In a meeting with its investors, Australian miner BHP Billiton has outlined the path for its coal business to improve returns by unlocking productivity, reducing costs and releasing latent capacity.
BHP Billiton’s coal president Mike Henry stated that, rather than waiting for higher prices, the company has focused on its portfolio that allows it to deliver value in challenging market conditions and positions it well for an expected longer-term improvement in coal market fundamentals. According to Mr. Henry, the company can also grow its coal business by releasing low-cost, latent capacity as well as by exercising high quality growth options if market conditions call for it. He also stated that, against the backdrop of greater uncertainty in the outlook for thermal coal, the company is confident that base demand in emerging economies will remain resilient for decades to come and its higher quality coals position it well in an increasingly carbon-constrained world.
According to the company’s statement, its coal business has delivered over US$3 billion of productivity gains since 2012 and is targeting another US$600 million by the end of the financial year 2016-17.