Slow coal market means razor gangs for BHP
THE razor gangs haunting Queensland mining projects aren't leaving anytime soon with BHP Billiton chief Marius Kloppers saying coal prices would be unlikely to return to the boom times of years past.
In a speech overnight at the company's annual general meeting in London, Mr Kloppers said the first decade of the new millenium was a time for creating mines that took advantage of historically high mineral prices.
To explain, the spot price of coal reached almost $200 per tonne in September 2008. But four years later the price was often struggling to stay about $80.
Prices are expected to improve as cheaper coal supplies start to run out, but Mr Kloppers said BHP - which included its coal alliance with Mitsubishi as BMA - would be restrained in its spending.
"We do not anticipate a repeat of the record prices experienced over the past decade," Mr Kloppers said.
"Those who sit at the low end of the cost curve, who are able to expand production in a timely and disciplined fashion, and who can invest in the right portfolio of commodities can indeed do well in this environment."
He described the mothballing of both the Gregory open-cut and Norwich Park mines in Central Queensland as the company remained in hot pursuit of savings.
"In the last financial year we took decisive and proactive action to ensure our businesses remain at the lower end of the cost curve," he said.
"This includes the closure of several higher cost operations and the commencement of a significant and targeted cost reduction program across the group."
He also repeated previous comments that state and federal governments needed to help keep company costs down.BHP Billiton reported a US$15.4 billion annual profit across the group earlier this year.