PERTH (miningweekly.com) – Diversified giant BHP Billiton would continue to take “deliberate measures” to address the challenges that its downstream-oriented businesses were facing, CEO Marius Kloppers said on Wednesday.

In its financial results for the first six months of 2012, BHP noted that the outlook for the aluminium, nickel and manganese alloy industries would remain challenging, and has led to significant margin compression.

“We run our business on the basis that we will run them if they produce cash, if they produce returns, and if the customer can take the product,” said Kloppers in a conference call.

“If they don’t, then we need to take action.”

During the six months under review, around $43-million was contributed to the underlying earnings before interest and tax from the post closing payment of the 2006 divestment of BHP’s interest in the Cascade and Chinook diamond projects, in the US.

The mining giant also recently sold its 37% stake in mineral sands producers Richards Bay Minerals to fellow miner Rio Tinto.

Kloppers said that the company would continue to optimise its portfolio of downstream products, and would prioritise capital expenditure on products with higher returns.

He noted that with increased investment in the larger tier-one assets, the minimum scale that BHP applies to its projects would be increased.

“There is no change in what we have said for the last five years. But we will continue working on those things that we have already flagged,” he said.
 

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