so what to do with all their cash now...., page-18

In my opinion:

WSA - No chance. Nickel is in the doldrums and they are cutting back production at their OWN nickel mines. Why would they buy smaller producers with larger operating costs?

WPL - You're joking right? BHP is a MINING company, not a petroluem company. Despite the fact they are unique in the world for having a petroluem division, it's very difficult for a company have two major focuses. All the major oil companies have tried mining and failed. In fact, Billiton was an offshoot of Shell. Besides, BHP would be happy to have the lower risk attached with having stakes in various projects.

OZL - Low chance. BHP likes companies with LARGE resources that it can easily fit into its economies of scale. It won't buy a 50MT copper mine that produces 2MT/y at $1/lb when its average is 500MT copper mines at 10MT/y at $0.50/lb.

A potential target therefore needs to satisfy 2 things for BHP in my humble opinion:

1/ Resource Size (has to be world scale)
2/ Operating Costs (capital costs if still not developed)
3/ Random Risks (debt, country, shareholders, etc)

FMG - Based on my earlier criteria, FMG certainly fits the bill of 'deposit size' and 'operating costs'. I don't know the exact details but I would assume that being such a large producer, FMG would be closer to BHP's production metrics than most others in the world.

While it is certainly an appealing target, there are some uncertainties that would make it an unusual takeover. Twiggy is a HUGE 'if'. They would need to offer that guy a nice golden parachute to offload his 30% stake or whatever. Judging by what Twiggy has said in the past, I think he would rather sell his family than FMG lol.

PNA - fits in the same category as OZL, except worse I would have thought (someone correct me on this).

RIV - Why? Demand for coal is forecast to fall. BHP is already the largest miner of most types of coal - why would it buy a coal miner in Mozambique? It makes sense that they would look to expand their already existing QLD mines.

AGO - Unlikely. Too small a fish for this shark.

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I think we need to broader our horizon and look offshore for potential targets. And look for low-cost miners with long-life deposits.

Maybe EQN?