BHP Billiton moves up despite Samarco’s softness
BHP Billiton’s (ASX: BHP) stock moved up a bit on December 22, 2017 with the update that the group will provide more funding to its Samarco joint venture in Brazil and the non-profit foundation (Renova) established after the mine dam collapse. The funding entails a total financial support of $US181 million ($A253 million) until June 30, 2018. BHP further revealed that $US133 million of the total fund amount will be held in reserve for remediation and compensation programs undertaken by the Renova foundation under which Samarco agreed to pay up to $US2.3 billion over six years and set up a fund for restoration work. The amount as slated will be offset against BHP’s provision for the Samarco dam failure.
Th group lately provided Minerals Australia Update and Olympic Dam Briefing wherein productivity gains of US$1.6bn have been identified to be delivered over the next two years. The group will seek Board’s approval for the South Flank project with submission to be made in mid of 2018 and first ore targeted for 2021. While Samarco is being handled, BHP’s key projects’ potential is zooming up and it remains to be a key mining stock for year 2018.
Wesfarmers purges Curragh Coal Mine
Wesfarmers (ASX: WES) has updated the market on the sale of its Curragh coal mine in Queensland for $700 million in a deal with US producer Coronado Coal Group. The agreement also includes a value share mechanism linked to future metallurgical coal prices. Particularly, WES will be earning further payments in case the coal price stays in strong territory and will be entitled for 25% of Curragh’s export revenue on sales with metallurgical coal price of above $US145 a tonne for the next two years. The group would also book a $100 million after-tax profit on successful completion of the sale. WES has been reviewing the future of its resources business for quite some time and the move comes as a part of this strategic review.
Despite the update, WES shares edged low on December 22, 2017, and still look to be trading at a higher level.
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