BHP said it is done with iron ore expansions but that it is not worried about the record low price the commodity has fallen to.
Speaking at the company’s annual general meeting in Adelaide yesterday, Andrew Mackenzie told The Australian he was not concerned that iron ore prices had hit $US70 a tonne as its iron ore business was still profitable at these levels.
BHP and Rio Tinto have been blamed for the falling price of iron ore, which has halved its value since the start of the year, as the two push massive production expansions that have flooded the market with new supply.
However BHP chairman Jac Nasser said the expansion plans were not a secret and had been long pipeline investments.
“They don’t creep up on you; they get approved by many people in the process including government regulators and government,” Nasser said.
But Mackenzie said BHP had put the brakes on further iron ore expansions three years ago.
“Our company has been very clear that the time for massive expansions of iron ore is over and we have shifted our investment into the energy sector, predominantly copper and petroleum, and we started doing that three years ago,” he said.
“We have been incredibly successful with productivity in our iron ore business and that means we can produce a lot more than we originally thought we would be able to do, both from long-established assets and stuff we have subsequently invested in, and that is something we will continue with.”