Mining giant BHP Billiton is spinning off its aluminium, coal, manganese, nickel and silver assets into a new company.
The announcement came as BHP lifted its full year profit 23 per cent to $US13.8 billion ($A14.93 billion).
The profit growth was broadly in line with analysts’ expectations.
It came after the world’s biggest mining company achieved a 15th straight year of record iron ore production.
Chief executive Andrew Mackenzie said BHP had delivered on its commitments in the past 12 months.
“Our operational performance continued to improve, enabling us to exceed production guidance for a number of our core commodities including iron ore, metallurgical coal and petroleum liquids,” he said.
BHP will pay a final dividend of 62 US cents per share, up from 59 US cents per share one year earlier.
The company said the demerger would allow it to almost exclusively focus on iron ore, copper, coal, petroleum and potash.
“With fewer assets and a greater upstream focus, the group will be able to reduce costs and improve the productivity of its largest businesses more quickly,” BHP said.
As a result, BHP expects to generate stronger growth in free cash flow and a superior return on investment.
Assets selected for the new company, dubbed NewCo, include BHP Billiton’s Aluminium and Manganese businesses and the Cerro Matoso Nickel, Energy Coal South Africa, Illawarra Metallurgical Coal and Cannington Silver-Lead-Zinc mines.
Chairman Jac Nasser said the proposed demerger would provide investors with choice and unlock value in both companies.
The new company is to be led by BHP’s chief financial officer Graham Kerr, while head of investor relations Brendan Harris will be chief financial officer.
The 24,000 employees at the new company’s assets can expect minimal changes to operations, BHP said.
Its headquarters will be in Perth, while a regional office will be located in Johannesburg.
The new company is expected to be listed on the Australian share market by mid-2015.
BHP’S lower costs lift profit
• Full year net profit of $US13.8b, up 23 pct from $US11.2b in 2012/13
• Earnings of $US23.4b, up 11.5 pct from $US21b
• Final dividend of 62 US cents per share, up from 59 US cents