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Rio Tinto Share News (RIO)
Share News for Rio Tinto (RIO)
| Share Price: 2,979.00 | Bid: 2,975.00 | Ask: 2,976.00 | Change: 0.00 (0.00%) |  | ||||||
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BHP chief says spending necessary through commodity down cycles
Wed, 6th Jun 2012 01:46
June 6 (Reuters) - BHP Billiton, the world's biggest mining company said on Wednesday it was n
'It is quite often the case that an investment decision in a particular commodity will be made in a part of the business cycle that results in a low price environment for that particular commodity, but the investment is made nevertheless in recognition of the expected future demand and prices,' BHP Chief Executive Marius Kloppers told a business forum in Perth.
Slumping commodity prices and escalating costs have squeezed cash flows, pushing BHP to join rival Rio Tinto in reconsidering the pace of their long-term expansion in countries such as Australia and Canada.
The miner was planning to finance the expansion with its cash flows, which analysts forecast may fall 20 percent to around $24 billion in the year ending June.
BHP has long maintained that it is committed to keeping its single-A credit rating, another constraint on spending. As of December, the company had net debt of $21.5 billion.
Three major projects are vulnerable: the Outer Harbour development at Port Hedland in Western Australia crucial to its iron ore growth, the expansion of the Olympic Dam copper and uranium mine in South Australia, and its Jansen potash project in Canada.
(Reporting by James Regan in Sydney; Editing by Lincoln Feast) Keywords: BHP KLOPPERS/INVESTMENT
(jim.regan@thomsonreuters.com)(+612 9373-1814)(Reuters Messaging: jim.regan.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
June 6 (Reuters) - BHP Billiton, the world's biggest mining company said on Wednesday it was n
ecessary to maintain investment in new projects even through down periods in commodities price cycles.
'It is quite often the case that an investment decision in a particular commodity will be made in a part of the business cycle that results in a low price environment for that particular commodity, but the investment is made nevertheless in recognition of the expected future demand and prices,' BHP Chief Executive Marius Kloppers told a business forum in Perth.
Slumping commodity prices and escalating costs have squeezed cash flows, pushing BHP to join rival Rio Tinto in reconsidering the pace of their long-term expansion in countries such as Australia and Canada.
The miner was planning to finance the expansion with its cash flows, which analysts forecast may fall 20 percent to around $24 billion in the year ending June.
BHP has long maintained that it is committed to keeping its single-A credit rating, another constraint on spending. As of December, the company had net debt of $21.5 billion.
Three major projects are vulnerable: the Outer Harbour development at Port Hedland in Western Australia crucial to its iron ore growth, the expansion of the Olympic Dam copper and uranium mine in South Australia, and its Jansen potash project in Canada.
(Reporting by James Regan in Sydney; Editing by Lincoln Feast) Keywords: BHP KLOPPERS/INVESTMENT
(jim.regan@thomsonreuters.com)(+612 9373-1814)(Reuters Messaging: jim.regan.reuters.com@reuters.net)
COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
COLUMN-Commodity companies' cost-cutting stampede yet to work: Clyde Russell
--Clyde Russell is a Reuters market analyst. The views expressed are his own.--By Clyde RussellLAUNCESTON, Australia, May 20 (Reuters) - If you ever n[Mon 07:09]
Rio Tinto faces big new union push at its iron ore mines
MELBOURNE, May 20 (Reuters) - Two powerful Australian unions have joined forces to try to take on Rio Tinto Ltd at its iron ore mines, where workers h[Mon 00:16]
UPDATE 1-Australia approves Rio Tinto's $1 bln bauxite mine
* South of Embley project could produce up to 50 mln T a year* Project faces long list of conditions to protect reef* Rio Tinto shares fall 3.1 pct vs[15 May '13]
Australian government approves Rio Tinto Alcan's bauxite mine
SYDNEY, May 15 (Reuters) - The Australian government on Wednesday approved Rio Tinto Alcan's South of Embley bauxite mine and port development proj[15 May '13]
RPT-UPDATE 1-New faces at Rio, BHP woo investors with austerity talk
* BHP says 2014 capex to drop to $18 billion* BHP promises internal competition for capital* Rio sticks to $2 billion cost cut target in 2013* Rio pro[14 May '13]
UPDATE 1-New Zealand/Australia Morning Call-Global markets
-----------------------(08:44 / 2044 GMT)----------------------- Stock Markets S&P/ASX 200 5,220[14 May '13]
UPDATE 1-New faces at Rio, BHP woo investors with austerity talk
* BHP says 2014 capex to drop to $18 billion* BHP promises internal competition for capital* Rio sticks to $2 billion cost cut target in 2013* Rio pro[14 May '13]
COLUMN-African minerals and the illusion of fair value: Kemp
By John KempLONDON, May 14 (Reuters) - "With Africa's economies riding the crest of the global commodities wave, there is an unprecedented opportunity[14 May '13]
