Western Australia Iron Ore Overview. Michael Bailey General Manager, Port Operations

Transcription

1 Western Australia Iron Ore Overview Michael Bailey General Manager, Port Operations

2 Disclaimer Forward looking statements This release contains forward looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certain operations or facilities (including associated costs); anticipated production or construction commencement dates; capital costs and scheduling; operating costs and shortages of materials and skilled employees; anticipated productive lives of projects, mines and facilities; provisions and contingent liabilities; tax and regulatory developments. Forward looking statements can be identified by the use of terminology such as intend, aim, project, anticipate, estimate, plan, believe, expect, may, should, will, continue, annualised or similar words. These statements discuss future expectations concerning the results of operations or financial condition, or provide other forward looking statements. These forward looking statements are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results to differ materially from those expressed in the statements contained in this release. Readers are cautioned not to put undue reliance on forward looking statements. For example, our future revenues from our operations, projects or mines described in this release will be based, in part, upon the market price of the minerals, metals or petroleum produced, which may vary significantly from current levels. These variations, if materially adverse, may affect the timing or the feasibility of the development of a particular project, the expansion of certain facilities or mines, or the continuation of existing operations. Other factors that may affect the actual construction or production commencement dates, costs or production output and anticipated lives of operations, mines or facilities include our ability to profitably produce and transport the minerals, petroleum and/or metals extracted to applicable markets; the impact of foreign currency exchange rates on the market prices of the minerals, petroleum or metals we produce; activities of government authorities in some of the countries where we are exploring or developing these projects, facilities or mines, including increases in taxes, changes in environmental and other regulations and political uncertainty; labour unrest; and other factors identified in the risk factors discussed in BHP Billiton s filings with the U.S. Securities and Exchange Commission (the SEC ) (including in Annual Reports on Form 20-F) which are available on the SEC s website at Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or review any forward looking statements, whether as a result of new information or future events. Non-IFRS financial information BHP Billiton results are reported under International Financial Reporting Standards (IFRS) including Underlying EBIT and Underlying EBITDA which are used to measure segment performance. This release also includes certain non-ifrs measures including Underlying attributable profit, Underlying basic earnings per share, Underlying EBITDA interest coverage, Underlying effective tax rate, Underlying EBIT margin, Underlying EBITDA margin, Underlying return on capital, Free cash flow, Net debt and Net operating assets. These measures are used internally by management to assess the performance of our business, make decisions on the allocation of our resources and assess operational management. Non-IFRS measures have not been subject to audit or review and should not be considered as an indication of or alternative to an IFRS measure of profitability, financial performance or liquidity. No offer of securities Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction. Reliance on third party information The views expressed in this release contain information that has been 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. This release should not be relied upon as a recommendation or forecast by BHP Billiton.

3 Western Australia Iron Ore An Integrated System Mine Seven open cut mines Four state of the art processing hubs 225mtpa* production in FY mtpa* production guidance for FY15 Rail Network comprising over 1300km of track Amongst the most productive, heavy haul private railroads in the world Port Two world-class port facilities located either side of the Port Hedland inner harbour 8 operating berths Significant infrastructure at each facility *100% basis

4 A decade of investment Over US$25 billion invested in series of successful growth projects Production (million wet tonnes) Capital Investment (US$ millions) Last major capital approval by the Board Projects $7,000 $6,000 RGP 5 $5, RGP 3 RGP 4 $4, RGP 1 RGP 2 $3,000 $2, $1, e $- Year % basis 2. Rapid Growth Program (RGP) milestones indicate first ore dates. 3. WAIO Port Hedland Inner Harbour Expansion, WAIO Port Blending and Rail Yard Facilities, WAIO Jimblebar Mine Expansion

5 Focus on productivity Our productivity initiatives are delivering more volume from existing equipment at lower unit costs We plan to reduce unit cash costs 1 well below US$20/t 2 in the medium term through release economies of scale through our growth plan to 290 Mtpa 3 reduction in general overhead and business development costs more efficient use of raw materials and consumables reduction in services through insourcing and efficiencies Shiploader unscheduled equipment downtime (per tonne index, January 2014 = 100) 100 Targeting continued reductions in FY15 1 (US$/t) Jan 14 Mar 14 May 14 Jul 14 Sep 14 Nov 14 Jan FY11 FY12 FY13 FY14 FY15e 1. Cost per tonne excludes royalties and freight. 2. Based on real 2014 terms, AUD:USD exchange rate of % basis.

6 Safe and sustainable operations above all else Total Recordable Injury Frequency (TRIF) (WAIO, number of recordable injuries per million hours worked) FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 YTD

7 Sharing the benefits BHP Billiton is committed to supporting the communities in which we operate. The benefits from our operations flow in a number of direct and indirect ways, including: Over $8 billion in Australian taxes and royalties paid last year 1 We contribute 27% of the State s royalty revenue We directly employ around one thousand resident workers, and many more contractors We are the Town s largest rate payer We procure 75% of goods and services from WA businesses Over the last five years we have voluntarily invested A$275 million in our WA host communities through our Community Development Program. Recent examples: A$11 million Mirnutharntu Maya A$8 million Youth Involvement Council A$2 million Spinifex Hill Studio Continued partnership with government to upgrade Pilbara schools Reference to FY14. Taxes and royalties by BHP Billiton Australia wide. All other figures WA Iron Ore100% basis.

8 WAIO Supply Processes and Opportunities Shane Elliss Supply Manager Site Services

9 Introduction Prior Growth Projects Move to Owner Operator Model Additional Operations Changing economic environment No growth projects in execution Increased operational footprint is ongoing and sustainable Decreasing operational spend (in real terms) Ongoing, sustainable and increased operational footprint Slide 9

10 Where are the opportunities? Projects Operational Contracted Operational Non- Contracted High Value Large Work Packages Not Sustained High Value Consolidated Long Term Competitive Tender e.g. Sustaining Capital Operationally Driven Lower Risk Value (<$2M) Locally Based SME Best Placed to Supply Slide 10

11 What are the procurement processes? >$2M Competitive Tender Process (Tender) < $2M Request for Pricing Process (RFP) Slide 11

12 How does BHPBIO select vendors? Increasing Focus on Safety Performance, Cost Effectiveness, Increasing Efficiency and Contractual Compliance Safety Indigenous participation Cost Local participation Efficiency Compliance Slide 12

13 How can you register your interest? On-line Vendor Registration Tool Key point of reference for Contracts and Purchasing Officers Vendor led system keep updated and load relevant information Vendor numbers are not issued until you are being engaged for work, you do not need a vendor number to bid for opportunities. Slide 13

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