BHP Billiton (ASX: BHP)

BHP Billiton (ASX: BHP) A diversified mining company

1851

FOUNDED

LARGE

SIZE

MINING + MATERIALS

Industry

Product / Service

  • BHP is among the world’s largest producers of major commodities including iron ore, coal, copper and uranium

  • BHP has substantial interests in conventional and unconventional oil, gas and coal

  • BHP is involved in the following four stages of producing commodities:

    • Discovering resources through exploration

    • Evaluation, planning and development of mine sites

    • Extracting, processing and transporting commodities

    • Managing product distribution through logistics chains and selling products through direct supply agreements and on major exchanges

  • BHP operates four business units:

    • Petroleum + Potash – oil and gas operations located in six countries.  Oil and gas is used for transportation, fuel oils for heating and electricity generation, asphalt and road oil and feedstocks used to make chemicals plastics and synthetics.  Potash is mainly used in fertilizer
    • Copper - includes copper, uranium and zinc.  Copper is used in coins, gun metals, electrical equipment and wiring.  Zinc is used in alloys such as brass, nickel, silver and aluminium solder.  Uranium is issued in nuclear rods in nuclear reactors
    • Iron Ore – about 98% of world iron ore production is used to make iron in the form of steel.  Iron and Steel are used widely in the construction of roads, railways, infrastructure, appliances and buildings.  A steel skeleton supports most large modern structures such as stadiums, skyscrapers, bridges and airports
    • Coal – primarily used as an energy source, either for heat or electricity

 

History

  • BHP Billiton was formed as a result of a merger of two companies, Broken Hill Proprietary and Billiton

  • Broken Hill Proprietary was incorporated in 1885 and began in a silver, lead and zinc mine in Broken Hill, on the New South Wales/South Australia border

  • Billiton began in 1851 as a tin mine on Billiton island, Indonesia

  • The two companies grew independently throughout the 20th century and merged in 2001

Customers

  • BHP’s customers include commodity processors, such as smelters (iron ore, aluminium) and diamond cutters.  An example is Asian steel mills that process iron ore into steel

Operations

  • The company is headquartered in Melbourne

  • The company’s principal operations are in Australia, but also include Chile, US, UK, Peru, Colombia, Brazil

Own and operate large, long-life, low cost, expandable, upstream assets diversified by commodity, geography and market

Profitability Table

Year Revenue ($m) % change Profit ($m) % change
FY 2009 50,211 (15.6) 12,160 (49.6)
FY 2010 52,798 5.2 19,719 62.2
FY 2011 57,088 8.1 28,462 44.3
FY 2012 56,642 (0.8) 22,602 (20.6)
FY 2013 53,860 (4.9) 21,977 (2.8)
FY 2014 56,762 5.4 22,649 3.1
FY 2015 44,636 (21.4) 8,670 (61.7)
FY 2016 30,912 (30.7) -6,235 L

Fun Facts

  • Andrew Mackenzie’s remuneration in FY 2016 was US$2.2m

  • BHP is one of the oldest listed companies on the ASX, with an official listing date of 13th August 1885

  • BHP has a workforce of over 65,000 employees and contractors

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