HUNG OUT TO DRY

22nd August 2014 By: Darlene Creamer

HUNG OUT TO DRY

South Africa has got the short end of the stick in the latest BHP Billiton commodity selection. To be demerged out of the group are aluminium, manganese and thermal coal – all South Africa-centric. Stranded by the decision are the Hillside and Mozal aluminium smelters on Southern Africa’s east coast, the Hotazel, Mamatwan and Wessels manganese mines in South Africa’s Northern Cape province, plus the Khutala, Klipspruit, Middelburg and Wolvekrans collieries. What about all the below-tariff electricity South African power utility Eskom gave you, BHP? You have turned South Africans into (B)roken (H)earted (P)eople. And who says your new portfolio choice will even be value accretive? Mining analyst Liberum Capital remains unconvinced.