“We are only going to pursue the right opportunities at the right time and the right price.” “We will not pursue things here just for the sake of creating a new business or just for the sake of growth.
BHP MAFIA TROUBLE NEWS BREAK FULL
“We have spent five or six years now building up trust and a track record of being very disciplined when it comes to the application of the capital allocation framework, and you saw that in its full glory around Noront,” he said.
The mining industry earned a bad reputation for paying too much for acquisitions a decade ago, and Mr Henry said BHP’s decision to walk away from a bidding war with Andrew Forrest for Noront was proof that the company would be disciplined on spending. Vale has repeatedly floated the idea of divesting its nickel and copper assets over the past decade, although it appears to have been motivated as much by a desire to garner more attention on the value of the assets, rather than a genuine intent to sell them. The focus on Eastern Canada has prompted speculation that BHP would be keen to acquire the nickel and copper assets of Brazilian miner Vale. Mr Lamont said the speed at which BHP believed its debt levels could return to the target range would be one of the considerations when assessing a spending item that would push it beyond the top end of the range.īHP is particularly keen on the nickel sulphide geology that occurs in Eastern Canada and has sought to strike some small partnerships in that region, including last year’s failed bid for Noront Resources. “For the right acquisition we would be prepared to move outside that range, but obviously that is dependent on finding the right acquisition,” he said.
The expectation that BHP will be a smaller company with fewer growth options after this year’s petroleum demerger drove a lowering of BHP’s net debt target to a maximum of $US15 billion ($21 billion) on Tuesday and has also fuelled market expectations that the company will need to make a large acquisition in coming years.īHP’s net debt stood at just $US6.1 billion on December 31, meaning it has enormous financial firepower to spend on growth within the new debt target range, and chief financial officer David Lamont said the target range would not be rigidly enforced. BHP is willing to exceed its new debt target for the right acquisition, but chief executive Mike Henry says he will not be pressured into a big deal to fill the void left by the imminent demerger of the petroleum division.īHP revenues could be substantially lower in the middle of this decade if, as expected, iron ore and coking coal prices retreat from historically high levels before revenues from BHP’s new potash business start to emerge around 2028.
0 kommentar(er)
