When BHP Billiton announced that it would spin off a collection of mines into a new business to be listed on the ASX, some said it was throwing out the rubbish. Others suggested the new company would be the dregs of BHP – parts of the business the miner couldn’t sell. The consensus agrees that, because the new business will house mines that aren’t good enough for BHP, it won't be good enough to invest in.
The consensus is wrong. It’s true that the new company, should it be approved, won't share the quality of its parent. That doesn’t mean it isn’t worth a look.