8th Mar 2016 07:43
LONDON (Alliance News) - BHP Billiton PLC Tuesday said it addressing the challenges within the global iron ore market through a "relentless pursuit of the basics" and improved productivity at its iron ore operations in Western Australia.
Edgar Basto, asset president of BHP's Western Australia operations, said the wider mining industry will need to continue to meet the challenges of a lower price environment through productivity.
Basto was delivering a speech at the Global Iron Ore and Steel Forecast Conference in Perth.
"Following a decade of strong growth driven by fixed assets investments, the Chinese economy is transitioning to a more consumer and services based model, with future growth likely to be inherently less steel intensive," said Basto.
"The Chinese government's steel industry restructure plans will take time to implement but it's important to note a reduction in excess capacity will mean improved sustainability of the industry and our customers are likely to benefit from any consolidation," he added.
Basto said BHP has been utilising existing infrastructure in Western Australia to support improving productivity as the company continues to battle lower iron ore prices, which have halved since 2012.
"We continue to increase our productivity in Port and Rail as we approach our targeted run rate of approximately 270 million tonnes per annum. This has been achieved through a range of measures such as the optimisation of our pit-to-port scheduling strategy and alignment of maintenance shutdowns across our mines, port and track," said Basto.
Basto said BHP's iron ore operations in Western Australia are still managing an earnings before interest, tax, depreciation and amortisation margin of over 50% despite the fall in prices, and forecast further improvements to its operations going forward.
"Through the new operating model we will deliver faster replication of leading practices and improved technologies across all of BHP Billiton's global operations as well as a major reduction in the costs of our functions," he said.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
Related Shares:
BHP Billiton PLC