BHP Billiton

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BHP Billiton
Type	Public (NYSE: BHP, LSE: BLT, ASX: BHP)
Founded	Broken Hill Proprietary Company (BHP) 1895; Billiton plc 1860; Merger of BHP & Billiton 2001(creation of DLC)
Headquarters	Melbourne, Australia (main headquarters), and London, England (secondary headquarters)
Key people	Charles (Chip) Goodyear (CEO)
Industry	Mining
Products	iron, diamonds, coal, petroleum, bauxite, copper, nickel, uranium, silver
Revenue	$32.153 billion USD (2006)
Net income	$10.534 billion USD (2006)
Website	bhpbilliton.com

BHP Billiton is the world's largest mining company. It was formed through the 2001 merger of the Broken Hill Proprietary Company (BHP), an Australian company, and Billiton, a British company with extensive operations in South Africa. The two together form a dual-listed company.

[edit] Corporate structure

The Australian BHP Billiton Limited and the British BHP Billiton Plc are separate listed companies and have separate shareholder bodies, but they operate as one business with identical boards of directors and a single management structure. The Australian company owns around 60% of the operating business and the main headquarters is in Melbourne. The British holding company owns the other 40% and there is a secondary headquarters in London.

The company operates a wide variety of mining and processing operations in 25 countries, including iron, diamonds, coal, petroleum, bauxite, and copper amongst other metals and mined products, with a total workforce of over 100,000 people.

In March 2005 BHP Billiton announced a US$7.3 billion agreed bid for another mining company WMC Resources, owners of the Olympic Dam uranium mine in South Australia, along with nickel, mineral sands and fertiliser mines in other places. The takeover achieved 90% acceptance on 17 June 2005, and 100% ownership was announced on 2 August 2005, achieved through compulsory acquisition of the last 10% of the shares.

The group publishes its accounts in US Dollars. Its revenue (or turnover) for the year ending 30 June 2006 was $32.153 billion. Profit before tax was $14.166 billion and profit for the year was $10.534 billion. Both of these figures were up significantly on the previous year as BHP Billiton benefitted from a continued global escalation of commodity prices.

[edit] History

[edit] Broken Hill Proprietary Company

Former Broken Hill Proprietary Company Corporate Logo

The Broken Hill Proprietary Company or BHP was incorporated in 1885, operating the silver and lead mine at Broken Hill in western New South Wales. In 1915, the company ventured into steel manufacturing, with its operations based primarily in Newcastle, New South Wales. The company grew to become Australia's largest corporation.

The company began petroleum exploration in the 1960s with discoveries in Bass Strait, an activity which became an increasing focus as their manufacturing operations began to become less profitable with the opening of the Australian economy. They began to diversify offshore in a variety of projects. One infamous project was the Ok Tedi copper mine in Papua New Guinea, where the company was successfully sued by the indigenous inhabitants because of the environmental damage caused by the mine operations.

In 1994 BHP negotiated a licence to prospect and mine coal in Phulbari, Bangladesh. BHP later sold on the licence to Asia Energy PLC, and reaction to their proposal to strip mine the coal in a densely populated area, has led to over 200 protesters being shot, with six deaths.

The inefficiencies of what was, by global standards, a small steel operation in Newcastle finally caught up with the company and Newcastle operations slowly wound down in the 1990s, leaving Port Kembla as the only iron smelter. The 'long products' side of the steel business spun off to form OneSteel in 2000.

In 2001, BHP merged with the Billiton mining company to form BHP Billiton, the largest mining company in the world. In 2002, the 'flat products' steel business spun off to form BHP Steel. In 2003, BHP Steel distanced itself by changing its name to BlueScope Steel.

[edit] Billiton

Billiton was the name of a Dutch and later British-based mining company.

Billiton (mining co.) origins stretch back to 29 September 1860, when the articles of association were approved by a meeting of shareholders in the Groot Keizerhof hotel in The Hague, Netherlands.

Two months later, the company acquired the mineral rights to tin-rich islands of Banka and Billiton in the Indonesian archipelago, off the eastern coast of Sumatra.

Billiton's initial business forays included tin and lead smelting in The Netherlands, followed in the 1940s by bauxite mining in Indonesia and Suriname. In 1970, Royal Dutch/Shell acquired Billiton and accelerated the scope of progress of this growth. The tin and lead smelter in Arnhem, Netherlands was shut down in the 80s.

In 1997, Billiton Plc became a constituent of the FTSE 100 Index.

Throughout the 1990s and beyond, Billiton Plc experienced considerable growth. Its portfolio included aluminium smelters in South Africa and Mozambique, nickel operations in Australia and Colombia, base metals mines in South America, Canada and South Africa, coal mines in Australia, Colombia and South Africa, as well as interests in operations in Brazil, Suriname, Australia (aluminium) and South Africa (titanium minerals and steel and ferroalloys).

In 2001 Billiton Plc merged with the Broken Hill Proprietary Company (BHP) to form BHP Billiton.

[edit] BHP Billiton in Pakistan

BHP Billiton Petroleum has been active in Pakistan since 1994. After a successful exploration review in 1993-4, in 1995 a Joint Venture led by BHP Billiton Petroleum was awarded the Dadu Concession (Block 2667-1) located in the Province of Sindh. The Zamzama Gas Field was discovered in 1998. On behalf of its joint venture partners, BHP Billiton Petroleum is the operator of the Zamzama production facility. The Zamzama field represents BHP Billiton’s first commercial production in Pakistan.^{[citation needed]} Once discovered, the Zamzama field development was pursued on a fast track basis with early production commencing in March 2001 through an Extended Well Test (EWT) as a precursor to full field development. Gas Sales and Purchase Agreements (GSPA) were signed with the Government of Pakistan and its nominated buyers, Sui Southern Gas Company Ltd (SSGCL) and Sui Northern Gas Pipelines Ltd (SNGPL), were allocated a total of up to 320 million standard cubic feet of gas per day (MMcf/d) over the expected field life of 20 years. In March 2002, the Joint Venture approved Phase-1 of the Zamzama field development.^{[citation needed]}

The full field development came on line in mid 2003. The project was completed about four months ahead of schedule, and under the original US$106 million budget, of which BHP Billiton’s contribution was approximately US$40 million. This represents a highly efficient, low cost development of a major gas resource. By 2004, a steady average production of 270 MMcf/d was being delivered from the field to our customers.^{[citation needed]}

The Zamzama field is now moving to Phase-2 development, which will accelerate the commercialisation of unallocated reserves. The Phase-2 Development was formally announced in November 2005, following the signing of separate agreements between the Zamzama Joint Venture, the Government of Pakistan and SSGCL. The Phase-2 Development project, scheduled for completion in the third quarter of 2007, will commercialize an additional 685 billion cubic feet (Bcf) of wet gas reserves. This amount represents an increase in plant production capacity of 50%, to a total of 450 million standard cubic feet of gas (MMcf/d) per day. This new facility will be located at the existing Zamzama plant site and will meet and exceed all local and international safety standards.

The additional gas produced will be sold to SSGCL, under a new Gas Sales and Purchase Agreement. The total amount produced by the Phase-2 Development will have the potential to supply around 13% of Pakistan’s daily gas demand. This will help to further bridge the gap between demand and supply of natural gas in the local market, so reducing the dependence on imported fuel and helping to rejuvenate the local economy. The total cost of Phase-2 is US$120 million, of which BHP Billiton’s share is US$46.2 million.

Production of condensate associated with gas from the Zamzama field will average approximately 3,000 barrels per day. Under an agreement signed with the Government of Pakistan, the Joint Venture will also proceed with the construction of a new, 40 kilometre condensate pipeline linking the Zamzama plant to the Karachi-Multan crude oil pipeline at Bubak. This pipeline will reduce the need for transport by road, thus decreasing the safety and environmental risks associated with this.^{[citation needed]}

BHP Billiton is committed during Phase-2 development to maximise the local economic benefits of our field development activities through using Pakistani content and local labour as far as practicably possible, as was successfully done during previous phases of the Zamzama development.

The Zamzama gas field has experienced an excellent health, safety and environmental performance to date, and during Phase-2 BHP Billiton will strive to maintain and improve this performance wherever possible.

In the short period since its inception, the Community Development Programme in Dadu, Sindh province has already begun to make a tangible difference in the areas of health, education, provision of basic infrastructure, and sustainable livelihoods.^{[citation needed]}

[edit] Mines and Processing Facilities

• Australia
  • Groote Eylandt, Northern Territory
  • Kalgoorlie, Western Australia
  • Kambalda, Western Australia
  • Leinster, Western Australia
  • Mount Keith, Western Australia
  • Mount Whaleback, Western Australia
  • Worsley, Western Australia
  • Ravensthorpe, Western Australia
  • Griffin, Western Australia, 45% owned
  • North West Shelf, Western Australia, 16.67% LNG phase, 8.33% domestic gas phase
  • Port Hedland, Western Australia
  • Yandi, Western Australia
  • Ore Body 18 , Western Australia
  • Ore Body 23/25 , Western Australia
  • Jimblebar , Western Australia
  • Mining Area C , Western Australia
  • Yarrie , Western Australia
  • Cannington, Queensland
  • Broadmeadow, Queensland
  • Goonyella/Riverside, Queensland
  • Peak Downs, Queensland
  • Norwich Park, Queensland
  • Saraji, Queensland
  • Gregory/Crinum, Queensland
  • Blackwater, Queensland
  • Moura, Queensland
  • Yabulu, Queensland (Nickel Refinery)
  • Olympic Dam, South Australia
  • Hunter Valley, New South Wales
  • Appin, New South Wales
  • Elouera, New South Wales
  • West Cliff, New South Wales
  • Dendrobium, New South Wales
  • Minerva offshore, Victoria, 90% owned
  • Bass Strait, Victoria, 50% owned
  • Bell Bay, Tasmania, 60% owned
• Brazil
  • Alumar Aluminum Smelter/Refinery - Sao Luis
  • Samarco Iron Ore mine and pelletizing plant - Belo Horizonte
  • Valesul Aluminum Smelter - Santa Cruz
• Canada
  • Ekati Diamond Mine
• Chile
  • Escondida
  • Cerro Colorado
  • Spence
• Colombia
  • Cerrejón, 33.3% owned coal mine in Guajira department
  • Cerro Matoso, ferronickel mine in Córdoba department
• Indonesia
  • Wetar gold mine
• Iraq
  • Halfaya oil field
• Mozambique
  • Mozal, aluminum smelter
• Pakistan
  • Zamzama, Karachi
• Papua New Guinea
  • (until 2002) Ok Tedi Mine, copper, cause of a large-scale ecological disaster down the Ok Tedi and Fly rivers
• Peru
  • Antamina
• South Africa
  • Bayside, 100% owned aluminium smelter in Richards Bay
  • Hillside, 100% owner aluminium smelter in Richards Bay
  • Ingwe Coal, comprises several coal mines in the Witbank area in Mpumalanga
  • Manganese Metal Company, Largest Electrolytic Manganese production facility in the world situated in Nelspruit, Mpumalanga
• USA
  • New Mexico Coal Company, coal mine in New Mexico consisting of San Juan and Navajo mine

[edit] External links

• BHP Billiton website
• BHP Billiton stock quote