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Nov 15, 2010

BHP may add to buyback program

Spokesperson will not rule out extension before interim results

BHP Billiton has left open the possibility of extending its buyback program before its interim results in February.

On Monday the mining giant reactivated its $13 bn buyback program, of which there is $4.2 bn remaining to be paid out.

‘As part of its normal course of business, the BHP Billiton board will fully review the company’s capital structure ahead of the interim results,’ a spokesperson tells IR magazine in an email. ‘In that context, the board will consider all future options.’

BHP Billiton decided to restart its buyback program following the failure of its bid for Potash Corporation of Saskatchewan, which was blocked by the Canadian government. This led BHP Billiton to officially withdraw its offer on Monday.

The collapse of the Potash bid leaves BHP Billiton with vast amounts of cash to play with, and one option is to add to its share buyback program. The move would appease shareholders who have complained that BHP Billiton has not returned enough of its excess cash to investors.

The mining giant has also left open the possibility of pursuing more large-scale deals, however. At its annual general meeting in Perth, Australia, on Tuesday, BHP Billiton said it remains committed to exploring opportunities to invest in tier one assets through M&A.