BHP Billiton share price: Miner trims 2016 spending
BHP Billiton’s (LON:BLT) share price opened marginally lower this morning after the FTSE 100-listed miner announced spending cuts. The company said in a statement this morning that it would cut its capital and exploration expenditure to $9 billion in the 2016 financial year from $12.6 billion in 2015.
BHP also said it expected to reduce iron ore unit costs at its Western Australia operations by 21 percent to $16 per tonne in the 2016 financial year. That builds on recent cost-cutting measures that drove costs in that division down by 29 percent in the six months through December. BHP further revealed that it expected to reduce costs at the Escondida copper mine in Chile by 16 percent, while reining in the cost of well drilling at the Black Hawk fields in the US by 20 percent.
Meanwhile, rival miner Anglo American (LON:AAL) has distanced itself from the iron-ore price war of its larger peers BHP and Rio Tinto (LON:RIO), by stating that its $8.4 billion Minas-Rio project would provide the highest quality product in the world. While the mine is forecast to have costs of about $33 a tonne — far more expensive than BHP’s and Rio’s Western Australian operations — Anglo hopes to achieve a higher price by dint of its higher iron grade and higher purity levels.
Paulo Castellari, chief executive of Anglo’s Brazilian iron-ore business, said yesterday, as quoted by The Times: “We have seen the volume that is in the market: that’s not the game for us. The game for us is the way we do business and the quality of our product.”
As of 08:45 BST, Tuesday, 12 May, BHP Billiton plc share price is 1,581.00p.