Monday, October 4, 2010

BHP (NYSE:BHP) Remains Attractive to Dahlman Rose

BHP Billiton (NYSE:BHP) has garnered the attention of the financial media recently largely on their bid for Potash Corp. (NYSE:POT) and the resultant resistance to the potential acquisition from the giant fertilizer company.

But BHP has a lot of other things going on than that, as Dahlman Rose analysts recently said after they toured the South American copper assets held by the company, which have enormous upside potential for expansion.

Even so, they did note there will be huge capital expenditure to bring operations to high levels.

Mines specifically looked at by Dahlman were Spence, Antamina and Escondida, which are among the largest in the world as far as copper ore goes.

Copper prices are expected to continue climbing based on the costs mentioned, but also the shrinking ore grades. That should offer support for copper prices, but demand still plays a factor based on macroeconomic conditions, which continue to remain weak.

BHP was trading at $76.19, down $1.50, or 1.93 percent, at $1:03 PM EDT. Dahlman has a price target of $100 on BHP.

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