BHP Billiton cuts back in effort to become lowest-cost iron ore producer
As was written in our sister publication Mining Global, mining giant BHP Billiton announced its plans to cut capital spending and operating costs for iron ore, following the company’s demerger of South 32. The goal of this strategy is to make BHP the lowest-cost iron ore mining company in the world.
BHP said it aims to reduce iron ore unit costs at its Western Australia operations, in an attempt to cut capital and exploration expenditure to $9 billion in the 2016 financial year from $12.6 billion in 2015.
"The potential benefits are substantial. We expect to cut unit costs at Western Australia Iron Ore by 21 per cent to $16 per tonne during the 2016 financial year,” said Billiton Chief Executive Officer Andrew Mackenzie
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BHP’s rival Rio Tinto is also expected to lower its cost per tonne to $17 this year. The two mining behemoths, along with Vale, have been criticized heavily in recent months for saturating the iron ore market.
Fortescue Metals Group chairman Andrew Forrest has launched an all-out war on BHP and Rio Tinto, saying: “When multinationals pursue business strategies which flood the market in a last-man-standing race to the bottom, we don’t have free markets. Australians own the iron ore."
The company recently defended itself, saying its approach was rational and that it stopped major investments in new capacity four years ago.
"What we're doing very clearly is we're operating our enterprise in a very economically rational way," said Alan Chirgwin, iron ore marketing vice president.
"We took action, so it wasn't just words. In 2011, that's the last time our board approved billions of dollars of additional investment in expansion."
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Speaking to The Australian Financial Review earlier this week, Mackenzie rejected the idea they were losing the public relations battle against Fortescue Metals Group.
"I think, on the whole, that there is a core in Australia that is very committed to free trade and free markets," Mackenzie said. "If you were to look at the way pricing has moved in almost every commodity recently, they've all had similar properties - oil, gas, agricultural commodities, [and] other mining commodities. And in most cases, the lowest-cost suppliers are the ones that continue producing, and the highest-cost suppliers, if there has to be some give, are the ones that come out of the market or reduce their production.”
Timeline: India takes unicorn leap with six in five days
We chart an historic week in India’s tech industry, where in just five days, between 5-9 April 2021, the country achieved six new unicorns, bringing India’s total to 10 in 2021 to date, an immense unicorn leap from just seven in 2020 and six in 2019.
April 5: Meesho
India’s first social commerce unicorn, Meesho raised US$300m from SoftBank, Facebook and Shunwei Capital, giving the Bangalore-based startup a US$2.1bn valuation, a threefold jump from its previous funding round in 2019. Founded in 2015 by two IIT-Delhi graduates, Meesho connects producers and resellers, helping small businesses sell through social media. It has 45m customers and has enabled 13m entrepreneurs to start their online businesses with no investment.
April 6: CRED
Founded just over two years ago, Bangalore-based credit card repayment app CRED raised US$215m from Falcon Edge Capital and Coatue, nearly trebling its valuation to US$2.2bn from its January US$80m round. Allowing customers to pay off their credit card debt while earning CRED coins which they cash in for rewards, CRED has grown rapidly during COVID-19, doubling its customer base to nearly 6 million in a year.
April 7: API Holdings / Groww
The first epharmacy startup to gain unicorn status, PharmEasy (API Holdings), which has digitised 60,000 brick and mortar pharmacies and 400 doctors across India, raised US$350m in a round led by Prosus Ventures. Founded by four former Flipkart employees as a way of making investing simple, investment platform Groww became India’s second-youngest fintech unicorn, raising US$83m in Series D funding led by Tiger Global, quadrupling its previous round in September.
April 8: ShareChat
New Delhi-grown social media startup ShareChat, founded in 2016 by Mohalla Tech raised US$502m from Lightspeed Ventures, Tiger Global, Twitter and Snap taking its raised total over six rounds to US$766m and pushing its valuation to US$2.1bn. The funding will be used to grow its user base and short video platform Moj, which launched in 2020 following TikTok’s ban in India. The regional language startup claims 280m users.
April 9: Gupshup
AI-led conversational message startup joined the unicorn club after raising US$100m from Tiger Global giving it a ten-fold valuation of US$1.4bn. The smart messaging platform, which has seen accelerated growth during the pandemic, was founded in Bangalore in 2005 by serial entrepreneur Beerud Sheth, whose online freelancing platform Elance is now listed. Gupshup’s API enables 100,000+ businesses to build messaging and conversation experiences across 30+ communication channels.