BHP Billiton share price up as miner confirms new metals firm will list in London

Caitlin Morrison
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BHP Billiton's shares yesterday dipped briefly by almost two per cent, but finished up 0.12 per cent, after confirming that its new company would be listed on the London Stock Exchange.

Andrew Mackenzie, BHP’s chief executive, said: “We are pleased to offer an additional listing in London in response to the interest investors have shown in the new company.

“We continue to work towards completion of the demerger in the first half of the 2015 calendar year, subject to receipt of the necessary approvals.”

The mining firm announced in August that it was creating an independent global metals and mining company based on a selection of its aluminium, coal, manganese, nickel and silver assets.

According to the group, this proposed spin-off company will “deliver more value for shareholders than maintaining the status quo”, or other ways of simplifying BHP Billiton, such as trade sales.

BHP said that following the demerger, it would be “almost exclusively focused on exceptionally large, long-life iron ore, copper, coal, petroleum and potash basins”, and would be able to reduce costs and improve productivity more quickly.

As a result, the firm said it expected to generate higher margins, stronger growth in free cash flow and a better return on invested capital.

The company also proposes to list its new firm on the Australian and South African stock markets.