bhp to invest in coking coal

BHP Billiton eyes big ticket acquisitions to put its balance sheet to work, report says

Reuters

Mining giant BHP Billiton plans to use part of a cash surplus of around $US18 billion to fund a round of acquisitions, possibly involving some large rivals, according to the Wall Street Journal.

The newspaper quoted BHP's chief commercial officer Alberto Calderon as saying "four or five opportunities" had been identified, all involving assets in the mining and energy sectors.

Around $US10 billion had been set aside for development of existing projects and initiating new ones in the current fiscal year, which ends in June 2010, Mr Calderon said. A separate undisclosed amount had been set aside for acquisitions.

"We have no pressure to do it. But I can tell you we have done a lot of work," Mr Calderon was quoted as saying in a report from London.

The Anglo-Australian mining giant is the world's largest mining company and last year withdrew from a bid to acquire one of its largest rivals, fellow Anglo-Australian miner Rio Tinto , after the two failed to agree on price.

Mr Calderon said the company wanted to put its "balance sheet to work" amid globally low prices due to the economic downturn.

The company was seeking to expand in specific areas, naming them as iron ore, copper, coking coal, petroleum and potash, he said.


--------------------------------------------------------

Wouldn't surprise me if BHP had a look over RIV.

* RIV have huge, high quality untapped coking coal reserves;
* BHP get a competing resource to VALE's neighbouring tenement;
* RIV are going to need some deep pockets and large scale mining experience to open up 946;

Whilst every second post on HC refers to someone hoping that their investment gets taken out by a major, I actually do not see this as a god thing, at present. I think RIV holds a lot more potential value for current shareholders, by being independent.

Can't deny the synergies for BHP, though.

Cheers, Skip