ME home
 
  SME FaceBook SME Twitter SME LinkedIn RSS Feed

Subscriber or
SME Member Log On

WEB-ONLY CONTENT

Go to SME eNEWS

MINING INDUSTRY EVENTS

Al Azhar‚Äôs 14th International Conference on: Engin  - Conference
Dec 12, 2017 - Dec 14, 2017
WM2E 2017 Energy Tech Expo  - Exhibit
Dec 14, 2017 - Dec 16, 2017
George Fox Conference  - Conference
Jan 24, 2018
2018 SME Annual Conference & Expo  - Conference
Feb 25, 2018 - Feb 28, 2018

METAL PRICES


Au
Ag
Pt
Pd
Ni
Cu
Al
Pb

AGGREGATES
AND MINERALS
MARKETPLACE


http://aggregatesmineralsmarketplace.com
The Mining Engineering, SME and NSSGA
Online Buyers Directory Site
The Online Global Mining and Minerals Library Site

BHP Billiton plans to invest in expansion, boost production
May 10, 2016

BHP Billiton Ltd. sees a strong future in copper and energy and will forge ahead with investments to boost production in those sectors despite a continuing rout in commodities prices.

BHP Billiton chief executive Andrew Mackenzie spoke to an investor’s conference and outlined a plan to lift its current production by more than 10 percent by investing in existing operations. He said the development will cost less than $1.5 billion over a five-year period, the Wall Street Journal reported.

He said the company’s plans are primarily focused on expanding its own mines and wells, not on acquisitions. “You can’t be focused on acquisitions because you’re dependent on so many other things,” said Mackenzie.

Similarly, Rio Tinto announced plans to expand its own operations at the Oyu Tolgoi Mine in Mongolia.

Mackenzie told the conference that BHP’s investments should earn average returns of about 60 percent based on current analyst forecasts of commodity prices.

He said BHP also plans to make investment decisions on at least two big projects, one in copper and one in oil, within 18 months. He expects capital expenditure to pick up next year.

Under Mackenzie’s three-year stewardship, BHP has focused on cutting costs, shedding assets and delaying big investments. Despite those moves, Moody’s Investors Service and Standard & Poor’s Ratings Services both recently cut credit ratings on the company to A3 and single-A, respectively.

Earlier this year, BHP slashed its dividend by 74%, abandoning its yearslong pledge to keep its annual payout steady or rising, as it announced a $5.7 billion loss for the six months through December.

The company’s challenges go beyond the tough market. In November, an iron-ore tailings dam at a BHP joint venture in Brazil burst, killing 19 people and polluting more than 400 miles of river. Last week Brazilian federal prosecutors filed a lawsuit that could force BHP and its joint venture partner Vale SA to pay up to $44 billion for cleanup and fixing environmental damage.

Mackenzie said in the interview that the company believes a settlement reached in March, in which it agreed to spend as little as 9.46 billion reals -- about $2.7 billion -- through 2030, was the best solution since it will get cash to the communities quicker. “We believe that is the fair way forward,” he said.
 

Related article search: