Why the Mining Should Follow BHP’s Spin-Off Strategy to Optimize Smaller Assets

Benjamin starts by discussing what could come out of BHP ($BHP) creating a “mini-me” corporation. By spinning out a couple “sub-prime” assets that don’t necessarily

1 min Read
06.2.2014

By Benjamin Cox

Managing Director of Oreninc Prior to founding Oreninc, Mr. Cox served as a senior analyst at the D.E. Shaw Group and as a consultant with the GLG Group, where he worked directly with 15 Wall Street teams in the mining deal space. Currently, he holds the position of Chief Executive Officer of Roche Bay plc, an iron ore mining company with leases in Nunavut, Canada. Mr. Cox is also the Chief Executive Officer and a Director of Aston Bay Holdings Ltd. (TSX-V:BAY), a copper and zinc company with properties in Nunavut, Canada. Mr. Cox has researched and developed business, financial, and shipping models for every major global iron ore project. He is also an expert on mining industry market dynamics and metals, with a focus on raw materials including base metals, iron ore, platinum group metals, and industrial materials such as potash and lithium. Mr. Cox holds a B.S. from Brandeis University and an M.B.A. in Finance from Portland State University.

Benjamin starts by discussing what could come out of BHP ($BHP) creating a “mini-me” corporation. By spinning out a couple “sub-prime” assets that don’t necessarily fit BHP’s model into a company that has its own management team, they could support exploration and development of smaller projects. More importantly, this would help shareholders get better value out of these assets than they are currently. If the top five companies in the space did this, the industry would be helped and we would see a much more vibrant mining community. Benjamin then explains how Private Equity firms work, and how majors could do the same things for themselves and get better value for their shareholders. Benjamin finishes by explaining how he hopes we see a new mid-tier group of mining companies, and that if we do it he expects it will reinvigorate the industry.