BHP Billiton is the world’s largest mining company, by market revenues; and the world’s third-largest company, by market capitalisation. Currently operating an eclectic range of mining and processing operations in 25 countries, it employs a massive 41,000 people. In 2011 alone, the Melbourne-headquartered company produced more than 600,000 tons of aluminium, over 2,000,000 tons of alumina, 80,600,000 tons of iron ore, 500,000 tons of copper and 70,000 tons of nickel.
At just eleven years of age, these statistics are simply remarkable — perhaps cofounding — and it is difficult not to imagine how such a young company overhauled the dozen mining empires that had for years existed before it. As usual, such successes are scarcely meteoric, and this is the story of Billiton. The foundation, strong!
BHP Billiton was formed in 2001 from the fusion of Australian Broken Hill Proprietary Company Limited (BHP) and Anglo-Dutch Billiton plc, two separate companies that were giants in their own rights.
Broken Hill Proprietary Company Limited, also known as The Big Australian, had been operating the silver and lead mine at Broken Hill in western New South Wales, Australia, since its 1885 incorporation. In 1915, the company embarked on steel manufacturing, with its operations based primarily in Newcastle, New South Wales; and petroleum exploration in the 1960s, with discoveries in Bass Strait.
From then on, it began tending towards offshore diversification, running successful projects such as the Ok Tedi copper mine in Papua New Guinea, the giant Escondida copper mine in Chile and the Ekati Diamond Mine in northern Canada.
Billiton, on the other hand, was a mining company whose origins stretched back to 29th September 1860, when the articles of association were approved by a meeting of shareholders at the Groot Keizerhof hotel in The Hague, the Netherlands. It had little time to waste, and its business-like orientation led to its acquiring the mineral rights to tin-rich Billiton (Belitung) and Bangka Islands in the Netherlands Indies archipelago, off the eastern coast of Sumatra, just two months after it’s take-off.
It’s most significant successes include tin and lead smelting in the Netherlands, the 1940 bauxite mining in Indonesia and Suriname, tin and lead smelting in Arnhem, the Netherlands; aluminium smelting 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).
By 2001 when it melded with the Broken Hill Proprietary Company Limited (BHP) to form BHP Billiton, the world’s biggest mining company had certainly been birthed.
In its 11 years, its strongest point has been its eye for purchasing viable rival companies while shedding off its own non-profitable ventures.
In March 2005, BHP Billiton announced a US$7.3 b bid for rival mining company, WMC Resources, which owned Olympic Dam copper, gold and uranium mine in South Australia, nickel operations in Western Australia and Queensland, and a fertiliser plant also in Queensland. The takeover achieved 90 per cent acceptance on 17th June 2005, and 100 per cent ownership was announced on 2nd August 2005.
Following a failed 2009 takeover of another mining competitor, Rio Tinto Group in an audacious bid, it went on to buy Athabasca Potash for $320m, in January 2010 prompting The Economist to predict it could be producing 15 per cent of world demand for potash by 2020.
On 22nd February 2011, BHP announced its payment of $4.75b for the control of all of Chesapeake Energy Corp.’s Fayetteville shale assets, which included 487,000 acres (1,970 km2) of mineral rights leases and 420 miles (680 km) of pipeline located in north central Arkansas in the United States. At the time, the wells on the mineral leases were producing some 415 million cubic feet of natural gas per day.
Again, on 14th July 2011, it announced its acquisition of Petrohawk Energy, United States, for approximately $12.1b in a move that significantly expanded its shale natural gas resources.
It the same number of years, it closed down and sold a number of its affiliates, including the Ravensthorpe Nickel Project in Western Australia (21st January 2009), the Pinto Valley mine in the U.S.
Currently headed by 50-year-old South African, Marius Cloppers, a widely read, widely travelled Chemical Engineering graduate of the University of Pretoria, BHP Billiton continues to dominate global business circles, maintaining its stranglehold on mining and processing operations in all six inhabited continents of the globe.
