PERTH (miningweekly.com) – Mining giant BHP Billiton on Thursday told shareholders in Perth that the company would increase its focus on the four core pillars of its operations – iron-ore, petroleum, copper and coal – and that it would introduce potash as a fifth pillar.
CEO Andrew Mackenzie said at the company’s annual general meeting that demand for potash was expected to grow by 2% to 3% a year, until 2030.
“The growth will be driven by a rising population and greater economic prosperity, which will change the patterns of food consumption, requiring higher yields from increasingly constrained arable land. Our continued investment in potash, at an average annual spend of $800-million, will make sure we are ready to take advantage of this opportunity to add to shareholder returns.”
BHP Billiton owns potash development projects in the Canadian province of Saskatchewan, with the Jansen project, located 140 km east of Saskatoon, its most advanced. It is being designed to produce about eight-million tonnes a year of agricultural-grade potash in three separate phases. The project has an estimated 70-year life-of-mine.
Mackenzie added that as demand for BHP’s core commodities grew, the company needed to become more productive.
“Our focus on productivity is extracting more value from existing operations. Over the next two years, we expect to increase production by 8% per year, on a copper-equivalent basis, and deliver additional productivity-led cost savings.”
He added that the group was focused on safely maximising the output of its installed capacity to deliver volume growth and lower unit costs.
“We have also reduced our planned capital expenditure by 25%, to $16-billion, for the 2014 financial year, and our expenditure will decline again next year.”
Meanwhile, Mackenzie said that Australia would remain a focal point for the company, pointing out that the country accounted for about 70% of its profits. BHP Billiton also paid about $9-billion in taxes and royalties in Australia, with the company spending about $19-billion a year to support some 9 000 local businesses.