| For one commodity play? 'Let it be BHP' |  | Digg It! |
| Wednesday, 25 July 2007 | |
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“With interest rates rising around the world and commodity prices moving higher, the commodity currencies were the big beneficiaries. Indeed, the commodity move has been gearing up, one by one. “Some markets will be stronger than others at times, but they are all in a major rise with demand being the driving force, which makes this mega move even more powerful. “China and Asia in general have been booming for many years now. The slowing economy in the U.S. caused concern that the fiery growth in Asia would cool down. It certainly could with time, but so far there are no signs of this at all. 2007 may end up seeing China’s economy expand at the fastest pace in 12 years. “Fear of slowing economies has been putting pressure on the super strong base metals, but demand for raw materials remains high and the surging rise in BHP Billiton is a sure sign of that. We have been recommending BHP and it’s long been one of our favorites because it’s the best way to stay invested in the whole raw materials sector. “Billiton is the world’s largest mining organization. It’s a leader in steel making, it’s the world’s third largest producer of copper and nickel, second largest exporter of coal, fourth largest producer of uranium… and the list goes on. So if you have to buy one natural resource company, let it be BHP.” |
“The hot Asian markets are keeping demand strong for commodities,” say Mary Anne and Pamela Aden in BHP Billiton Announces Record June Quarter Production
By Nathan Becker
24 Jul 2007 at 06:27 PM GMT-04:00
St. LOUIS (ResourceInvestor.com) -- Mining giant BHP Billiton [NYSE:BHP] kept with its trend of exceeding expectations as it announced today that it has posted record annual production for eight resources, including copper, nickel and iron ore.
Analysts say the encouraging results could lead to the company’s largest yearly profit.
A ramp up in production from the Melbourne-based miner’s Escondida Sulphide Leach and Spence projects in
It looks like CEO Charles Goodyear will leave the company on a positive note as he retires in October shortly after the company’s annual earnings report will be released Aug. 22. Marius Kloppers, current group president of non-ferrous materials, will take over for Goodyear on October 1.
An average of 18 analyst estimates compiled by the Bloomberg News shows that BHP should post a record profit of about $14.3 billion for the year ended June 30 – up from last year’s record $10.45 billion. Analysts at Thomson Financial have projected BHP’s profit to land at about $14.4 billion.
In this year’s June quarter, the company produced 342,100 tonnes of copper, the metal that contributes the most to BHP’s earnings. BHP said its copper sales of 274,280 tonnes should boost earnings by $108 million.
“Strong performances at all operations” drove record annual nickel production, according to BHP’s statement. All nickel operations also closed in on near-record production as well as sales.
The company’s iron ore production set annual production and sales volume records because of a bump in production from the Western Australia Iron
Metallurgical coal production was up 21% from the June quarter last year as the BHP’s Hay Point Coal terminal in Australia made up for the negative impact of ongoing port constraints at third party facilities on Australia’s east coast.
BHP also hit production records for natural gas, alumina, aluminium and manganese ore, and the company saw increased annual production for energy coal, diamonds and manganese alloy.
One area in which the company could not produce, however, was uranium. BHP’s report cites variability of ore sources, lower grade and ongoing maintenance at the Olympic Dam project in
Petroleum production remained steady with the year ended June 2006, according to the report, despite natural field decline and no major start-ups in the period. Increased seasonal Australian gas demand and improved facility performance kept production from falling, the report said.
Rumours of BHP’s position as a frontrunner to purchase Alcoa [NYSE:AA], which recently lost out to Rio Tinto [NYSE:RTP; LSE:RIO] in an effort to acquire Canadian aluminum miner Alcan [NYSE:AL; TSX:AL], have cooled, and there are whispers that BHP is instead looking to acquire Freeport McMoRan [NYSE:FCX]. A BHP representative did not immediately return phone calls seeking comment.
