May 29 (Bloomberg) -- BHP Billiton Ltd., the world’s biggest shipper of steelmaking coal, will seek to sell coal assets and close high-cost mines as profitability is constrained by cost inflation and a decline in prices.
“We will selectively pursue asset divestment opportunities with a firm focus on value,” the Melbourne-based company said today in a presentation for an analyst visit to its mines in Australia’s Queensland state. “Assets must earn their right to remain in the portfolio.”
BHP in February said it’s looking to sell the Gregory steelmaking coal mine in Queensland, after last year closing one part of the operation due to low prices. The following month the company confirmed it’s planning to sell about 10 of its assets across its portfolio amid a rise in debt levels after a metal price boom driven by China stuttered.
“We have taken decisive action to drive costs lower,” the company said. “Our plan will deliver substantial growth in free cash flow.”
The stock closed little changed at A$33.98 in Sydney yesterday. The key S&P/ASX 200 Index gained 0.2 percent.
“The market appears comfortably supplied in the near-term,” BHP said. “In the absence of a major supply disruption, near-term metallurgical coal prices will be range bound.”
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