Say goodbye to iron ore high growth

June 4, 2012 - PRLog -- This is the fifth year of Marius Kloppers as CEO of the world's largest mining company BHP Billiton. To outsiders, he is very lucky, are catching up with the most productive in the history of mining demand a period of time.

BHP Billiton profit levels not only at its peak, He also conducted a series of bold, aggressive action taken by BHP Billiton, breaking a long iron ore price agreement mechanism, so that the price of iron ore has become - according to him - more accurate, and iron ore prices is one of the most important source of BHP Billiton profit growth over the past few years.

The good old days of the upstream resource companies how long? In Beijing on May 29, Marius Kloppers fiscal an interview, a prudent and rational attitude. "The stage of rapid development of iron ore and steel industry has passed.", Marius Kloppers said.

Earnings and cash flow to reduce the iron ore business has affected BHP Billiton's capital expenditure plans. In the next six months, BHP Billiton will not approve any significant project investment, including the closely watched four large projects - the Olympic Dam copper, shale gas project in the United States, Canada's potash project, as well as Australia, Outer port expansion scheme. These four projects is expected in the next 15 years the cost of up to $ 120 billion.

Bid farewell to the iron ore super-boom cycle, he is working for BHP Billiton to develop new business areas, including gas, oil and potash. His demand for these resources and market outlook remains positive and the most effective allocation of these resources assets, he thinks the biggest challenge they face.

China's iron ore market
Marius Kloppers: In China, almost all of the metallurgical industry, including copper, nickel, and iron and steel, alumina and aluminum are present the problem of overcapacity. Because there are a lot of capacity built under the assumptions of economic growth is not slowing down. So, now BHP Billiton is a major challenge for our customers very difficult to profit. When we discuss why it difficult for them to profit by telephone, the answer is the metallurgical industry overcapacity.

So I think in the next few years, these industries there will be restructuring, shutting down the old capacity, only run the new capacity, etc.. But let us be surprised that, even if the industry in the face of losses, as well as in the construction of a new steel production capacity. Logically speaking, you must stop. This is not for BHP Billiton, but because our customers are very difficult.

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