AFRICA — Billiton on acquisition trail

Since acquiring the mining assets of Royal Dutch/Shell in 1994, Billiton has prospered and grown into one of the world’s largest mining companies. The success of Gencor’s international arm now has some analysts speculating that Billiton may be interested in acquiring new opportunities in North and South America.

Billiton Chairman Brian Gilbertson has publicly stated that the company is particularly interested in new opportunities in iron ore and copper. The company has made no secret of its interest in the proposed privatization of Venezuela’s state-owned aluminum company, and it also intends to monitor the privatization of mining assets in neighboring Brazil.

In recent months, Billiton has been mentioned as one of several companies watching developments at Inco (N-T). The Canadian nickel producer is currently developing its Voisey’s Bay nickel project in Labrador and, with nickel prices at depressed levels, it has not gone unoticed that Inco’s market capitalization is now roughly in the same ballpark as the price it paid for the nickel-copper-cobalt project.

Analysts speculate that Billiton and others are viewing Inco as a potential takeover target. Billiton has made no public comment in the matter, though Gilbertson has stated that the company is “keen” to expand its portfolio further. Billiton already is the fourth- or fifth-largest nickel producer in the world.

Billiton recently raised US$1.25 billion, some of which is expected to be used to pursue new opportunities. The company recently got a provisional green light to construct an aluminum smelter in Mozambique. It also plans to build a zinc smelter somewhere in South Africa, or possibly in Namibia.