Melbourne—BHP Billiton Ltd. reported a US$5.67 billion attributable after-tax loss for the first-half ending Dec. 31, 2015, of its financial year, a 222 percent year-on-year downturn. The fiscal result includes US$6.13 billion of exceptional charges after tax. BHP also announced that it would implement a new operating model aimed at creating “a more agile company” that was ready to respond to the challenges and opportunities presented by a rapidly changing global marketplace. The exceptional charges include US$1.2 billion (US$858 million after tax) for costs associated with the November dam failure at the Brazil-based Samarco Mineraçao SA iron ore joint-venture, in which the group holds a 50 percent interest (GM Nov. 20, 2015). Of the Samarco-related charges, US$655 million relates to BHP’s share of the miner’s $1.3 billion provision for costs related to the dam incident. The balance comprises a US$525 million impairment to reduce the value of BHP’s investment in Samarco to zero, a decision the group said did not reflect its views on the potential restart of the mine, but rather the present uncertainty surrounding the nature and the timing of future cash flows that BHP would receive from the miner. Dean Dalla Valle, BHP’s chief commercial officer, has been assigned to lead the group’s response to the incident and will be based in Brazil. The executive will retain responsibility for the Jansen Potash Project in Canada. CEO Andrew Mackenzie said BHP still wants to build the Jansen mine despite a severe bear market for the crop nutrient, but “it does not seem likely to happen any time soon.” The project was 54 percent complete as of Dec. 31, 2015 (GM Jan. 28, p.15). Mackenzie said BHP probably will not be ready for a push to production until the potash market recovers, which it does not see happening until the 2020s.
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