BHP Billiton Ltd (NYSE:BHP) Provides Minerals Australia update


BHP Billiton Ltd (NYSE:BHP) issued minerals Australia update, wherein BHP Minerals Australia President Mr. Mike Henry outlined plans to improve returns and grow value on capital across the firm’s Australian operations. Speaking to analysts and investors at a briefing in Adelaide, he Henry said BHP’s leading, long-life, low-cost Australian assets support future optionality and current margins.

The details

Mr. Henry stated that the quality, concentration, location and scale of their assets boosted improvement measures, efficient technology deployment, attractive investment prospects and compelling latent capacity options. He stated that replicating best practice and sharing knowledge across their international portfolio, they have been able to substantially lower unit costs at their Australian mining businesses over the preceding five years, and still they have further to go. They can make themselves even more productive and safer, and anticipate to lower unit costs by a further 10% over the medium-term.

Through strengthening their maintenance processes and capability, including by getting in expertise from other segments, and through better leveraging know-how, their international Maintenance Centre of Excellence is allowing a step-change in maintenance show across BHP. With their international technology plans and asset-level programs to lower costs and unlock resources, they project their Australian mining operations to offer US$1.6 billion of increased productivity gains over the imminent two years.

Mr. Henry added that they also boast a suite of remarkable medium-term investment prospects. While these remain contingent to their stringent Group-level capital allocation structure tests, with mean returns potentially surpassing 40%, they are well positioned to compete for capital. Mr. Henry underlined the Brownfield Expansion option at Olympic Dam as an instance of a project with the prospect to offer sustainable returns to government, shareholders and the local community.

In the last trading session, the stock price of BHP Billiton gained more than 1% to close the day at $41.63.

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