Australia is well placed to supply China’s insatiable demand for commodities, BHP Billiton chairman Jac Nasser today told investors.
Addressing shareholders at its annual general meeting today Nasser said China’s economic growth is a linchpin for the mining sector and despite a slight slowdown it remains an important driver for the industry.
Predicting the Chinese economy will grow at over seven per cent next year, Nasser explained continued urbanisation in China is expected to continue for years to come.
“It is expected that another 250 million people will move from the countryside to the cities over the next 15 years,” he said.
“China and other emerging economies will be the major drivers of global economic growth in the long term, which could deliver up to a 75 per cent increase in demand for some commodities over the next 15 years.”
Looking to add potash to its coal, copper, iron ore and petroleum portfolio Nasser said the company is in a good position to adapt as markets evolve.
“We are less vulnerable to specific commodity risks,” he said.
BHP chief executive Andrew Mackenzie said the company’s focus will continue to be on productivity, “extracting more value from existing operations”.
Mackenzie said the company has cut its planned capital expenditure by 25 per cent, to $US16 billion for the 2014 financial year and expects further reductions next year.
“We are focussed on safely maximising the outputs of our installed capacity in order to deliver volume growth on lower unit costs,” he said.
“Our iron ore team in the Pilbara unlocked an additional 40 million tonnes of capacity, reducing mining costs per tonne.”