Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (October 2008)
24 slides from Bhp's investor presentation, Oct 30, 2008
Slide 1: Aluminium Investor Presentation
For personal use only Aluminium Investor Presentation Australia Analysts Site Visit 29 October 2008
Slide 2: Disclaimer
Disclaimer By viewing this presentation you agree to be bound by the following conditions. For personal use only Certain statements in this presentation are forward-looking statements (including statements regarding contribution synergies, future cost savings, the cost and timing of development proj
Slide 3: Presenter introduction
Presenter introduction For personal use only Jon Dudas Julius Matthys President Aluminium CSG COO Worsley Alumina • 24 years resources experience • 26 years resources experience • 17 years at BHP Billiton • 26 years at BHP Billiton Markus Meurer Warren McKenzie VP M arketing Alumina E&G Project Dire
Slide 4: Presentation agenda
Presentation agenda For personal use only Business overview – Operating performance – Significance to BHP Billiton portfolio – Comparison to peers – Key challenges for the industry Aluminium and alumina commodity outlook – Global demand and China growth outlook – Global supply outlook – Cost curves
Slide 5: Aluminium
Aluminium investor presentation For personal use only Business overview – Operating performance – Significance to BHP Billiton portfolio – Comparison to peers – Key challenges for the industry Aluminium and alumina commodity outlook – Global demand and China growth outlook – Global supply outlook –
Slide 6: Business overview: HSEC
Business overview: HSEC For personal use only Safety Community TRIFR Community Expenditure (12 MMA) (US$m) 9 Arts Other 8 2% Environment 7 7% Sport / Recreation 4% 6 5% 5 Community 4 46% Welfare Health 17% 3 2 19% 1 0 Education Dec-04 Dec-05 Dec-06 Dec-07 Jun-04 Jun-05 Jun-06 Jun-07 Jun-08 FY08 Comm
Slide 7: Business overview: current assets
Business overview: current assets For personal use only Source: BHP Billiton. Bayside reduced capacity ~50% . Slide 7
Slide 8: Business overview: operating performance
Business overview: operating performance Year ended June (US$m) 2008 2007 % Change For personal use only Aluminium EBIT 1,465 1,856 -21.1 • Record alumina production • South African power situation will continue to impact metal production • Worsley E&G approved EBIT Margin (%) 50 40 30 20 10 0 2004
Slide 9: Business overview: contribution to group
Business overview : contribution to group (Our portfolio is diversified and balanced across high margin commodities) For personal use only Underlying EBIT Underlying EBIT Margin(a) (FY2008, US$bn) (FY2008) 25 Petroleum 67% Petroleum Energy (27%) Energy Coal 30% 20 Energy Coal Aluminium 31% Aluminium
Slide 10: Business overview: key challenges
Business overview: key challenges • Raw material price pressures For personal use only • Global power supply • Bringing on new capacity • Quality of Chinese bauxite Slide 10
Slide 11: Aluminium
Aluminium investor presentation For personal use only Business overview – Operating performance – Significance to BHP Billiton portfolio – Comparison to peers – Key challenges for the industry Aluminium and alumina commodity outlook – Global demand and China growth outlook – Global supply outlook –
Slide 12: Aluminium and alumina commodity outlook
Aluminium and alumina commodity outlook Key China Messages For personal use only • China has a significant influence on the Aluminium market – Aluminium is required to supply the intensive urbanisation of China – A question of self sufficiency of aluminium supply – Is power a constraining factor? –
Slide 13: China production capacity can respond rapidly to pricing opportunities
China production capacity can respond rapidly to pricing opportunities Smelter Production in China Aluminium Price For personal use only (‘000 mt) (US$/t) 16,000 3,000 14,000 2,500 12,000 SHFE in US$ (2002 fi xed exchange rate) 2,000 10,000 8,000 1,500 6,000 Chinese Marginal Smelter 1,000 4,000 500
Slide 14: China has been self-sufficient in smelting
China has been self-sufficient in smelting Chinese Aluminium supply is up 650% driven by low capital construction costs and For personal use only strong domestic demand Aluminium Production (kt) 45 40 35 China 30 25 Asia 20 Oceania Eastern Europe 15 Western Europe 10 Latin America 5 North America 0
Slide 15: Chinese Aluminium capacity additions at the top end of cost curve
Chinese Aluminium capacity additions at the top end of cost curve Chinese Aluminium capacity additions come at the top end of the cost curve For personal use only US$/t Other Smelters BHP Billiton Smelters 2,800 Chinese Smelters 2,400 Bayside 2,000 Hillside Alumar Mozal 1,600 1,200 800 400 0 0 5,000
Slide 16: China has a track record of bringing on new power capacity
China has a track record of bringing on new power capacity Ability to bring on new power capacity on tim e as planned For personal use only Sources of Chinese power (GW) 750 Wind / Other Nuclear Hydro 600 450 300 Coal 150 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Source: CEC. Slide 16
Slide 17: Aluminium stocks
Aluminium stocks Exchange Stocks LME Cash price For personal use only (kt) ($/t Nominal) 1,800 Comex 3,500 SHFE 1,600 LME 3,000 1,400 LME Cash (RH) 2,500 1,200 1,000 2,000 800 1,500 600 1,000 400 500 200 0 0 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Jan-04 Jul-04 Oct-04 Jan-05 Jul-05 Oct-05 Jan-06 Jul-06 O
Slide 18: Chinese demand for imported Alumina and Bauxite
Chinese demand for imported Alumina and Bauxite Alumina For personal use only (kt) 30,000 25,000 20,000 Alumina Imports 15,000 Domestic Alumina Production – Imported Bauxite Ore 10,000 Domestic Alumina Production – 5,000 Chinese Bauxite 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2
Slide 19: Chinese alumina supply at the top end of the cost curve
Chinese alumina supply at the top end of the cost curve CRU Alumina cost curve, 2008 For personal use only US$/t Other refineries BHP Billiton Refineries Chinese Refineries 480 400 320 Paranam Alumar Worsley 240 160 80 0 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 Cumulative cap
Slide 20: Aluminium
Aluminium investor presentation For personal use only Business overview – Operating performance – Significance to BHP Billiton portfolio – Comparison to peers – Key challenges for the industry Aluminium and alumina commodity outlook – Global demand and China growth outlook – Global supply outlook –
Slide 21: Most attractive bauxite deposits
Most attractive bauxite deposits Most attractive bauxite deposits are in Guinea For personal use only World’s top 10 bauxite deposit countries (Bt) Kazakhstan Greece 0.4 Bt 0.6 Bt China Jamaica India 2.3 Bt 2.5 Bt 1.4 Bt Suriname 0.6 Bt Guyana 0.9 Bt Guinea 8.6 Bt Brazil 2.5 Bt Australia 7.9 Bt Sour
Slide 22: Guinea project
Guinea project Guinea For personal use only • Long life, world class bauxite resource with embedded options • Strong government support • Currently finalising feasibility study • Greenfield projects are more challenging in new geographies Slide 22
Slide 23: Aluminium
Aluminium investor presentation For personal use only Business overview – Operating performance – Significance to BHP Billiton portfolio – Comparison to peers – Key challenges for the industry Aluminium and alumina commodity outlook – Global demand and China growth outlook – Global supply outlook (T
Slide 24: Key messages
Key messages • China’s focus is on self-sufficiency in aluminium For personal use only • China’s growing requirement to import alumina or bauxite to meet domestic metal demands • Our growth options and project pipeline are aligned to this view (to feed the emerging seaborne bauxite/alumina market) •