Australian mining giant BHP Billiton Ltd. (NYSE: BHP) is working on a plan to spin off its underperforming assets. Its shares were higher Tuesday as investors speculated the value of the assets might be worth as much as $20 billion. Shares of some of its competitors were higher as well, as investors speculated the spin-off might prove contagious.

BHP is looking to concentrate its business on four key commodities — iron ore, copper, coal and petroleum — and may add potash as a fifth business. That would mean BHP would get rid of aluminum, manganese and nickel assets. Prices for the three commodities have been weak in recent years. Primary aluminum, in particular, has been especially weak, suffering from overcapacity in China.

Copper, it should be noted, has suffered from lower prices. The metal ended 2010 at $4.45 a pound and ended Monday at $3.0255 a pound, a decline of 32%. On the other hand, it is one of the world’s key industrial metals. So demand should be steady.

A key question that BHP’s plans raises is how much can it realize by shedding the assets. The chatter Tuesday was $20 billion (U.S.). But that raised a lot of skepticism. If you announce you are selling unwanted assets, who would be willing to pay a premium price. BHP shares in New York were up 1.5% to $68.79. They have traded in a range of $55.66 to $72.97.

The most obvious company that might be interested in divesting some of its assets would be Alcoa Inc. (NYSE: AA), whose primary aluminum and mining business is barely profitable — if at all. It makes its money from selling specialty aluminum products to the auto, aerospace, construction and other industries, where there is high demand. Alcoa shares were up 0.2% to $12.89 in morning trading, after hitting a 52-week high of $13.18 soon after the open.

Also moving higher was Rio Tinto PLC (NYSE: RIO) the London-based mining company, which acquired Alcan, the Canadian aluminum producer, for $38 billion in a 2007 deal, becoming the world’s largest aluminum producer. Shares in New York were up 0.6% to $56.15. In the past 52 weeks, the shares have ranged from $39.14 to $60.61.

U.S. shares of Vale S.A. (NYSE: VALE), the Brazilian mining company, were flat at $13.84 in New York trading. The company produces iron ore and pellets, nickel, fertilizer, copper, coal, manganese, ferroalloys, cobalt, platinum group metals and precious metals. In the past 52 weeks, the shares have ranged from $12.29 to $18.55.

Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) might seem a candidate that could unlock value in a similar fashion. The company produces copper, gold, silver and molybdenum from mines in North and South America, Africa and Indonesia. Last year, it deliberately moved outside mining in acquiring Plains Exploration & Production in a deal worth $16.3 billion, including assumption of $9.7 billion in debt. Its shares were down about 1% to $32.75. They ranged from $26.37 to $38.09 in the past 52 weeks.

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