MARKETS

Illawarra Coal 'too small' for BHP

BHP Billiton's Illawarra Coal assets in New South Wales will be removed from the company's stable...

Staff Reporter
Illawarra Coal 'too small' for BHP

The Illawarra Coal met coal business will be absorbed by NewCo which will be based in Perth and include other non-coal commodities.

While BHP Billiton had decided to retain its Queensland metallurgical coal operations, it sees the future of the company more in energy coal and will be holding on to its NSW thermal coal assets.

“That's why we’ve retained the very best energy coal assets in the BHP Billiton portfolio,” Mackenzie said.

“The reason that Illawarra Coal has been placed in NewCo is purely on the basis of its scale.

“We’re thinking very much that the BHP Billiton of the future will be concentrated on some of the world’s best orebodies of enormous scale and in many cases, tens of years, if not a 100-plus years of resources waiting to be developed by what we think will be increasingly an advanced manufacturing approach.

“Because of that longevity and because of that stability and because of the world-beating scale, Illawarra doesn’t really fit in that category. It fits more in the category of NewCo, but let me be clear and you can see this by some of the decisions that we’ve made about things like New Mexico Coal and Nickel West, the businesses that are going into NewCo, even though they’re a smaller scale, in their sectors and in their industries, they are top assets.”

Mackenzie said NewCo will be a top quartile company, a leader in the industry, but based around businesses which are of a smaller scale than the ones BHP Billiton will be based around.

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