Download - BHP Billiton presentation
-
7/27/2019 BHP Billiton presentation
1/18
BHP Billiton Limited BHP Billiton Plc171 Collins Street Neathouse PlaceMelbourne Victoria 3000 Australia London SW1V 1BH UKGPO BOX 86 Tel +44 20 7802 4000Melbourne Victoria 3001 Australia Fax + 44 20 7802 4111Tel +61 1300 55 47 57 Fax +61 3 9609 3015 bhpbilliton.combhpbilliton.com
To: Australian Securities Exchange cc: New York Stock Exchange
London Stock Exchange JSE Limited
AUSTRALIAN NATIONAL CONFERENCE ON RESOURCES AND ENERGY
BHP Billiton President, HSEC, Marketing and Technology, Mike Henry, will present at the AustralianNational Conference on Resources and Energy in Canberra today.
A copy of the presentation is attached.
Further information on BHP Billiton can be found at: www.bhpbilliton.com.
Nicole DuncanCompany SecretaryBHP Billiton Limited
3 October 2013
-
7/27/2019 BHP Billiton presentation
2/18
NEWS RELEASERelease Time IMMEDIATE
Date 3 October 2013
BUILDING ON AUSTRALIAS COMPARATIVE ADVANTAGE
BHP Billiton today further outlined its productivity agenda to capitalise on the next phase ofthe Asian growth cycle.
Speaking at the Australian National Conference on Resources and Energy, BHP Billiton
President, HSEC, Marketing and Technology, Mike Henry, said the commodities that wouldfeed future China growth would require Australias resources industry to continue to improveits competitiveness.
We see moderation in the rate of GDP growth in China, and a reduction in manufacturingand investment share over time, but it is really important to note that there is still anincredibly large opportunity to be captured from a commodity demand perspective.
Commodity demand growth will remain robust as the fundamentals of wealth creation,demographics and urbanisation continue to drive demand for resources. However theshifting dynamics of economic growth will challenge Australias traditional understanding ofcore commodities.
As China transitions to a more consumption based economy, and the level of trueurbanisation increases, we expect that commodities supporting the production of food,energy and consumer goods will see more durable demand growth over an extended part ofthe economic development curve.
Mr Henry said it was critical industry and policy makers worked together to capitalise onthese opportunities.
We believe the vast majority of the productivity challenge lies with industry and it isincumbent on employers to create an environment that inspires people to work smarter and
-
7/27/2019 BHP Billiton presentation
3/18
-
7/27/2019 BHP Billiton presentation
4/18
Mike Henry, President HSEC, Marketing and TechnologyBHP Bill itonOctober 2013
China: Looking forwardPort Hedland
-
7/27/2019 BHP Billiton presentation
5/18
-
7/27/2019 BHP Billiton presentation
6/18
Content
BHP Billiton Marketing, ANCRE, October 2013 Slide 3
China economic outlook
Implications for Australia
-
7/27/2019 BHP Billiton presentation
7/18
Relative to previous decades, the pace ofgrowth in China is expected to moderate
Slide 4BHP Billiton Marketing, ANCRE, October 2013
0
2
4
6
8
10
12
14
16
1997 2000 2003 2006 2009 2012
Source: NBS.
0
2
4
6
8
10
12
T-15 T-10 T-5 T T+5 T+10 T+15 T+20
China (T=2012)
Japan (T=1964)
South Korea (T=1989)
Source: IHS - Global Insight.Note: T = US$8000 / Capita @ PPP. Japan 1974 (oil crisis) and South Korea 1998 (AFC)excluded from dataset.
Real GDP growth rates(YoY % - 5 year moving averages)
GDP growth(YoY %)
-
7/27/2019 BHP Billiton presentation
8/18
0
5
10
15
20
25
30
35
1997 2000 2003 2006 2009 2012
China JapanUS South Korea
Manufacturing will become less significantover time
Slide 5
Share of manufactur ing(% GDP)
Source: IHS - Global Insight.Note: % GDP is nominal.
BHP Billiton Marketing, ANCRE, October 2013
Share of industry 2012(% GDP)
0
10
20
30
40
50
China South Korea Japan US
Source: IHS - Global Insight.Note: % GDP is nominal.
-
7/27/2019 BHP Billiton presentation
9/18
Investment is trending down however itcontinues to be a key cyclical support
Slide 6
China investment(% YoY YTD)
BHP Billiton Marketing, ANCRE, October 2013
(20)
(10)
0
10
20
30
40
Jul 10 Jul 11 Jul 12 Jul 13
Manufacturing Transportation
Water & environment Total FAI
Source: NBS.
0
10
20
30
40
50
China South Korea Japan US
Share of investment 2012(% GDP)
Source: IHS - Global Insight.Note: % GDP is nominal.
-
7/27/2019 BHP Billiton presentation
10/18
Increasing urbanisation will change thesource of future economic growth
BHP Billiton Marketing, ANCRE, October 2013 Slide 7
0
10
20
30
40
50
60
1992 1997 2002 2007 2012
Industry Service Agriculture
Industry, service and agriculture(% GDP)
Source: NBS.Note: % GDP is nominal.Source: McKinsey Insights China macro model April 2013 version.
0
10
20
30
40
50
60
70
80
2005 2010 2015 2020 2025 2030
Urbanisation rate(%)
-
7/27/2019 BHP Billiton presentation
11/18
Consumption underpins long term potential
BHP Billiton Marketing, ANCRE, October 2013 Slide 8
Private consumption 2012(US$ thousand 2005 PPP/capita)
0
10
20
30
40
50
60
70
80
90
100
1952 1962 1972 1982 1992 2002 2012
Japan South Korea Malaysia
China India US
GDP per capita (2005 PPP $US)(US=100)
Source: Penn World Table, BHP Billiton analysis. Source: IHS - Global Insight.
0
5
10
15
20
25
30
35
China Malaysia SouthKorea
Japan US
Chi ill ti t i it h f
-
7/27/2019 BHP Billiton presentation
12/18
China will continue to increase its share ofglobal energy and metals demand
BHP Billiton Marketing, ANCRE, October 2013
Intensity trends evolve with economicdevelopment(US intensity index1)
1. The demand intensity index represents the volume consumption per capita, with 1972consumption representing 100 for electricity, and 1968 consumption representing 100
for the other commodities.Source: World Bank; Wood Mackenzie; CRU; IISI; IHS - Global Insight; CISA; World SteelAssociation; JBS; IEA; BHP Billiton analysis.
GDP per capita
(2005 real US$000, PPP basis)
50
100
150
200
0 10 20 30 40 50
Electricity
Steel
Copper
Emerging
economies
Developed
economies
Cumulative consumption 20101
(copper kg/capita) (steel t/capita)
1. Cumulative steel and copper consumption is calculated using historical demandadjusted for replacement cycle and indirect trade.Source: Fraunhofer ISI.
0
2.5
5
7.5
10
12.5
0
60
120
180
240
300
China US China US
x 5 x 3
-
7/27/2019 BHP Billiton presentation
13/18
Content
BHP Billiton Marketing, ANCRE, October 2013 Slide 10
China economic outlook
Implications for Australia
E d t d h h id d
-
7/27/2019 BHP Billiton presentation
14/18
Endowment and geography have providedrelative advantage in some commodities
BHP Billiton Marketing, ANCRE, October 2013 Slide 11
Iron ore reserves 2012(Bt contained iron)
Source: USGS Mineral Commodity Summaries, January 2013.
0 20 40 60 80 100 120
Other
Kazakhstan
Canada
Congo
Zambia
Australia
PolandIndonesia
China
Russia
Mexico
USA
Peru
Chile
180
1. Australia represents JORC reserves.Source: USGS Mineral Commodity Summaries, January 2013.
Copper reserves 2012(Mt contained copper)
1
0 5 10 15 20
Other
South Africa
Mauritania
Kazakhstan
Iran
USA
Sweden
Canada
Ukraine
Venezuela
India
China
Russia
Brazil
Australia
US
US
Current operations impacted by structural
-
7/27/2019 BHP Billiton presentation
15/18
Current operations impacted by structuralcost escalation and policy changes
BHP Billiton Marketing, ANCRE, October 2013 Slide 12
Q1, Q2, Q3, and Q4 represent the percentage of total Australian production within the first, second, third and fourth quartile of the global cost curve. Copper and nickel costs based onC1 ranking. Coal delivered to China, metal costs net of by-product revenue.Source: Minerals Council of Australia, Opportunity at Risk 2012.
0
25
50
75
100
2006 2012 2006 2012 2005 2012 2008 2012
Quartile 1 Quartile 2 Quartile 3 Quartile 4
Thermal Coal Hard Coking Coal Copper Nickel
Cash Operating Costs Australian Mining Operations(% of production by cost curve quartile*, Mt production)
152 206 89 120 1.76 2.14 0.47 0.48
Future mining investment requires
-
7/27/2019 BHP Billiton presentation
16/18
Future mining investment requiresimproved project costs and productivity
BHP Billiton Marketing, ANCRE, October 2013 Slide 13
0 50 100 150
Australia
Canada
US
Middle East
Brazil
Construction All -in Wage Rate (Mean)(US$)
1. US refers to US Gulf Coast.Source: Independent Projects Analysis Inc., Engineering Procurement and
Construction Market Forecast, August 2013.
0
50
100
150
200
250
1990 1995 2000 2005 2010
Australian Productivity(Indexed to 2011)
Source: Australian Bureau of Statistics, Estimates of Industry MultifactorProductivity, 2012.
12 Selected Industries
Mining Labour
Mining Capital
Mining1
-
7/27/2019 BHP Billiton presentation
17/18
Summary
BHP Billiton Marketing, ANCRE, October 2013 Slide 14
Chinese economic growth is expected to be 7-8% in the short to medium term
Urbanisation and consumption will support economic growth as manufacturing declines
Commodity consumption patterns will evolve, providing robust energy and metals demand
Restoring Australias global competitiveness will underpin future capital investment
-
7/27/2019 BHP Billiton presentation
18/18