IGO to record impairment against nickel assets in strategy shift
IGO has been undertaking a strategic review in an attempt to revaluate its resources.
South32 chief executive Graham Kerr.
BHP Billiton (ASX:BHP) shareholders approved Wednesday one of the mining sector’s most important restructurings, as they voted in favour of splitting some of the company’s assets into another firm, South32.
Speaking at the meeting in Perth, South32 chief executive Graham Kerr said he did not want to make the mistake of prioritizing acquisitions, even though the company is ready and equipped to buy new assets.
The man in charge of the new company highlighted acquisitions will not be the main focus of South32’s first few months.
“We are not overleveraged,” Kerr said. “We don’t have that problem that a lot of our peers have in the industry We will look, we will be aware of M&A opportunities but we will only pursue those if we have the mandate from our shareholders.”
Based in Perth and named after the 32nd parallel south line of latitude that links its business centres in Perth and Johannesburg, South32 will produce alumina, aluminum, coal, manganese, nickel, silver, lead and zinc from mines and smelters in Australia, Brazil, Colombia, South Africa and Mozambique.
Those assets would have generated combined revenue of US$8.3bn last year as a standalone company.
*Note: Excludes Nickel West, which remains with the portfolio as non-core, and New Mexico Coal and several smaller petroleum assets, which are under review. (Source: BHP’s presentation to investors. May 6, 2015)
The creation of South32 unwinds most of the merger between Australia’s BHP and UK-listed Billiton in 2001, a deal that placed the combined mining company as the leader in the industry during the China-led commodities boom.
South32, Australia’s third-biggest mining company will start trading on the Australian Securities Exchange on May 18 on a deferred settlement basis with normal trading to begin on June 2.
