Wednesday, February 8, 2012

Australia a Gold Standard Country: BHP


Amid the global economic turmoil and credit squeeze, Australia remains a gold standard country to invest in, says BHP Billiton boss Marius Kloppers.

Mr Kloppers said he was cautious about 2012 and its "risk premia" along with shortages in a skilled workforce in Australia, but was optimistic about long-term commodity demand, tied to China's economy.

BHP Billiton delivered a $US9.941 billion ($A9.23 billion) first-half profit on Monday, more than half of it driven by the company's most profitable division, its iron ore operations in Western Australia.

"If we think in the long run we are very fortunate as a country in these unstable times in terms of international credit availability and amounts of investment," Mr Kloppers told reporters in a teleconference.

"I said to somebody the other day that Australia was the gold standard and has been the gold standard and therefore has the very best companies in the world operating here."

Those companies were more likely to continue investing through the cycle than smaller companies, which currently had funding difficulties, he said.

No changes have been announced to the company's $US80 billion ($A74.30 billion) budget for growth projects.

An investment decision on the $US21.66 billion ($A20 billion) Olympic Dam expansion - the world's biggest open cut mine - is still due in mid-2012, while BHP is still planning to increase iron ore production to 350 million tonnes a year by 2020 (it is currently 178mtpa).

Last month it committed $US779 million ($A723.51 million) to building an outer harbour at Port Hedland for shipments.

The current leadership instability in the Gillard Government or prospects for a change of government was not a major concern for miners doing business in Australia, he said.

"What is important to us is that we don't get discontinuities like we nearly had with the MRRT (Mineral Resources Rent Tax) two years ago," he said.

"We must continue to ensure we've got a long-term flexible, productive, highly innovative technologically advanced workforce.

"That is probably something which occupies a significant share of mind at the moment."

The proposed merger between Anglo-Swiss groups Xstrata and major shareholder and trading house Glencore was not a concern, with BHP pursuing different assets that were only tier-one, long-life and low-cost, he said.

Australia a Gold Standard Country: BHP