BHP Billiton’s thinking in spinning off South32 is straightforward, although the process of actually divesting its unwanted mining assets is anything but.
The idea is that offloading exposure to more problematic commodities, such as silver, aluminium and manganese, will leave the Australian miner free to concentrate on BHP’s core investments of iron ore, oil and gas, coal, copper and potash.
Similarly, relieved of the constraints of being under the BHP Billiton umbrella, South32’s executive team, led by Graham Kerr, the miner’s former finance director, can dedicate itself to micromanaging individual mines and commodities lines in a way that should create much more value for shareholders.
The prospect that a predator may try to buy the business, entirely or in part, also has been seen as