Thank you for contacting me with your thoughts on the proposed Crandon mine project. I share in your commitment to protecting Wisconsin's natural environment. Wisconsin has some of the strictest mining standards in the country. These standards must be met before any mining project will be allowed to proceed.

The Wisconsin Department of Natural Resources is currently drafting an Environmental Impact Statement regarding the proposed project. The United States Army Corps of Engineers will also conduct research and prepare such a statement before any mining will be allowed to begin.

I am confident that with all of these safeguards in place, no mining project that threatens our environment will be allowed in the state of Wisconsin. Thank you again for contacting me regarding this situation. I appreciate hearing your thoughts and concerns.

Sincerely,
Scott McCallum, Lieutenant Governor

The shareholders in BHP may be uncertain about the value of the proposed merger of their company with Billiton but they had better get used to it, because more uncertainty lies ahead. BHP's steel division is named as the only definite sale, but a lot of other assets might also go (not that any are nominated in the merger documents). Copper, coal, zinc and uranium assets seem certain to be sold - and possibly entire divisions that are today being presented as gems in the merged business.

Billiton's nickel division, touted as a growth area for the merged BHP Billiton, is not a high-class business, falling well short of the standards achieved by the coal, iron ore, copper and aluminium businesses. Nickel will need substantial new-project investment, an acquisition, or to be sold.

Samancor, Billiton's manganese operation, is also a poor performer. It includes two former BHP operations sold to Billiton three years ago because they were considered non-core assets. The return to partial BHP control of the Groote Eylandt Mining Company in the Northern Territory and the TEMCO works in Tasmania must be raising eyebrows, even inside BHP.

Those two divisions are not world-class and might be sold, however the businesses that are on the block are metals distribution in North America, a 29.1% interest in the Bullmoose coal mine in Canada, 25% of the Polaris zinc mine in Canada, and the wholly owned Smith Ranch uranium mine in the United States. It is also highly likely that the 25% of the Alumbrera copper mine in Argentina will be sold if a buyer can be found.

Most of the assets likely to be sold came with Billiton's acquisition last year of the Canadian company Rio Algom. But there are other parts of the merged BHP Billiton that do not fit the grand plan of creating a globally competitive company that will focus on being one of the top few in its chosen fields - also the Rio Tinto strategy. BHP's hot-briquetted iron project in Western Australia is a dud, and Billiton executives are believed to be querying the logic in trying to develop a diamond business based on Canada's Ekati mine, and a silver business based on the Cannington mine in Queensland.

The problem for BHP shareholders as they decide whether to approve the merger with Billiton (they are required to vote on it on May 18) is knowing what their new business will look like. BHP will not talk about what is likely to be sold. A company spokesman says: "It is too sensitive at the moment." Critics of the deal say BHP cannot talk about sales because most Billiton assets were presented as "not reviewable".

However, one of the few independent observers of the merger, David Walker of Auzeq Securities, is highly critical of the terms of the merger and the quality of some Billiton assets. In a research paper dated April 30, he says the merger should be rejected because it grossly undervalues BHP. He says the merger represents a transfer of value from BHP to Billiton of $4.6 billion, or $2.55 per BHP share. "This value is similar to that lost to BHP shareholders through the disastrous Magma Copper purchase."

Walker says Billiton is the driving force behind the sale of BHP's steel division but has refused to acknowledge weakness in its own manganese and nickel operations.

Another broking firm, Credit Suisse First Boston (CSFB) has also questioned the quality of Billiton's development portfolio, particularly the Spence copper project in Chile. "It would seem likely that if the merger goes ahead, BHP Billiton would prefer to expand the brownfield Escondida Norte, before undertaking a greenfield development of Spence."

CSFB resources analyst Peter O'Connor agrees that asset sales will be a priority after the merger. "A number of the old Rio Algom assets will certainly be sold." O'Connor says about $US500 million could be generated from the sale of small assets, although he doubts that entire divisions will go.

Walker says most BHP shareholders have little understanding of the risks attached to Billiton cashflow and new projects, mostly in southern Africa or South America; if they did, they would be deeply unhappy with the proposed future ownership structure of 58% BHP and 42% Billiton. "We estimate the Billiton operational cashflows have a 30% higher risk than those from BHP, and Billiton's cashflows from new projects are nearly 40% higher-risk than BHP's," he says. "When this differential is applied as discount rates against project cashflows, valuations indicate merger terms of 70:30."

FOR THE CHOP
BHP Billitonís potential asset sales
Highly Likely:
100% of North American Metals trading
25% of Alumbrera Copper mine in Chile
29.1% of Polaris zinc mine in Canada
100% of Smith Ranch uranium in the U.S.
33.6% of Highland Valley copper in Canada
Possibilities:
100% of Cannington silver/lead in Qld
100% of Hot-briquetted iron in WA
Probable divisinal sales:
Nickle
Manganese
Diamonds

Source: BRW

Nicolet Minerals to move office to Crandon Nicolet Minerals Co. will close its Rhinelander office at 7 N. Brown St. and move that portion of the operation to Crandon May 1.

The Rhinelander offices currently house administration and accounting divisions and the offices of president Don Cumming and public affairs officer Dale Alberts. All Rhinelander office functions will be relocated to the Nicolet Minerals Co. office at 104 W. Madison St. in Crandon.

Nicolet Minerals maintains two offices in Crandon, the engineering office on Madison Street and the information center at 201 W. Pioneer.

"Essentially right now what we are doing is consolidating into the existing office space in Crandon," Alberts said. "This step of moving to Crandon has always been in the plan and is a natural evolution of our process. In 1998 when we assembled the team to buy this project, we assembled a fairly large number of technical people to, basically, redesign the project. That work which was done out of the Crandon office has all been completed. We submitted our last major study on the project to the Department of Natural Resources in December of last year."

"It is a logical time to take the next evolutionary step in our process and move to Crandon," Alberts said.

With the move, Alberts will become president of Nicolet Minerals Co. with Cumming's retirement April 15. Senior environmental engineer Ken Black will be taking a promotion and transfer to head up the Environment, Health and Safety Office at Nicolet Minerals' corporate office.

"Essentially, we are just a little smaller, and that allows us to move into the existing office space in Crandon. We will be keeping a small, core technical group to answer questions, but we are certainly getting smaller than we were," Alberts said.

Nicolet Minerals Co. currently employs 14 people in Rhinelander and will transfer nine jobs to Crandon. With Cumming's retirement and Black's promotion and transfer, three Rhinelander jobs will not be continued at the Crandon office.

Alberts said that eventually Nicolet Minerals Co. will be building larger quarters in Crandon.

"Now we can all fit into the existing building, but, yes, we will be consolidating and building some larger facilities there. This won't happen in the near term," he said.

"What I currently envision as we get closer to production, after we have received state and federal permits to begin this project, is an administrative and personnel office in Crandon where employees will be interviewed and hired and so on, and where our basic accounting and administrative personnel can be housed under one roof. When the mine is built, we will (also) have a mine management and administration building on site. So I think we will have two offices and the information center in Crandon."

"The information center will remain open," Alberts added. "It provides a good public outreach and educational facility that will have a viable role for the life of the project."

Mr Steve Kesler has resigned as Executive Director of Billiton Plc, with responsibility for the Group's Base Metals business, with immediate effect.

Brian Gilbertson, Chairman and Chief Executive of Billiton, commented, "I thank Steve for his contribution to Billiton, particularly in his previous portfolio of New Business in which he led last year's successful acquisition of Rio Algom. Together with the potential application of our BioCOP technology in alliance with Codelco, Billiton has now established a quality asset base for growth in the copper business."

Mr Mike Parrett, a former Chief Financial Officer of Rio Algom Limited, has been appointed Acting Chief Executive of Billiton Base Metals. He will report to Mr David Munro, Executive Director responsible for Billiton' s Aluminium and now also Base Metals businesses.

More on resignation...

Steve Kesler, executive director of global mining group Billiton, with responsibility for the group's base metals business, has resigned with immediate effect. Until last November, Mr Kesler was in charge of new business, exploration and technology, and led the controversial $1.2bn acquisition of Rio Algom in the middle of last year.

In November his responsibilities were changed: he lost the new business, exploration and technology brief and was left with the new Billiton Base Metals business - essentially the Latin American copper assets acquired with Rio Algom.

Mike Parrett, a former chief financial officer of Rio Algom, has been appointed acting chief executive of Billiton Base Metals. He will report to Dave Munro, executive director responsible for aluminium and for the base metals business.

Mr Kessler can expect to receive a compensation package of around $800,000. His basic salary last year was $553,000 and all Billiton directors are on contracts giving 12 months' notice with a payoff of 1.5 times basic salary.

Before joining Billiton, Mr Kessler worked at major mining projects for several other companies. In Latin America he worked at two major copper joint ventures, Escondida (BHP and Rio Tinto) and at Collahuasi (Falconbridge and Anglo American).

Billiton chairman and CEO, Brian Gilbertson, paid tribute to Mr Kesler's contributions as new business director, notably the Rio Algom acquisition and the technical joint venture with Chilean copper giant Codelco.

Sources close to the company suggested that the resignation was prompted by worries about whether Mr Kesler was the right man to take Rio Algom forward. At the time of the Rio Algom bid in August, many analysts were concerned that Billiton might be paying too much. In early Monday afternoon trading in London, shares in Billiton were stable at 312p.

Billiton Chairman's message to stockholders released Feb. 12 2001.

Integration of Rio Algom into Billiton is well advanced, and should be completed by the end of the current financial year. Rio Algom’s exploration programme is being absorbed into that of Billiton’s. Given efficiency gains and cost savings, this will be accomplished without any increase in the Group’s exploration budget. Together with cost cutting at the centre, this will enable us to reduce the annual corporate costs of Rio Algom by an estimated 38% going forward. The new management team is reviewing strategic alternatives in respect of a number of the former Rio Algom assets, including the metals distribution business, the Alumbrera operation and a number of non-core projects, with a view to adding value.

The following press statement was posted today in the infomine website. For more stories (mostly general profits statements, see: http://www.busrep.co.za/general/busrep/br_newsview.php?click_id=345&art_id=iol981972539304J530&set_id=60

Billiton plc has raised the prospect of selling its stake in Columbus Stainless, the lossmaking stainless steel project owned in joint venture with rival mining house Anglo American.

Billiton chairman Brian Gilbertson said the group would consider the project's disposal if the right opportunity presented itself: "You've got to ask is this the right asset," he said of Columbus's recent performance. Billiton owns about a third of Columbus Stainless through its ferroalloys operating unit, Samancor. The balance is held by Anglo American and the Industrial Development Corporation (IDC).

Commenting on Columbus Stainless, Gilbertson said: "Columbus is a disappointment. But I take some comfort that the investment in small," he said. Columbus Stainless's contribution is denominated in rands and therefore has relatively little impact on the group's dollar account. Gilbertson was speaking at Billiton's interim financial and operating results presentation to analysts and media in London today (12 February).

Billiton's share of continued losses at Columbus in the first half ? a $2 million loss compared to a $4 million loss previously ? has thrown the project's struggle to overcome poor market conditions into the spotlight. Gilbertson also noted Billiton's ferroalloys division was the weak link in Billiton's spread of commodities. "Weaker market conditions (in the steel and ferroalloys division) are likely to adversely affect the second half," he said.

So it's in this context that market speculation of a possible linkup between Billiton and Australian company, BHP, takes an interesting dynamic. Perhaps BHP sees value in Billiton's steel operations. But in the main, the speculation has focused on a merger between the two which would, in turn, precipitate a rival offer from Anglo American.

Commenting on the speculation linking Billiton and BHP, Gilbertson was intriguingly coy: "We (mining industry leaders) have discussions from time to time, but I have absolutely nothing to announce - otherwise I would have done so," he said.

Other disposals, new investments Gilbertson said the group would consider other disposals. Alumbrera, a base metals mine inherited from Billiton's $1.2 billion acquisition of Canadian company, Rio Algom, is one of them. Alumbrera is the only area of disappointment in Rio Algom, Gilbertson said, although new management at the mine was hoping to improve costs. "But in the absence of that we would have to look at whether it made sense in the portfolio," he said.

Billiton has enjoyed a spate of acquisitions in the first half of its financial year in which it spent a combined $2.7 billion alone on buying Rio Algom and Alcoa's 56 per cent stake in alumina mine, Worsley. Others could follow including a further investment in iron ore.

"Iron ore is a difficult commodity to get in to, but we have a small stake in CVRD (a 2.1 per cent holding through Valepar costing $327 million). There is no news, but if there is an opportunity to lift this stake in a value-adding way then we would like to do so," Gilbertson said. CVRD, or Companhia Vale do Rio Doce, is the world's largest iron ore producer.

Billiton also said it would buy resources group Exxon's remaining stake in Cerrejon Zone Norte, a Colombian coal field in which the group has considerable exposure. "We will look seriously at buying CZN stake from Exxon," financial director Mick Davis said.

Interim pretax profit rises to $498m from $332m Debt rises to 70 per cent of shareholders' funds Further major expansions under consideration as Rio Algom assets shape up Billiton's bold acquisition spree over the last few months appears to be coming good. The assets acquired from Rio Algom have, with the exception of the Alumbrera mine, performed ahead of expectations. The exploration assets are shaping up nicely.

The activity doesn't stop there. Billiton is looking at expanding both of its big aluminium smelters, Hillside in South Africa and Mozal in Mozambique. If these were to go ahead, the purchase of additional equity in the Worsley alumina project would come into it own - the company would still be self-sufficient in alumina and not exposed to the vagaries of the spot market.

All of this comes at a price, of course. Net debt at the period-end was $2.75bn, but the subsequent acquisition of more equity in Worsley pushed that figure up to $4.238bn or 70 per cent of shareholders' funds. The impact so far has been muted, because revaluations of the company's rand-denominated debt have mitigated the extra interest. But that situation may not necessarily persist.

The company is reasonably confident on the outlook for product prices, noting that aluminium remains firm because of supply-side disruptions, while coal prices have picked up of late. The outlook for ferrous raw materials is less rosy given the over-capacity plaguing the steel industry.

The share price has slipped slightly today, but remains above 300p. Analysts' price targets are in the 320-350p range.

Johannesburg - Almost 700 workers at Mozal, the $1,3 billion aluminium smelter plant at Beluluane on the outskirts of Maputo, were expected to down tools today over wages, sources close to the unions said yesterday.

But Billiton, the majority shareholder, warned that a strike would be illegal because it would be a violation of a recent arbitration award prescribing that parties continue with negotiations.

Mozambican workers are demanding a 700 percent increase to bring their wages on par with those of expatriate workers from the UK and South Africa.

Billiton had offered an increase of 17 percent to 35 percent on a sliding scale.

But even at 17 percent, which would mean a monthly wage of R4 000 [tw--about $500 per month] , the lowest paid workers would still enjoy the highest minimum wages in both Mozambique and the southern African region.

The Mozambican government has also come out against the strike. Domingo, the State-owned newspaper, said there would be very little public sympathy for the strike. "The country's highest paid workers want to strike", said its headline.

The fear was that the strike might discourage further international investment in Mozambique, one of the world's poorest nations.

Proposed Crandon mine no longer in Billiton's plans?
Crandon mine opponents to Gov. McCallum:
Halt the permitting process

Madison Opponents of the proposed Crandon mine today cited a recent mining company declaration that the proposal is a "non-core asset" as a strong indication that new London-based South African owner, Billiton, may be preparing to sell the controversial project. Non-core assets are generally entities that corporations deem nonessential to operations, and are willing to abandon or sell. Organizers of several state organizations called on our next Governor, Scott McCallum to halt permitting activities by state regulators and call on Billiton to transfer the mine site to the people of Wisconsin. Organizers also cited recent predictions by Billiton itself, that the mine - if permitted - would violate state groundwater quality standards.

• The inability of this and previous owners to demonstrate the ability to operate the mine safely or to gain state and federal approvals to mine in the last 25 years;
• The proposed mine's proximity to extremely sensitive natural resources such as the wild rice beds at Mole Lake and the Wolf River;
• The lack of local approval for the proposal. At the mine site itself, the Mole Lake Sokaogon Chippewa community and the town of Nashville oppose the proposed mine. Below the mine, every community on the Wolf River down through the Menominee Nation oppose the proposed mine;
• Continued opposition by Wisconsin tribes, labor, environmental and conservation groups and efforts to ensure that the use of cyanide in mining is banned in the state and
• The strong upsurge in anti-corporate sentiment in rural Wisconsin, including the powerful campaign to stop the Duluth/Wausau transmission line that would provide power via a feeder line to the Crandon mine.

Governor McCallum should call on Billiton to drop the mine permit application and open talks on the future of the mine site with federal, state, tribal, and local governments, to ensure that such a grave threat to surface and ground waters never rears its head again." Buettner added, "Just as Governor Thompson has urged Perrier to rethink its plans, our new Governor McCallum should explain to mining companies that the Crandon mine is a risky investment."

Zoltan Grossman of the Wolf Watershed Educational Project said, "The Crandon proposal's new owner, Billiton, has insurmountable technical and legal hurdles in front of it. It is time for Billiton and state officials to recognize that state and local residents do not want environmentally destructive sulfide mining to take place in the headwaters of the Wolf River."

Dave Blouin, coordinator of the Mining Impact Coalition of Wisconsin, said, "Billiton's own data continues to show that the mine would violate state groundwater standards. Since it cannot get state permits if it will be a polluter, Billiton should abandon the proposal. There is a reason this proposal is the hot potato of the mining industry - it is in an entirely inappropriate site for an underground mine." The spokespeople urged all Crandon mine opponents to e-mail our new Governor Scott McCallum at wisgov@mail.state.wi.us to congratulate him on his new position, and to ask him to end the 25-year Crandon mine dispute. Governor McCallum should ask Billiton to drop its risky investment, and to transfer the mine site to the people of Wisconsin.

Rio Algom Limited ("Rio Algom") announced today that it will transfer its interests in its wholly-owned subsidiaries, Atlas Ideal Metals Inc. ("Atlas Ideal") and NAMD Inc. ("NAMD") to wholly-owned subsidiaries of Billiton Plc ("Billiton"). Atlas Ideal and NAMD, directly and through subsidiaries, carry on Rio Algom's metals distribution business. In addition, wholly owned subsidiaries of NAMD carry on Rio Algom's uranium mining activities in the United States and own the Nicolet exploration project near Crandon, Wisconsin.

These transactions will allow Rio Algom to achieve an orderly and certain transfer of non-core assets at market value, permit it to concentrate and grow its core business of copper mining and relieve the company of the investment requirements necessary to maintain its competitive position in the consolidating metals distribution business. From Billiton's perspective, the transaction will align Rio Algom's and Billiton's management structures and eliminate certain tax inefficiencies associated with Rio Algom's corporate structure.

A committee of independent directors of Rio Algom, established to review the transaction and the fair market value of the assets being sold, retained RBC Dominion Securities Inc. to provide independent valuation advice as to such value.

The total consideration to be received by Rio Algom for such interests (which consist of all of the common shares of Atlas Ideal and NAMD and the indebtedness of such companies and their subsidiaries to Rio Algom) is approximately US$410 million which is within the range of fair market values as determined by RBC Dominion Securities. Of this consideration approximately US$350 million will be loaned by Rio Algom to another wholly-owned Canadian subsidiary of Billiton on market terms with the loan fully guaranteed, as to both principal and interest, by Billiton.

Billiton is a U.K. public company, listed on the London Stock Exchange, which indirectly owns 100% of the common shares of Rio Algom.

Rio Algom Limited
120 Adelaide Street West 416.367.4000 tel Toronto, Ontario
416.365.6870 fax Canada M5H 1W5 www.rioalgom.com
Contact: Wes Muir, Director, Communications Rio Algom News & Public Affairs, 416.365.6863

TOP

Officials with the state Department of Natural Resources say it could be late next year before it issues a long-awaited environmental assessment of the proposed zinc and copper mine near Crandon.

Bill Tans, who is overseeing the permitting process for the DNR, also said the agency has received no indication that the recent sale of the company developing the mine will cause any changes in the proposal.

Environmentalists, however, think otherwise and say there have been signs that interest in the mine may be on the wane.

The mine near Crandon in northeastern Wisconsin is being developed by Nicolet Minerals, formerly a subsidiary of Rio Algom, a Canadian mining company. Last fall, Rio Algom was purchased by Billiton, a South African mining giant that specializes in aluminum and coal. Nicolet officials reassured people in Crandon that the sale would have no impact on development of the mine.

"Companies spend millions looking for something this good," Nicolet spokesman Dale Alberts said late last summer. "We're not going anywhere."

But environmentalists fighting the proposed mine say the DNR's difficulties in permitting the project and the sale of the parent company combine to throw the mine's future in doubt.

"The state's most controversial environmental issue is at a crossroads," said David Blouin, with a group called the Mining Impact Coalition of Wisconsin.

Blouin said there has been no indication of what Billiton intends to do with the proposed mine. He added, however, that there have been signs the mine may not be as good a financial investment as was once believed.

Earlier this month, Blouin said, Rio Algom announced that it was transferring its interest in Nicolet Minerals to Billiton. In a release, Blouin added, the Crandon mine was called a "non-core asset."

Blouin said such wording is a strong indication that Billiton may be preparing to sell the controversial mine.

"Non-core assets are generally entities that corporations deem non-essential to operations, and are willing to abandon or sell," the Mining Impact Coalition noted in a press release last week.

Tans said the DNR has not heard of an impending sale. Billiton and Nicolet officials were unavailable for comment Tuesday.

Meanwhile, Tans said the DNR and Nicolet continue to disagree on computer models that are created to show the impact the mine would have on groundwater.

"They have their model and we have our model," Tans said. "We've sort of gone our separate ways."

Most recently, Tans said, the company has provided information for a model that would show the impact of its proposal to use grout, or cement, to keep water from the mine from seeping into groundwater.

"Evaluating that will take a number of months," Tans said. "The upshot of all this is that we don't know for sure when we will have a draft environmental impact statement. We've always said it will happen by such and such a day. But then it never happens."

Tans said the soonest an environmental assessment might be ready is sometime during the second half of 2001.

CRANDON, Wis. (AP) - An environmental group says changes in ownership of a proposed underground zinc and copper mine may be in the works, but a mining company official said Thursday it's business as usual for the project. "We are going to be spending several million dollars next year continuing to pursue the permits," said Dale Alberts, a spokesman for Nicolet Minerals Co. "Our budget is set."

But Dave Blouin, a spokesman for the Mining Impact Coalition of Wisconsin, an environmental group opposed to the mine, believes the mine's future is in doubt. "The state's most controversial environmental issue is at a crossroads," he said.

Nicolet Minerals, a subsidiary of London-based Billiton Plc., is seeking local, state and federal permits to remove 55 million tons of mostly zinc and copper ore from a site south of Crandon.

Earlier this month, Billiton announced that it was transferring assets of its U.S. holdings to a subsidiary in Ireland, Alberts said. "I met with senior Billiton people earlier this month and we were told that this transfer was done simply to maximize or optimize the U.S. tax structure and benefits. We were instructed business as usual for the Crandon project," he said.

Billiton is one of the world's largest producers of aluminum and is the world's largest exporter of thermal coal. It employs about 33,000 workers worldwide, including at major operations in Australia, Brazil, Colombia, South Africa and Suriname.

Blouin said there has been no indication of what Billiton intends to do with the proposed mine near Crandon, which company documents describe as a "noncore asset." The label is an indication Billiton may be preparing to sell the mine, Blouin said. "Noncore assets are generally entities that corporations deem nonessential to operations, and are willing to abandon or sell," the Mining Impact Coalition said in a statement.

Earlier this year, Billiton acquired Rio Algom Ltd. of Toronto, which had taken over sole development of the Crandon mine from Exxon Coal and Minerals Co. in 1998.

Rio Algom had been involved in the project since 1993.

Alberts discounted Blouin's predictions of what may be happening with the mining project. "Some of the anti-mining crowd are engaging in a bit of wishful thinking," he said.

Meanwhile, Alberts said he expected the state Department of Natural Resources' study of the proposed mine with recommendations for whether state permits should be granted will be completed by next May or June. "We submitted our last major document," he said. "We have answered every question and answered every question 15 times."

Alberts said mining company experts and the DNR continue to disagree on some groundwater issues related to the mine, including how much water will flow back into the mine. "The DNR insists on trying to capture a worst-case scenario that we've said won't happen," Alberts said.

Bill Tans, who is overseeing the permitting process for the DNR, agreed there were disagreements on computer models created to show the impact the mine would have on groundwater. "They have their model and we have our model," Tans said. "We've sort of gone our separate ways."

Most recently, Tans said, the company has provided information for a model that would show the impact of its proposal to use grout, or cement, to keep water from the mine from seeping into groundwater. "Evaluating that will take a number of months," Tans said. "The upshot of all this is that we don't know for sure when we will have a draft environmental impact statement."

Tans said the soonest the study might be ready is sometime during the second half of 2001.

Rio Algom Limited announced that, effective November 29, 2000, Billiton Copper Holdings Inc., a wholly-owned subsidiary of Billiton Plc, and the holder of 96.5% of Rio Algom's outstanding common shares, completed the compulsory acquisition of the balance of the common shares, to hold 100%. With effect from November 29, 2000, the Rio Algom common shares will no longer be listed on the Toronto Stock Exchange or the New York Stock Exchange.

Rio Algom Limited
120 Adelaide Street West
416.367.4000 tel
Toronto, Ontario
416.365.6870 fax
Canada M5H 1W5
www.rioalgom.com

Substantial progress has been made over the past year in the on-going task of developing the most effective business model for Billiton and of refining its corporate strategy to deliver superior shareholder returns in the years ahead. Recent corporate developments, including the buy-out of minority interests across the group and the significant expansion of the asset base through both acquisitions and internal projects, have positioned Billiton for a further evolution of its strategy across two major fronts.

The first is a commitment to build on the base of our traditional commodity businesses, running these as efficiently as possible, pursuing attractive growth opportunities where these offer acceptable risk-weighted returns, competing for positions of industry leadership for each of our commodities, and maintaining the single-minded focus on low unit operating costs. This range of activities is encompassed by the generic title Billiton Metals and Mining ("BMM").

The second is a commitment to seek new initiatives and business opportunities - yielding returns higher than usually associated with our industry - in areas within and related to our traditional business activities. It is intended that particular emphasis be given to reducing the amount of equity capital tied up in our businesses, to reducing the volatility of our revenue streams, and overall, to enhancing Billiton's financial efficiency, and hence its return on equity. This range of activities is encompassed by the generic title Billiton Capital ("BCAP").

Recent Billiton projects, such as the Sweet River transaction and the development of e-marketplaces, have demonstrated the advantages of this dual approach, and the Board has now approved an organisational restructuring to give further impetus to these initiatives:

• The established commodity-structure will be retained, with each separate commodity business reporting to a member of the Billiton Executive Committee, who in turn is responsible directly to the Group Chairman and Chief Executive for the performance of that business.

• In addition to his existing executive responsibilities for Nickel, Steel & Ferroalloys and Titanium Minerals, Mr Mike Salamon will assume responsibility within the Billiton executive team for promoting BMM-related initiatives across the various commodity businesses. Formal processes will be put in place to advance these from an overall Billiton perspective. In recognition of their corporate wide significance, Mr Salamon will also assume responsibility for Health, Safety and Environmental matters and for Projects.

• In addition to his existing executive responsibility for Finance, Mr Mick Davis will assume central responsibility for BCAP initiatives, both across the various commodity businesses and in new areas. For the optimal execution of these new duties, and to ensure organisational coherence, he will assume responsibility also for the Group's Marketing, e-Business, Exploration and Development, Biotechnology and New Business initiatives.

• In view of the recent acquisition of Rio Algom, Mr Steve Kesler will relinquish executive responsibility for New Business, Exploration and Technology to focus on the new Billiton Base Metals business.

• To accommodate the BMM and BCAP developments, Mr Marius Kloppers, previously Chief Executive of Samancor Manganese, will join the Billiton Executive Committee with responsibility for Coal and Manganese, previously the responsibility of Messrs Davis and Salamon respectively.

The changes will take effect from 1 January 2001. Commenting on these developments, Billiton Chairman and Chief Executive Brian Gilbertson said, "The Billiton executive has spent considerable time reflecting on the strategies and structure that will create optimum value for shareholders in the future. In the process, we have reaffirmed our belief in the inherent potential of Billiton's high-quality assets and its entrepreneurial management teams. The reinvention we announce today is internal in nature, but holds much future promise. It reflects our singleminded commitment to create opportunities which will boost Billiton's performance and growth."

Marc Gonsalves Senior Manager Corporate Affairs
Billiton Plc

LONDON, Oct 4 (Reuters) - Mining and metals group Billiton Plc took two more steps to internationalise its business on Wednesday by winning the battle for Canada's Rio Algom Ltd and expanding its coal interests in Colombia.

The London-based group -- which moved from Johannesburg three years ago -- said it was proceeding with its C$1.7 billion (US$1.13 billion) offer for Rio Algom after Noranda Inc abandoned a rival bid.

At the same time, a consortium of Billiton, Anglo American Plc and Swiss-based Glencore International agreed to buy Colombia's state-run coal miner Carbocol for $384 million, securing 50 percent of Cerrejon Norte, the largest open-cast coal mine in Latin America.

Investors welcomed the news and shares in Billiton were the biggest gainers in the FTSE 100 index, jumping 5.3 percent to 267 pence by 1018 GMT. The stock has underperformed the overall London market by 22 percent since the start of the year.

Traders said the shares were boosted by relief that Billiton had avoided a protracted bidding war with Noranda, while a near 10-percent jump in the stock of aluminium giant Alcoa Inc overnight in the U.S. provided an extra boost.

OUT OF AFRICA

Paul Galloway, mining analyst at UBS Warburg, said the spate of deals culminating in the Rio Algom acquisition would transform Billiton into a truly global business and significantly dilute its South African exposure.

"Billiton have successfully internationlised their business. Their geographic spread is now going to be about 40 percent Africa, 30 percent Latin America and 30 percent Australia," he said.

Russell Skirrow of Merrill Lynch agreed that Billiton -- which had 70 percent of its business in Africa when it came to London in 1997 -- had finally shed its emerging market image.

But he argued that Chairman and Chief Executive Brian Gilbertson had paid a high price for Rio Algom. Skirrow believes the Canadian group is worth no more than C$24 per share against the C$27 Billiton will be paying.

"The company has gone more global but it has cost its shareholders something in the process -- they have destroyed some value in this deal," he said.

Billiton last month raised US$754 million in fresh equity to help fund its acquisition spree, which also included a US$1.49 billion deal to take control of Australia's low-cost Worsley alumina refinery from Alcoa.

REUTERS@