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In The News: BHP Billiton mines Beijing Olympics opportunity for international goodwill

GLOBAL mining giant BHP Billiton is not your average Olympic sponsor. It produces metal ore, not soft drinks, cameras, credit cards or sports shoes – products typically associated with Olympics sponsorship deals. However, China is the biggest market for its mineral products, and that has spurred BHP to use an unconventional sponsorship deal to capture some of the Olympics glow. BHP will provide the gold, silver and bronze medals for the 2008 Olympics Games in Beijing this August, as well as for the Paralympics that follow. In return for providing the medals and an unspecified amount of cash, BHP is an official sponsor of the 2008 Olympic Games and is able to use the Olympics logo to promote its business. But rather than promote its brand to Olympic spectators, BHP is using the deal to appeal to a close circle of clients and employees. “Most sponsorships focus on media buys and advertising. We’ve done almost none,” said Maria McCarthy, who heads up the company’s Olympic sponsorship team. “Instead, we are focusing on community leveraging, stakeholder leveraging that involves governments and customers, and our staff.” There are no BHP Billiton TV ads or billboards for the 2008 Olympics games in Beijing. Instead, from mountain mining towns in Africa, to open pits in the Western Australian desert, to China’s gritty industrial cities, BHP is using its sponsorship rights to organise community events that bring Olympic athletes to its staff and customers, and their families. “In Africa, when we invite our staff, they bring their villages; 4,000 people might show up,” Ms McCarthy said. “The take-up’s been huge. A lot of our assets are really remote, and this type of planned attention hasn’t happened before.” BHP hopes that some of the glow transfers to the company, which has operations in 25 countries that don’t always have too much in common. And there’s a practical basis too. “The interaction with customers is very different. Normally, you’re sitting across the table, there’s a big dinner, it’s the same dynamic every time,” BHP’s China president Clinton Dines said. “This breaks the dynamic and you get a new interaction with the customer. “They bring lots of people and everyone has a great time.” BHP is also hoping that sponsorship agreement will help to ease the sometimes-acrimonious relationship with its top customer, following commercial tension over iron ore price negotiations, which have led to big price increases in recent years.

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BHP Billiton (BHP)

Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 31/01/18

1 year TSR5 year TSR
348thBHP Billiton18%2%
709 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
Source: Morningstar

Revenue

th-BHP Billiton$50,729.3m
77 listed non wa companies ranked by revenue.
Source: Morningstar

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