Charlotte Mathews
23 February 2009
Johannesburg — GLOBAL resources group BHP Billiton might consider investing in the platinum sector if it could add value to the group's portfolio, but the sector presented the group with a dilemma, group executive and CE of the nonferrous division, Andrew Mackenzie, said last week.
He was asked in an interview about BHP Billiton's level of interest in platinum, in view of the fact that it already had some precious metals exposure through its diamond business, and its rival, Xstrata, the world's fifth-largest resources company, had been expanding its interests in platinum.
Late last year Xstrata made a hostile bid for Lonmin, but abandoned it after credit conditions deteriorated.
"Platinum is something of a gap in our portfolio and it is something we do have a look at from time to time," Mackenzie said. "But we like to operate assets that are fairly capital-heavy and people-light and platinum is a business that is very people-heavy.
"Though the platinum industry has made enormous strides in safety, there are serious safety issues and with our commitment to zero harm, I am not sure that is something we can be comfortable with," Mackenzie said.
According to the minerals and energy department's report on the presidential safety audit of SA's mines, platinum mines scored slightly better on safety than diamond mines, with a 67% rating compared with 66% for diamonds. Base metal operations scored 60% on safety.
On any commodity, BHP Billiton always considered opportunities that it thought could add value, Mackenzie said, so it would not rule out a platinum acquisition completely. "But platinum does currently cause a dilemma for us."
Mackenzie's comments indicate BHP Billiton's attitude towards the sector has not changed since August 2007, when CEO Marius Kloppers was asked the same question. "As long as it is safe and environmentally sound, I can't see any reason to exclude the (platinum group metals)," Kloppers said at the time.
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