BHP Billiton CEO speaks at Miami conference
BHP Billiton’s (ASX, NYSE:BHP) CEO Andrew Mackenzie spoke Tuesday about the company’s production and efficiency model at the Bank of America Merrill Lynch Metals, Mining & Steel Conference in Miami.
The Anglo-Australian mining giant, said Mackenzie, embedded $4.9 billion of “sustainable productivity gains which will increase to $5.5 billion by the end of this financial year.”
“By doing what we said we would do in the first half of the year, we increased free cash flow by $7.8 billion and underlying return on capital to 22%,” he added.
Mackenzie also said the company completed $6.5 billion of divestments in the last two years.
The company plans to exit West Africa and has been trying to sell its 41.3% stake in Mount Nimba in Guinea since July 2012.
ArcelorMittal (NYSE:MT), the world’s No.1 steelmaker, is close to becoming the buyer for BHP Billiton’s stake in a major Guinean iron-ore deposit.
The company reduced capital expenditure by 25%, added Mackenzie, and spending will decline again in the 2015 financial year.
This contrasts with its rival Rio Tinto’s (ASX, LON, NYSE:RIO) statement last week as the multinational mining giant may be looking “to stop focusing on cost cuts to make room for growth alternatives.”