Thu, Apr 22, 2010 - Page 5 News List

Australia’s BHP uncovers signs of possible corruption

AFP , SYDNEY

The world’s top miner, BHP Billiton, said yesterday it had uncovered evidence of possible corruption linked to mineral exploration projects and has handed the information to US authorities.

The Anglo-Australian giant said it was also conducting an internal probe into the matter, which involves “interaction” with government officials surrounding some projects.

“The company has disclosed to relevant authorities evidence that it has uncovered regarding possible violations of applicable anti-corruption laws involving interactions with government officials,” a statement said.

“Accordingly, the company is cooperating with the relevant authorities including conducting an internal investigation, which is continuing,” it said.

A spokeswoman refused to reveal where the alleged violations took place, but said it was not China, where four Rio Tinto staff were jailed for bribery and commercial espionage last month.

She said the US Securities and Exchange Commission (SEC) had requested information related to “relatively small” exploration contracts which were terminated about a year ago.

“We’re talking about a couple of relatively small minerals exploration projects, the last of which was terminated about a year ago on commercial grounds,” the spokeswoman said.

“Only after that, in August last year, did we get an inquiry from the SEC asking us to do some internal investigations, which we did commence at that point,” she said.

“We have recently uncovered some evidence we have given to the SEC, and we are involved in ongoing internal investigations and cooperating fully with the SEC on this issue,” she said.

BHP made the announcement as it released third-quarter production figures that were slightly below expectations.

The company, which recently negotiated with most of its Asian iron ore customers to switch from annual contracts to index-based prices, said iron ore and metallurgical coal production had been impacted by weather disruptions.

Iron ore production for the quarter ending on March 31 was 31.16 million tonnes — down 4 percent on second quarter output but 11 percent ahead of that of a year earlier.

Production of metallurgical coal at Queensland mines was hit by tropical Cyclone Ului, leaving total production up 7 percent compared with last year, but down 8 percent on the second quarter at 8.16 million tonnes.

Record petroleum production was achieved for the nine months to March 31, following the successful start-up of the Pyrenees operation in Australia and the strong performance of projects in the US, BHP said.

“At first glance, BHP Billiton looks to have reported a mixed set of production numbers for the March 2010 quarter,” IG Markets market strategist Ben Potter said.

“Total petroleum production looks to have come in shy of analysts’ expectations despite a third consecutive year-to-date production record,” he said.

“However, a stronger-than-expected performance from the base metals unit would have partially offset this weakness,” Potter said.

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