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BHP Billiton considers demerger of aluminium, manganese and nickel assets

SSM_NickelWest_LargeIn a statement released late Friday, BHP Billiton announced they were strongly considering a ‘demerger of a selection of assets’ as part of their ‘next phase of simplification’.

These assets include the company’s aluminium, manganese and nickel operations, which could be sold off entirely or absorbed into a newly created listed company.

Australian assests that would be affected by the potential demerger include the Groote Eylandt Mining Company in the Northern Territory, the Tasmanian Electro Metallurgical Company, all Nickel West operations in Western Australia, as well as the Boddington bauxite mine and Worsley alumina refinery, also in Western Australia.

Four key resources – iron ore, copper, coal and petroleum – will remain as the core of BHP Billiton’s operations, with potash potentially joining the list.

“We believe that a portfolio focused on our major  assets would retain the benefits of diversification, generate stronger growth in cash flow and a superior return on investment,” the company statement said.

“By increasing our focus on these four pillars, with potash as a potential fifth, we will be able to more quickly improve the productivity and performance of our largest businesses.”

The Board of BHP Billiton will reconvene this week to consider their preferred option to demerge the assets as well as other structural changes to increase the efficiency and productivity of the business.

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