Andrew Mackenzie discusses sales and productivity at mining conference

BHP Billiton has told a mining conference that portfolio simplification is compelling, but said a decision on whether to sell a number of non-core assets or go ahead with a $US15 billion demerger had not been made.

Speaking at the Bank of America Merrill Lynch Metals, Mining & Steel Conference in Miami overnight, Mackenzie reiterated the company was seeking to structurally alter its operations as it studies the next "phase of simplification".

BHP has previously said that a portfolio focused on major iron ore, copper, coal and petroleum assets would be part of its four pillar company, with everything else subject to changes.

Speculation is mounting that the company will seek a demerger to shareholders that will include its aluminium, nickel and manganese assets, The Australian reported.

“We will only pursue options that maximise value for BHP Billiton shareholders,” Mackenzie said.

As part of his speech, Mackenzie spoke of the productivity and efficiency measures the company was undertaking.

He said capital expenditure had been reduced by 25 per cent with spending to decline again in the 2015 financial year.

Mackenzie said BHP had embedded $US4.9bn of sustainable productivity gains which will increase to $US5.5 billion by the end of this financial year.

“In the first half of the 2014 financial year, average truck utilisation, compared with last year, improved by 8 per cent. The average utilisation of our diggers increased by 10 per cent, and we have reset the performance benchmark higher so a clear opportunity remains across the group.

“By doing what we said we would do in the first half of the year, we increased free cash flow by $US7.8 billion and underlying return on capital to 22 per cent,” Mackenzie said.

Taking over as boss of BHP last May, Mackenzie wasted no time in announcing new austerity measures aimed at cutting costs and improving productivity.

Mackenzie said there was a new "realism about the challenge to remain competitive" and that gaps in performance needed to be closed.

Since then the company has sold several of its assets including the its West Musgrave nickel project and diamond projects overseas.

The miner has also taken the axe to a number of coal and nickel jobs.

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