring some relief to the Chilean economy after a strike that has lasted 43 days. But there was little immediate effect on copper prices, with industry experts saying the two sides will still have to tackle major issues in 18 months, when talks must resume.

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BHP Billiton, striking Escondida union to meet Wednesday – by Felipe Iturrieta (Reuters U.K. – March 22, 2017)

http://uk.reuters.com/

ANTOFAGASTA, CHILE – The striking union at BHP Billiton’s (BHP.AX)(BLT.L) Escondida copper mine in Chile, the world’s largest, will meet with the company on Wednesday to resume conversations, both parties said on Tuesday night.

In a letter sent to the members of the 2,500-member Escondida union, labour leaders said they would meet with the company in the hopes of putting an end to the 41-day strike, one of the longest in the history of Chilean mining.

A company spokesman confirmed to Reuters that a meeting would take place on Wednesday, adding that the time of the meeting would be coordinated on Wednesday.

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Iron Ore Takes a Battering as Bear Market Engulfs China Futures – by Ranjeetha Pakiam (Bloomberg News – March 22, 2017)

https://www.bloomberg.com/

Iron ore is getting battered. After rounds of warnings that this year’s rally may be overdone, the raw material is in retreat as doubts gather about the strength of demand in China as steel sells off and record port stockpiles put a spotlight on rising supplies.

In China, futures on the Dalian Commodity Exchange sank into a bear market as steel in Shanghai posted the longest run of declines this year, while the SGX AsiaClear contract in Singapore fell for a fourth day. Benchmark spot prices from Metal Bulletin Ltd. extended a loss below $90 a dry metric ton to the lowest since Feb. 9.

“Steel demand in China is clearly robust, but iron ore prices remain very elevated versus fundamentals, and it’s only a matter of time before they normalize to below $60,” Ian Roper, an analyst at Macquarie Group Ltd., said in an email. “We’ve had a negative view on prices for a while but they’ve held up longer than we expected.”

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Brazil dam disaster lawsuit against BHP Billiton, Vale, suspended – by Paul Kiernan(The Australian – March 17, 2018)

http://www.theaustralian.com.au/

A Brazilian judge has suspended a nearly $US50 billion ($A65bn) lawsuit against the mining firms responsible for the 2015 Samarco tailings dam disaster, as negotiations between the companies and authorities moved forward.

The decision came as part of a ruling in which federal judge Mário de Paula Franco Júnior approved a road map toward a final agreement between prosecutors and mining companies BHP Billiton (BHP), Vale, and their joint-venture Samarco Mineração.

Brazil’s government, which brought the lawsuit, was not immediately available for comment but in the past has indicated its main concern was reaching a settlement and safely restarting the mine.

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