Vancouver — The completion of the US$28-billion merger between London-based Billiton and Australian-based BHP (BHP-N) has created the leading diversified mining company in the world.
BHP Billiton will be the industry leader (or near-leader) in aluminium, metallurgical coal, seaborne steaming coal, copper, ferro-alloys, iron ore and titanium minerals. The group also has substantial world-wide interests in oil, gas, liquefied natural gas (LNG), nickel, diamonds and silver.
“The combination of world-class assets, outstanding cash generation and a common commitment to realize future growth opportunities provide the platform for high-value growth going forward,” says Paul Anderson, BHP-Billiton’s CEO.
The new mining giant pegs the cost of the merger at US$98 million, which will be included in its 2000-2001 financial results.
BHP Billiton is eyeing the synergies between the two companies to create its new business model, which groups its major operating assets into customer sector groups consisting of: aluminium (aluminium, alumina); base metals (copper, silver, zinc, lead); carbon steel materials (coking coal, iron ore, manganese); stainless steel materials (chrome, nickel); thermal (steaming coal); petroleum (oil, gas); and steel.
“Each customer sector will have clear financial and operating responsibilities and will be required to deliver sector-specific growth opportunities,” says Anderson. “This is a new way of approaching our business and will deliver wide-ranging benefits to both BHP Billiton and its customers.”
Using financial results for the year 2000, BHP-Billiton has pro forma revenue of US$18.6 billion and attributable profits of US$2 billion. Cash flow, including dividends from joint ventures, tops US$4.6 billion. The company’s assets are worth US$11.9 billion.
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