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Wednesday, August 19, 2020 - 1:27:42 PM
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Mining News Pro - BHP has announced it plans to sell a number of coal assets as the company looks to simplify its portfolio.
In an analyst and briefing speech for BHP’s 2020 financial year results, the company’s chief executive Mike Henry said the company was looking to step away from BHP Mitsui Coal, which owns and operates metallurgical coal mines in Queensland’s Bowen Basin, including the South Walker Creek mine and Poitrel mine.
BHP also plans to exit its New South Wales Energy Coal and Cerrejon thermal coal assets.
According to Henry, these assets have not provided sufficient profits.
“Collectively these assets have further upside potential to be unlocked through productivity and growth, but are unlikely to compete for capital within BHP,” Henry said.
“While it is still relatively early we are considering all options, including a potential demerger of these assets, or trade sale opportunities for value.”
Despite BHP stepping away from BMC, the company will still give focus to its remaining metallurgical coal assets due to its use in increasing blast furnace productivity and cutting down emissions.
“Exiting these assets would simplify BHP’s coal portfolio, with the retained assets largely hard coking coal, long-life, low-cost, well positioned for decarbonisation upside and competitive for capital within BHP,” he said.
“The strong cash flows from these two businesses – metallurgical coal and iron ore – will support attractive returns for shareholders and growth in future-facing commodities.”
BHP plans to grow the value of its metallurgical coal and iron ore businesses by “relentlessly lowering costs, and driving capital efficiency,” Henry stated.
“We will adopt a balanced approach to the portfolio,” he said.
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