Thursday , August 17 2017
Home / News / BHP copper output slumps, eyes shale sell off

BHP copper output slumps, eyes shale sell off

BHP copper output slumps, eyes shale sell off

Mining giant BHP Billiton reported a slump in copper output Wednesday as strike action at the world’s largest mine for the metal dented production, while flagging the sale of some US shale assets.

The world’s biggest miner said copper production slid 44 percent to 227,000 tonnes in the first quarter of 2017 compared to the same period last year, revising down its annual forecast to between 1.33 million and 1.36 million tonnes.

It blamed a 43-day strike at the Escondida mine in Chile where BHP has a 57.5 percent stake. Workers ended their lengthy stand-off last month, triggering a law that pushed back pay negotiations by 18 months.

Earlier this month, Rio Tinto also reported a plunge in copper output due to the strike in Chile, where it has a 30 percent interest.

BHP said in a quarterly report it had “initiated the divestment of non-core acreage” in its shale fields in the US, just weeks after rejecting an activist hedge fund proposal to restructure the business and spin off its US petroleum arm.

The sale of 50,000 acres (20,234 hectares) in Hawkville was “well advanced”, the miner said, adding that it was “considering all options” including the sell-down of its Fayetteville gas assets.

“Everything we do at BHP Billiton is designed to create value for all of our shareholders, today and for the long term,” chief executive Andrew Mackenzie said.

BHP knocked back a call this month from New York-based Elliott Advisors, a significant shareholder, to merge the miner’s British and Australian entities into a single Australian-headquartered and Australian tax resident listed company.

Elliott, run by billionaire Paul Singer, also wants BHP to spin-off its petroleum business into a separate entity listed on the New York Stock Exchange and return more cash to shareholders through buy-backs.

The mining giant in February reported a dramatic rebound in half-yearly profits to US$3.2 billion on the back of surging commodity prices — including iron ore — and improved productivity.

On Tuesday it reported continued record production from its Australian iron ore and coal mines for the nine months to March.

–AFP