Johannesburg - Samancor, the South African ferroalloy producer, is likely to remain part of BHP Billiton, the merged global mining group, despite the group's plans to get out of the steel business.
BHP Billiton indicated yesterday that it would stay in the upstream steel industry but would sell or spin off its value-added steel businesses.
Brian Gilbertson, the deputy chief executive of the group, said the non-core assets would amount to less than 5 percent of the total asset base but declined to identify the non-core assets remaining on the group's balance sheet.
The group confirmed that it planned to spin off BHP Billiton Steel through a public listing by the end of fiscal 2001/02.
BHP Billiton Group, one of the world's largest mining conglomerates, said yesterday it was considering shutting down parts of its copper and nickel operations to cope with low prices.
The group ruled out the sale of its petroleum business but said it had not dismissed the possibility of listing an oil unit.
BHP Billiton and Woodside Petroleum are in talks over a possible partnership after Shell's A$10 billion (R44 billion) takeover bid for Woodside was rejected by the Australian government in April. The group said it would continue merger talks with Woodside Petroleum and Royal Dutch/Shell Group but said there was no guarantee a deal would be struck.
Shell, BHP and Woodside at the moment are equal one-sixth partners in the project, which is operated by Woodside.
Paul Anderson, the chief executive of BHP Billiton, said if the deal went ahead he didn't see any problem with BHP listing part of its petroleum unit stake.
Anderson, who was presenting the merged group's first set of combined results, said the group was thinking of closing some of its copper and nickel operations.
The Australian-based mining conglomerate reported a solid debut net profit for the year to June 30 of A$1,53 billion, which is up 1,5 percent from the equivalent profit a year ago.
The result was nevertheless at the low end of market expectations after accounting for an unheralded A$148 million write-down on the company's 52 percent owned Ok Tedi copper and gold mine in Papua New Guinea.
Indicating that other global producers would consider production cuts as well, Anderson said that it was less than happy with the prices of copper and nickel.
The group was also looking at further cost cuts. It announced that it was merging its North American metals distribution businesses with aluminium giant Alcoa.
Merging was expected to strip out costs by combining 90 metals distribution service centres into one company with 3 000 employees and combined revenues of $2,1 billion in fiscal 2000.
Anderson warned that the group faced a difficult 12 months.
He did not expect a pick-up in prices on the London Metal Exchange in 2001/02, adding to the growing perception that the metal market is far from a recovery.
However, Anderson did say the industry was better placed than during previous downturns to ride out the rough patch as metals inventories were lower than in previous cycles.
He said BHP Billiton's varied portfolio, together with new base metals projects coming on line, would help it improve its profit for the year.
Analysts said the group should expect 12 percent growth in the coming year.
Billiton closed unchanged at R38,20 in Johannesburg yesterday.