More miming rationalisation emanating from BHP today:
BHP Billiton has all but ruled out pursuing growth projects in its coal division in the short to medium term and has raised the possibility of looking to sell more assets, because of a weaker outlook for the business.
In presentation slides released for an analyst visit to its Queensland coal operations on Wednesday, coal president Dean Dalla Valle said the miner would work to maximise the use of installed capacity, deliver significant cost savings, complete existing expansions and continue to simplify the portfolio. However, it warned of a potential delay and cost blowout at the $US2.5 billion ($2.59 billion) Hay Point expansion project.
…In an environment with a more subdued coal outlook, the coal division’s vice president of finance, Gideon Oberholzer, said the company had significantly cut headcount in the business and had successfully renegotiated terms with some contractors while other contracts had been terminated. He said cash costs at BHP Billiton Mitsubishi Alliance (BMA) operations had fallen to the lowest level since fiscal 2011 after peaking last year.
“No new major projects are being considered,” Mr Oberholzer said. “Our capital expenditure profile will trend toward the rate required to sustain our operations in the medium to long term. We are ‘long’ resource and have sustainably reduced exploration expenditure.”
Once more for the dummies. No more major projects.
