BHP cautious on economic uncertainty
The world's largest miner, BHP Billiton, warned Thursday that global economic uncertainty and volatility in the commodities market would present it with short-term challenges.
The Anglo-Australian giant expressed caution on its outlook, saying some of its customers were already facing difficulties from a tightening in availability of trade finance and the terms at which it can be accessed.
"The heightened volatility and uncertain economic outlook are expected to continue to weigh on sentiment in the markets for our commodities," BHP chief executive Marius Kloppers told shareholders in Melbourne.
"None of us is able to say for certain how the markets will perform in the short run," he said at the company's annual general meeting.
"One thing we can probably say is that higher volatility is likely to remain until issues surrounding the European sovereign debt markets are definitively addressed."
But despite challenging times, he said the company was managing to sell all it produces and that the longer-term outlook remained positive as developing nations contribute more to global economic growth.
"Against this backdrop, the future long-term demand for our products will remain strong," he said.
BHP's strategy remained to invest through economic cycles, he said, adding that the company had plans to invest more than US$80 billion over the next five years on its mining and petroleum assets.
The company's chairman, Jacques Nasser, said BHP would continue to make acquisitions from "time to time" when they make strategic sense.
Nasser, responding to a shareholder call to halt acquisitions and return further cash to holders, said BHP had a well-defined strategy that included investing in key assets, maintaining its credit rating and paying out dividends.
BHP Billiton also announced it had priced a US$3.0 billion, three-tranche global bond, with the proceeds earmarked for general corporate purposes and the retirement of commercial paper.
The bond is priced under a debt shelf registration statement previously filed with the US Securities and Exchange Commission.
Debt ratings agency Moody's Investors Service said it assigned an A1 senior unsecured rating to the BHP guaranteed senior unsecured bond issue, with a stable outlook to the rating.
-- Dow Jones News Wires contributed to this report --
© 2011 AFP