In a statement released late yesterday, BHP Chief Executive Officer, Andrew Mackenzie, said, “At Queensland Coal, a 24 per cent reduction in operating costs has re-established the business as a leader in its industry. We expect to reduce unit costs by a further 10 per cent, to below US$90 per tonne, in the 2015 financial year as we continue to increase throughput from our installed infrastructure.
Mr Mackenzine went on to say that the company was firmly focused on increased production.
“Production from the core portfolio is expected to grow by 23 per cent over the two years to the end of the 2015 financial year as the Company completes high-return, brownfield projects and embeds productivity-led volume gains. BHP Billiton remains on track to meet all 2015 financial year production guidance.”
“The Group has cut unit costs across all its mineral businesses and expects further reductions across the core portfolio. Unit costs at Western Australia Iron Ore fell 12 per cent in the second half of the 2014 financial year and a 25 per cent reduction is expected in the medium term.”
“BHP Billiton expects to embed a minimum of US$3.5 billion in annualised productivity gains by the end of the 2017 financial year with more than US$2.3 billion to come from cash cost savings.”
“We see our capital management strategy as a precondition to maximising shareholder value. It has allowed us to invest through the cycle and grow our dividend at an average annual rate of 17 per cent over the last decade without interruption.”
“Our focus in Iron Ore and Coal is to safely stretch the potential of our existing infrastructure and equipment. In Copper, BHP Billiton holds many of the industry’s best brownfield development options with projects under evaluation at Escondida, Spence and Olympic Dam.”
In closing, Mr Mackenzie said, “Our strategy, including our commitment to a strong balance sheet, has worked well for our owners. We have delivered a total shareholder return of 394 per cent over the last decade including US$64 billion in dividends and buy-backs. By safely improving operating and capital efficiency we will maximise value and increase cash returns to our shareholders. Improving our competitiveness will benefit shareholders and the local communities and economies in which we operate.”