We'll survive ore price drop: BHP

Global miner BHP Billiton plans to sell its African iron ore assets. Source: AAP

GLOBAL miner BHP Billiton says it's in a good position to weather steep iron price falls, despite predictions of more pain to come.

Analysts have forecast more falls as the iron ore price reached $US105 per tonne on Tuesday, with Citi analysts predicting an average price of $US80 in 2016.

BHP Billiton president of iron ore Jimmy Wilson said while 50 per cent of the company's earnings came from iron ore, the global miner was diversified enough to handle price fluctuations and maintain its forecasts.

"The iron ore price we see going down," Mr Wilson told reporters on the sidelines of an iron ore conference in Perth.

"The magnitude of that number... $US80 per tonne feels a little low.

"We don't make forecasts like that."

Mr Wilson said he did not see the current dip as a down cycle.

"There's a lot of fluctuations coming through the market."

The world's largest mining company is still targeting overall iron ore production of 212 million tonnes per annum in full year 2014.

Mr Wilson said the current credit issue in China and reasonably high iron ore stocks had led to the price decrease.

"I do think we'll see it come down but it will come back up and steady out.

"Our view is the long-term is still very robust. We shouldn't let today's price influence our long-term thinking."

However, Mr Wilson conceded the company's iron ore division had limited protection if Chinese buyers stopped paying for iron ore shipments. BHP protects itself by asking for letters of credit.

"We have assurances around each of the cargoes. We're reasonably protected."

Over time BHP Billiton's customers in Japan and China had continued to pay their bills, with very few defaults, he said.

"We'll certainly survive this," he said.

Mr Wilson added that lower prices would probably affect BHP much less than some of its peers in Western Australia.

And he said this year global supply of iron ore would exceed demand.

BHP's growth plans were conservative and focused on squeezing more from existing assets.

The company says the current price dip will not affect its future iron ore expansion to 260-70 million tonnes per annum in the Pilbara.

"I'm pretty confident of our investment opportunities."

Mr Wilson also said BHP Billiton would not have to make any adjustments to its business if the current iron ore price is maintained over the short to medium term.

"Obviously we would keep going hard at cost reduction, but we're doing that anyway."

The company would continue to push higher volumes and was not looking to cut jobs as a result of the recent fall in prices.

Anda sedang membaca artikel tentang

We'll survive ore price drop: BHP

Dengan url

http://suarabisikan.blogspot.com/2014/03/well-survive-ore-price-drop-bhp.html

Anda boleh menyebar luaskannya atau mengcopy paste-nya

We'll survive ore price drop: BHP

namun jangan lupa untuk meletakkan link

We'll survive ore price drop: BHP

sebagai sumbernya