UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
May 28, 2013
| BHP BILLITON LIMITED (ABN 49 004 028 077) (Exact name of Registrant as specified in its charter)
VICTORIA, AUSTRALIA (Jurisdiction of incorporation or organisation)
180 LONSDALE STREET, MELBOURNE, VICTORIA 3000 AUSTRALIA (Address of principal executive offices) |
BHP BILLITON PLC (REG. NO. 3196209) (Exact name of Registrant as specified in its charter)
ENGLAND AND WALES (Jurisdiction of incorporation or organisation)
NEATHOUSE PLACE, VICTORIA, LONDON, UNITED KINGDOM (Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: x Form 20-F ¨ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: ¨ Yes x No
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a
bhpbilliton resourcing the future BHP Billiton Limited 180 Lonsdale Street Melbourne Victoria 3000 Australia GPO BOX 86 Melbourne Victoria 3001 Australia Tel +61 1300 55 47 57 Fax +61 3 9609 4372 bhpbilliton.com BHP Billiton Plc Neathouse Place London SW1V 1BH UK Tel +44 20 7802 4000 Fax + 44 20 7802 4111 bhpbilliton.com 28 May 2013 To: Australian Securities Exchange1 London Stock Exchange cc: New York Stock Exchange JSE Limited COAL BRIEFING AND QUEENSLAND COAL SITE TOUR BHP Billiton advises that there will be a Coal briefing and Hay Point site tour on Wednesday, 29 May 2013. The Queensland Coal visit will conclude with a tour of the Peak Downs mine and Caval Ridge project on Thursday, 30 May 2013. A copy of the materials to be presented on Wednesday, 29 May 2013 is attached. The remaining materials will be released on Thursday, 30 May 2013. The presentation materials will be available on the BHP Billiton website at www.bhpbilliton.com. Jane McAloon Group Company Secretary 1 This release was made outside the hours of operation of the ASX market announcements office. BHP Billiton Limited ABN 49 004 028 077 Registered in Australia Registered Office: 180 Lonsdale Street Melbourne Victoria 3000 BHP Billiton Plc Registration number 3196209 Registered in England and Wales Registered Office: Neathouse Place, London SW1V 1BH United Kingdom The BHP Billiton Group is headquartered in Australia
BMA BHP Billiton Coal overview bhpbilliton resourcing the future Dean Dalla Valle President Coal 29 May 2013
Disclaimer bhpbilliton resourcing the future Forward looking statements This presentation 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’ 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 presentation. 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 presentation 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 US Securities and Exchange Commission (the “SEC”) (including in Annual Reports on Form 20-F) which are available on the SEC’s website at www.sec.gov. 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 presentation also includes certain non-IFRS measures including Attributable profit excluding exceptional items, Underlying EBITDA interest coverage, Underlying effective tax rate, Underlying EBIT margin and Underlying return on capital. 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. UK GAAP financial information Certain historical financial information for periods prior to FY2005 has been presented on the basis of UK GAAP, which is not comparable to IFRS or US GAAP. Readers are cautioned not to place undue reliance on UK GAAP information. No offer of securities Nothing in this presentation 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 presentation 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 presentation should not be relied upon as a recommendation or forecast by BHP Billiton. Coal briefing, 29 May 2013 Slide 2
Disclaimer bhpbilliton resourcing the future Coal Resources This presentation includes information on Coal Resources (inclusive of Coal Reserves). Coal Resources are compiled by: R Macpherson (MAIG) – Metallurgical Coal and D Lawrence (SACNASP) – Energy Coal. This is based on Coal Resource information in the BHP Billiton 2007 and 2012 Annual Report for all assets. All reports can be found at www.bhpbilliton.com. All information is reported under the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004’ (the JORC Code) by the above mentioned persons who are employed by BHP Billiton and have the required qualifications and experience to qualify as Competent Persons for Mineral or Coal Resources under the JORC Code. The compilers verify that this report is based on and fairly reflects the Coal Resources information in the supporting documentation and agree with the form and context of the information presented. Coal Resource classifications (100% basis) for each province, where relevant, are contained in Table 1. Table 1 Asset Measured Resource Indicated Resource Inferred Resource BHP Billiton interest (million tonnes) (million tonnes) (million tonnes) (%) Metallurgical coal 2007 2012 2007 2012 2007 2012 2007 2012 CQCA and Gregory JV 1,549 2,812 3,174 4,524 3,239 3,772 50 50 BHP Mitsui 116 183 646 1,119 1,035 1,082 80 80 Illawarra Coal 200 283 202 453 774 589 100 100 IndoMet Coal 0 83 120 33 0 658 75 75 Energy coal New Mexico 1,097 847 5 260 0 4 100 100 South Africa 2,098 1,836 1,742 1,030 1,999 1,030 921 100 Australia 983 1,229 1,873 2,808 1,319 1,729 100 100 Colombia 905 2,955 1,214 984 58 730 33.3 33.3 1. Weighted average equity interest. Coal briefing, 29 May 2013 Slide 3
Program bhpbilliton resourcing the future Day 1: Wednesday, 29 May 2013 BHP Billiton Coal overview Metallurgical coal market outlook Metallurgical coal financial performance Metallurgical coal projects Hay Point overview Hay Point site visit Day 2: Thursday, 30 May 2013 BMA overview Peak Downs site visit Caval Ridge site visit Dean Dalla Valle Vicky Binns Gideon Oberholzer Phil Hynes Stephen Dumble Stephen Dumble Coal briefing, 29 May 2013 Slide 4
Key themes bhpbilliton resourcing the future A strong management team with deep operational experience Committed to ongoing improvement in HSEC performance Our productivity agenda will increase returns from our installed capacity We have taken decisive action to drive costs lower Capital expenditure will peak in FY13 with no new major projects planned Further simplification of the portfolio remains a priority Our plan will deliver substantial growth in free cash flow Coal briefing, 29 May 2013 Slide 5
Operationally experienced leadership team bhpbilliton resourcing the future President Coal Dean Dalla Valle VP Projects Phil Hynes VP Strategy & Development David Ruddell VP Finance Gideon Oberholzer VP Human Resources Matthew Brady VP HSEC Hannes van Rensburg VP External Affairs Kym Winter Dewhirst Asset President BECSA Manie Dreyer Asset President NSWEC Peter Sharpe Asset President BMA Stephen Dumble VP Production New Mexico, BMC, Illawarra Michael Rosengren VP Marketing Coal Vicky Binns Coal briefing, 29 May 2013 Slide 6
Managing material risks to eliminate fatalities is our first priority bhpbilliton resourcing the future Total Recordable Injury Frequency (TRIF, 12 month moving average) 10 8 6 4 2 0 TRIF Metallurgical coal fatality Energy coal fatality Jun 08 Jun 09 Jun 10 Jun 11 Jun 12 Coal briefing, 29 May 2013 Slide 7
Committed to ongoing improvement in HSEC bhpbilliton resourcing the future Health Safety Environment Community Improve controls to eliminate and reduce occupational exposures such as diesel exhaust, respirable dust and silica Manage workplace fatigue Control and reduce malaria, HIV and TB in developing nations Focus on visible safety leadership Manage material and fatal risks – standardise critical controls Simplify health and safety management systems and procedures Increase water recycling and reduce high quality water consumption Maximise gas capture and abatement to reduce greenhouse gas emissions Work with local communities and governments to effectively manage dust and noise Deliver major health, education and housing programs in developing nations Continue our substantial contribution to local community groups Support our local buying program in the Bowen Basin Coal briefing, 29 May 2013 Slide 8
Our business is underpinned by our high quality resource base bhpbilliton resourcing the future Substantial high quality resource base1 (billion tonnes, equity share) 15 10 5 0 Metallurgical coal Energy coal FY07 FY12 Share of BHP Billiton production2 Coal 21% Share of BHP Billiton EBIT2 Coal 14% New Mexico Coal 100% Cerrejón Coal 33.3% Metallurgical coal assets Energy coal assets Offices Energy Coal South Africa (BECSA) 100%3 Singapore Marketing office IndoMet Coal project 75% BHP Billiton Mitsui Coal (BMC) 80% BHP Billiton Mitsubishi Alliance (BMA) 50% Coal head office NSW Energy Coal 100% Illawarra Coal 100% 1. Coal Resources (100% terms) are tabulated in Disclaimer Table 1. 2. Contribution to BHP Billiton over the five year period from FY08 to FY12. Production calculated on a copper equivalent basis using FY12 average prices. 3. BHP Billiton’s effective interest in BECSA will reduce to 90% following completion of a Black Economic Empowerment transaction and Employee Share Ownership Program implementation. Coal briefing, 29 May 2013 Slide 9
Our plan will deliver substantial growth in free cash flow bhpbilliton resourcing the future We will pull the productivity lever hard with an extreme focus on operating performance maximise utilisation of installed capacity deliver significant operating cost savings complete existing capital expenditure programs continue to simplify the portfolio We have the resources, assets, people and a plan that will seek to increase margins and returns in the absence of higher prices This plan will substantially increase free cash flow and cement the integrated Coal business as the ‘fourth pillar’ of the BHP Billiton portfolio Mt Arthur Coal Coal briefing, 29 May 2013 Slide 10
We will maximise utilisation of installed capacity
bhpbilliton
resourcing the future
• Our operational focus is to maximise utilisation of installed capacity
• recover latent capacity
• complete projects in execution
• debottleneck installed capacity
• A substantial increase in metallurgical coal volumes will underpin lower unit costs
• Queensland Coal is currently producing at 100% of supply chain capacity
• by FY15 capacity will be more than 40% higher than FY12 production
• We will continue to optimise our energy coal production mix with a focus on high margin export volumes
Metallurgical coal production capacity1
(million tonnes per annum, 100% basis)
100
75
50
25
0
7
55
7
46
8
44
8
51
16
9
66
FY10 FY11 FY12 FY13e
Projects & latent capacity
FY15e
Queensland Coal
Illawarra
1. Includes major projects in execution; FY15 capacity excludes Norwich Park and Gregory nominal capacity.
Coal briefing, 29 May 2013
Slide 11
We have taken decisive action to drive costs lower
bhpbilliton
resourcing the future
• Decisive action has already delivered tangible results
• temporary closure of high cost metallurgical coal mines
• US$0.8 billion annualised controllable cash cost savings achieved for our Coal business in H1 FY13
• Substantial opportunity to deliver further cost savings
• maximise utilisation to drive unit costs lower
• optimise contractor usage and rates
• reduce supplier costs and general overheads
• reduce business development and exploration expenditure
• The implementation of our productivity agenda will drive margins and returns higher
Coal business cash cost savings achieved in H1 FY131
(US$ million)
500
375
250
125
0
252 52(37) 267 134 401
Operating
Overheads
Volume related
Sub-total
Exploration & business development
Total
(P&L)
Metallurgical coal unit cash costs2
(index, FY08 = 100)
250
200
150
100
FY08
FY09
FY10
FY11
FY12
Q1 FY13
Q2 FY13
Q3 FY13
Q4 FY13e
BMA BMC Illawarra
1. Controllable cash costs exclude non-cash and one-off items. Variance relative to H1 FY12.
2. A$ per tonne FOB costs - cash production costs plus shiploading, demurrage, royalties and marketing and selling costs.
Coal briefing, 29 May 2013
Slide 12
Our productivity agenda extends to development projects
bhpbilliton
resourcing the future
• Capital expenditure will peak in FY13
• Our major Coal projects in execution are nearing completion with the majority expected to deliver first production by end CY14
• Caval Ridge, 63% complete
• Hay Point Stage Three Expansion, 61% complete on the basis of the revised scope
• Appin Area 9, 40% complete
• Newcastle Third Port Stage Three, 71% complete
• Cerrejón P40, 65% complete
• We will substantially reduce development expenditure with no new major projects planned
• Our plan will result in a substantial increase in free cash flow
Coal capital and exploration expenditure
(US$ billion)
5.0
4.0
3.0
2.0
1.0
0.0
FY08
FY091
FY10
FY11
FY12
FY13e
FY14e
FY15e
Forecast
Minor and sustaining
Major project
Exploration
Note: All references regarding project completion are as at 30 April 2013.
1. Saraji East acquisition of US$980 million excluded from FY09 expenditure.
Coal briefing, 29 May 2013
Slide 13
Further simplification of the portfolio remains a priority
bhpbilliton
resourcing the future
• Formation of the integrated Coal business has led to a significant reduction in overheads
• Assets must earn their right to remain in the portfolio
• We have taken decisive action across our Coal operations
• temporary closure of high cost Norwich Park and Gregory open cut mines
• New Mexico non-binding MOU to transfer full ownership of the Navajo Coal Company to the Navajo Nation
• we will selectively pursue asset divestment opportunities with a firm focus on value
• We will focus our efforts on the things that matter most
Goonyella Riverside
Coal briefing, 29 May 2013
Slide 14
Key themes
bhpbilliton
resourcing the future
• A strong management team with deep operational experience
• Committed to ongoing improvement in HSEC performance
• Our productivity agenda will increase returns from our installed capacity
• We have taken decisive action to drive costs lower
• Capital expenditure will peak in FY13 with no new major projects planned
• Further simplification of the portfolio remains a priority
• Our plan will deliver substantial growth in free cash flow
Coal briefing, 29 May 2013 Slide 15
Metallurgical coal market outlook
Vicky Binns
Vice President Marketing Coal
29 May 2013
bhpbilliton
resourcing the future
Key themes
bhpbilliton
resourcing the future
• Strong steel production outlook continues to underpin metallurgical coal demand
• Scrap will become an increasingly important component of Chinese steel production
• China has become a significant importer of metallurgical coal
• Future demand growth is expected to transition towards other emerging economies
• The market appears comfortably supplied in the near-term
• BHP Billiton coals continue to be among the most highly valued, supporting strong long-term margins
• We are progressing towards a more liquid, index-linked metallurgical coal market
Coal briefing, 29 May 2013
Slide 17
BHP Billiton is a major seaborne supplier
bhpbilliton
resourcing the future
CY12 metallurgical coal supply, selected
seaborne suppliers1
(million tonnes)
60
50
40
30
20
10
0
BHP Billiton
Teck
Alpha NR
Mechel
Rio Tinto
Anglo American
Peabody
Walter Energy
Xstrata
BHP Billiton metallurgical coal sales
(%)
100
80 60 40 20
0
FY09 FY10 FY11 FY12 FY13e
China
India
Europe
Japan, Korea, Taiwan
Latin America
Other
Source: Company filings.
1. Presented on a 100% basis except Anglo American which is presented on an equity basis. Peabody and Alpha tonnages represent metallurgical coal sales. Figures could include some thermal coal. Some producers converted from short tonnes to metric tonnes.
Coal briefing, 29 May 2013
Slide 18
China has driven global steel production growth
bhpbilliton
resourcing the future
• Industrialisation and urbanisation of China has underpinned strong global steel demand growth
• Chinese crude steel production is expected to peak at ~1.1 billion tonnes by ~2025
• Steel production growth in China is expected to moderate as steel intensity per unit of GDP declines
• Pig iron growth rates will decline further as scrap use increases
• Growth ex-China is expected to be driven by India and, to a lesser extent, Latin America, the CIS and South East Asia
• However, the Indian steel outlook is less certain as steel production growth has been slower than expected
Crude steel production
(million tonnes)
CAGR
2000-2010
2010-2030
China
15.5%
2.7%
Rest of world
0.9%
3.2%
3,000
2,000
1,000
0
2000 2005 2010 2015e 2020e 2025e 2030e
China
Rest of World
Pig iron production
(million tonnes)
CAGR
2000-2010
2010-2030
China
16.4%
1.1%
Rest of world
-0.2%
3.2%
1,800
1,200
600
0
2000 2005 2010 2015e 2020e 2025e 2030e
China
Rest of World
Source: BHP Billiton; World Steel Association.
Coal briefing, 29 May 2013
Slide 19
Scrap usage in China will increase substantially
bhpbilliton
resourcing the future
• Scrap availability in China is expected to quadruple from 2010 to 2030
• Increased usage of scrap in basic oxygen furnaces will see pig iron growth rates decline
• Electric arc furnaces are expected to contribute a significant share of total Chinese steel production by 2030
China scrap availability to total steel output
(%) (million tonnes)
50
40
30
20
10
0
1,250
1,000
750
500
250
0
2000 2005 2010 2015e 2020e 2025e 2030e
Scrap availability (RHS)
Steel production (RHS)
Scrap ratio to steel output (LHS)
Source: BHP Billiton; World Steel Association.
Coal briefing, 29 May 2013
Slide 20
China is now a significant importer of metallurgical coal
bhpbilliton
resourcing the future
Chinese metallurgical
coal consumption
(million tonnes)
800
600
400
200
0
Pig iron production
(million tonnes)
800
600
400
200
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2020e
Imports
Domestic
Pig iron
Source: BHP Billiton; China Customs.
Chinese coking coal imports
(million tonnes)
60
40
20
0
(20)
(40)
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Coking coal imports
Coking coal exports
Coal in coke exports Net imports
Source: BHP Billiton; China Customs.
Note: Coking coal, inclusive of Mongolia.
Coal briefing, 29 May 2013
Slide 21
Long-term seaborne metallurgical coal demand will transition towards other emerging markets
bhpbilliton
resourcing the future
• China is expected to remain a significant importer, however much of China’s future demand growth will be met by domestic coals
• Global metallurgical coal demand growth rates will moderate as demand transitions towards other emerging markets
• India is expected to be the most significant source of new seaborne demand
• Rest of world (RoW) demand growth will be driven by Turkey and South East Asia
• Limited growth is expected in developed markets such as Europe and Japan
Source: BHP Billiton; GTIS; IEA.
Global metallurgical coal demand
(million tonnes)
CAGR
2000-2010
2010-2030
Global
6.2%
1.5%
1,600
1,200
800
400
0
Brazil
India
China
RoW developing
RoW developed
Actual
Forecast
2000
2003
2006
2009
2012
2015e
2018e
2021e
2024e
2027e
2030e
Coal briefing, 29 May 2013
Slide 22
bhpbilliton
resourcing the future
The industry has responded to Australian supply constraints
Severe production constraints in Australia led to a sharp price increase in CY11
Higher prices induced a substantial increase in US supply
As a result, the market rebalanced and prices mean reverted
The market is currently well supported by the cost of high quality Australian supply
The US remains the swing producer while China, with an abundance of domestic supply options, will be the source of swing demand
In the absence of a major supply disruption, near-term metallurgical coal prices will be range bound
Metallurgical coal seaborne supply versus Q1 2010 forecast
(million tonnes per annum)
40 20 0 (20) (40)
Australia USA
2010 2011 2012
US exports of metallurgical coal
(million tonnes, annualised)
(US$/tonne, FOB)
80
60
40
20
0
400
300
200
100
0
CY08 CY09 CY10 CY11 Q1 Q2 Q3 Q4 Q1
CY12 CY12 CY12 CY12 CY13
US exports (LHS) Hard coking coal price (RHS)
Source: BHP Billiton; GTIS; Platts.
Coal briefing, 29 May 2013
Slide 23
Future supply growth is predominantly Australian
bhpbilliton
resourcing the future
The recovery of latent capacity and delivery of projects in execution in Australia should lead to a comfortably supplied market in the near-term
Emerging supply basins in Mozambique and Mongolia have had limited impact to date
Unlocking these new basins has proven challenging given their risk and capital intensity
The growth profile for US supply is limited
Slower demand growth and range-bound pricing in the near-term could lead to project delays
Australian quality hard coking coals are expected to remain among the most highly valued
Source: BHP Billiton; WoodMackenzie; GTIS.
Note: Mongolian land based (not seaborne) exports included.
Metallurgical coal seaborne supply
(million tonnes per annum)
2010-2015 2015-2020 2020-2025 2025-2030
CAGR 7.9% 4.1% 1.4% 0.1%
600 500 400 300 200 100 0
2010 2015e 2020e 2025e 2030e
Australia Canada Indonesia
Mozambique Russia United States
Mongolia Others
Coal briefing, 29 May 2013 Slide 24
BHP Billiton’s coals are at the higher end of the value chain
bhpbilliton
resourcing the future
Coal strength
(coke CSR)
BHP Billiton brands1
80 70 60 50 40 30 20 10 0
Saraji
Peak Downs
Illawarra
Goonyella
Blend quality target
Hard CC
Gregory
Semi-hard CC
Poitrel
Blackwater coking
Blackwater weak
Semi-soft CC
LV low-volatile matter
MV mid-volatile matter
HV high-volatile matter
15 17 19 21 23 25 27 29 31 33 35 37 39
Coal volatile matter
(% air dried)
Source: BHP Billiton.
1. BHP Billiton coking coal brands in bold text.
Coal briefing, 29 May 2013 Slide 25
BHP Billiton’s coals are at the higher end of the value chain
bhpbilliton
resourcing the future
BHP Billiton brands1 and coal basins
Coal strength
(coke CSR)
80 70 60 50 40 30 20 10 0
15 17 19 21 23 25 27 29 31 33 35 37 39
Peak Downs
Saraji
Illawarra
AUS and CAN Prime HCCs
Goonyella
Hard CC
Blend quality target
US LV
AUS SHCCS
Poitrel
Gregory
Prime US HV
Semi-hard CC
Blackwater coking
AUS Hunter Valley SSCC
Blackwater weak
Semi-soft CC
LV low-volatile matter
MV mid-volatile matter
HV high-volatile matter
Coal volatile matter
(% air dried)
Source: BHP Billiton.
1. BHP Billiton coking coal brands in bold text.
Coal briefing, 29 May 2013 Slide 26
Price indices are becoming more liquid and increasingly accepted in the industry
bhpbilliton
resourcing the future
Various price indices are available to the market, with CSR, volatiles and ash among the key value drivers
There are an increasing number of index providers accepted by the industry
Increased spot sales have led to greater liquidity
Price discovery has improved and is now more reflective of the market
Pricing ranges have narrowed, however better quality LV HCC maintains a premium even in weak markets
More customers are employing index-linked pricing in contracts
Coking coal price indices
(US$/tonne)
250 200 150 100 50
Platts LV HCC FOB
Argus FOB HCC
Platts 64 CSR Mid-vol FOB Platts LV PCI FOB
Platts SSCC FOB
Apr 12 May 12 Jun 12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13
Source: Platts; Argus.
Coal briefing, 29 May 2013 Slide 27
Key themes
bhpbilliton
resourcing the future
Strong steel production outlook continues to underpin metallurgical coal demand
Scrap will become an increasingly important component of Chinese steel production
China has become a significant importer of metallurgical coal
Future demand growth is expected to transition towards other emerging economies
The market appears comfortably supplied in the near-term
BHP Billiton coals continue to be among the most highly valued, supporting strong long-term margins
We are progressing towards a more liquid, index-linked metallurgical coal market
Coal briefing, 29 May 2013 Slide 28
bhpbilliton
resourcing the future
Peak Downs
Metallurgical coal financial performance
Gideon Oberholzer
Vice President Finance Coal
29 May 2013
Our plan will substantially increase free cash flow
bhpbilliton
resourcing the future
Strong financial performance over the last five financial years reflects the underlying quality of our metallurgical coal assets
US$11.9 billion of Underlying EBIT1, representing 10% of total BHP Billiton Underlying EBIT
US$13.8 billion of cash generated from operations, representing 10% of total BHP Billiton cash generated from operations
14% of total BHP Billiton copper equivalent production2
average EBIT margin of 34%
Recent performance has been affected by significant market and operating challenges
The opportunity lies before us to significantly increase margins and free cash flow
1. Excluding exceptional items and third party products.
2. Copper equivalent production calculated using FY12 average prices.
Metallurgical coal financial performance1
(EBIT, US$ billion)
(EBIT margin, %)
6 4 2 0 (2)
FY08 FY09 FY10 FY11 FY12 H1 FY13
60 40 20
0 (20)
EBIT EBIT margin
EBIT contribution by asset
(Average EBIT FY08 to FY121)
Illawarra 19%
BMC 16%
BMA 65%
Coal briefing, 29 May 2013 Slide 30
A challenging operating environment
bhpbilliton
resourcing the future
A number of factors have constrained profitability
severe operational challenges
substantial drop in coal prices
significant increase in Queensland royalties and the introduction of a carbon tax
cost inflation driven by a heated market for labour, consumables, contractors and accommodation
persistent strength of the Australian dollar
We have a simple roadmap to recovery and have already delivered tangible results
HCC prices have experienced a sharp decline
(US$/tonne, FOB)
350 300 250 200 150 100
100
Apr 10 Nov 10 May 11 Dec 11 Jun 12 Jan 13
Argus FOB HP (USD)
Argus FOB HP (AUD equivalent)
Source: Argus.
Coal briefing, 29 May 2013 Slide 31
Queensland Coal is now operating at supply chain capacity
bhpbilliton
resourcing the future
Queensland Coal volumes were severely constrained by extraordinary rainfall events and industrial activity
Operating challenges have recently been overcome
flood mitigation infrastructure and water release programs have reduced risk
a three year BMA Enterprise Bargaining Agreement was signed in October 2012
BMA capacity utilisation has recovered
(%)
120
100
80 60 40
Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Mar 13 Jun 13e
Coal briefing, 29 May 2013 Slide 32
A sustainable reduction in costs is our primary goal
bhpbilliton
resourcing the future
We are targeting five key components of our cost base to reduce operating expenditure
a reduction in contractor usage and rates
a significant reduction in overheads
the alignment of mine input costs with the external market
a reduction in exploration and study costs
the closure of high cost operations
Substantial reduction in BMA functional headcount
(full time equivalent, index, July 2012 = 100)
150
100
50
0
Jul 12
FY13e
Targeted FY13 cost savings are broad based
Other
Consultants
Personnel Contract reduction
Equipment
Maintenance
Coal briefing, 29 May 2013 Slide 33
Strong progress has already been achieved
bhpbilliton
resourcing the future
We have successfully renegotiated terms with some contractors while other contracts have been terminated
We have optimised the use of hire equipment and rationalised the mining fleet
We have renegotiated terms with suppliers of bulk consumables, spares and maintenance services
We have delivered significant savings and will continue to pull the productivity lever hard
BMA monthly absolute mine site cash costs
(AUD, index, FY12 = 100)
110 100 90 80 70 60
FY12 Jul 12 Aug 12 Sep 12 Oct 12 Nov 12 Dec 12 Jan 13 Feb 13 Mar 13 Apr 13 May 13e Jun 13e
BMA unit cash costs have turned the corner1
(index, FY08 = 100)
250 150 50
FY08 FY09 FY10 FY11 FY12 H1 FY13 H2 FY13e
1. A$ per tonne FOB costs - cash production costs plus shiploading, demurrage, royalties and marketing and selling costs.
Coal briefing, 29 May 2013 Slide 34
Our expenditure profile declines significantly from FY14
bhpbilliton
resourcing the future
Capital expenditure will peak in FY13
No new major projects are being considered
Our capital expenditure profile will trend towards the rate required to sustain our operations in the medium to long term
We are ‘long’ resource and have sustainably reduced exploration expenditure
Metallurgical coal capital and exploration expenditure
(US$ billion, BHP Billiton share)
4.0
3.0
2.0
1.0
0.0
FY08 FY091 FY10 FY11 FY12 FY13e FY14e FY15e
Forecast
Major project
Minor and sustaining
Exploration
1. Saraji East acquisition of US$980 million excluded from FY09 expenditure.
Coal briefing, 29 May 2013 Slide 35
Our plan will substantially increase free cash flow
bhpbilliton
resourcing the future
We have the coal resources, people and a plan to maximise returns from our asset base
– increase the productivity and efficiency of the supply chain
– deliver a sustainable reduction in costs
– re-establish our competitive advantage
– substantially increase free cash flow
Coal briefing, 29 May 2013 Slide 36
Caval Ridge CPP
bhpbilliton
resourcing the future
Metallurgical coal projects
Phil Hynes
Vice President Project Development Coal
29 May 2013
Our capital expenditure will peak in FY13
bhpbilliton
resourcing the future
We have successfully completed a number of projects with ramp-up progressing to plan
We are committed to the successful delivery of the remaining projects in execution
No new major projects are planned
Valuable options provide us with substantial flexibility in the long term
South Walker Creek CHPP upgrade
Coal briefing, 29 May 2013 Slide 38
Daunia and Broadmeadow projects successfully delivered
bhpbilliton
resourcing the future
Daunia
4.5 mtpa (100% basis) greenfield mine development
First production achieved in March 2013, ahead of schedule and under budget
Forecast to ramp-up to nameplate capacity by Q4 CY13
Budget of US$800 million (BHP Billiton share) with forecast final cost of US$710 million
Broadmeadow Life Extension
Extends mine life and increases capacity by 0.4 mtpa (100% basis)
First production achieved in March 2013, ahead of schedule
Forecast to ramp-up to nameplate capacity by Q4 CY13
Budget of US$450 million (BHP Billiton share) with forecast final cost of US$473 million
Longwall top coal caving provides upside potential
Daunia CHPP
Broadmeadow stack out conveyor
Coal briefing, 29 May 2013 Slide 39
Caval Ridge will be a tier 1 hard coking coal asset
bhpbilliton
resourcing the future
Project progressing to plan
– budget of US$1.87 billion (BHP Billiton share)
– project is 63% complete1, with initial production expected in CY14
Resource life of the initial project is expected to be greater than 60 years2
Caval Ridge refers to the northern extension of the Peak Downs mine
Peak Downs North coking coal is a high quality premium hard coking coal
Mining fleet supports initial 5.5 mtpa (100% basis) open cut mine
– owner operated dragline / truck and shovel operation
Preparation plant is being constructed with capacity of 10 mtpa (100% basis)
– a low cost expansion will be timed to meet market demand
Coal Prep Plan Building Screen Floor
Tailings filter building
1. As at 30 April 2013.
2. The Resource Life is estimated from the Caval Ridge resource base (767 mt) divided by the approved production rate of 5.5 mtpa, factored up by coal preparation plant recovery (56%) and mining recovery (96%). The Caval Ridge Resource is incorporated into the Peak Downs Mineral Resource reported as of 30 June 2012 composed of: Measured Resource 685 mt; Indicated Resource 874 mt , Inferred Resource 572 mt on a 100% basis (BHP Billiton interest is 50%) and should be read together with and subject to, the notes set out in the FY12 Annual Report, which can be found at www.bhpbilliton.com.
Coal briefing, 29 May 2013 Slide 40
Hay Point expansion underpins our uniquely integrated supply chain
bhpbilliton
resourcing the future
Hay Point Stage Three Expansion increases port capacity from 44 mtpa to 55 mtpa and reduces storm vulnerability
Project is 61% complete1
The project scope has been revised and now excludes demolition of the existing trestle
Schedule is currently under review with no impact to sales volumes anticipated
– marine works represent the major challenge given significant weather interruptions and productivity issues
In this context, the budget of US$1.25 billion (BHP Billiton share) is being reviewed
This project further underpins our competitive advantage in the Bowen Basin
HPX3 marine construction
Tropical Cyclone Yasi (Indicative)
16.5m
Tropical Cyclone Ului
11.5m
Highest tide level
7.14m
Existing trestle
New trestle
1. As at 30 April 2013.
Coal briefing, 29 May 2013 Slide 41
Appin Area 9 sustains Illawarra Coal operations
bhpbilliton
resourcing the future
Project progressing to plan
– budget of US$845 million (BHP Billiton share)
– project is 40% complete1, with initial production expected in CY16
Appin Area 9 will have production capacity of 3.5 mtpa
Two longwall domains will largely use existing infrastructure, personnel and longwall equipment
Appin Area 9 - shaft sinking
1. As at 30 April 2013.
Coal briefing, 29 May 2013 Slide 42
Hay Point
Hay Point – maximising supply chain efficiency
Stephen Dumble
Asset President BMA
29 May 2013
bhpbilliton
resourcing the future
Hay Point Coal Terminal
bhpbilliton
resourcing the future
Existing berths
3rd berth
New trestle
Existing trestle
New transfer towers
Product stockyards
Coal briefing, 29 May 2013 Slide 44
Hay Point Coal Terminal provides a significant competitive advantage
bhpbilliton
resourcing the future
Hay Point is 100% BMA owned
Dedicated port with full blending capability underpins our competitive advantage
Existing port capacity of 44 mtpa with expansion to 55 mtpa underway
Services eight of our Queensland Coal mines
Capacity details
– in-loading and out-loading capacity of 6,000 tph
– 5 stackers / reclaimers
– stockyard capacity 1.25 million tonnes
The port loads around 450 vessels per annum, shipping to 70 customers in more than 20 countries
Hay Point shiploading
Hay Point stockyards
Coal briefing, 29 May 2013 Slide 45
Leveraging our infrastructure network to deliver value for our shareholders
bhpbilliton
resourcing the future
Capacity at four Queensland ports with matched rail flexibility allows us to optimise the supply chain
BMA rail operations are being established with initial capacity of 15 mtpa commencing in CY14
BMA is the only integrated metallurgical coal producer from mine to port in Australia
BMA locomotive
BMA operations
BMC operations
Under construction
Mine Port Rail
Abbot Point
Bowen
Abbot Point 50 mtpa
Collinsville
DBCT 85 mtpa
Newlands Rail
System 50 mtpa
Mackay
DBCT
Hay Point
South Walker Creek
Hay Point 44 mtpa (55 mtpa HPX3)
Goonyella Riverside
Broadmeadow
Moranbah
Daunia
Poitrel
Goonyella Rail System
129 mtpa
Caval Ridge
Peak Downs
Saraji
Dysart
Norwich Park
Gladstone 81 mtpa
Gregory Crinum
Rockhampton
Emerald Blackwater
Blackwater
Gladstone
Blackwater Rail System 74 mtpa
0 100km
Note: All rail and port capacities are shown at 100%.
Coal briefing, 29 May 2013 Slide 46
bhpbilliton
resourcing the future
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BHP Billiton Limited and BHP Billiton Plc | ||||||||
| Date: May 28, 2013 | By: | /s/ Jane McAloon | ||||||
| Name: | Jane McAloon | |||||||
| Title: | Group Company Secretary | |||||||