Melbourne, Australia-based BHP said the reorganization will allow it to concentrate on its mainstay iron ore, copper, coal, petroleum and potash businesses.
The new company, which will have BHP’s current chief financial officer Graham Kerr as its CEO, will include some of BHP’s assets from five countries, including aluminum, nickel, manganese, silver and coal.
It will be based in Perth, Australia, and listed on the Australian Securities Exchange, with a secondary listing in South Africa.
“We believe the proposed demerger, if implemented, will accelerate the simplification of the group’s portfolio, provide investors with choice and unlock value in both companies,” BHP chairman Jac Nasser said in a statement.
The proposed split is subject to regulatory approvals and will be put before shareholders for a vote. The spinoff is expected to be completed in the first half of 2015.
Meanwhile, BHP on Tuesday posted a $13.8 billion profit for the 12 months to June 30, up more than 23 percent from last year. Revenue was up 1.9 percent to $67.2 billion.
The results follow another strong year for the company’s iron ore business, with production up 20 percent in 2014.
“Our operational performance continued to improve, enabling us to exceed production guidance for a number of our core commodities including iron ore, metallurgical coal and petroleum liquids,” said CEO Andrew Mackenzie.
BHP declared a final dividend of 62 cents a share.