Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Metal Bulletin Conference 2003
23 slides from Bhp's conference presentation, September 2003
Slide 1: Opportunities and challenges in southern Africa
BHP Billiton Opportunities and challenges in southern Africa Mahomed Seedat President and COO: Aluminium Southern Africa September 2003
Slide 2: Opportunities and Challenges
Opportunities and Challenges 1. Introduction to BHP Billiton 2. Southern Africa smelters 3. Socio - economic contributions/benefits 4. Key challenges 5. Conclusion: the 5-P’s
Slide 3: The largest company in a consolidating sector
The largest company in a consolidating sector 45,000 Market value of minerals industry US$306 bn BHPB Value of Top Five US$141 bn 40,000 Value of BHP Billiton US$ 42 bn Anglo American Market Cap. on 22/08/03 (US$Bn) 35,000 Rio Tinto 30,000 Alcoa 25,000 Newmont 20,000 CVRD 15,000 Alcan Barrick Anglog
Slide 4: A global footprint
A global footprint Petroleum Aluminium Base Metals Carbon Steel Materials Diamonds & Spec Prod Energy Coal Stainless Steel Materials
Slide 5: Outstanding Diversity
Outstanding Diversity By Commodity Customer Sector Group EBIT: Carbon S teel Ma teria ls Petrol eum EBIT US$3,481m 8% (+12%) 10% 4% Energy Coal Aluminium 15% Diamonds & Spec. Prod. 27% Base Me ta ls S tai nl ess S teel Material s South America 5% Aus tralia 9% 7% 30% Southern Africa 31% 21% North Am
Slide 6: Southern African Smelters
Southern African Smelters 267 000tpa 536 000tpa y Richards Bay 535 000tpa 660 000tpa 180 000tpa
Slide 7: Alusaf: Richards Bay 1969
Alusaf : Richards Bay 1969 • Strategic • Labour intensive • Power intensive • Kick-start regional economy Electricity from 8 tons coal converts 2 tons of alumina into 1 ton aluminium
Slide 8: Bayside Aluminium
Bayside Aluminium • Officially opened on 13 October 1971. • Initial production capacity of 52 000 tpa. • Expanded production capacity during the early seventies to 85 000 tpa. • Further expansion during 1980s increases production capacity to current level of 180 000 tpa.
Slide 9: Stop the haemorrage or I will
Substantial challenges lay ahead for Bayside : • Tariff protection (15%) phased out from late 1980’s. • High emission levels and outdated technology. • High production costs, and productivity levels similar to those of Russian smelters. • Bayside exposed as a high cost producer in the face of intern
Slide 10: Hillside Aluminium lines 1 and 2
Hillside Aluminium lines 1 and 2 • Officially opened on 19 April 1996 by Nelson Mandela • Initial production capacity of 466,000 tpa • Cost $1,3 billion, some $500m under budget and fully completed in just 45 months, 5 months ahead of schedule • Capacity creep increases capacity to 535,000 tpa • Exp
Slide 11: The Mozal Smelter
The Mozal Smelter • Officially opened on 21 September 2000 • Initial production capacity of 253,000 tpa • Cost $1,1bn, some $100m under budget and completed in 25 months, ahead of schedule • Capacity creep gives total 268,000 tpa • Expansion (M2) of 268,000 tpa completed in August 2003 • M2 cost $66
Slide 12: Winning partnerships: Southern Africa producing 7% of world aluminium
These winning partnerships will result in Southern Africa now producing some 7% of the world’s primary aluminium : ONGOING ALLIANCES (MOZAL 1 PROJECT) [ 000 TONS PRIMARY PRODUCTION] Current capacity Under construction/ commissioning 268 133 268 BHP Billiton has grown 1384 its SA 983 Aluminium 535 bu
Slide 13: Socio-economic benefits from Hillside
Socio-economic benefits from Hillside : LOCAL FOREIGN CONSTRUCT ION JOB CREAT ION ECONOMY EXCHANGE 7 000 Jobs on Site $50 million pa $375 million pa 25 000 temporary NATIONAL THE TAX BASE INVESTMENT OPPORTUNITY PEOPLE OF SOUTH NATIONAL AFRICA INCOME $800 million PERMANENT JOB CREAT ION 1 100 on Site
Slide 14: Socio-economic benefits from Mozal
Socio-economic benefits from Mozal REGIONAL FOREIGN CONSTRUCT ION ECONOMY EXCHANGE JOB CREAT ION $105 million pa 9 000 Jobs on Site $125 million pa CSI $4 million pa INVESTMENT THE OPPORTUNITY PEOPLE OF EXPORTS MOZAMBIQUE TRIPLED TO $600M pa PERMANENT JOB CREAT ION LOCAL WAGES etc. 750 on Site INFRA
Slide 15: Integrated Development
INTEGRATED DEVELOPMENT QUALITY OF COMMUNITY LIFE INDUSTRIAL JOB CREATION MOZAL ECONOMIC DREAM ENERGY PARK DEVELOPMENT Zero Harm
Slide 16: Key challenges - South Africa
Key challenges -South Africa The situation in 1993 : • ANC recently unbanned (1990) • Negotiations on new S.A. Constitution proving very difficult • Important political party not in the negotiations • Very uncertain political future
Slide 17: Key Challenges - Mozambique
Key Challenges - Mozambique The situation in 1997 : • Recently ended civil war ( 2 decades) • Vestiges of earlier centrally planned economy still lingering-especially at lower levels of government • New democracy < 4 years old • Outdated bureaucracy with limited capacity • Ravaged economy • Run down
Slide 18: Mozambique in the 1990's
Mozambique in the 1990’s • 18th out of 23 African countries in the 1998 competitiveness index • 17th out of 20 African countries in terms of Business People’s ratings of burdens of government regulations, state interference, time required for permits etc. – New enterprise required 12 procedures,151
Slide 19: Mozambican Government's response
Mozambican Government’s response Four steps : 1. Annual Private Sector Conferences 2. World Bank’s Foreign Investment Advisory Service (FIAS) invited to assist with the compilation of a detailed catalogue of barriers to FDI e.g cost of incorporating an entity could be as much as 10% of a company’s i
Slide 20: 5-P Philosophy to investing in aluminium
5 - P Philosophy to investing in aluminium • power ! • people ! • position ! • politics ! • profits !
Slide 21: 5-P Philosophy to investing in aluminium - position
5 - P Philosophy to investing in aluminium-position m n iu i Al u lum mi A n iu m m n iu i l um A Co Electricity ke a Alumina Slide 19
Slide 22: 5-P Philosophy to investing in aluminium
5 - P Philosophy to investing in aluminium • power ! • people ! • position ! • politics ! • profits !
Slide 23: Ohpoilliton
6dl Ohpoilliton