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BHP backtracks on plan to spend $80bn on projects; Who could have seen that coming?
Topic Started: 17 May 2012, 08:17 AM (1,326 Views)
newjez
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BHP backtracks on plan to spend $80bn on projects

by: Sarah-Jane Tasker
From: The Australian
May 17, 2012 12:00AM

THE chairman of the world's largest miner, BHP Billiton's Jac Nasser, has warned of increasing global volatility and uncertainty while ditching plans to invest $80 billion on growth projects over the next five years.

As global sharemarkets reeled yesterday, Mr Nasser said the world had fundamentally changed since the global financial crisis, adding that the 2008 event was not a short-term glitch but a "structural shift".

Read more: http://www.theaustralian.com.au/business/mining-energy/bhp-backtracks-on-plan-to-spend-80bn-on-projects/story-e6frg9df-1226358210022
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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earthsta
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Oops.

(Perth) house prices to the moon????
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peter fraser
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newjez
17 May 2012, 08:17 AM
It is the olympic dam project in SA that is at risk.

http://www.news.com.au/olympic-dam-project-to-inject-a-86bn/story-e6frea6u-1226166275856

They have warned that they may pull the expansion plan, they haven't canned it yet. It's a big deal to South Australia.

Any expressed market opinion is my own and is not to be taken as financial advice
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BHP boss threatens to invest offshore

Elizabeth Knight, Phillip Coorey
May 17, 2012

AUSTRALIA'S most influential businessman, Jac Nasser, has slammed the Gillard government's record on tax and industrial relations, saying that unpredictability is undermining investment and could push BHP Billiton offshore.

Addressing the Australian Institute of Company Directors yesterday, the chairman of BHP Billiton demanded the government deregulate the industrial relations system and stop targeting the minerals sector with taxes. ''I cannot overstate how the level of uncertainty about Australia's tax system is generating negative investor reaction. People don't know where it's going,'' he said.

Mr Nasser also had a shot at the Treasurer, Wayne Swan, who has declared war on mining magnates Gina Rinehart, Clive Palmer and Andrew Forrest, claiming they are using their wealth to shape public policy for their own betterment.

''Attacking individuals and specific industries doesn't build confidence in our country, nothing good comes of this,'' he said.

Mr Nasser said that given the uncertain global outlook and the fact that some domestic leading indicators were not encouraging, the government needs to get the two key levers of tax and industrial relations right to boost sentiment and confidence.

He was critical of the federal budget for axing a promised 1 percentage point cut to company tax because it would not pass Parliament and instead spending the money on family payments. Mr Nasser said it put wealth distribution ahead of wealth creation.

Read more: http://www.smh.com.au/opinion/political-news/bhp-boss-threatens-to-invest-offshore-20120516-1yrc2.html
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themoops
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Waaaaaahhh, there's always got to be more more more more more. I'm entitled to a new Landrover and 500 ips.
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Frank Castle is a liar and a criminal. He will often deliberately take people out of context and use straw man arguments.
Frank finally and unintentionally gives it up and admits he got where he is, primarily via dumb luck!
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Property will be 50-70% off by 2016.
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Mike
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earthsta
17 May 2012, 08:35 AM
Oops.

(Perth) house prices to the moon????
Its South Australia you dill if you bothered to read the whole thing. WAs projects are mostly locked in as they are under construction. Iron Ore would need to fall along way as it is one of the most profitable resources to lower costs.

I do agree with BHP though. This Govt with its carbon tax, mining tax is no way to a run a nation. You dont tax successful industries at a time of weakening global demand if at all. Govt policies need to work to promote further growth by instead of taxing massive corporations, force them to build and buy local content. That is a form of tax by forcing them to use Australian businesses, employ australians. Far more efficent, taxes will increase due to great profits from other business, income tax from higher employment and so on. A far better way to distribute the mining proceeds then a direct tax. Still enables companies to tender to the lowest australian produces to force efficencies and productivity improvements.

Our IR laws do need some relaxation. I thought Howard had it right prior to work choices, that was a step to far. Prior to work choices struck a nice balance. We need to get back to that balance.

Labour with its IR policies, taxation is destroying this nation. I really hope this Thompson saga brings down the Govt, we need a new election quick.
Edited by Mike, 17 May 2012, 10:42 AM.
http://mike-globaleconomy.blogspot.com.au/
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audas
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Mike
17 May 2012, 10:41 AM
Its South Australia you dill if you bothered to read the whole thing. WAs projects are mostly locked in as they are under construction. Iron Ore would need to fall along way as it is one of the most profitable resources to lower costs.

I do agree with BHP though. This Govt with its carbon tax, mining tax is no way to a run a nation. You dont tax successful industries at a time of weakening global demand if at all. Govt policies need to work to promote further growth by instead of taxing massive corporations, force them to build and buy local content. That is a form of tax by forcing them to use Australian businesses, employ australians. Far more efficent, taxes will increase due to great profits from other business, income tax from higher employment and so on. A far better way to distribute the mining proceeds then a direct tax. Still enables companies to tender to the lowest australian produces to force efficencies and productivity improvements.

Our IR laws do need some relaxation. I thought Howard had it right prior to work choices, that was a step to far. Prior to work choices struck a nice balance. We need to get back to that balance.

Labour with its IR policies, taxation is destroying this nation. I really hope this Thompson saga brings down the Govt, we need a new election quick.
You seem pretty confident about that - I absolutely wouldn't be based on the figures coming out of China as of today, especially since the EU is about to implode, Ore is trending down below $130, and everything is about to turn to shit - in fact Id pull my head right on about this time.......no confidence AT ALL.

As for the rest of your post, the only reason this dickhead from BHP is blaming the tax, and industrial relations is because he can't admit that the long term outlook for BHP Ore is screwed, the only way we can compete is if we turn ourselves into Africa - fuck that mate, I dont want slave labor, I dont want resource wars - BHP can not compete with China's Africa projects, especially now that the boom is completely finihsed, thats all there is to it - they had no problem with things when the price of Ore was at $160-$180 a ton, but now that things are predicted to go to $80 a ton they are screwed - simple as that, end of story.

Your arguments for not benefiting Australians from our own resources, or destroying our working conditions and living wage in order to compete with African slaves lacks honesty.

Cheers.
Edited by audas, 17 May 2012, 11:58 AM.
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Singing from same song book

May 17, 2012

The chief executive of BHP Billiton, Marius Kloppers, and its chairman, Jac Nasser, delivered speeches on different sides of the planet yesterday that sent the same message to quite different audiences.

It is this: China still promises to underpin long-term commodity price strength, but its economic boom is maturing, and commodity prices have fallen from their highs. BHP's resource development plans are being scaled back in response, and there will be casualties.

Nasser said the group's five-year, $US80 billion capital expenditure target had been canned, but he and Kloppers both said BHP and its rivals also had more expansion options than they could fund. They need to make hard choices, about what to develop, and where.

Their decisions will go some way to deciding where the resources boom continues, and where it is choked off, and geopolitics is in the mix. Nasser told the Australian Institute of Company Directors in Sydney that the industrial relations and political climates here will be a factor - and he made it clear that BHP thinks both have deteriorated.

In Miami, Kloppers as good as said that all expansion prospects were under review. He said BHP expected rising steel production in China to seed a 650 million tonne increase in iron ore demand in the next decade, but that would be less than the 800 million increase recorded over the past 10 years.

Steel production would become a less important component of Chinese demand as the economy completed its infrastructure build-out and consumer demand became a bigger growth engine.

BHP's uranium, oil and gas and planned potash (fertiliser) production would benefit from the shift, he said, but stable Chinese steel production after 2025 and increased availability of scrap for recycling would result in a ''protracted period of low to negative growth for the seaborne iron ore market''.

Read more: http://www.smh.com.au/business/singing-from-same-song-book-20120516-1yrd3.html#ixzz1v5HNuknl
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audas
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Exactly - Chinas demand is contracting and they cant compete with Africa - period. Moving into alternative resources.

Best of luck with uranium there BHP (clearly a veiled request to open up more Uranium mines in the north and west).

Good luck with the oil and gas over the next 25 years - I think someone has forgotten to mention something to him about Chinas green targets which do not include these primordial resources.

Whats more, China is also looking at light water, fast breeder (liquid fluoride thorium ) reactors which do not use Uranium but instead use some of hte most abundant materials available - best of luck with that venture as BHP.

"he and Kloppers both said BHP and its rivals also had more expansion options than they could fund"

Really ? What ventures would that be ?

"BHP's uranium, oil and gas and planned potash (fertiliser) production would benefit from the shift"


Nice one, I think BP, Exxon and Shell might have you covered there, but I think the potash idea is a real goer, BHP - the Potash Kings, lmao - writings on the wall.

:bye: :bye: :bye: :bye: :bye:
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miw
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I don't disagree with the case you make entirely, but I think it is overstated.

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Exactly - Chinas demand is contracting and they cant compete with Africa - period. Moving into alternative resources.


Not contracting. It's still growing, but not fast enough to make all the planned projects profitable. So naturally some projects will need to get canned.

Quote:
 
Good luck with the oil and gas over the next 25 years - I think someone has forgotten to mention something to him about Chinas green targets which do not include these primordial resources.

Whats more, China is also looking at light water, fast breeder (liquid fluoride thorium ) reactors which do not use Uranium but instead use some of hte most abundant materials available - best of luck with that venture as BHP.


Gas has great prospects in China in the medium term, oil perhaps shorter-term. China is certainly being very aggressive about reducing its dependence on hydrocarbons, but it takes a long time to turn this around. Oil is obviously first priority because it is so expensive and because China's own resources are inadequate. Gas will be buffered, because as they run down on coal-fired plants (coal is mostly local) they will ramp up gas in the medum-long-term.

China is certainly looking at thorium cycle plants, but as far as I know none of the nuclear power stations in planning/approved/being built at the moment (and there are a lot) will use that cycle. I would be ecstatic if you could prove me wrong on this. As far as I can tell, they are still working on the actual design. Hell, China discards enough thorium from its rare-earth metal mines each year to power the whole world, probably.

This new tack from BHP-Billiton is very interesting. I think there is both more and less to it than meets the eye. They would not be saying it via carefully-timed public events on opposite sides of the world if they weren't trying to pressure someone into something. Otherwise they would have saved it for a shareholder meeting.
Edited by miw, 17 May 2012, 02:48 PM.
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