BHP piles struggling assets into new division
BHP Billiton has shifted most of the company’s struggling assets into a single division, in what the company says is a sign of its long-term faith in commodities such as aluminium and nickel.
The move will blend two divisions into one named “Aluminium and Nickel”, and will affect Australian assets such as Nickel West and the Worsley alumina refinery.
The division will also include Cerro Matoso in Colombia, Mozal in Mozambique, Hillside and Bayside in South Africa and two non-operated joint ventures, Alumar and Mineracao Rio do Norte in Brazil.
Nickel and aluminium sectors have been struggling under low prices and challenging trading environments for some time, with BHP chief executive Marius Kloppers declaring earlier this year that aluminium in particular was undergoing a ‘’structural shift” that was not cyclical.
Many observers had expected a divestment in those sectors could be imminent, but BHP group executive Alberto Calderon said – on the contrary – the change was reflecting BHP’s long term faith in those commodities.
“Despite the current challenges, BHP Billiton is committed to Aluminium and Nickel as commodities that may benefit from later phases of economic development in the emerging economies,’’ he said.
“However, individually, Aluminium and Nickel are small divisions relative to the other businesses in BHP Billiton. The combination of these into a single business unit will provide appropriate scale within the BHP Billiton portfolio, as well as simplifying the functional structure of the business to assist in our efforts to make it a more efficient and competitive organisation.”
The new division will be based in Perth and lead by Glenn Kellow.