BLUECHIP: Test of mettle for Billiton
Yet the South African-styled business has given institutional investors plenty to think about. Billiton gains automatic entry to the FT-SE 100 index of leading companies, courtesy of its pounds 4.6bn market capitalisation, which makes it the 56th largest company in the UK. In the metals field it joins Rio Tinto, the venerable mining finance house which has dominated British efforts in the area for decades.
Billiton has some UK roots; a large part of it was acquired by its South African owner Gencor from Royal Dutch Shell in 1994. The company holds all Gencor's non-gold and non-platinum interests, stretching from coal to titanium, ferroalloys, aluminium and base metals.
Despite its stodgy start Billiton has several attractions. It has some plum assets in South Africa, notably the manganese and chrome operations, among the best of their kind in the world. It has strong trading operations in Holland, while it has become one of the largest players in the world aluminium market.
Billiton has eschewed the once fashionable belief among aluminium producers that one had to be vertically integrated, owning factories to turn aluminium into finished products for end users. Instead, it will concentrate solely on the aluminium process itself: mining bauxite ore and converting it into alumina before finally smelting it into refined aluminium.
Much of its operations - and therefore costs - are in countries like Brazil, South Africa, and Colombia, where the local currency is soft. Because the vast majority of its production is exported, denominated mainly in dollars, soft currencies are a good thing - as long as they continue to depreciate.
The group is, however, open to translation costs from currency swings hitting profits. Other risks include the political uncertainty of many of its base countries. And every big metals and mining group is vulnerable to operational disaster: flooded mines, smelters that pack up, striking workers.
Investors are also faced with some complex subsidiary ownership arrangements, although there could well be some hidden value. On balance, however, Rio Tinto looks the better bet.
Copyright: IOS & Bloomberg
Pope Francis: Being an atheist is alright as long as you do good
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Man and woman arrested on suspicion of conspiracy to murder victim of Woolwich machete attack, named as Drummer Lee Rigby
'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
Exclusive: Suspect Michael Adebolajo was inspired by cleric banned from UK after urging followers to behead enemies of Islam
- 1 Pope Francis: Being an atheist is alright as long as you do good
- 2 Man and woman arrested on suspicion of conspiracy to murder victim of Woolwich machete attack, named as Drummer Lee Rigby
- 3 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 4 Archaeologists uncover nearly 5,000 cave paintings in Burgos, Mexico
- 5 Lord of the Sings: Sir Christopher Lee, 91, to release heavy metal album
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.