By Rhiannon Hoyle
SYDNEY-- BHP Billiton Ltd. outlined plans to cut costs further
and curb investment spending as the world's biggest miner by market
value looks to simplify and strengthen its business amid falling
commodity prices.
The Anglo-Australian resources group Monday said it wants to
record at least another $4 billion of productivity-led gains by the
middle of 2017, through paring costs and bolstering the volume of
commodities it produces. BHP said it thinks it can cut the cost of
running its iron-ore operations in Western Australia by 15% in the
year through June, excluding freight charges and royalty payments
to government. It hopes to reduce its cost of producing coal in
Australia's Queensland state by 10% over the same period.
Meanwhile, BHP plans to cut its investment in projects to $13
billion in the year through June 2016, from $14.2 billion this
fiscal year "with no impact on growth," Chief Executive Andrew
Mackenzie said in presentation slides released to the Australian
Securities Exchange.
One of the projects that will form a core part of the miner's
strategy will be the development of its Olympic Dam
copper-and-uranium mine in southern Australia, BHP said.
"We are evaluating a low-risk, capital-efficient underground
expansion at Olympic Dam" that could increase copper output there
to 450,000 metric tons a year from mid-2024, from around 185,000
tons last financial year, Chief Financial Officer Peter Beaven said
in the slides.
The miner is also considering options for its Spence copper
operation, including plans for an expansion that could boost
production next decade, it said.
BHP separately outlined plans for a management reshuffle. Among
the changes, Daniel Malchuk, head of aluminum, manganese and nickel
operations that BHP plans largely to spin off next year, will
become president of its copper division, succeeding Peter Beaven,
who was recently named chief financial officer.
And next year, Mike Henry, president of safety, marketing and
technology, will switch places with Dean Dalla Valle, president of
its coal division, BHP said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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