and so it begins......, page-22

BHP may be buyer for Prominent Hill Mine: Goldman Sachs

11th December 2008, 9:30 WST


BHP Billiton, the world’s largest mining company, may seek to buy the $2.5 billion Prominent Hill copper and gold mine from cash-strapped OZ Minerals, Goldman Sachs JBWere analysts said.

The obvious and most logical suitor would be BHP, whose Olympic Dam operation is in close proximity, Goldman analysts led by Ian Preston said in a report dated yesterday. BHP is well suited to be able to fund such an acquisition in the short term timetable required by OZ Minerals.

OZ Minerals, the world’s second-largest zinc mining company, yesterday said its been approached by a number of parties for possible joint ventures or to acquire assets as it scrambles to refinance at least $560 million of debt. BHP may be able to treat copper and gold concentrate from the mine at its nearby Olympic Dam smelter, analysts at Citigroup said.

The commodity price decline and credit market conditions that have hastened OZ Minerals demise will also constrain third- party interest and the capacity to pay for its operations, Credit Suisse Group AG analysts led by Melbourne-based Michael Slifirski said today in a report. BHP, or perhaps a Chinese group, may have interest in Prominent Hill.

OZ Minerals has slumped 79 per cent this half as a widening global recession and frozen credit market curbs demand for metals. The stock is suspended from trading on the Australian stock exchange through to Dec. 29 and last traded at 55 cents on Nov. 27.

Melbourne-based BHP Samantha Evans said the company does not comment on speculation.

BLOOMBERG