|Traded as||LSE: BLT NYSE: BHP NYSE: BBL ASX: BHP JSE: BIL|
|Industry||Metals and Mining|
|Founded||Broken Hill Proprietary Company Limited (BHP) 1885;
Billiton plc 1860;
Merger of BHP & Billiton 2001 (creation of a DLC)
(BHP Billiton Limited, BHP Billiton Plc (London); global BHP Billiton Group
|Key people||Andrew Mackenzie (CEO)
Jacques Nasser (Chairman)
|Products||Iron ore, diamonds, coal, manganese, gold, petroleum, aluminium, copper, natural gas, nickel, uranium & silver|
|Revenue||US$ 72.226 billion (2012)|
|Operating income||US$ 23.752 billion (2012)|
|Profit||US$ 15.532 billion (2012)|
BHP Billiton is an Anglo Australian multinational mining and petroleum company headquartered in Melbourne, Australia, and with a major management office in London, United Kingdom. It is the world's largest mining company measured by 2011 revenues. As of February 2011, BHP Billiton was also the world's third-largest company measured by market capitalization.
BHP Billiton was created in 2001 through the merger of the Australian Broken Hill Proprietary Company Limited (BHP) and the Anglo–Dutch Billiton plc. The result is a dual-listed company. The Australia-registered BHP Billiton Limited, which has equal financial share in the company, has a primary listing on the Australian Securities Exchange and is the largest company in Australia measured by market capitalisation. The UK-registered BHP Billiton Plc has a primary listing on the London Stock Exchange and is a constituent of the FTSE 100 Index. It had a market capitalisation of approximately £67.6 billion as of 23 September 2013, the ninth-largest of any company listed on the London Stock Exchange.
Billiton was a mining company whose origins stretch back to 29 September 1860, when the articles of association were approved by a meeting of shareholders in the Groot Keizerhof hotel in The Hague, the Netherlands.
Billiton's initial business forays included tin and lead smelting in the Netherlands, followed in the 1940s by bauxite mining in Indonesia and Suriname. In 1970, Shell acquired Billiton and accelerated the scope of progress of this growth. The tin and lead smelter in Arnhem, the Netherlands, was shut down in the 1990s.
In 1994, South Africa's Gencor Ltd. acquired the mining division of Billiton excluding the downstream metal division. Billiton was divested from Gencor in 1997. Bhp Billiton remains one of the largest companies listed on the Johannesburg Stock Exchange (JSE, sharecode bil) in South Africa by market capitalisation.
Throughout the 1990s and beyond, Billiton Plc experienced considerable growth. Its portfolio included aluminium smelters in South Africa and Mozambique, nickel operations in Australia and Colombia, base metals mines in South America, Canada and South Africa, coal mines in Australia, Colombia and South Africa, as well as interests in operations in Brazil, Suriname, Australia (aluminium) and South Africa (titanium minerals and steel and ferroalloys).
Broken Hill Proprietary Company
The Broken Hill Proprietary Company Limited, BHP Co. Ltd., BHP, also known by the nickname "the Big Australian", was incorporated in 1885, operating the silver and lead mine at Broken Hill in western New South Wales, Australia. The Broken Hill group floated on 10 August 1885. The first consignment of Broken Hill ore (48 tons, 5 cwt, 3grs) was smelted at the Intercolonial Smelting and Refining Company's works at Spotswood, Melbourne.
The resulting 35,605 ounces of silver raised a lot of interest when exhibited at the City of Melbourne Bank in Collins St. Some sceptics asserted the promoters were merely using silver from somewhere else, to ramp up the shares...Another shareholder, the dominating W.R. Wilson had had to lend [William Jamieson, General Manager] a new suit so he could take the first prospectus, printed at Silverton near Broken Hill on 20 June 1885, to Adelaide to start the float process.
- The geographic Broken Hill for which the town was named, was discovered and named by Charles Sturt, and created much interest among prospectors, but nothing of note was discovered until Charles Rasp, boundary rider for the encompassing Mount Gipps Station, pegged out a 40-acre claim with contractors David James and James Poole, then with half-a-dozen backers (the Syndicate of Seven) including station manager George McCulloch (nephew of Victorian premier William McCulloch) formed the Broken Hill Company to stake out the whole Hill. In the ensuing months of fruitless search and with costs mounting, several of the original seven parted with their shares, and at the eve of the Company's great success there were nine shareholders, including Rasp, McCulloch, William Jamieson (who bought up shares from several of the founders), Philip Charley, David James, James Poole, Bowes Kelly and W. R. Wilson.
In 1915, the company ventured into steel manufacturing, with its operations based primarily in Newcastle, New South Wales. The decision to move from mining ore at Broken Hill to open a steelworks at Newcastle was due to the technical limitations in recovering value from mining the 'lower-lying sulphide ores'. The discovery of Iron Knob and Iron Monarch near the western shore of the Spencer Gulf in South Australia combined with the development by the BHP metallurgist A. D. Carmichael of a technique for 'separating zinc sulphides from the accompanying earth and rock' led BHP 'to implement the startlingly simple and cheap process for liberating vast amounts of valuable metals out of sulphide ores, including huge heaps of tailings and slimes up to' 40 ft (12 m) high.
BHP began to diversify offshore in a variety of projects. One project was the Ok Tedi copper mine in Papua New Guinea, where the company was successfully sued by the indigenous inhabitants because of the environmental degradation caused by the mine operations. BHP had better success with the giant Escondida copper mine in Chile (57.5 percent owned) and the Ekati Diamond Mine in northern Canada.
The inefficiencies of what was, by global standards, a small steel operation in Newcastle finally caught up with the company and the Newcastle operations were closed in 1999. The 'long products' side of the steel business was spun off to form OneSteel in 2000.
2001 to 2011
In 2001, BHP merged with the Billiton mining company to form BHP Billiton. In 2002, the 'flat products' steel business was spun off to form BHP Steel. In 2003, BHP Steel changed its name to BlueScope Steel.
In March 2005, BHP Billiton announced a US$7.3 billion agreed bid for another mining company, WMC Resources, owners of the Olympic Dam copper, gold and uranium mine in South Australia, nickel operations in Western Australia and Queensland, and a fertiliser plant also in Queensland. The takeover achieved 90 percent acceptance on 17 June 2005, and 100 percent ownership was announced on 2 August 2005, achieved through compulsory acquisition of the last 10 percent of the shares.
On 8 November 2007, BHP Billiton announced it was seeking to purchase rival mining group Rio Tinto Group in an all-share deal. The initial offer of 3.4 shares of BHP Billiton stock for each share of Rio Tinto was rejected by the board of Rio Tinto for "significantly undervaluing" the company. It was unknown at the time whether BHP Billiton would attempt to purchase Rio Tinto through some form of hostile takeover; however, CEO Marius Kloppers met with many of Rio's shareholders following the announcement and reiterated that the offer for Rio was "compelling" and that BHP Billiton is very "patient". A formal hostile bid of 3.4 BHP Billiton shares for each Rio Tinto share was announced on 6 February 2008. The bid was withdrawn on 25 November 2008 due to a global recession.
On 14 May 2008, BHP Billiton shares rose to a record high of A$48.90 after speculation that Chinese mining firm Chinalco was considering purchasing a large stake. BHP representatives had no comment.
On 25 November 2008, Billiton announced that it would drop its A$66 billion takeover of rival Rio Tinto Group saying that the "risks to shareholder value" would "increase" to "an unacceptable level" due to the global financial crisis.
On 21 January 2009, the company announced that in response to the global financial crisis the BHP Billiton Ravensthorpe Nickel Project in Western Australia would cease operations, with a resultant discontinuation of shipments of ore from Ravensthorpe to the Yabulu nickel plant in Queensland Australia. Subsequently the Yabulu refinery was sold to Queensland billionaire Mr Clive Palmer. Additionally, the Pinto Valley mine in the United States was closed. In total, 6,000 employees were laid off, including those laid off with the scaling back at some other projects.
On 9 December 2009, BHP sold its Ravensthorpe Nickel Mine, which cost A$2.4 billion to build, to Vancouver-based First Quantum Minerals for US$340 million. First Quantum was one of three bidders for the mine and actually produced the lowest offer. The Canadian company plans to have the mine back in production in mid-2011. Ravensthorpe cost BHP US$3.6 billion in writedowns when it was shut in January 2009 after less than a year of production.
In August 2010, BHP Billiton made a hostile takeover bid worth US$40 billion for the Potash Corporation of Saskatchewan. The bid came after BHP's first bid, made on 17 August, was rejected as being undervalued. This acquisition marked a major strategic move by BHP outside hard commodities and commenced the diversification of its business away from resources with high exposure to carbon price risk (coal, petroleum, iron ore). The takeover bid was opposed by the Government of Saskatchewan under Premier Brad Wall. On 3 November, Canadian Industry Minister Tony Clement announced the preliminary rejection of the deal under the Investment Canada Act, giving BHP Billiton 30 days to refine their deal before a final decision was made.
On 14 November 2010, the company announced that it was dropping its offer for Potash Corporation of Saskatchewan.
2011 to present
On 22 February 2011 BHP announced that it paid $4.75 billion in cash to Chesapeake Energy Corp. for all of the company's Fayetteville shale assets which include 487,000 acres (1,971 km2) of mineral rights leases and 420 miles (680 km) of pipeline located in north central Arkansas in the United States. The wells on the mineral leases are currently producing about 415 million cubic feet of natural gas per day. BHP plans to spend $800 million to $1 billion a year over 10 years to develop the field and triple production.
On 14 July 2011, BHP Billiton announced that it would acquire Petrohawk Energy of the United States for approximately $12.1 billion in cash, considerably expanding its shale natural gas resources.
In August 2012, BHP Billiton announced that it was shelving its US$20 billion (£12 billion) Olympic Dam copper and uranium mine expansion project in South Australia, as a result of falling commodity prices and slowing global economic growth. The company simultaneously announced a freeze on approving any major new expansion projects.
Days after announcing the Olympic Dam pull-out, BHP announced that it was selling its Yeelirrie Uranium Project to Canadian Cameco for a fee of around $430 million. The sale was part of a broader move to step away from resource expansion in Australia.
The Australian BHP Billiton Limited and the British BHP Billiton Plc are separately listed with separate shareholder bodies, but they operate as one business with identical boards of directors and a single management structure. The headquarters of BHP Billiton Limited, and the global headquarters of the combined BHP Billiton Group, are located in Melbourne, Australia. BHP Billiton Plc is located in London, United Kingdom. BHP Billiton also has corporate centres in Johannesburg, South Africa and Houston, USA, and offices in Perth, Santiago, Singapore, Shanghai and The Hague.
The company's shares trade on the following exchanges:
Following the merger between BHP and Billiton in 2002, Brian Gilbertson of Billiton was appointed as the corporation's chief executive officer (CEO). In 2003, after just six months in the CEO role, Gilbertson abruptly stepped down and cited irreconcilable differences with the boards as the reason for his resignation.
Upon Gilbertson's departure, Chip Goodyear was announced as the new CEO and he continued in that role until his retirement on 30 September 2007. Marius Kloppers was Goodyear's successor and, following the end of Kloppers' tenure on 20 February 2013, Andrew Mackenzie, the Chief Executive of Non-Ferrous, will assume the role of CEO. In response to investor demands and a diminishing mining boom, BHP Billiton announced in mid-April 2013 that Mackenzie's remuneration package will be 25 per cent less that that of Kloppers—Barry Fitzgerald, writing for the Australian newspaper, stated that the decision represented the introduction of a "new era of austerity" for the corporation.
BHP Billiton operates a wide variety of mining and processing operations in 25 countries, employing approximately 41,000 people.
The company has ten primary operational units which it refers to as Customer Sector Groups (CSGs):
- Base metals
- Diamonds and Specialty Products
- Energy Coal
- Iron ore
- Metallurgical Coal
- Minerals Exploration
- Stainless Steel Materials
In 2011 BHP Billiton, produced more than 600,000 tonnes of aluminium as well as over 2 million tonnes of alumina. Their iron ore production increased to 134.4 million tonnes per annum, which makes it the 3rd largest producer of iron ore. BHP Billiton produced 500,000 tonnes of copper in 2011, a decrease to the year before, as well as 70,000 tonnes of nickel.
In addition it has subsidiary logistics companies BHP Transport and Logistics Pty Ltd (incorporating the former BHP Shipping) and BHPB Freight Pty Ltd.
Mines and facilities
- Ohanet gas field
- ROD gas field
- Diamond exploration
- Appin, New South Wales
- Area C mine, Western Australia
- Bass Strait, Victoria (50 percent owned)
- Broadmeadow, Queensland
- Cannington Mine, Queensland
- Dendrobium, New South Wales
- Eastern Ridge, Western Australia
- Elouera, New South Wales
- Goonyella Riverside, Queensland
- Gregory/Crinum, Queensland
- Griffin, Western Australia (45 percent owned)
- Groote Eylandt, Northern Territory
- Hunter Region, New South Wales
- Jimblebar, Western Australia
- Kalgoorlie, Western Australia
- Kambalda, Western Australia
- Kwinana, Western Australia
- Leinster, Western Australia
- Minerva offshore, Victoria (90 percent owned)
- Mount Keith, Western Australia
- Mount Whaleback, Western Australia
- Nickel West operations
- North West Shelf Venture, Western Australia (16.67 percent LNG phase, 8.33 percent domestic gas phase)
- Norwich Park, Queensland
- Olympic Dam, South Australia
- Orebodies 18, 23 and 25 mine, Western Australia
- Peak Downs, Queensland
- Port Hedland, Western Australia
- Saraji, Queensland
- Temco George Town, Tasmania
- West Cliff, New South Wales
- Worsley, Western Australia
- Yandi mine, Western Australia
- Yarrie mine, Western Australia
- Sangaredi bauxite mine and alumina refinery (currently in feasibility study) (33.3 percent interest)
- Wetar gold mine
- Mozal, aluminium smelter
- Zamzama gas field
- South Africa
- Bayside, 100 percent owned aluminium smelter in Richards Bay
- Hillside, 100 percent owned aluminium smelter in Richards Bay
- BECSA (BHP Billiton Energy Coal South Africa), comprises several coal mines in the Witbank/Emalahleni area in Mpumalanga
- Metalloys manganese production facility in Meyerton, Gauteng
- HMM (Hotazel Manganese Mines) including Mamatwan and Wessels mines near Hotazel in the Northern Cape
- Trinidad & Tobago
- Angostura oil and gas field
- United Kingdom
- Liverpool Bay oil and gas field
- United States
- Permian Shale, Texas
- Eagle Ford Shale, Texas
- Haynesville Shale, Louisiana
- Fayetteville Shale, Arkansas, shale natural gas fields, including the associated midstream pipeline system
- New Mexico Coal Company, coal mine in New Mexico consisting of San Juan and Navajo mines
- Southwest Copper, Arizona
- San Manuel, Arizona
- Pinto Valley, Arizona
- Gulf of Mexico, oil and gas field (Shenzi & Neptune fields)
- Resolution Copper, near Superior, Arizona
- Papua New Guinea (until 2002)
- The United Nations Environment Programme has noted that BHP’s Ok Tedi mine site’s "uncontrolled discharge of 70 million tonnes of waste rock and mine tailings annually has spread more than 10 km (6.2 mi) down the Ok Tedi and Fly rivers, raising river beds and causing flooding, sediment deposition, forest damage, and a serious decline in the area's biodiversity." The resulting devastation caused by the mining of Ok Tedi has included the loss of fish, a vital food source for the local community; loss of forest and crops due to flooding and; the loss of "areas of deep spiritual value for villagers are now submerged in mine tailings."
BHP Billiton and BHP Petroleum provided A$3.4 million to sponsor the Australian leg of the global, 10-year study 'Census of Marine Life', conducting a count of the species occupying the world's oceans, and in particular the Great Barrier Reef.
In June 2011 BHP Billiton agreed to donate A$10 million to fund the establishment of two energy institutes at University College London – the Energy Policy Institute, based in Adelaide, and the Institute for Sustainable Resources, based in London.
Inclement weather caused a BHP Billiton helicopter to crash in Angola on 16 November 2007, killing the helicopter's five passengers. The dead were: BHP Billiton Angola Chief Operating Officer David Hopgood, Australian; Angola Technical Services Operations Manager Kevin Ayre, British; Wild Dog Helicopters pilot Kottie Breedt, South African; Guy Sommerfield of MMC, British; and Louwrens Prinsloo of Prinsloo Drilling, Namibian. The helicopter went down approximately 80 km / 50 miles from Alto Cuilo exploration facility in north eastern Angola. BHP Billiton responded by suspending operations in the country.
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- Official website
- London Stock Exchange BHP Billiton PLC (BLT) stock quote
- Australian Securities Exchange BHP Billiton Limited (BHP) stock quote
- BHP Billiton Products & Services, Competitors and Contact Details