Bhp Group Ltd · ASX:BHP

Bhp — BHP Billiton — Barclays Capital 5th Annual Commodities Investor Conference 2009

15 slides from Bhp's conference presentation, March 2009

  1. Slide 1: Barclays Capital 5th Annual Commodities Investor Conference

    Olympic Dam, Australia Barclays Capital 5th Annual Commodities Investor Conference Alex Vanselow March 2009

  2. Slide 2: Disclaimer

    Disclaimer The views expressed in this presentation are based on information derived from publicly available sources that has not been independently verified. No representation, warranty or undertaking, express or implied, is made or given as to the fairness, accuracy, completeness or reliability of

  3. Slide 3: Agenda

    Agenda ƒ Markets for our Commodities ƒ Cycle Duration ƒ Long-term Outlook ƒ Industry Impact Barclays Capital 5th Annual Commodities Investor Conference, March 2009 Slide 3

  4. Slide 4: Growth Forecasts Continue to be Revised Downwards

    Growth Forecasts Continue to be Revised Downwards YOY Real GDP Growth (%) 5 4 3 Actual Jan 2008 2 Apr 2008 1 Jul 2008 Oct 2008 0 Jan 2009 (1) (2) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2006 2007 2008 2009 Source: Global Insight (World) Barclays Capital 5th Annual Commodities Investor Confer

  5. Slide 5: China Consumed ~30% of Commodities in 2008

    China Consumed ~30% of Commodities in 2008 Copper Nickel (mt) (%) (kt) (%) 6 Chinese refined copper 30 500 Chinese primary nickel 30 consumption consumption 400 25 % share of world refined copper % share of world primary nickel 4 consumption (RHS) 20 consumption (RHS) 20 300 15 200 2 10 10 100 5 0 0

  6. Slide 6: Absolute OECD Demand is Important

    Absolute OECD Demand is Important Monthly Crude Steel Production (mt) 120 100 80 China 60 40 Ex China 20 Jan 2009 Jun 2004 Jun 2005 Jun 2006 Jun 2007 Jun 2000 Jun 2001 Jun 2002 Jun 2003 Jun 2008 Dec 2005 Dec 2003 Dec 2004 Dec 2006 Dec 2008 Dec 2007 Dec 2000 Dec 2001 Dec 2002 Source: World Steel Barc

  7. Slide 7: Inventories are Rising Rapidly

    Inventories are Rising Rapidly Base Metal Stocks and Real Prices Exchange/Producer Stocks (LMEX Price Index) (Weeks of Demand) 7,500 17 Real Prices 6,500 Exchange/Producer Stocks (Cu, Al, Zn, Pb, Ni) 15 5,500 13 4,500 11 3,500 9 2,500 7 1,500 5 500 3 1987 1989 1996 1998 1997 1985 1986 1988 1990 1991

  8. Slide 8: Relationship Between Prices and C1 Costs

    Relationship Between Prices and C1 Costs Copper Prices and Average C1 Costs(a) (US¢/lb) 300 Monthly Average Low Price 90th Decile Cost 75th Decile Cost 250 200 150 100 50 0 2004 2006 2008 1989 1990 1991 1992 1993 1994 1995 1997 1998 2000 2005 2007 1996 1999 1980 1981 1982 1983 1984 1985 1986 1987 19

  9. Slide 9: Timing for Recovery is Uncertain

    Timing for Recovery is Uncertain Industrial Production and Leading Indicators (6 Months Forward) (% Change YOY) 10 OECD Industrial Production 8 OECD Leading Indicator 6 4 2 0 (2) (4) (6) (8) (10) Jan 2006 Jan 2008 Jan 1990 Jan 1992 Jan 1994 Jan 1996 Jan 1998 Jan 2000 Jan 2004 Jan 1982 Jan 1984 Jan 1

  10. Slide 10: Commodities Consumption Unlikely to Recover in the Short Term

    Commodities Consumption Unlikely to Recover in the Short Term Index of World Consumption Index of World Consumption (1973 = 100) (1989 = 100) 115 115 110 110 105 105 100 100 95 95 90 90 85 85 80 80 1973 1974 1975 1976 1977 1978 1989 1990 1991 1992 1993 1994 1995 Aluminium Copper Nickel Steel Source:

  11. Slide 11: Long-term Outlook for China

    Long-term Outlook for China Steel Use by Sector China’s Urban Residential Floor Space (2008) (Billions of Square Metres) Home Appliances 35 33 1% Other 6% 30 Autos and Ship-building 5% 25 24 Metal Goods 6% 20 18 Construction 15 Machinery 48% 20% 10 9 5 Infrastructure 14% 0 2000 2008 2015 2025 Source

  12. Slide 12: Industry Balance Sheet Conditions

    Industry Balance Sheet Conditions Enterprise Value(a) (US$10bn) 0% Poor Well Returns Positioned BHP 10% Billiton 20% 30% Net Gearing(b) 40% 50% 60% 70% Highly Leveraged, Highly Leveraged, Poor Returns Good Returns 80% 0% 10% 20% 30% 40% Return on Capital(c) (a) Enterprise value is calculated as sum

  13. Slide 13: Future Supply will be Impacted

    Future Supply will be Impacted Capital Expenditure for the Global Mining Industry (US$bn) 120 116 108 110 100 92 90 80 72 70 61 62 59 60 56 53 51 52 46 48 50 44 43 43 Exploration 42 40 42 40 37 33 30 Investment 20 10 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 1992 1993 1994 1995 1996 2

  14. Slide 14: Conclusions

    Conclusions ƒ Weak markets persist ƒ Downside risk remains ƒ Long-term emerging markets growth is intact ƒ Supply side constraints will determine prices in the longer term Barclays Capital 5th Annual Commodities Investor Conference, March 2009 Slide 14

  15. Slide 15: bhpbilliton

    édl bhpbilliton ourcing the future

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