BHP Billiton separates aluminum and nickel assets into a separate entity

Investors welcomed the news that mining giant BHP Billiton is setting up a separate company to include its AUD 20 billion in aluminum, bauxite and nickel assets. The world's largest miner issued a statement explaining that asset unbundling is the preferred option for the structural simplifications that collapsed in April.

BHP advised that it studied all possible separation routes before choosing this option. After the market received news of the split, the company's shares were up about 2.46 percent. BHP shares reached AUD 39.10. The company said its manufacturing portfolio is focused on iron ore, copper, coal and oil assets, while maintaining the benefits of diversification to generate strong cash flow growth and improved return on investment.

“By increasing our focus on these products, we can improve the productivity and efficiency of our largest corporations faster,” says a company spokesman. Beginning in April, the company's board of directors has continued to explore structural alternatives, which it discussed at this week's meeting. The company said the board expects to continue discussions on these issues, resuming its work next week. The decisions approved at the meeting will be announced immediately.

The team consulted with investment bank Goldman Sachs, which is exploring a range of strategic options, including unbundling assets, to ensure adequate returns to shareholders.