BHP Billiton CEO Andrew Mackenzie has defiantly told a mining conference that the company is not going to be tied down, “waiting for prices to recover”.
Instead its lifting spending looking for more oil and copper, a point the company has made several times this year.
“Although we remain confident in the long term outlook for commodities, we are not waiting for prices to recover. We have everything we need in our portfolio right now to significantly increase the value of the Company,” he said.
He said the company could achieve a 70% increase in value. Mr Mackenzie said about 15 per cent would come from the continuation of his productivity agenda and further cutting of operating costs, and "In the next financial year we expect costs across all our major assets to fall and to be almost half the levels experienced just five years ago," he said
He told a major mining conference in Miami overnight (http://www.bhpbilliton.com/investors/news/bhp-billiton-outlines-strategy-to-grow-value) that the mining giant is continuing to drive down costs, and lifting investment looking for oil while costs are low in the sector.
Speaking at the Global Metals, Mining and Steel Conference in Miami, Mr Mackenzie said BHP intends making a further $US3.6 billion of productivity gains by the end of the 2016-17 financial year, while it is also investing in assets to unlock “latent capacity”.
BHP said it is increasing its efforts to take advantage of falling exploration costs. "We have embarked upon one of our most significant oil exploration programs, accelerating activity in our three priority basins. Following the positive exploration results at Shenzi North, we plan to drill a further exploration well (Caicos) in July 2016 on our nearby Green Canyon 564 lease (BHP Billiton interest 100 percent).
“We will also increase the number of copper targets we test this year by 38 percent."
Mr Mackenzie said the company could add “over one million tonnes of copper equivalent capacity at a total capital cost of less than $US1.5 billion”
This is equivalent to more than 10 percent of BHP Billiton’s total current production. We will also maximise the value of our high quality shale assets in a disciplined manner as prices recover.
Mr Mackenzie insisted that BHP can deliver growth despite commodities prices remaining weak.
We have the financial strength and the flexibility to pursue a diverse range of opportunities and grow value per share at all points in the cycle, and we have a clear and simple strategy in place to deliver that growth.
BHP shares fell more than 3% in Australian trading yesterday to $17.83, but rose more than 2% in London overnight, despite another slide in iron ore futures in China.
