Billiton reports strong half

Rising metal prices helped Billiton, the world’s third-largest aluminum producer, post a profit of US$241 million for the first half of the major’s fiscal year. Profits for the 6-month period ended Dec. 31, 1999, jumped 46% jump from the US$165 million earned a year earlier.

The London-based mining giant earned US11.6 per share during the period, up from US7.8 in the first half of the previous fiscal year. The company benefited from investments made during 1998, when metals prices were significantly lower, and its operating profits surged 12% to US$378 million from US$337 million in the corresponding period of 1998.

“The strength we have seen in recent months in the prices of the LME-traded metals, coupled with signs of recovery in at least some of the bulk commodities, suggests that the worst of the commodity cycle is now behind us,” says Billiton CEO Brian Gilbertson. “I would expect to see a further increase in our operating earnings in the second half of this financial year.”

On the back of strong aluminum prices, Billiton announced plans to complete prefeasibility studies at its Hillside aluminum smelter in South Africa and at its 47%-owned Mozal smelter in Mozambique. The company hopes to up its production at Hillside to 125,000 tons per year and double output at Mozal, which is slated to hit full production of 250,000 tons per year by 2001. According to Billiton, the studies will last about six months and, if they are economically positive, construction will follow over an 18-month period.

In response to the strong nickel market, Billiton has started construction work on a second production line at its 30%-owned Cerro Matoso ferronickel plant in Colombia. Completion is slated for the end of March 2001. Nickel prices jumped 75% during calendar 1999.

Billiton ended the 6-month period with US$447 million in cash and a US$1.15-billion revolving credit facility.