BHP's best buy could be itself

MELBOURNE - BHP Billiton, the world's largest mining company, could boost earnings by 10 per cent by buying back A$15 billion ($19 billion) of its own shares, Southern Cross Equities said.

"I can't see any investment BHP can make that stacks up better than buying large wads of their own shares back," said Southern Cross executive director Charlie Aitken.

"We believe it is likely that a buy-back is announced at the result in February."

BHP suspended a buy-back programme when it launched a hostile takeover for Rio Tinto Group in 2007.

BHP, spending US$10.7 billion ($14.3 billion) on developing projects this year, and another US$5.8 billion on a joint venture with Rio, may seek to buy Potash Corp of Saskatchewan, Bank of America-Merrill Lynch said.

Southern Cross has a "buy" rating on BHP, with a target price of A$43.

BHP could buy back 492 million shares at A$39 each, Aitken said in a report.

BHP may consider buying back 10 per cent of its shares next year, Citigroup said in September.

Chief executive Marius Kloppers said in August that BHP had no plans to return surplus cash to shareholders.

- BLOOMBERG