Thursday November 27, 02:42 AM
BHP Billiton presents upbeat outlook at AGM
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MELBOURNE (AFP) - The world's biggest miner, BHP Billiton (LSE: BLT.L - news) , said Thursday it was in a better position to cope with a slowdown in demand than its rivals and would continue to invest in growth projects.
"We believe that our financial strength and low position on the cost curve mean that we are better placed than our competitors to respond to fluctuating demand for our products," said chief executive Marius Kloppers.
He told shareholders at the Anglo-Australian company's annual general meeting in Melbourne that the miner had been able to maintain its sales volumes through a mix of contract and spot sales.
Kloppers said BHP would "respond accordingly" if falling prices made any of its operations cash negative, and would advise the market if it planned any production cuts.
BHP expects Chinese steel production will fall by about 17 percent and that this will flow through to the entire industry, he added.
BHP chairman Don Argus told the meeting that a 70 billion US dollar bid for rival Rio Tinto (LSE: RIO.L - news) had been dropped because it would not have been in their best interests.
Argus (A078670.KQ - news) said that while BHP still believed in the industrial logic of the bid Rio Tinto's debt position was a concern, especially given that it hadn't managed to make divestments to pay down debt.
A merged company would have had a net debt of nearly 120 billion dollars during a global credit crisis and a slump in commodity prices, he said.
"Your board considers that the large debt position that would have resulted from the acquisition of Rio Tinto would have created an unacceptable risk for our shareholders in this environment."
- Dow Jones Newswires contributed to this report -
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