BHP eyes bigger fish. Matt Chambers | October 31, 2009 Article from: The Australian
BHP Billiton chief executive Marius Kloppers has put a dampener on any expectations that the mining giant might be about to start mopping up small Pilbara iron ore neighbours, saying he would focus on larger deals.
As BHP waits to complete one of its smallest transactions in recent times, the $204 million friendly takeover of United Minerals, whose Railway iron ore deposit in Western Australia's Pilbara region is near BHP's infrastructure, Mr Kloppers indicated the deal could be a one-off.
"You shouldn't expect that we do transactions of smaller companies with smaller assets, but from time to time we're going to do things like the Rio Tinto iron ore joint venture," Mr Kloppers said at the company's London annual general meeting late on Thursday night.
The $US116 billion ($127bn) WA iron ore joint venture is still being finalised by BHP and Rio before a binding agreement, targeted for December, is signed and the deal is sent to European Union regulators for approval.
Mr Kloppers appeared less certain about a timeframe for completing the mammoth iron ore deal, twice saying it would be concluded "some time in 2010".
Previously, both BHP and Rio had said the target was the middle of the year.
A Rio spokesman yesterday said Rio's target was still mid-2010.
At the meeting, BHP repeated warnings that short-term growth in demand could slow, with China's recent drive to rebuild its stockpile drawing to a close.
Mr Kloppers said the company was still considering what to do with the failed Ravensthorpe nickel operation in WA, which had been written down to zero value.
"By the end of the year we will decide whether we are going to sell it, in which case maybe we'll get a price for that, or whether we restart the asset," he said.
Separately, BHP looks set to finish building the $US1.7bn Pyrenees oil and gas project off the Pilbara coast next quarter.
Joint venture partner Apache told investors on Thursday night that the project was set for first production late in the first quarter of 2010.
BHP has said production will start some time in the first half of 2010.
At full capacity, Pyrenees is expected to produce 96,000 barrels of oil and 60 million cubic feet of gas a day.
Departing BHP chairman Don Argus said the global economic recovery would be sluggish, but the company remained confident that long-term Asian growth would remain strong.
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