Explosive profit rise for Orica

ORICA chief Alberto Calderon says normality is slowly returning to the resource sector as miners move away from looking to lower their costs by cherry picking the best parts of their deposits.

Mr Calderon called out signs of improving market conditions among Orica’s key customers as the explosives and chemical maker posted a 31 per cent surge in half-year profit to $195.2 million.

The result, covering the six months ending March, was up from $149 million on the same period a year earlier when Orica was hit with a one-off settlement with the Australian Taxation Office.

The company is the world’s biggest explosives maker and sells its product to the mining, quarry and construction industries.

Miners can cut costs by socalled high grading where they target the parts of a deposit which require the least amount of earth and rock to be removed, lowering the need for explosives.

Mr Calderon said this had been occurring in the past two years but the industry was reverting back to a more normal mining pattern.

“The volumes of waster that they (miners) need to move are higher,” Mr Calderon said. “It is a gradual process.” Shares in Orica have surged more than one-third over the past year.

They closed 65¢, or 3.37 per cent, lower at $18.63. ACTIVIST hedge fund Elliott Advisors has called on BHP Billiton to conduct an independent review of its petroleum business, saying it has found broad support from other shareholders for unlocking its value.

Elliott, which claims a 4.1 per cent stake in BHP’s UKlisted unit, says it prefers a full or partial demerger of the unit, but recognises there are other possible solutions to unlock the latent value of the petroleum business.

“Our shareholder conversations