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Building on Productivity Leadership and a Strong Asset Base

BHP Billiton is meeting the challenges of the global iron ore market through a focus on productivity and a "relentless pursuit of the basics" in its Western Australia Iron Ore (WAIO) operations.

In a key note address at this year’s Global Iron Ore and Steel Forecast Conference, Asset President WAIO, Edgar Basto, spoke to the global market dynamics affecting one of Australia’s most important exports.

"Following a decade of strong growth driven by fixed assets investments, the Chinese economy is transitioning to a more consumer and services based model, with future growth likely to be inherently less steel intensive," he said.
"The Chinese Government’s steel industry restructure plans will take time to implement but it’s important to note a reduction in excess capacity will mean improved sustainability of the industry and our customers are likely to benefit from any consolidation."

Mr Basto reiterated that the mining industry would need to continue to meet the challenges of a lower price environment through productivity. 

"Our structured approach to safely increasing the availability, utilisation and rate of our existing infrastructure will support continued productivity improvements at WAIO," he said.

"We continue to increase our productivity in Port and Rail as we approach our targeted run rate of approximately 270 million tonnes per annum. 

"This has been achieved through a range of measures such as the optimisation of our pit-to-port scheduling strategy and alignment of maintenance shutdowns across our mines, port and track."

Mr Basto said BHP Billiton’s new Operating Model would also support safe delivery of further productivity gains from WAIO’s Tier 1 asset base in the Pilbara.

"Our productivity drive has supported an EBITDA margin of over 50 per cent at WAIO despite the iron ore price halving since 2012," he said.

"Through the new Operating Model we will deliver faster replication of leading practices and improved technologies across all of BHP Billiton's global operations as well as a major reduction in the costs of our functions."

Mr Basto reinforced the Company’s commitment to Western Australia and its local communities.

"WAIO remains a strong supporter of the communities in which we operate, having committed A$300 million over the past five years to health, education and Indigenous development programs and community infrastructure.

"We are proud of the contribution we have made, and continue to make in WA. Despite the challenging market conditions faced by the industry, BHP Billiton is unwavering in its commitment to the State and our local communities."

For more information, please see the news release and presentation or read the speech.