Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Port Hedland Port Authority Conference 2007
15 slides from Bhp's conference presentation, Jun 28, 2007
Slide 1: Pilbara Ports: Expansion Approaches to Ensure Tomorrow’s Exports
Pilbara Ports: Expansion Approaches to Ensure Tomorrow’s Exports Photo: The Australian Ian Ashby President, BHP Billiton Iron Ore Port Hedland Port Authority Conference 28 June 2007
Slide 2: Disclaimer
Disclaimer The views expressed here contain information derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. Any forward looking information in this presentation ha
Slide 3: BHP Billiton WA iron ore operations
BHP Billiton WA iron ore operations • Seven mines producing ~ 106 Mtpa; • Total productive movement ~ 300 Mt; • Integrated mine, port and rail operations; • More than 7,000 permanent and contract employees in WA • Multiplier effect: 21,400 jobs • 8.7% of WA employees 8 Indigenous (Jan 07) Page 3
Slide 4: Chinese urbanisation likely to lead to major city development
Chinese urbanisation likely to lead to major city development China’s tiered city structure: Today: 45 tier 1-3 cities 2020: 147 tier 1-3 cities 2010: 86 tier 1-3 cities Total Urban Population (millions): Total Urban Population (millions): 532 970 Tier 1 Tier 2 Tier 3 Total Urban Population (million
Slide 5: Which in turn will increase demand for steel…
Which in turn will increase demand for steel… Steel Intensity per Capita 1200 USA (1900-2005) Japan (1950-2005) 1000 S. Korea (1970-2005) Taiwan (1970-2005) 800 China (1970-2005) Kg Steel/Capit a India (2005) = 600 kg x 1.4 billion 600 400 200 0 0 5000 10000 15000 20000 25000 30000 35000 40000 45000
Slide 6: And for iron ore…
And for iron ore… Chinese iron ore demand and % share of world demand Million tonnes 350 50% 300 Chinese iron ore imports 45% 40% 250 % share of global seaborne iron ore (right hand scale) 35% 200 30% 25% 150 20% 100 15% 10% 50 5% 0 0% 95 96 97 98 99 00 01 02 03 04 05 06 Source: IISI, China Customs,
Slide 7: BHP Billiton has been growing to meet demand
BHP Billiton has been growing to meet demand Approved Project Cost (US$M) (1) Tonnes (Mt) 2002 Area C & PACE 564 15 2003 Accel. Expansion 50 7 2004 RGP1 111 10 2004 RGP2 575 8 2005 RGP3 1,529 20 2007 RGP4 2,100 26 TOTAL 4,929 77 (2) • Studying expansion options beyond 155Mtpa • Potential to grow bey
Slide 8: WA is well placed to continue supplying growing demand
WA is well placed to continue supplying growing demand • Close proximity to Asian markets • Efficient, low cost operations • Realising this opportunity will require: – Large, high quality resources – Continued expansion of mining activities and investment in rail infrastructure – Investment in addit
Slide 9: Port Hedland will meet current requirements
Port Hedland will meet current requirements • Port Hedland has sufficient capacity to accommodate BHP Billiton’s current expansions • Increased exports from Port Hedland are also being evaluated • Considerations include: – Cost of expansion – Dust – Noise – Tides – Stockyard space Page 9
Slide 10: Longer term a new port will be required
Longer term a new port will be required • A new port will mitigate single system risks and ease capacity constraints at Port Hedland • Three possible options for a new port: – Mining company owner and user – Privately owned, multi-user port – Government owner • Certainty around investment framework
Slide 11: Ownership structures affect timing of expansions
Ownership structures affect timing of expansions 30 May 2007 Kalgoorlie Miner 14 April 2007 Sydney Morning Herald RAIL DELAYS FORCE GIANT BUYER OVERSEAS The biggest threat PORT’S COAL 7 February 2007 Woodside Australia Fire faces the loss ofSale multi-billion dollar coal Rising labour and developmen
Slide 12: Hay Point vs. DBCT – A case study
Hay Point vs. DBCT – A case study Ph Ph 22 commissioning commissioning toto Ph Ph 11 expansion expansion 44mtpa 44mtpa (+28% (+28% on on Ph Ph 11 commissioned commissioned current approved approved currentcapacity) capacity) Hay Point: +16% Capacity (35 to 40 mtpa) Prime Prime Infrastructure Infrast
Slide 13: Criteria for assessment of options
Criteria for assessment of options • Economic development • Fiscal policy • Competition • Environment • Safety • Security and planning Page 13
Slide 14: Conclusion
Conclusion • Longer term we believe that a new port will be required – Ronsard Island is a strong option however we are exploring others to reduce time, risk and cost – A second port will mitigate single system risks at Port Hedland • Developing a greenfield port site requires: – Long lead times to
Slide 15: Page 15
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