Back in March 2001, about a year before the start of the so-called commodities supercycle – an event that would blow off across the 12 months commencing mid-2007 – BHP Billiton ranked as the world’s No 2 mining stock, by market value, after Alcoa, the US-based aluminium giant. Today, BHP Billiton has long ranked as the world’s biggest, in all senses, diversified resources stock; Alcoa has slipped to No 31 among global mining groups.
For investors, the different roads followed by these two, and many other, mining groups have had profound results. In early 2001, BHP Billiton commanded a market value of around US$28bn. That soared nearly 10-fold by the middle of 2008, and after recovering following the great 2008 markets scare, today sits around US$189bn, well ahead of No 2, Vale, the Brazilian supergroup that can overwhelmingly attribute its success to specialising in iron ore.
Even that dynamic has changed; in early June 2009, Rio Tinto and BHP Billiton announced that BHP Billiton would pay Rio Tinto US$5.8bn “for equity type interests at financial close” to take its interest in the two companies’ Pilbara, Australia iron ore joint venture from 45% to 50%.