PERTH (miningweekly.com) – BHP Billiton has reiterated its positive outlook for the resources sector, with CEO Andrew Mackenzie stating that commodity demand would expand by about 75% over the next 15 years.
He said in a copy of a speech delivered at the mining major’s annual general meeting in London, on Thursday, that the increase in commodity demand would mainly be driven by Chinese demand, as around 250-million citizens moved from the Chinese countryside to the cities, and the rising middle class demanded improved housing and consumer goods.
China currently accounts for around 30% of BHP’s revenue stream, chairperson Jac Nasser added.
“With employment conditions and income growth remaining resilient, we believe the Chinese government has room to pursue reforms that support its agenda of stable, long-term growth,” Nasser said.
“We expect the Chinese economy to grow at over 7% next year. China, and other emerging economies, will be the major drivers of economic growth in the long term.”
He added that with BHP’s four key pillars of coal, copper, iron-ore and petroleum, and a possible fifth pillar of potash, the company was able to meet every phase of the development cycle, from investment to consumption-led economies.
“This portfolio approach positions us well to adapt as markets change, including the shifts now under way in the global energy mix. Technology and the need for lower carbon energy have led to a shift in emphasis from coal to gas in the US, while globally, various policy measures have also affected the use of different energy sources.”
Meanwhile, Mackenzie noted BHP’s focus over the near term would be to increase its competitiveness, saying that the company’s productivity agenda was now fully under way.
“Our businesses are focused on maximising the outputs of their installed capacity to deliver volume growth and lower unit costs. We have also reduced our planned capital expenditure by 25% to $16-billlion for the 2014 financial year, and our level of expenditure will decline again next year.”