BHP

BHP Billiton, BHP Billiton, is the world's largest mining company. The main headquarters is located in Melbourne ( Australia ) with additional headquarters in London ( UK ). The main activities are the extraction of oil and gas (including shale ), copper, iron ore and coal. The main facilities are located in Australia, as well as in the USA , Chile , Peru and other countries.

Formed in 2001 by the merger of the Australian Broken Hill Proprietary Company (BHP), founded in 1885, and the Anglo-South African Billiton , founded in the Netherlands in 1860 .

History

Billiton

Although Billiton was considered an Anglo-South African company at the time of its merger, its early history is linked to the Netherlands. In 1851, large reserves of tin were found on the island of Belitung (Malay archipelago, now part of Indonesia); in 1860, the company NV Billiton Maatschappij (Billiton is one of the forms of the name of this island) was founded in The Hague to develop them. In 1935, the company expanded its scope of activity by starting to mine bauxite on another Indonesian island, Bintan. Six years later, she also began mining bauxite in Dutch Guiana (modern name - Suriname, South America).

On July 25, 1970, Billiton was absorbed by another large Dutch company, Royal Dutch Shell. In 1994, most of Billiton was bought by the South African mining company Gencor, and three years later it was spun off into a separate company headquartered in London, with its shares listed on the London Stock Exchange valued at $1 billion . The value of the company's assets at that time was about $7 billion, it was one of the world's leading producers of aluminum, ferrochrome , nickel and coal , 65% of its assets were located in South Africa, the remaining assets were in Mozambique , Australia, Colombia , Brazil , Suriname and North America.

Broken Hill Proprietary Company

The name of the company Broken Hill Proprietary Company (BHP Co. Ltd.) is also associated with geography. Broken Hill is a small town in the Australian state of New South Wales , near which significant reserves of silver and lead were discovered. In 1885, Charles Rasp founded the Broken Hill Proprietary Company Ltd to develop the deposit. The company's headquarters were soon moved to Melbourne. At the same time, Broken Hill continued to remain a backward village, neglect of the miners and falling prices for silver and lead led to a mine strike in 1892. The four-month standoff between BHP Co. and the Amalgamated Miners' Association ended in victory for the former ^[9] .

The value of the deposit increased significantly with the development of flotation (a method of ore enrichment) in 1902 , which made it possible to increase the amount of silver obtained from the ore, as well as to obtain a significant amount of zinc. In 1906, a major fire occurred at the Broken Hill mine, killing several miners.

The depletion of the Broken Hill mine and regular miners' strikes forced the company to expand its operations. In 1915, development of an iron ore deposit began on the shores of Spencer Gulf (South Australia), and a steel mill was opened in the city of Newcastle in the neighboring state of New South Wales. In 1922, there was a workers' strike at this plant, which lasted for 9 months and practically paralyzed the life of the city. In 1937, a steelworks was opened in Whyalla, and soon, in the run-up to the Second World War, BHP Co. began building ships in this city, as well as aircraft in Melbourne. Since the 1920s, BHP Co. began to acquire its own merchant fleet.

In 1935 BHP Co. absorbed its only Australian competitor, the Australian Iron & Steel Company. The company's opponents considered this a monopolization and demanded an official investigation into this matter, which, however, did not prevent the deal. In 1940 the Broken Hill mine was closed, but despite this the company retained its name. In 1957, in Shortland (a suburb of Newcastle, Australia), BHP Co. opened a research laboratory that was primarily focused on the application of computational fluid dynamics to metallurgical processes. In 1963 BHP Co. Together with Esso Standard (the Australian division of Standard Oil), it began oil production in Bass Strait. Significant reserves of natural gas were also discovered there. Around the same time, the company began developing a manganese deposit near the Gulf of Carpentaria.

In 1968, rich deposits of iron ore were discovered near Mount Newman and the city of the same name. To operate them, a railway was built, connecting Newman with Australia's largest cargo port, the city of Port Hedland . The development of the field was undertaken by BHP Co. in association with American Metal Climax, Inc. and CSR. In 1985, BHP Co. bought out the partners' shares.

In the early 1970s, BHP Co. was a monopoly in Australia in the mining and steel industries. However, it was not controlled in any way by the Australian government, and its workers received only a minimum wage. The situation began to change with Labour's coming to power in 1972. The company was deprived of subsidies for oil production and tax breaks and was obliged to coordinate its pricing policy with the government. In the mid-1970s, the company began producing natural gas near the north coast of Western Australia in partnership with Shell; in the early 1980s, gas production began in the Timor Sea.

In 1982, an Australian entrepreneur of South African origin, Robert Holmes à Court , having bought a 30% stake in BHP Co., attempted to take over the company. Although the attempt was unsuccessful and BHP Co. managed to buy back these shares, this fact, as well as the fall in steel prices, forced the company to reorganize. The company was formed into three divisions: steel, minerals and oil. Steel production was significantly modernized, and relations with plant workers were revised.  

In the early 1980s, BHP Co. received a license to develop one of the world's largest copper and gold deposits in Papua New Guinea , production at the Ok Tedi Mine began in 1984. In 2002, BHP Billiton transferred management of the mine to Ok Tedi Mining Limited, which was nationalized in 2013. BHP was accused of causing extensive environmental damage by open-pit mining of this deposit.

In 1984, BHP Co. bought the Utah International mining division from General Electric , becoming the largest coal exporter in the Australian state of Queensland, as well as acquiring deposits in the USA, Brazil, Canada and Chile, including the Chilean Escondida copper mine - the third largest in the world by mining. The history of the Escondida mine began in 1979, when Utah International, together with Getty Oil began geological exploration in the Atacama Desert. In 1981, large copper reserves were confirmed. In 1984, the field became the property of BHP, and development of the field began in 1990.

Between 1986 and 1992 BHP Co. significantly expanded its oil production division by acquiring Monsanto Oil in 1986, Hamilton Oil in 1987, Gulf Energy Development in 1988, and Pacific Resources Inc. in 1989. By 1992, BHP Co. entered the top ten leading oil producing companies in the world. By 1996, the share of the company's foreign assets reached 40%, and these assets accounted for up to 70% of the company's revenue. In 1999-2000, the company carried out a large-scale reorganization, selling part of its non-core or unprofitable assets (worth about $4 billion), dismissing about 20 thousand employees and closing the plant in Newcastle.

After the merger

Preliminary agreement for the merger of the Australian company BHP Co. with the Anglo-South African Billiton was reached in March 2001, the final step towards unification was approval by the European Commission on 15 June 2001.

In 2005, Australian mining company WMC Resources an operator of copper, gold and uranium mines in southern Australia and the owner of a fertilizer plant in Queensland, was purchased for $7.3 billion. The company's main asset was the Olympic Dam mine, the world's fourth largest copper deposit and the largest uranium deposit. A joint venture between WMC and BP Minerals was created in 1979 to explore and develop this deposit. Copper mining has been carried out at the mine since 1988, and since 1989 silver and gold have also been mined there. In 1993, WMC bought out BP Minerals' stake . After becoming the owner of the mine in 2005, BHP Billiton planned to invest up to $30 billion to increase production by moving to open-pit mining, but abandoned this plan in 2012 due to falling global copper prices and criticism from environmentalists.

At the beginning of June 2006, the Norilsk Nickel concern announced that it had entered into an agreement with BHP Billiton, according to which the companies would work together to “identify” deposits that are attractive for exploration and development in Russia. For each project, it was planned to create joint companies in which 50% plus 1 share would belong to Norilsk Nickel, and the remaining share would belong to BHP Billiton. As of 2015, joint activities were limited to geological exploration in both Russia and Australia.

In 2007-2008, there were negotiations about BHP Billiton's takeover of its competitor, Rio Tinto, but due to the outbreak of the global financial crisis, the deal did not take place. After 2010, BHP Billiton acquired several US companies involved in the development of shale gas and oil. In particular, at the beginning of 2011, part of the assets of Chesapeake Energy (a field in Arkansas) was purchased for $4.8 billion, and in July of the same year, the Texas company Petrohawk, which owned three large deposits in Texas and Louisiana.

In 2015, part of the assets of BHP Co. was spun off into an independent company South32.

In July 2018, a subsidiary of Petrohawk Energy Corporation, which produces oil and gas in the United States (shale fields in Texas, Louisiana and Arkansas), was sold to the British company British Petroleum for $10.5 billion; it accounted for about half of BHP Billiton's hydrocarbon production (125 million barrels of oil equivalent).

In June 2020, BHP Billiton Nickel West Pty bought the Australian deposits Honeymoon Well, Albion Downs North and Jericho from Norilsk Nickel.

Owners and management

Legally, BHP Billiton consists of two companies - the Australian BHP Billiton Limited and the British BHP Billiton Plc - which are independently listed on stock exchanges. The largest holder of voting shares of BHP Billiton Limited is BlackRock Group (about 5%), and the largest holder of voting shares of BHP Billiton Plc is BlackRock, Inc. (10%) and Aberdeen Asset Managers Limited (6%). The largest holder of common shares of an Australian company is HSBC Australia Nominees Pty Limited (19%) and JP Morgan Nominees Australia Limited (13.8%), and the largest holder of a British company is PLC Nominees (Proprietary) Limited (14.5%).

Jacques Nasser - Chairman of the Board since March 2010, Director since 2006. Born December 12, 1947 in Amion ( Lebanon ). Graduated from the Royal Melbourne University of Technology. From 1968 to 2001 he worked at Ford, including from 1999 to 2001 as president and CEO; resigned in 2001 due to the Ford Explorer safety scandal (at least 174 people died due to defective Firestone tires). He is also a director of 21st Century Fox (since June 2013), a director of Koç Holding A.Ş. (since March 2015) and member of the international board of Allianz Aktiengesellschaft (since February 2001).

Andrew Mackenzie (eng.  Andrew Mackenzie) - chief executive officer (CEO) since May 10, 2013. Born on December 20, 1956 in Kirkintilloch ( Scotland ). He graduated from the University of St Andrews and the University of Bristol. From 1983 to 2004 he worked at British Petroleum , from 2004 to 2007 at Rio Tinto. At BHP Billiton since November 2007. Member of the Royal Society of London since May 2014.

Activities

The company consists of the following divisions:

• Oil - the division's headquarters is located in Houston (USA), includes oil and gas production in the Gulf of Mexico, Australia, and the islands of Trinidad and Tobago . The division also operates a potash deposit in Saskatchewan, Canada, which is expected to begin development after 2020. Turnover in 2018 amounted to $5.408 billion , the volume of oil and gas produced was 120 MMbeo . Oil and gas production in the Gulf of Mexico in 2015 produced 36.6 MMboe, with the largest Australian fields in Bass Strait (31.2 MMboe) and on the northwestern shelf (28.7 MMboe).
• Copper - The division is headquartered in Santiago, Chile and includes the mining and processing of copper, uranium, zinc, gold and silver. Turnover in 2018 amounted to $13.29 billion, copper production amounted to 1.8 million tons. Main productions:
  • Escondida (Chile) - has two quarries and three processing plants, employs 12 thousand people, produced 979 thousand tons of copper in 2016, owned by BHP Billiton 57.5%;
  • Pampa Norte (Chile) - includes two deposits, Spence and Cerro Colorado, which produced 251 thousand tons of copper;
  • Antamina (Peru) - BHP Billiton owns 33.75% of the deposit, which produced 146 thousand tons of copper and 66,400 tons of zinc concentrate;
  • Olympic Dam (Australia) - includes a mine and processing plant, producing 203 thousand tons of copper cathode, 3,100 tons of uranium oxide, 104,800 ounces of pure gold and 724,000 ounces of pure silver.
• Iron Ore - The division's headquarters is located in Perth (Australia), with major production located in Western Australia, as well as Brazil (Samarco), Guinea and Liberia. Turnover in 2018 amounted to $14.81 billion, 238 million tons of ore were produced.
• Coal - Headquartered in Brisbane (Australia), the division includes coal mining in Australia, Colombia, New Mexico (USA) and Indonesia. Turnover in 2018 amounted to $8.89 billion, production volume was 43 million tons of metallurgical coal and 29 million tons of thermal coal.
• Other assets of the group include Nickel West (nickel production , 91 thousand tons in 2018) and the production of potash salts. The aluminum and manganese production facilities that were previously included here were separated into a separate company, South32. Turnover in 2018 amounted to $1.3 billion.

Social responsibility

CSRHub, which rates companies on corporate social responsibility, gave BHP Billiton a score of 61 out of 100, including 58 for community relations, 62 for environment, 64 for human resources and 60 for on the quality of leadership.

Criticism

In May 2015, the company paid a $25 million fine following an investigation by the US Securities and Exchange Commission. The investigation concerned the visit of a number of government officials, including from countries where BHP Billiton operates, to the Beijing Olympic Games in 2008 at the company's expense. Despite the fine, no corruption charges were brought.

In the company's activities, the greatest dissatisfaction among environmentalists is IndoMet's coal mining project on the Indonesian island of Kalimantan. IndoMet is a joint project between BHP Billiton and the Indonesian company Adaro Energy, it involves the construction of several mines over an area of ​​350,000  hectares in the island's tropical forests, as well as the construction of a railway that will connect the mines to the coast; metallurgical coal reserves are estimated at 1.2 billion tons. The area where the work is planned feeds 14 of the island’s 20 rivers, and the forests are home to 6% of endangered animal species. Despite protests, the Haju mine, the first of the project, began operations in September 2015.

According to calculations by the magazine Climatic Change , two-thirds of the amount of carbon dioxide released into the atmosphere as a result of human activity since the mid-19th century was produced by 90 companies, among which BHP Billiton took 19th place, producing 7.24 billion over a century and a half of its activity. tons of CO ₂ (or 0.5% of the total).