This week, BHP Billiton recommended shareholders approve the proposed demerger of South32 at its shareholder meetings to be held on May 6.

“Following the demerger, BHP Billiton will remain one of the largest diversified global resources companies and its strategic priorities will not change,” said BHP Billiton Chairman Jac Nasser. “The demerger simplifies BHP Billiton and enables us to further focus on generating value from our core portfolio.”

BHP Billiton has interests in 41 assets across 13 countries and six continents. The demerger is significant progress toward achieving BHP Billiton’s identified core portfolio of 19 assets across eight countries and three continents. This portfolio consists of large long-life petroleum, copper, iron ore, coal and potash assets, collectively generating 96% of the BHP’s underlying EBIT in the 2014 financial year.

“More challenging markets demand a sharper focus on the businesses that drive the majority of our earnings and the push for productivity must continue,” said BHP Billiton CEO Andrew Mackenzie. “Having achieved considerable productivity gains to date, future gains will be harder won. We believe that the simplification of our portfolio has been, and will continue to be, a key driver of delivering and sustaining productivity improvements.”

The demerger will allow BHP to further focus on delivering gains beyond the $4 billion per year by the end of the 2017 financial year already targeted, Mackenzie explained.

Linked by the 32nd parallel line of latitude, South32’s asset portfolio is diversified across five countries and produces alumina, aluminum, coal, nickel, manganese, silver, lead and zinc. The company’s head office will be in Perth, Australia. A regional head office and global shared services center will be located in Johannesburg.

“We have a clear strategy to improve performance,” said South32 Chairman-elect David Crawford. “The directors and management team collectively have extensive mining, exploration, commercial and financial experience plus valuable expertise in the countries in which we operate. Members of the senior management team bring with them a track record of improving earnings through cost management, productivity enhancements and investment.”

South32 CEO-elect, Graham Kerr said, “We are building a new company from the ground up. We will benefit from the best of BHP Billiton’s approach to productivity and will create a culture that empowers our people.”

The total one-off costs of implementing the demerger are estimated to be approximately $738 million ($641 million after tax).