BHP/Rio Tinto have big plans... Two of the largest diversified miners appear to have very “big” plans to get much larger if the authors of the two articles are correct. Don’t be surprised if we continue to feel bumps, volatility and down right scary times ahead. This can be expected if indeed the underlying shift continues….The “shift” continues away from the west and moves toward “the new Beijing-based power dynamic.” When you have major “shifts”…buckle up cause the earth shakes….Understanding the Why is very important to understand that the world is not coming to an end…and being invested in a company that the “New World Power” is going to need is a good thing…imho. The other interesting quote which appears to be from a BHP insider… “Inside BHP, the view is that, within a decade, pure-play fertilizer producers such as PotashCorp and The Mosaic Company will be owned by diversified miners that will have far greater financial firepower to withstand a downturn in prices,”
Neither (BHP or Rio Tinto) has let that deter their longer term goals as they've focused far beyond the current global economic malaise and towards the new Beijing-based power dynamic.
BHP still seems to have its eyes on PotashCorp - and, possibly, Mosaic
Potashblog: by Robin Bromby Jan 9,2012 In the Street Talk section of The Australian Financial Review, which is based in Sydney, there’s an unsourced item which has all the hallmarks of coming from someone at BHP. The piece says so much with one paragraph beginning “Inside BHP, the view is …”
…Then comes to dig: it is stated that the idea of cutting production is anathema to BHP, “which has made it clear that it plans to sell all it can produce at a profit and that it will not join the Canpotex cartel”. But - again with a BHP briefing apparent - the newspaper says it has been Potash Corp.’s “modus operandi” to shut down production in tougher times as it seeks to maintain profitability.
Here’s the cruncher, clearly from the horse’s mouth: “Inside BHP, the view is that, within a decade, pure-play fertilizer producers such as PotashCorp and The Mosaic Company will be owned by diversified miners that will have far greater financial firepower to withstand a downturn in prices,” the item concludes.
I wonder which “diversified miner” they have in mind?
Resource giants power on
January 26, 2012
Rio Tinto and BHP Billiton are shrugging off the doom and gloom and looking to long term expansion plans.
IT'S NOT often the opportunity presents itself for a ringside seat in a winner-takes-all contest between Australia's resource giants and the guardians of global finance. In the past week, however, the World Bank and the International Monetary fund have locked horns with the world's two biggest mining operators, Australian-domiciled BHP Billiton and Rio Tinto, about the direction of the global economy.
...For months now, it has been obvious to anyone who has cared to look, that the IMF has nowhere near enough in the kitty to bailout even Greece, let alone the other debt-laden stalwarts of the euro zone, and it now is hinting that a further $1 billion should be extended by donating countries, including Australia.
That sudden bout of panic seems strangely at odds with the intentions of our big resource companies, both of which have committed themselves to massive expansions in their export capability backed up by what they see as a long-term realignment in global economic power.
The World Bank and the IMF are making a call that a European recession will affect global trade and growth, that will hit the developed world hard.
The resource giants, in contrast, are banking on a decline in the importance of the West and continued growth in the emerging markets of Asia, led by China, even if there is a temporary slowdown in the next three to five years.
Neither has let that deter their longer term goals as they've focused far beyond the current global economic malaise and towards the new Beijing-based power dynamic.