BHP split spruiked amid low iron price, high concern
Environmental concerns have come into play in BHP’s decision to split itself in two.
Campaigners from residents' groups, environmentalists and even the Australian Conservation Foundation attended the latest BHP shareholder’s meeting, where the company discussed its plan to divide into two ‘core’ and ‘non-core’ companies.
BHP Billiton has indicated it will retain its core 'four pillars' of profitability - iron ore, coal, petroleum and copper – and there are rumours that potash could be a fifth.
Other commodities such as some base metals, silver and the Illawarra Coal facility would be hived off into a new company.
“The new company will be the world's largest producer of manganese ore, will own the world's largest producing silver mine and be a substantial producer of alumina, aluminium, nickel and coal,” BHP chief Andrew Mackenzie told the AGM.
BHP has been strongly criticised for its eager iron ore increase at a time of excessive supply.
The over-abundance has already driven iron ore prices down to a five-and-a-half-year low of $US70 a tonne.
But the company told shareholders that the Chinese economy was expanding at above 7 per cent this year, and though the property market is slowing, demand for the ore would remain.
The environmentalists’ questions were focused mainly on BHP Billiton's record of not factoring climate change.
Most want the world's biggest mining firm to stop digging up coal and uranium.
A spokesperson for Friends of the Earth Indonesia called on BHP to pull out of the IndoMet coal project in central Kalimantan.
Questions were asked about the environmental record of BHP Billiton's copper and uranium Olympic Dam mine in South Australia.
The poor uranium price put Olympic Dam on hiatus recently, but the company says it can use ‘heap leaching’ and expansions of underground works to increase output.
Chairman Jac Nasser told shareholders not to back the election of climate change activist and former energy industry executive Ian Dunlop to the board.
Mr Dunlop has stood for the board two years in a row, but Mr Nasser says activists should be in the executive team.
“They are going to have to be at the table because the debate is not going to go away and this company has to be at the leadership,” Former Keating government minister Chris Schacht said in favour of Mr Dunlop’s campaign.
Mr Nasser said BHP Billiton supported a worldwide price on carbon, despite the company pushing hard for the repeal of the carbon tax in Australia.
“From a public policy perspective, the most effective way to reduce emissions is a portfolio of measures, including a price on carbon,” Mr Nasser told the AGM.