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Everything about Billiton totally explained

» "Billiton" redirects here. For the Indonesian island formerly known as Billiton, see Belitung.

BHP Billiton is the world's largest primary resources company. It was created in 2001 by the merger of Australia's Broken Hill Proprietary Company (BHP) and the UK's Billiton, which had a South African background. The result is a dual-listed company.

Corporate structure

The Australian BHP Billiton Limited and the British BHP Billiton Plc list separately with separate shareholder bodies but they operate as one business with identical boards of directors and a single management structure. The headquarters are in Melbourne, Australia. The company has other key offices in London, Perth, Johannesburg, Santiago, Singapore, Shanghai, Houston and The Hague.
   The company's shares trade on the following exchanges:
  • BHP Billiton Limited
    • Australia
    • Germany (Frankfurt)
    • Switzerland (Zurich)
    • US
  • BHP Billiton plc
    • UK
    • South Africa
    • US
The company operates a wide variety of mining and processing operations in 25 countries, employing approximately 38,000 people.
   The company has nine primary operational units:
  • Iron ore
  • Manganese
  • Petroleum
  • Aluminium
  • Base Metals (primary products include copper, lead, zinc and uranium)
  • Metallurgical Coal
  • Thermal Coal
  • Stainless Steel Materials (nickel and cobalt)
  • Diamonds & Speciality Products (diamonds and titanium minerals) The group publishes its accounts in US Dollars. Its revenue (or turnover) for the year ending 30 June 2006 was $32.153 billion. Profit before tax was $14.166 billion and profit for the year was $10.534 billion. Both of these figures were up significantly on the previous year as BHP Billiton benefited from a continued global escalation of commodity prices and higher production levels.

    History

    Broken Hill Proprietary Company

    The Broken Hill Proprietary Company or BHP was incorporated in 1885, operating the silver and lead mine at Broken Hill in western New South Wales. In 1915, the company ventured into steel manufacturing, with its operations based primarily in Newcastle, New South Wales. The company grew to become Australia's largest corporation. It is also known by the nickname "the Big Australian".
       The company began petroleum exploration in the 1960s with discoveries in Bass Strait, an activity which became an increasing focus.
       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 damage caused by the mine operations. BHP had better success with the giant Escondida copper mine in Chile (57.5% 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.
       In 2001, BHP merged with the Billiton mining company to form BHP Billiton, the largest mining company in the world. In 2002, the 'flat products' steel business was spun off to form BHP Steel. In 2003, BHP Steel changed its name to BlueScope Steel.

    Billiton

    Billiton was the name of a Dutch and later British-based mining company.
       Billiton (mining co.) 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, Netherlands.
       Two months later, the company acquired the mineral rights to tin-rich islands of Banka and Billiton in the Indonesian archipelago, off the eastern coast of Sumatra.
       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, Royal Dutch/Shell acquired Billiton and accelerated the scope of progress of this growth. The tin and lead smelter in Arnhem, Netherlands was shut down in the 1980s. In 1991 Gencoracquired the mining division of Billiton, excluding the downstream metal division. Billiton was being divested from Gencor in 1997.
       In 1997, Billiton Plc became a constituent of the FTSE 100 Index.
       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).
       In 2001 Billiton Plc merged with the Broken Hill Proprietary Company (BHP) to form BHP Billiton.

    BHP Billiton Mergers and Acquisitions

    In March 2005, BHP Billiton announced a US$7.3 billion agreed bid for another mining company WMC Resources, owners of the Olympic Dam uranium mine in South Australia, nickel operations in Western Australia and Queensland, and a fertiliser plant also in Queensland. The takeover achieved 90% acceptance on 17 June 2005, and 100% ownership was announced on 2 August 2005, achieved through compulsory acquisition of the last 10% of the shares.
       On November 8, 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 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 if 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 since 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 February 6, 2008.
       On May 14, 2008, BHP Billiton shares rose to a record high of AU $48.90 after speculation than Chinese mining firm Chinalco was considering purchasing a large stake. BHP representatives refused to comment.

    Management

    After the merger between BHP and Billiton in 2001, Brian Gilbertson of Billiton was appointed CEO. In 2003, after just six months at the helm, he abruptly stepped down, citing irreconcilable differences with the boards.
       Upon Gilbertson's resignation, Chip Goodyear was announced as the new CEO. He continued in that role until his retirement on September 30 2007. Marius Kloppers is his immediate successor CEO.

    Angola

    Inclement weather caused a BHP Billiton helicopter to crash in Angola on November 16, 2007, killing the helicopter's five passengers, including BHP's chief operation officer in Angola, David Hopgood. The helicopter went down about 80 km/50 miles from Alto Cuilo Camp, a diamond mining site the employees wanted to visit. BHP Billiton responded by suspending operations in the country. The company is investigating the incident.

    Mines and processing facilities

  • Algeria
    • Ohanet gas field
    • ROD gas field
  • Angola
    • Diamond exploration
  • Australia
  • Brazil
    • Alumar aluminum smelter/refinery - Sao Luis
    • Samarco iron ore mine and pelletizing plant - Belo Horizonte
  • Canada
  • Chile
  • Colombia
  • Guinea
    • Sangaredi 33.3% interest in bauxite mine and alumina refinery (currently in feasibility study)
  • Indonesia
  • Iraq
  • Mozambique
    • Mozal, aluminum smelter
  • New Zealand
  • Pakistan
  • Papua New Guinea
    • (until 2002) Ok Tedi Mine, copper, cause of a large-scale ecological disaster down the Ok Tedi and Fly rivers
  • Peru
  • South Africa
  • Trinidad & Tobago
  • United Kingdom
  • USA

    Further Information

    Get more info on 'Billiton'.


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