Mining giant BHP Billiton believes growth in China will underpin an eight per cent boost in its production over the next two years.
Chief executive Andrew Mackenzie says recent economic data and policies out of China have confirmed the company’s long held belief in the strength of the world’s second largest economy.
“We do think it will continue to grow,” Mr Mackenzie told reporters after the company’s annual general meeting in Perth.
“We do think it has the confidence over time to move to a consumption based economy which is going to increase the demand for energy.
“It’s given us reassurance about our plans.”
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BHP plans to increase its overall production by eight per cent per year over the next two years, as it focuses on getting the most out of its existing operations, including the “four pillars” of iron ore, petroleum, copper and coal.
The company has the flexibility within its portfolio to adapt quickly if global conditions change, Mr Mackenzie said.
And he added that the company was thinking about changes, depending on the energy needs of China and the world.
BHP is also focused on Potash over the longer term, and continues to operate its aluminium, manganese and nickel businesses as efficiently as possible.
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Chairman Jac Nasser told the meeting that growth in China, despite slowing, is resilient enough to drive strong demand for commodities for the next 15 years.
“With employment conditions and income growth remaining resilient, we believe the Chinese government has the room and flexibility to pursue reforms that support its policy of stable, long term growth,” he said.
The company expects the Chinese economy to grow at more than seven per cent next year.
“Only a few countries in the world are well placed to supply this increased demand for commodities, and Australia is one of them,” Mr Nasser said.
BHP made a profit of $US10.9 billion in the 2012/13 financial year, a drop of 30 per cent from the previous year due to weaker commodity prices.
The company has cut costs and spending in response to price falls.
The company’s production in the first quarter of the 2013/14 financial year was higher than analysts had expected.
