BHP offloads mine for $632m
Sale of the Pinto Valley mine and associated rail asset has yielded $US650 million ($632 million) for BHP, which is trying to free up cash by offloading as many non-core assets as possible.
Pinto Valley's new owner - once the deal is completed later this year - will be Capstone Mining, a Canadian miner with interests in North and South America.
BHP's new copper president, Peter Beaven said the sale was part of a year-long divestment campaign that had already raised $US5 billion. This includes BHP's diamond assets in Canada, a stake in a mineral sands project in South Africa and a uranium deposit in Western Australia.
More assets are expected to be sold in the months ahead, with BHP's nickel, manganese and aluminium holdings considered likely candidates, as well as some of its peripheral oil and gas assets, such as the Zamzama operation in Pakistan.
Rio Tinto is also on a divestment campaign and is trying to sell diamond and coal assets.
Bank of America Merrill Lynch analyst Peter O'Connor believes such divestments are the best hope for BHP shareholders of getting a special dividend this year.
Expectations have risen over the past week after Woodside Petroleum said its shareholders would get a special dividend. But BHP is caught between falling revenues and big capital spending plans on its US petroleum division, leading the Credit Suisse analyst team to suggest it was unlikely to be able to match Woodside's special dividend.
About $US31 billion (or 41 per cent) of BHP's capital spending over the next five years will be spent on its petroleum business, and Credit Suisse estimated $US23 billion of that would be spent on the US shale assets bought in 2011.
Frequently Asked Questions about this Article…
BHP announced the sale of the Pinto Valley copper mine and an associated rail asset in Arizona for US$650 million (about $632 million). The deal is expected to be completed later this year.
The buyer is Capstone Mining, a Canadian miner with operations and interests across North and South America, which will take ownership once the transaction is finalised.
BHP is offloading non-core assets to free up cash as part of a year-long divestment campaign. According to the company, the program has already raised around US$5 billion from sales including the Pinto Valley deal.
The divestments mentioned include BHP's diamond assets in Canada, a stake in a mineral sands project in South Africa, and a uranium deposit in Western Australia. More sales are expected in the months ahead.
The article identifies BHP's nickel, manganese and aluminium holdings as likely candidates for sale, along with some peripheral oil and gas assets such as the Zamzama operation in Pakistan.
A Bank of America Merrill Lynch analyst, Peter O'Connor, thinks these divestments are the best hope for BHP shareholders to receive a special dividend. However, analysts at Credit Suisse say BHP may be unlikely to match Woodside’s special dividend because of falling revenues and large planned capital spending.
About US$31 billion, or roughly 41% of BHP's capital spending over the next five years, is earmarked for its petroleum business. Credit Suisse estimates around US$23 billion of that will be spent on the US shale assets BHP bought in 2011, which could limit cash available for shareholder payouts.
Yes. The article notes that Rio Tinto is also on a divestment campaign and is looking to sell diamond and coal assets, indicating a broader trend among large miners to trim non-core holdings.
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