re: bhp plans 3 billion dollar buyback From Timesonline...

re: bhp plans 3 billion dollar buyback From Timesonline UK
http://business.timesonline.co.uk/article/0,,9072-2321766,00.html

BHP plans $3bn share buyback amid 'positive' strike talks
By Martin Waller

BHP BILLITON, the global mining group, is expected this week to announce a $3 billion (£1.6 billion) share buyback, its second this year, to take advantage of the soaring prices of metals such as nickel and copper.
The announcement, accompanying results from the miner on Wednesday, would come at an embarrassing time because BHP is locked in negotiations with miners who are on strike at the Escondida copper mine that the company operates in Chile.


The miners shut down the site last week, driving up the price of copper, after they demanded pay rises and bonuses that would allow them to share in the huge profits that BHP is making as a result of the price rises. The two sides were in talks last night. A spokesman for the mine, which is majority-owned by BHP, said that earlier negotiations at the weekend had been “positive”.

Escondida provides 8 per cent of the world’s copper production and a prolonged shutdown would put further pressure on the metal’s price.

BHP refused to comment on a weekend report that it planned a $3 billion shares buyback to soak up excess cashflow, but a spokesman said: “We have always said we will return cash to shareholders if we don’t have projects to put it into.

“At the moment there’s a lot of money coming out of commodities.” BHP carried out a $2 billion share buyback earlier this year.

Soaring metal prices have also prompted corporate activity in the mining sector. A report at the weekend suggested that Anglo American, another mining giant, could face a break-up bid. The company, which did not return calls, is attempting to restructure by selling peripheral operations, but some analysts have queried the pace of change.

Xstrata, which was mentioned as a possible bidder, is currently completing a protracted battle to acquire another miner, Falconbridge, of Canada, and is not thought to be preparing an imminent approach. Another putative bidder, CVRD, of Brazil, is also involved elsewhere, trying to acquire Inco, of Canada.

However, one mining executive commented yesterday: “With all the M&A activity in the sector, people are starting to look at Anglo.”