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| 22.04.25 00:30:00 |
Metals Billionaire Agarwal Seeks Mining Reboot Amid Debt Overhaul, Saudi Push |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
(Bloomberg) -- Indian billionaire Anil Agarwal is inching closer to finishing a long-planned breakup of his metals-to-energy conglomerate Vedanta Ltd., a move aimed at trimming the group’s $11 billion debt pile and giving greater attention to different businesses.
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While prices of aluminum, zinc, and copper have given up the heady gains of 2024, the 71-year-old tycoon is betting that a simpler structure for the sprawling group and growing demand for critical minerals will add to the allure of his companies even as the specter of a global recession looms.
The overhaul will allow the group to list each of its key businesses: aluminum, oil & gas, power, iron & steel, along with the publicly traded core company Vedanta. The demerger could provide new funding sources and increase financial transparency across the group, according to Bloomberg Intelligence analyst Mary Ellen Olson.
“The time for growth is now as demand is strong, supply is tight, and we’re positioned in the right markets,” Agarwal said in a recent video interview from his London home, adding that most of the materials mined by his company are locally consumed. The billionaire said that this makes Vedanta less vulnerable to potential disruptions in global supply chains arising from US President Donald Trump’s tariff measures.
Vedanta is also expanding the gamut of its operations by winning rights to mine critical minerals like nickel, chromium, platinum, and cobalt in India through November auctions. The global demand for these and other metals that are key to energy transition remains high and will give the group the next fillip of growth, Agarwal said.
Middle East and Africa
Agarwal has long dreamed of building an empire that spans continents and competing with the ranks of the world’s largest diversified miners, including Rio Tinto Group and BHP Group Ltd.
The group plans to spend more on overseas projects and is doubling on investments in the Middle East and Africa. Vedanta is set to invest $2 billion in copper-processing facilities in Saudi Arabia — one of the largest by a foreign firm — as the oil kingdom aspires to build its metals and mining industries significantly.
“Saudi not only has good geology but strong local consumption too,” Agarwal said, adding that “funding is never a problem for a project like that.”
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According to local government estimates, Saudi Arabia has untapped resources, including phosphate, copper, gold, and bauxite, worth as much as $2.5 trillion. About a third of its investments in the country will be funded through internal accruals, and for the rest, the group will seek project financing, Agarwal said.
The company is currently seeking funds to develop mines in Africa, too. The Konkola Copper Mines in Zambia, which it controls, has a major copper deposit and cobalt reserves, according to Vedanta.
The financing options being weighed range from a billion-dollar bond offering, “off-take financing, or sale of a minority stake to global investors, for which there is significant demand,” Agarwal said.
Cutting Debt
Vedanta shares dropped about 7% this year in Mumbai trading amid a slump in commodities prices. Other than economic growth woes, weighing on investor sentiment is the company’s $6.2 billion debt, the upshot of an acquisition spree since the turn of the century that includes stakes in Bharat Aluminium Co. and Hindustan Zinc Ltd.
Over the last two years, Agarwal has been on a drive to cut leverage and push back repayment deadlines on the group’s borrowings. The plan is to halve it over the next three years.
The group will be cautious about loading up on debt as it chases growth for each demerged unit, he said. All existing shareholders of Vedanta will receive one new share in each of the newly listed entities against each share they own in the parent company.
“There is no need for a stake sale to reduce our debt at the parent company level, and neither are there any plans to sell our stakes in any of the demerged entities,” Agarwal, who started as a scrap metal dealer and has weathered cash crunches and government friction, said. Each listed company can look at issuing fresh shares to raise funds for expansion, he said.
The so-called debt to earnings before interest, taxes, depreciation, and amortization ratio — a financial metric that measures a company’s ability to pay off its debt obligations — for Vedanta has to be brought down to 1 from the current 1.4 and maintained, according to him.
Over the years, Agarwal has been grooming his daughter Priya Agarwal Hebbar to take over from him as the head of the conglomerate. A psychology and film studies graduate from the University of Warwick, the 35-year-old is the chairwoman of Hindustan Zinc and is on the board of Vedanta.
“The group’s future is very focused on transition and critical minerals, and that is where the company will go,” Hebbar said.
--With assistance from Sanjit Das.
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| 17.04.25 08:50:06 |
The World's Biggest Miner Warns About Trade-War Risks |
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BHP's chief executive cautioned that a tariff war could slow the global economy and fracture world trade, as the world's largest mining company reported higher quarterly copper output. “Despite the limited direct impact of tariffs on BHP, the implication of slower economic growth and a fragmented trading environment could be more significant,” Chief Executive Mike Henry said Thursday.
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| 17.04.25 04:38:49 |
Iron ore miners in rocky start to year as tariff turmoil begins |
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(Bloomberg) — The world’s biggest iron ore miners face a difficult start to the year, after extreme weather impacted production and as their biggest customer China braces for a trade war.
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This week, BHP Group Ltd. (BHP), Rio Tinto Group (RIO), and Vale SA all reported drops in quarterly shipments from the year before, the result of disruptions from cyclones in Australia’s Pilbara and heavy rains in northern Brazil. Rio was worst affected, with exports slumping 9% to a six-year low.
That leaves the companies needing to play catch-up on their supply targets at a time when escalating tensions with the US could wreak havoc on the Chinese economy. The question now is whether Beijing will deliver enough stimulus to support demand for steel and its inputs, of which iron ore is key.
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“We might see a recovery phase where these companies ramp up production to compensate for the lost output,” said David Cachot, an iron ore research director at Wood Mackenzie Ltd. “Market participants are waiting to see what Beijing will do to further stimulate its economy, an additional source of concern the country did not need.”
Market Dives
Before the supply disruptions hit and trade tensions ratcheted higher, the iron ore market was contending with a surge in supply just as demand in China’s maturing economy was dwindling. Still, benchmark iron ore futures in Singapore were steady, averaging around $103 a ton over the first three months, about the same as the previous quarter.
But the market dived earlier this month, to below $95 a ton at one point, after the Trump administration announced punitive tariffs on China, and Beijing responded with its own eye-watering levies on the US.
Now, China’s economic targets are in doubt, and officials have set a clear goal of expanding domestic consumption to counter the hit to exports. That could lift demand for the steel used in vehicles, household durable goods and machinery. Iron ore traders are also probably hoping that Beijing doesn’t ignore the playbook it has used during previous downturns, which involves splurging on more steel-intensive infrastructure to generate growth.
BHP Chief Executive Officer Mike Henry warned on Thursday that slower global growth and a fragmented trading environment could have a significant impact on the company.
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“China’s ability to shift toward a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook,” he said.
—With assistance from Paul-Alain Hunt.
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| 17.04.25 03:42:00 |
BHP Cautions on Tariff War Risks While Posting Higher Copper Output |
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The world’s No. 1 miner by market value reported a 10% rise in third-quarter copper output due to higher volumes from the giant Escondida mine, and flat iron-ore output.
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| 16.04.25 22:41:55 |
BHP says tariff impact on global economy could be significant |
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By Roushni Nair and Melanie Burton
(Reuters) -BHP Group said that an escalating trade war could harm the world economy and adaptation was key to sustaining global growth, as it reported a slight decline in iron ore production in the third quarter on Thursday.
The direct impact on BHP of the tariffs unleashed by U.S. President Donald Trump this month was limited, the mining giant said.
Trump has since postponed some of the duties, but has increased levies on China even further. Tariffs apply to steel from China where BHP sells most of its major product, iron ore.
"China's ability to shift toward a consumption-led economy and for trade flows to adapt to the new environment will be key to sustaining the global outlook," CEO Mike Henry said in a statement.
The comments came as the world's biggest listed miner reported a slightly lower third-quarter iron ore output and flagged higher production of copper, which is also subject to a tariff probe by the U.S.
BHP said the dip in quarterly iron ore production was due to cyclones, while it forecast 2025 Chilean copper production in the upper half of its guidance range as part of a ramp-up at its Escondida mine.
The world's largest listed miner was forced to temporarily halt operations at Port Hedland, the world's largest iron ore export hub, after Cyclone Zelia struck Western Australia's Pilbara region in February, following earlier disruptions from Cyclone Sean in January.
Despite the bad weather, BHP hit record nine-month output from its Pilbara operations, where the South Flank and Mining Area C sites benefited from the completed ramp-up of South Flank last year and a 13% boost in mining activity.
Shares of the company rose 0.6% to A$36.2, as of 0027 GMT, largely in line with a 1% jump in the broader mining sub-index.
Copper production rose 10% to 513,200 metric tons in the quarter, bolstered by a 20% jump in volumes at the Escondida mine in Chile due to improved operational performance.
The company said it expects to meet its fiscal 2025 unit cost targets across all operations except at its BMA coal joint venture, where adverse weather and geological issues at the Broadmeadow mine are expected to increase costs.
BHP has been leveraging revenue from its iron ore business, which still generates over half its earnings, to expand copper and potash potash projects, as it positions for growth from the energy transition.
Iron ore production from the global miner's Western Australia operations eased to 67.8 million tons in the quarter ended March 31, from 68.1 million tons a year earlier, in line with Visible Alpha consensus view of 68.03 million tons.
(Reporting by Roushni Nair and Roshan Thomas in Bengaluru, Melanie Burton in Sydney; Editing by Maju Samuel, Rashmi Aich and Kate Mayberry) |
| 09.04.25 18:17:20 |
BHP Group (ASX:BHP) Sees 11% Share Price Decline Over the Past Week |
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BHP Group experienced a 11% decline in share price over the past week, a movement reflecting broader market volatility rather than isolating company-specific factors. The retirement of Ken MacKenzie as an independent Non-executive Director was a key event, but given the 12% drop in the broader market amid global tariff uncertainties, it's unlikely this board change exerted a significant effect on the company’s trajectory. Financial markets, especially industries entwined with global trade, were broadly impacted by fear of an economic slowdown, suggesting BHP's price move was part of a wider market trend.
We've spotted 2 possible red flags for BHP Group you should be aware of, and 1 of them can't be ignored.ASX:BHP Earnings Per Share Growth as at Apr 2025
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The recent changes at BHP Group, particularly the departure of Ken MacKenzie, seem to reflect broader market volatility rather than being isolated company-specific issues. In the past week, BHP's share price declined by 11%, aligning with a similar drop in the broader market. This correlates with the economic uncertainties and potential slowdowns in global trade impacting the entire sector. Over a longer period, however, BHP's shares have seen a total return of 72.81% over five years, indicating a historically strong performance despite recent fluctuations.
Relative to the industry, BHP underperformed in the past year, returning less than the Australian Metals and Mining industry, which saw a 19.8% decline. This context suggests that while BHP's long-term performance is robust, short-term challenges persist. The broader economic conditions remain a pivotal factor affecting revenue and earnings forecasts. Analysts project a revenue decline of 2.5% annually and earnings reduction, potentially reaching $10.7 billion over the next few years. However, the company's strategic expansions into copper and potash markets could balance these forecasts by adding diversity and stability to its revenue streams.
The current share price of A$38.32 is notably below the analysts' consensus price target of A$44.33, reflecting a discount to perceived fair value. This gap suggests that analysts believe BHP's long-term potential remains strong despite anticipated short-term earnings and revenue adjustments. As BHP progresses with its diversification efforts and addresses liabilities, such as those from the Samarco dam incident, the market's perception might align more closely with analyst expectations.
Story Continues
Click to explore a detailed breakdown of our findings in BHP Group's financial health report.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include ASX:BHP.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
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| 09.04.25 11:42:00 |
Freeport-McMoRan Stock Loses 25% in 3 Months: Should You Buy Now? |
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Freeport-McMoRan Inc. FCX shares have lost 25.1% in the past three months. The downside is partly due to the slump in copper prices amid uncertainties over U.S. tariffs and concerns over FCX’s high production costs.
Freeport has underperformed the Zacks Mining - Non Ferrous industry’s decline of 24.2% while outperforming the S&P 500’s fall of 13.6% in the past three months. Its peers, Southern Copper Corporation SCCO, BHP Group Limited BHP and Rio Tinto Group RIO, have lost 20.1%, 17.1% and 11.1%, respectively, over the same period. Southern Copper remains hamstrung by higher operating costs. BHP Group is facing headwinds from lower iron ore and steelmaking coal prices and higher labor costs. Weaker iron ore prices and lower shipments are weighing on Rio Tinto.
Freeport’s 3-Month Price PerformanceZacks Investment Research
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Technical indicators show that FCX has been trading below the 200-day simple moving average (SMA) since Nov. 11, 2024. The stock is currently trading below its 50-day SMA. Following a death crossover on Dec. 3, 2024, the 50-day SMA continues to read lower than the 200-day SMA, indicating a bearish trend.
FCX Stock Trades Below 50-Day SMAZacks Investment Research
Image Source: Zacks Investment Research
Given the significant pullback in Freeport’s shares, investors might be tempted to snap up the stock. But is this the right time to buy FCX? Let’s find out.
FCX’s Growth Actions to Expand Capacity & Drive Production
Freeport is well-placed with high-quality copper assets and remains focused on strong execution and advancing its organic growth opportunities. At its Cerro Verde operation in Peru, a large-scale concentrator expansion provided incremental annual production of around 600 million pounds of copper and 15 million pounds of molybdenum. It is evaluating a large-scale expansion at El Abra in Chile to define a large sulfide resource that could potentially support a major mill project similar to the large-scale concentrator at Cerro Verde. FCX is also conducting pre-feasibility studies (expected to be completed by mid-2026) in the Safford/Lone Star operations in Arizona to define a significant sulfide expansion opportunity. It also has expansion opportunities at Bagdad in Arizona to more than double the concentrator capacity of the operation.
Also, PT Freeport Indonesia (PT-FI) substantially completed the construction of the new greenfield smelter in Eastern Java during 2024, with an expected start-up in mid-2025, followed by a full ramp-up by the end of 2025. PT-FI is also developing the Kucing Liar ore body within the Grasberg district with a targeted commencement of production by 2030. Gold production also commenced at the new precious metals refinery in late 2024. Plans are in place to transition PT-FI’s existing energy source from coal to natural gas, which is expected to significantly reduce greenhouse gas emissions at Grasberg.
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FCX’s Solid Financial Health & Capital Discipline Bode Well
FCX has a strong liquidity position and generates substantial cash flows, which allow it to finance its growth projects, pay down debt and drive shareholder value. It generated operating cash flows of around $1.4 billion in the fourth quarter. The same for full-year 2024 climbed around 35% year over year to $7.2 billion. It has distributed $4.7 billion to shareholders through dividends and share purchases since June 30, 2021. Freeport ended 2024 with strong liquidity with $3.9 billion in cash and cash equivalents, $3 billion in availability under the FCX credit facility and $1.5 billion in availability under the PT FI credit facility.
At the end of 2024, Freeport had a net debt of $1.06 billion, excluding smelter projects in Indonesia. Its net debt is below its targeted range of $3-$4 billion. Freeport has a policy of distributing 50% of the available cash to shareholders and the balance to either reduce debt or invest in growth projects. FCX has no significant debt maturities until 2027.
FCX offers a dividend yield of roughly 1% at the current stock price. Its payout ratio is 20% (a ratio below 60% is a good indicator that the dividend will be sustainable), with a five-year annualized dividend growth rate of about 21.8%. Backed by strong financial health, the company's dividend is perceived to be safe and reliable.
Higher Production Costs Cloud Freeport’s Prospects
Freeport faces headwinds from higher costs. Freeport’s consolidated unit net cash costs per pound of copper for fourth-quarter 2024 were 9% higher than the prior-year quarter level. The company now estimates that consolidated unit net cash costs for the first quarter will be roughly 5% higher than the January 2025 guidance of $2.05 per pound of copper, mainly due to the timing of gold shipments, which has led to lower by-product credits. FCX is grappling with higher unit net cash costs in North America. Higher labor and mining costs are leading to increased unit costs in the region.
Retreating Copper Prices Pose Concerns for FCX
Weak demand in top consumer China due to the property crisis weighed on copper prices in 2024. The economic uncertainty in China and the absence of detailed policy plans raise concerns about future demand. The looming threat of higher U.S. tariffs under the Trump administration added further uncertainty to the market outlook.
While copper started the fourth quarter of 2024 on a strong note, prices remained volatile throughout the period. Prices of copper fell nearly 12% in the fourth quarter, closing the quarter at around $4 per pound. Copper prices surged to a new record high of $5.24 per pound in late March 2025 as buyers stocked up the commodity amid concerns that President Trump could impose tariffs on copper, leading to a disruption in the global supply chain. However, prices have nosedived more than 20% since then to around $4.10 per pound amid demand worries due to tariffs, which have threatened to cause a broader slowdown globally. Copper prices are likely to remain under pressure over the near term amid tariff uncertainties.
FCX’s FY25 Earnings Estimates Going Down
Freeport’s earnings estimates for 2025 have been going down over the past 30 days. The Zacks Consensus Estimate for 2025 has been revised lower over the same time frame.
Find the latest earnings estimates and surprises on Zacks Earnings Calendar.Zacks Investment Research
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A Look at FCX’s Valuation
FCX is currently trading at a forward price/earnings of 16.35X, a roughly 1.7% discount to the industry average of 16.64X. The FCX stock is trading at a premium to BHP Group and Rio Tinto and a modest discount to Southern Copper.
FCX’s P/E F12M Vs. Industry, SCCO, BHP & RIOZacks Investment Research
Image Source: Zacks Investment Research
How Should Investors Play the FCX Stock?
FCX is poised to gain from progress in expansion activities that will boost production capacity. Robust financial health allows FCX to invest in growth projects and drive shareholder value. Despite these positives, declining earnings estimates, retreating copper prices and high production costs warrant caution. Holding onto this Zacks Rank #3 (Hold) stock will be prudent for investors who already own it.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Freeport-McMoRan Inc. (FCX) : Free Stock Analysis Report
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Southern Copper Corporation (SCCO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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| 04.04.25 23:06:22 |
Is BHP Group Limited (BHP) the Best Copper Stock to Buy According to Wall Street Analysts? |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
We recently published a list of the 10 Best Copper Stocks to Buy According to Wall Street Analysts. In this article, we are going to take a look at where BHP Group Limited (NYSE:BHP) stands against other best copper stocks to buy according to Wall Street analysts.
The U.S. stock market has changed rapidly since the new president took control of the Oval Office. In the list of commodities that are recently surfacing as standout performers in the market, copper holds a significant place. The commodity has captured the attention of investors across the globe. According to The Wall Street Journal, by the end of March 2025, the U.S. copper future saw a 26% increase, reaching $5.02 per pound. The extraordinary growth, in addition to surpassing global prices, has set unprecedented records in the industry.
The recent tariff implementations from the U.S. administration stand among the heavy contributors to this surge. The U.S. president has recently announced a series of tariff increases, targeting the major trading partners of the U.S. Accordingly, the EU imports will be charged a 20% tariff. Chinese goods have the most impact at a 34% tariff. Similarly, a minimum 10% hike is imposed on all imports globally. Because of these measures, the average tariff rate has risen to 23%, the highest in over a century. The WSJ calls it the most significant shift in the United States’s approach to global trade.
READ ALSO: Why These Energy Stocks are Gaining This Week.
These new tariffs affect the import and export of various goods in the U.S. concerning copper. A rush has been noted to import the commodity into the U.S. before the new import tax rates take effect. This influx has resulted in a notable rise in physical deliveries, causing domestic copper prices to surge.
Income-seeking investors in the market, however, need to look past these immediate market reactions and focus on the long-term outlook for copper. Even in the long run, the value of copper remains robust. An article by CNBC noted that the world’s leading mining companies anticipate a 70% growth in the global demand for copper by 2050. The surge is expected to be driven by the adoption of copper-intensive technologies, such as renewable energy systems and electric vehicles. With constant growth in several customers shifting to renewable energy-based technologies, such an increase in demand for the commodity is inevitable.
On the other hand, the industry will likely face significant challenges in meeting this rise in demand. The mining industry, for instance, faces constraints like declining ore grades and the need for substantial capital investments to develop new projects. Owing to these factors, the growth in supply and the industry’s ability to sustain high copper prices in the future could take a hit.
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Even so, copper stocks remain attractive, and investors are increasingly looking towards adding them to their portfolios to give them a diverse touch. The immediate price surges due to trade policies and the potential for long-term demand position the copper sector as a compelling investment avenue. But with this said, investors may be wondering what the best copper stock to buy today is.
Our Methodology
We followed a few criteria when putting together our list of best copper stocks for investors. Primarily, we considered only those copper stocks with an upside potential of 10%. The criteria were placed to present our interested investors with stocks with the prospect of significant capital appreciation. A substantial rise in the price of stocks often correlates with substantial profits for investors. Hence, we ranked our list based on this upside potential. We have also considered only those stocks followed by hedge funds listed in Insider Monkey’s Q4 2024 database. It ensures the institutional interests in the stocks.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).Is BHP Group Limited (BHP) the Best Copper Stock to Buy According to Wall Street Analysts?
An aerial view of a mining operation in action, with large trucks and yellow diggers.
BHP Group Limited (NYSE:BHP)
Number of Hedge Fund Holders: 28
Upside potential: 13.12%
One of the world’s largest mining companies, BHP Group Limited (NYSE:BHP) operates from its headquarters in Melbourne, Victoria, Australia. The company is among the largest iron ore, Copper, nickel, and metallurgical coal producers. BHP serves global infrastructure, technology, and energy markets, with significant operations in Australia, the Americas, and beyond. Access to vast resources and high free cash flow allows the company to enjoy economies of scale. As one of the top-performing copper stocks, the company leverages its capital discipline to drive long-term value.
BHP Group Limited (NYSE:BHP) has seen a strong operational and financial performance since the beginning of the 2025 financial year, achieving an underlying EBITDA of $12.4 billion. The company continues to lay its focus on operational excellence and capital discipline. Significant advancements in copper projects have led to a 10% growth in copper production, contributing to a 24% growth over three years. With its Escondido Mine performing better in the first half of 2025, the company aims to elevate its positive outlook among shareholders by increasing copper production to between 1,845 and 2,045 kt.
BHP Group Limited (NYSE:BHP) is held by 28 hedge funds, as per the Insider Monkey Q4 2024 database, indicating relatively lower institutional participation than some other companies here. However, the upside potential of 13.12% points to near-term share price expansion in the future for interested investors.
Overall, BHP ranks 9th on our list of best copper stocks to buy according to Wall Street analysts. While we acknowledge the potential for BHP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than BHP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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| 02.04.25 10:55:10 |
Exclusive-BHP considered spinning off iron ore, coal divisions |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
By Melanie Burton
MELBOURNE (Reuters) - The world's biggest listed miner BHP Group considered spinning off its Australian iron ore and coal divisions as part of a medium-term growth strategy, three sources with knowledge of the matter told Reuters.
As part of a planned focus on future-facing commodities potash and copper, BHP weighed separating out the divisions, as it did with South32 in 2015, with an Australian listing most likely, two of the sources said.
The consideration was underway as BHP was pushing hard to green its business and preparing its bid for Anglo American in 2023 and 2024, they said, asking to remain anonymous because the issue was sensitive.
BHP declined to comment.
Such a move would radically reshape BHP, divorcing it from more than half a century of iron ore mining in Australia, where it was incorporated in 1885. Iron ore accounts for approximately 60% of its profits. Unbundling coal with iron ore would also remove the bulk of its carbon exposure.
BHP would, however, keep its South Australian copper assets, backing its strategy to be a leading supplier of the metal needed for the energy transition.
While BHP opted not to progress with its plans for now, the discussions are an insight into the scale of transformation the miner would consider as it recalibrates its future direction with a change in senior leadership.
Former National Australia Bank head Ross McEwan assumed his role as new BHP chair this week, following the departure of Ken MacKenzie, and the contest for a successor to CEO Mike Henry - in his fifth year in the top job - is about to begin.
Henry and CFO David Lamont, who stood down from the role in February 2024, discussed with investors the plan to separate BHP's future growth from its declining growth businesses towards the end of the decade.
Ultimately they decided it was not the right time because BHP still required the huge amounts of cash generated by the two Australian divisions to fund capital spending at its Escondida copper complex in Chile and its Jansen potash development in Canada.
BHP's view was a spin-off of iron ore and coal would generate cash and franking credits that benefit Australian tax-payers, meaning there could be considerable Australian interest in any flotation, one of the people said.
In addition, a freed-up copper and potash unit would have more scope to seek out fresh combinations, such as with Teck Resources, the people said.
The plan was complicated by BHP's failure to purchase Anglo, which would have bulked up the copper business and helped with cash flow, while the incentive to green its business has become less strong as many corporations across the world step back from environment goals.
Story Continues
That suggests any move down that path may be further off.
"The whole strategy is contingent on copper and potash being self-sustaining businesses, both of which have large capital requirements for at least the next five years," another of the people said.
(Reporting by Melanie Burton; Editing by Veronica Brown and Barbara Lewis) |
| 01.04.25 16:05:19 |
BHP Group price target lowered to $56 from $68 at Argus |
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**Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!**
Argus analyst John Eade lowered the firm’s price target on BHP Group (BHP) to $56 from $68 and keeps a Buy rating on the shares. The shares are down more than 20% off their 52-week high, with the company’s results linked to trends in iron ore, copper, and coal, as well as other commodities, the analyst tells investors in a research note. Argus says that while prices in several of these commodities are lower year-over-year, it expects them to rise in coming quarters as global economic growth resumes.
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