BHP Billiton: Hedge or hog?

The world’s biggest miner is no cyclical pig. Gaurav Sodhi argues it makes the perfect hedge for China sceptics.

The popular image of BHP Billiton is as a cyclical business that makes decent money in the good years but loses it by the bucket load in the bad years. In truth, BHP has not made an operating loss for more than 20 years. That period includes major global upheavals: the Asian financial crisis, Russian and Argentine debt defaults, September 11 and, of course, the global financial crisis.

Yet despite the multitude of crises, BHP has remained resilient, generating operating profits in the face of each calamity.

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