29/09/2016 - 15:49

Grimbeek touts South32 performance

29/09/2016 - 15:49

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South32 Australian chief operating officer Ricus Grimbeek has pointed to the company's share price performance against BHP Billiton to show that its assets shouldn't be considered poorer quality, speaking at a WA Mining Club lunch today.

South32 listed in May 2015, after spinning off from BHP Billiton. Photo: Attila Csaszar

South32 Australian chief operating officer Ricus Grimbeek has pointed to the company's share price performance against BHP Billiton to show that its assets shouldn't be considered poorer quality, speaking at a WA Mining Club lunch today.

BHP Billiton spun-off South32 in a demerger last year, with the new business holding the coal and base metal operations, while BHP retained iron ore and petroleum among other commodities.

“When you look at our operations, they’re actually very high quality,” Mr Grimbeek said.

“They just don’t fit the BHP Billiton mould.

“They’re a lot more complex and they need special attention to be able to manage them really well.

“I just stand back and point at the scoreboard.

“If you look at the difference in share price performance in the past 12 months, I think we’re about 30 or 40 per cent better than BHP Billiton.”

BNiQ Search Engine data backs up this claim, with the latest August numbers showing a one-year total shareholder return (including price appreciation and dividend payouts) for South32 of 26 per cent.

For the same 12-month period, BHP Billiton’s TSR was -15 per cent as the company dealt with the Samarco tailings dam fallout.

But he said his focus was on his own company’s strategy and creating a winning recipe, not competitors.

One good bit of news for South32 has been the improving coal price, with the company operating three metallurgical coal mines in NSW.

There had been a few beneficial market dynamics, Mr Grimbeek said.

Both supply interruptions in coal production and higher demand driven by increasing Chinese steel output had put upward pressure on the price, he said.

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