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
November 3, 2008
| BHP BILLITON LIMITED (ABN 49 004 028 077) (Exact name of Registrant as specified in its charter) |
BHP BILLITON PLC (REG. NO. 3196209) (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) |
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
Australian Site Tour Olympic Dam
31 October 2008
Disclaimer
Reliance on third party information The views expressed here contain information that have 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.
Forward looking statements
This presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of BHP Billiton. 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. For more detail on those risks, you should refer to the sections of our annual report on Form 20-F for the year ended 30 June 2008 entitled “ Risk factors” , “ Forward looking statements” and “ Operating and financial review and prospects” filed with the U.S. Securities and Exchange Commission.
No offer of securities
Nothing in this release 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.
Resources and reserves
Cautionary Note to US Investors – The SEC generally permits mining companies in their filings with the SEC to disclose only those mineral deposits that the company can economically and legally extract. Certain terms in this presentation, including “ resource” , “ inferred resource” , “ indicated resource” and “ measured resource” , would not generally be permitted in an SEC filing. The material denoted by such terms is not proven or probable Reserves as such terms are used in the SEC’s Industry Guide 7, and there can be no assurance that BHP Billiton will be able to convert such material to proven or probable Reserves or extract such material economically. BHP Billiton urges investors to refer to its Annual Report on Form 20-F for the fiscal year ended June 30, 2008 for its most recent statement of mineral Reserves calculated in accordance with Industry Guide 7.
Competent Persons for Mineral Resources and Ore Reserves are named in the BHP Billiton Annual Report 2008, which can be viewed at www.bhpbilliton.com. Shane O’Connell, who is a member of the AusIMM and a full time employee of BHP Billiton, has the required qualifications and experience and is the Competent Person for the assessment of Mineral Resources at Olympic Dam, which has been reported in accordance with the Australasian Code for Reporting of Mineral Resources and Ore Reserves, December 2004 (the JORC Code).
Shane O’Connell verifies that the 2008 Mineral Resource data included in this document is based on and fairly reflects the information in the supporting documentation relating to Olympic Dam Mineral Resource. The Mineral Resource numbers prior to 2008 have been sourced from the publicly available Annual Reports for WMC and BHPBilliton.
Slide 2
Agenda
Introduction & Olympic Dam Resource
Market
Current Business Performance
Olympic Dam Expansion
Strong Future for the Uranium Business
Slide 3
Introduction & Olympic Dam Resource
Graeme Hunt
President Uranium and Olympic Dam Development
Introduction and Resource
Key Points
• Safety is our Key Priority
• The current business is performing strongly
• Work is progressing on the Olympic Dam Expansion Study
Slide 5
One co-ordinated Uranium business unit
Marius Kloppers
Chief Executive Officer
Graeme Hunt
President Uranium and Olympic Dam Development
• 33 years with BHP Billiton
• Previously
- President Aluminium
- President Iron Ore
Olympic Dam
Dean Dalla Valle
President & Chief Operating Officer
• 31 years with BHP Billiton
• Previously
– Asset Leader Olympic Dam
– Asset Leader Cannington
Olympic Dam Expansion
Ted Bassett
Project Director
• 2 years with BHP Billiton
• 38 years mine project development experience, Previously
– VP Capital Projects (Inco Ltd)
– Project Director Goro Nickel Project
Corporate Affairs
Richard Yeeles
Manager Corporate Affairs
• 12 years with BHP Billiton
• 25 years experience with government, public relations and journalism, Previously
– Manager Government and Community Relations
– Chief of Staff to South Australian Premier
Technology
Andrew Shook
Chief Technology & Information Management Officer
• 16 years with BHP Billiton
• Previously
– Global Technology Manager Process Engineering
– Team Leader Pyrometallurgy
Marketing & Development
John Crofts1
Chief Commercial Officer
• 23 years with BHP Billiton
• Director, London Metal Exchange
• Previously
– Marketing Director, Base Metals
Note: 1 – J Crofts reports jointly to Graeme Hunt, President Uranium and Olympic Dam Development and Tommy Schutte, President Marketing.
Slide 6
Olympic Dam: A world class resource
Thousand tonnes U3O8
2,500 2,000 1,500 1,000 500 0
Olympic Dam
Elkonsky Gorsk
Imouraren
McArthur River
Inkai
Viken
Cigar Lake
Streltsovskoye
Jabiluka
Mynkuduk
Largest uranium resource in the world
Million tonnes Copper
120 100 80 60 40 20 0
El Teniente #
Andina #
Chuquicamata #
Olympic Dam
Escondida
Grasberg
Collahuasi
Oyu Tolgoi
Norilsk (Nickel)
Lubin
4th largest copper resource in the world
Million oz Gold
~1,100
250 200 150 100 50 0
Witwatersrand Camp Muruntau Grasberg (Copper) Olympic Dam (Copper) Pebble (copper) Natalka Sukhoi Log Oyu Tolgoi (Copper) Reko Diq (Copper) Lihir
4th largest gold resource in the world
Sources: Company Annual Reports, press releases and International Atomic Energy Agency (as at September 2008).
Witwatersrand figure is BHP Billiton estimate and is approximate only. Note: # Based on reported resource “inventory” at 0.2% Cu cut-off grade.
Slide 7
A multi-generational business
Olympic Dam Resource
8,339 Mt Resource
2.33 Mt Contained U3O8
Existing Operation in our backyard
Mineral Resource (Mt)
9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Inferred Indicated Measured
2005 2006 2007* 2008*
* Excludes Non Sulphide Au resource declared for the first time in 2007
Sources: BHP Billiton annual report, BHP Billiton estimates, Company Annual Reports, press releases and International Atomic Energy Agency (as at September 2008).
Slide 8
Copper Market
John Crofts
Chief Commercial Officer
Copper Market
Key Points
• BRICs development underpinned by energy & infrastructure build out associated with urbanisation
• Advantageous industry economics. Low price elasticity of demand in key electrical uses
• Supply interruptions (now) and constrained growth (future) a differentiator
• Low stocks and no significant rate of ingress thus far
Slide 10
World copper demand: The paradigm shift
Global refined Cu demand 1950-2006
(Mt)
Reconstruction 1950—1970
20 18 16 14 12 10 8 6 4 2 0
4.5%
Post-war OECD reconstruction
US Government stockpiling
Industrialization of Japan and Korea and Vietnam War
Stagnation 1970—1996
2.1%
Global recession
reduces global
demand
Oil shocks initiate demand weakening
Demand growth driven by Asian Tigers
Rapid growth of
China causing supply
shortages
China 1997 –
3.3%
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Source: World Bureau of Metal Statistics (WBMS)
Slide 11
Copper – GDP per capita vs consumption per capita
Copper Consumption
(kg / capita)
20 15 10
5 0
0
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 GDP/Capita (Jan. 2008 Constant US Dollars)
Source: World Bank, Government Statistics, CRU, Brook Hunt.
Note: The shape of the arrow shows the general trend among countries for copper consumption as GDP per capita increases and is not to scale
China Germany India Japan Korea, Rep. United States Taiwan
Slide 12
Future supply growth:
Disruption a feature of new supply growth?
Expected future production from highly probable and probable copper developments as at 2006 Q1
(kt)
8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0
Forecast production as at 2006 Q1
2-3 year delays
Forecast production as at 2008 Q2
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Source: Brook Hunt.
Note: “Forecast production as at 2008 Q2” represents the expected future production as at 2008 Q2 from those copper developments classified as highly probable and probable as at 2006 Q1. It excludes new developments classified as highly probable or probable since 2006 Q1.
Slide 13
Supply side constraints are limiting the industry’s response
Existing Supply
Future Supply Growth
• Equipment stress
• Industrial action and wage disputes
• Labour shortages
• Equipment shortages
• Significant cost pressures, including fuel
• Energy and power constraints
• Declines in ore-grade levels
• Rising tariffs
• Infrastructure challenges
• Developments are increasingly tending to be:
– Smaller
– Lower grade
– Higher risk geographies
• Equipment shortages – longer lead times and project delivery dates
• Rising capital costs
• Resources nationalism
Slide 14
Copper
Exchange Stocks (t)
LME Cash price
($/t Nominal)
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Comex SHFE LME LME Cash (RH)
Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Source: London Metal Exchange (LME), Shanghai Futures Exchange (SHFE) and Comex.
Slide 15
China copper raw material requirements
Copper raw materials 2008 estimates by sources
(kt Cu contained)
5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500
0
2004
2008 estimate
Scrap
Net Imported Cathode
Imported Concentrates
Domestic Mine
Scrap
Domestic Mine
Net Imported Cathode
Imported Concentrates
29%
21%
29%
21%
Source: BHP Billiton, Customs trade data.
Note: Data assumes imported concentrate grade 27% and scrap 25% copper
Slide 16
Indian copper consumption 1960-2020F
Copper consumption
(kt)
2008F – 2020F (7.7% growth pa)
Enabling policies
Generation capacity growth, rural electrification The XI Five year plan (Apr’07-March’12) Access to electricity to all village households Energy Efficiency – India Accelerated Power Distribution Reform Program
1,800
1,500
1,200
900
600
300
0
1960-1969 -2.2% growth pa
1970-1979 2.4% growth pa
1980-1989 6% growth pa
1990-1999 9.4% growth pa
2000-2009 9.9% growth pa
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010F
2015F
2020F
Sources of data: Brook Hunt Quarterly Reports (September 2008); International Copper Association (ICA) Sustainable electrical energy.
Slide 17
Results of Network Substitution Survey
Selected
applications of
which 2006 CU
demand = 14 Mt
% share of 14 Mt Selected applications
21 Building wire
14 Electrical/Electronic Strip
14 Industrial power cable
11 Commercial tube
10 Electric motors
| 7 |
|
Plumbing tube |
| 6 |
|
Automotive wire |
| 5 |
|
Utility power cable |
| 4 |
|
Telecom cable |
| 4 |
|
Power/distribution transformers |
| 2 |
|
Roofing strip |
| 1 |
|
Automotive HEX |
| 1 |
|
LAN cable |
| 1 |
|
Industrial HEX tube |
Source: CRU substitution data / International Copper Association (ICA).
Level of substitution – Net view
2006
2007
% share of 14 Mt by threat
% share of 14.5 Mt by threat
2006
2007
Low and stable
Low to medium
Low to medium
Low and increasing
Low
High and sustained
Low and increasing
Medium
Medium and increasing
Medium and stable
High but stable
High and increasing
Medium
High and increasing
Low
Low to medium
Low to medium
Medium
Low
High
Medium
Medium and increasing
High
Medium
High and increasing
High and increasing
Medium and increasing
High
76
14
10
59
29
13
Slide 18
Uranium Market
John Crofts
Chief Commercial Officer
Uranium Market
Key Points
• Real impact of Climate Change still to come & meaningful options are limited
• Security of supply key for BRICs
• Supply side response challenges (near term & future)
• Nuclear cost competitiveness on the rise – priced carbon & reduced capital intensity (China) are further upside
Slide 20
Primary energy consumption is strongly correlated to economic development
Primary energy use
(tonnes of oil equiv/capita)
10
8
6
4
2
0
China Germany India Japan Korea, Rep. United States Taiwan
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
GDP/Capita (Jan. 2008 Constant US Dollars)
Source: World Bank, Government Statistics for Taiwan, BP Statistical Review of World Energy (2007).
Note: The shape of the arrow shows the general trend among countries for primary energy consumption as GDP per capita increases and is not to scale.
Slide 21
China’s power output is annually growing by as much as the total power output of a major European country
China’s Growing Power Output
(in billion kWh)
Power output added from previous year
UK’s total power output today
400
426
3,500 3,000 2,500 2,000 1,500 1,000 500
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
Source: National Bureau of Statistics of China (Yearbook), China Electricity Council, and Digest of UK Energy Statistics (Dept. for Business Enterprise & Regulatory Reform).
Slide 22
China is only just starting to develop nuclear strategy
China’s nuclear programme:
– Current share of nuclear generation approximately 2%
– Latest announced target of 70 GWe, approximately 5% of 2020 generation
– Recent purchase of reactors (Areva) included technology transfer
– In 2007, China added 80 GWe of coal fired generation alone, consuming an additional 200 to 250 million tonnes of thermal coal per annum
Current nuclear projects in China:
– First reactor on commercial operation in 1994 (Daya Bay)
– 11 reactors operational at 4 sites totalling approximately 9 GWe
– 16 reactors under construction at 2 brownfield and 6 greenfield sites (combined 16 GWe)
Slide 23
China is preparing for a major nuclear programme
Ling Ao: two new reactors being built adjacent to the two operating reactors, representing a key strategy for China nuclear power expansion, complementary to green-field (Date: 10 Dec. 2007) Taishan project ready for foundation work, 2 EPRs
Source: BHP Billiton China
Shanghai Electric: partnership with Westinghouse – AP1000 – specifically including technology transfer
Dongfang Electric: partnership with Areva – EPR – specifically including technology transfer
Harbin Electric: partnership with Doosan Babcock
China Nuclear Energy applied Tenex enrichment technology – capacity 500,000 SWU Industry Cooperation:
Shenyang Blower Works: to be major supplier of AP1000 main pumps specifically including technology transfer
Sichuan Sanzhou: produces critical piping units for 1 GW level nuclear units
Slide 24
Nuclear growth in China is not restricted to coastal areas
• Current nuclear capacity and capacity under construction is concentrated along the coast
• Increasing number of planned and proposed reactors in landlocked provinces
Currently operating Under construction Planned / proposed
Source: http://www.insc.anl.gov/pwrmaps/map/china.php and internal BHP Billiton analysis
Slide 25
China has demonstrated its ability for fast growth……
China’s share of world aluminium production has grown from 11% in 2000 to 33% in 2007
(Million tonnes)
25.0 20.0 15.0 10.0 5.0 0.0
China Aluminium Production China Alumina Production China share aluminium China share alumina
2000 2001 2002 2003 2004 2005 2006 2007
40% 30% 20% 10% 0%
China’s share of crude steel production has grown from 15% in 2000 to 36% in 2007
(Million tonnes)
1400 1200 1000 800 600 400 200 0
World ex-China China China share (RHS)
1997 1998 1999 2000 2001
2002 2003 2004 2005 2006 2007
40% 30% 20% 10%
Sources: Brook Hunt Aluminium Metal Service.
Source: International Iron and steel Institute
Slide 26
….and shown itself very capable of re-writing capital intensity and delivery times
China Western Benchmark
Alumina refinery 10x 300mw power stations and
Shangdong 3500kt/yr alumina refinery – 40 Months +
province construction time 10 months
East Hope 800kt/yr alumina refinery – construction
40 Months +
Alumina time 10 months
400kt/yr alumina refinery – construction
Jinbei Alumina time 14 months 40 Months +
400kt/yr alumina refinery – construction
Kaiman alumina 40 Months +
time 10 months
40 Months, Greenfields US$1000-
60-66 Months US$3000-
Copper smelters 1300/t installed capacity Detailed
US$5000/t installed capacity
engineering through commissioning
Source: BHP Billiton Analysis.
Slide 27
Short to medium term market outlook balanced, long term primary supply growth required
WNA supply and demand forecast
(kt u3o8)
400 350 300 250 200 150 100 50 0
HEU
MOX & RepU other secondary supply Primary supply WNA high WNA reference
What if the world goes nuclear? *
2008F 2009F 2010F 2011F 2012F 2013F 2014F 2015F 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F 2026F 2027F 2028F 2029F 2030F
An external view
(GWe)
2,000 1,600
1,200 800 400 0
372
960
1,634
2008 installed capacity Deloitte Climate Action Deloitte Climate Crisis
* BHP Billiton analysis concludes 1,300 GWe is feasible by 2030 if the world seriously embraces nuclear power generation.
Source: International Atomic Energy Agency Power Reactor Information System (IAEA PRIS), World Nuclear Association (WNA) 2007 Supply & demand; Deloitte & Australian Uranium Association (AUA) Outlook for the uranium industry, April 2008, BHP Billiton internal analysis.
Slide 28
Short to medium term market outlook balanced, long term primary supply growth required
Supply developments and events likely to dominate short to medium term market dynamics:
• Kazakhstan – upside surprise
• Cigar Lake – uncertainty on start-up
• Dominion – care and maintenance
Recent events in the nuclear industry with long term implications:
• India granted exemption by NSG
• Combined Construction and Operating applications submitted for 24 reactors to NRC in USA (as at 30 Sep 2008)
• UK energy white paper reversal (Jan 08) & EdF acquisition of British Energy (Sep 08)
Slide 29
Legacy fixed sales position is winding off
• Current “legacy” portfolio continues to hold significant fixed price sales at historic prices
• BHP Billiton does not have committed sales at fixed prices more than forecast production in any one financial year
Uranium fixed sales commitments
(% of forecast production)
100 90 80 70 60 50 40 30 20 10 0
rest of FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
FY 2017
FY 2018
FY 2019
FY 2020
FY 2021
FY 2009
Note: Production data includes only current life of mine production from Olympic Dam (underground).
Sales data includes only sales at fixed prices (including base escalated prices). Data as at 1 October 2008.
Slide 30
Olympic Dam Expansion - Uranium marketing
• BHP Billiton has agreed 10 term sheets with customers in Europe, US and Asia
– Aggregate market interest is well in excess of the first phase expansion tonnage
• BHP Billiton intends to put in place a portfolio of sales contracts prior to making an expansion decision
– A portion of the volumes in these contracts will be conditional upon a positive decision to expand Olympic Dam
– Pricing mechanism will be designed to capture the fair market price of uranium at the time of delivery
– BHP Billiton is actively engaging with its customers to develop an improved price discovery mechanism that will meet the requirements of both consumers and producers
Slide 31
Current Business Performance
Paul Dunn
Vice President Finance
Current Business Performance
Key Points
• Experienced team leading the turnaround in performance
• Safety the driver for cultural change
• Sustainable improvement in performance
Slide 33
An experienced team leading the turnaround in performance
Dean Dalla Valle
President and Chief Operating Officer
• 31 years with BHP Billiton
• Previously
- Asset Leader Olympic Dam
- Asset Leader Cannington
Barry Mitchell
Vice President Mining
• 2 years with BHP Billiton
• 33 years minerals industry experience, previously
- Perilya Ltd, General Manager Broken Hill
- Barrack Gold, GM Nth Eastern Goldfields
John England
VP Processing
• 32 years with BHP Billiton
• Previously
- Senior Manager Metallurgical Engineering
- Operations General Manager BHP Titanium Beenup
Justin Bauer
VP Smelter and Refinery
• 6 years with BHP Billiton
• 22 years minerals industry experience, previously
- Production Manager WMC Fertilisers Phosphate Hill
- Operations Manager Boodarie Iron
Giles Hellyer
VP Maintenance and Engineering
• 24 years with BHP Billiton
• Previously
- Production Manager TEMCO
- Manager Engineering and Maintenance, Escondida
John Hatty
VP Health Safety and Enviroment
• 30 years with BHP Billiton
• Previously
- Manager HSEC Assessment and Review
- Manager Environmental Auditing
Paul Dunn
Vice President Finance
• 23 years with BHP Billiton
• Previously
- Finance Manager Cannington
- Manager Forecasting BHP Minerals
Paul Harvey
VP Business Improvement and Planning
• 16 years with BHP Billiton
• 23 years minerals industry experience, previously
- Project Director Undreground Projects, EKATI
- U/G Mine Manager EKATI
Paul Walters
VP Human Resources
• 3 years with BHP Billiton
• 10 years minerals industry experience, previously
- Manager HR & Legal Services Vetco Aibel
- National Employee Relations Manager, ABB Australia
Kym Winter-Dewhirst
VP Government and Community Relations
• 3 years with BHP Billiton
• 22 years government and media experience, previously
- Government Relations Advisor WMC
- Chief of Staff to SA Environment Minister
Gary Sutherland
Client Representative – OD Expansion
• 7 years with BHP Billiton
• 23 years minerals industry experience, previously
- VP Processing Olympic Dam
- Operational Manager Pasminco
Slide 34
Site Layout
1 kilometre
Tailings Storage Facility
Quarry
Underground Mine
Evaporation Ponds
Process Plant
Phase 1 Open Pit
Slide 35
Olympic Dam Underground Mine Layout
Slide 36
Process Plant Layout
200 metres
Hydromet
Smelter & Acid Plant
Concentrator
Refinery & Gold Room
Slide 37
2008 Copper Supply Cost Curve
C1 Cash Cost (Brook Hunt Normal Costing)
(US¢/lb Cu) 175 150 125 100 75 50 25 0 -25 -50 -75 -100
OLYMPIC DAM
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
Cumulative Cu Production (kt)
Source: Brook Hunt 2008 Production Cost League
Slide 38
2008 Uranium Supply Cost Curve
Uranium Supply (US$/lb)
50 45 40 35 30 25 20 15 10 5 0
OLYMPIC DAM
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000
Tonnes U3O8
Source: NAC International, estimated 2008.
Slide 39
What Drives Value at Olympic Dam?
Economic Value Drivers Supported by
Mine Capacity
Ore Throughput Mill Capacity
Smelter Capacity Metal Production Copper Grade Metal Grades Value Uranium Grade Copper Recovery Metal Recoveries Uranium Recovery
Copper Price Metal Prices Contract Price & Volume Uranium Price Spot Price & Volume Operating Costs Capital
Zero Harm People Planning
Slide 40
High Priority Areas since Acquisition
Economic Value Drivers Supported by
Mine Capacity
Ore Throughput Mill Capacity Smelter Capacity Metal Production Copper Grade Metal Grades Value Uranium Grade Copper Recovery Metal Recoveries Uranium Recovery
Copper Price Metal Prices Contract Price & Volume Uranium Price Spot Price & Volume Operating Costs Capital
Zero Harm
People
Planning
Slide 41
High Priority Areas since Acquisition
Supported by
Total Recordable Injury Frequency Rate
(per million hours, 12 month moving average) • Safety – the driver of cultural
40 change
30 20 10
0
Apr-06 Jun-06 Aug-06 Oct-06 Dec-06 Feb-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08
• > 50 BHP Billiton people transferred into business
• Clear accountability through BHP Billiton operating model
- Uranium Business Unit
• Incentive program linked to business outcomes for all employees
• Co-operative industrial agreement in place for next 5 years
• Implement BHP Billiton Planning processes
• Improved understanding of Resource
• Existing business recovery and growth plans
• Expansion study
• Business Improvement capability developed
Zero Harm
People
Planning
Slide 42
High Priority Areas since Acquisition
Economic Value Drivers
Annual Record Ore Hoisted and Material Milled in FY08 FY06 FY07 FY08 Quarterly Record Ore Hoisted in Q1 FY09
Ore Hoisted (kt) 8,219 8,566 9,674
• Improve mine flexibility
Material Milled 1 (kt) 9,635 2 8,889 9,910
- Restore & grow underground stocks
- Focus on bottleneck (development and production drilling)
• Improve mill capacity Notes: 1 – Includes re-treatment of electric furnace slag
- Advanced control systems 2 – FY06 production supported by surface ore stockpiles
- Reliability focus
Mine Stocks and Head Grade Ore Hoisting Annualised Rate
(mt) Copper Grade (%) (mtpa)
16 4.0 11
14 3.5
10
12 3.0
10 2.5
9
8 2.0
6 1.5 8
4 1.0
7
2 0.5
6
Dec-02 Apr-03 Aug-03 Dec-03 Apr-04 Aug-04 Dec-04 Apr-05 Aug-05 Dec-05 Apr-06 Aug-06 Dec-06 Apr-07 Aug-07 Dec-07 Apr-08 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08
Developed and partially developed Drilled and partially Drilled Hoisting Rate 6 Month moving average (Hoisting Rate) Broken Stocks Cu%
Sources: BHP Billiton production reports, BHP Billiton internal reporting.
Slide 43
High Priority Areas since Acquisition
Economic Value Drivers
Uranium Recovery Future
• Uranium recovery project • Leach circuit tank upgrade and capacity increase
• Improved process optimisation and control, supported by • Minor upgrades of Solvent Extraction circuit improved resource understanding
FY06 FY07 FY08
Uranium Recovery (ex ore) Head Grade
Uranium oxide (%) (U3O8 kg/t) 3,936 3,486 4,144 concentrate production (t)
80 0.80
Uranium recovery 75 0.75 67.5 68.7 72.8 (ex ore) (% )
70 0.70
65 0.65
60 0.60
55 0.55
50 0.50
45 0.45
40 0.40 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08
Before Uranium Recovery Project After Uranium Recovery Project Headgrade
Sources: BHP Billiton production reports, BHP Billiton internal reporting.
Slide 44
Recent copper price performance and cost structure
2008 Daily Copper Price & Exchange Rate Current Cost Structure
($ )
10,000 1.50 Maintenance
1.40 Labour
8,000 1.30 14%
Royalties
1.20 24%
5% 6,000 1.10 Administration 5% 1.00 Electricity 3%
4,000 0.90
0.80 19%
30%
2,000 0.70
US$/tonne Consumables
US$/A$ 0.60
0 0.50 Contractors
1-Jan-08 31-Jan-08 1-Mar-08 31-Mar-08 30-Apr-08 30-May-08 29-Jun-08 29-Jul-08 28-Aug-08 27-Sep-08 27-Oct-08
• Exchange rate movement in correlation with commodity price
• Approximately 85% of operating cost is A$ denominated
Sources: London Metal Exchange (LME), Reserve Bank of Australia (RBA), BHP Billiton internal analysis.
Slide 45
Moving Forward – Priority Areas
Zero Harm – A core value Volumes
• Good safety is good business • Pre-expansion volume growth to offset declining
• Water efficiency grades
• Energy efficiency – US$30.5m approved for early works
• Smelter outage FY2011
– 60 days Sept 2010
People
– Relining both major furnaces
• Transition organisation to align with expansion
– Modifications to suit declining grades
• Talent Pipeline
• Employee value proposition – maintain low
Uranium Recovery turnover (14.5%)
• Uranium leach circuit upgrade
• Geometallurgy – optimisation of process plant Planning conditions to suit future ore types
• Build on planning discipline
• Integration of underground mine with open pit
• Regional exploration
Slide 46
Olympic Dam Expansion
Ted Bassett Project Director
31 October 2008
Olympic Dam Expansion
Key Points
• Configuration established
• Utilising a staged expansion path
• Politically stable environment
• Environmental Impact Statement to be issued to government before the end of 2008
• Focus on simplicity & preservation of future options
Slide 48
A team with large project experience
Ted Bassett
Project Director
• 2 years with BHP Billiton
• 38 years mine project development experience, Previous Roles
- VP Capital Projects Inco Ltd
- Project Director Goro Nickel Project
Jon Gilligan Ken Sutliff
DPD Mine Development DPD Ore Processing
• 15 years with BHP Billiton • 2.5 years with BHP Billiton
• 8 yrs project & 16 yrs operations experience, Previous Roles • 37 yrs experience in operations & projects, Previous Roles
- Operations Manager, Escondida Norte - Project Manager Bechtel
- Assistant Manager, Mine Engineering Escondida - Project Manager Southern Peru Copper
Dave Thomas Marco Herrera
DPD Infrastructure DPD Project Services
• 3 years with BHP Billiton • 2 years with BHP Billiton
• 24 yrs project & 20 yrs operations experience, Previous Roles • 16 yrs project & 12 yrs operations experience, Previous Roles
- Project Manager SX Plant - Project Manager Hydrometallurgy-BHPB ODX
- General Manager WMC - Project Director Sth. America Ops - Newmont
Rob Williams Jason Schell
DPD Operational Development DPD Stage 1
• 3 years with BHP Billiton • 16 years with BHP Billiton
• 20 years experience in the mining industry, Previous roles • Previous Roles
- Principal Mining Engineer – Coffey Mining - VP OD Maintenance & Engineering
- GM Gympie Gold - GM Engineering & Site Services
Graham Batten Brink Van Schalkwyk
Manager IT & Communications Manager Business Evaluation
• 2 years with BHP Billiton • 11 years with BHP Billiton
• 17 years experience in mining related IT, Previous Roles • Previous Roles
- Newmont - Regional IT Director - Project Manager, Integration of OD
- WMC Manager Project Systems OD Expansion - Business Analysis Manager, Base Metals
Michael Anstey Alison Hartman
Manager Health & Safety Manager – Risk & Approvals
• 2 years with BHP Billiton • 4 years with BHP Billiton
• 20 years experience in operations, Previous Roles • 15 Years experience in HSEC & engineering, Previous Roles
- Newmont - Director Safety & Risk - VP HSEC Olympic Dam
- Minera Alumbrera Ltd - HSE Manager - Steelscape - Corporate EHS Manager
Notes: DPD – Deputy Project Director.
Slide 49
Staging reduces risk and allows integration of technology
Stage 1 Optimise the existing operation. Alternatives are under evaluation for expansion of the ore delivery and treatment capacities up to 12 Mtpa.
Stage 2 Develop 20 Mtpa open pit ore supply (2A), Cu concentrator and U3O8 leach plant
(2B). Cu concentrate sold to China smelter.
Stage 3 Expand the existing OD smelter to treat stage 4 & 5 high Cu:S Cu concentrate.
Delivery of Stages 3 & 4 coincide.
Stage 4 Expand to 40 Mtpa the open pit ore supply, Cu concentrator and U3O8 leach plant
capacities. Low Cu:S Cu concentrate sold to China smelter.
Stage 5 Expand to 60 Mtpa the open pit ore supply, Cu concentrator and U3O8 leach plant
capacities. Low Cu:S Cu concentrate sold to China smelter.
Slide 50
The proposed staged development of Olympic Dam
CONCEPTUAL
Concentrating & Stages
Mining Smelting Proposed Capacity
Hydrometallurgy
Cu U308 Au (ktpa) (ktpa) (kozpa)
10Mtpa 0 Current 180 4 100 9Mtpa 0Mtpa 10Mtpa (500ktpa con)
1 Optimise underground 200 4.5 120
Brown-fields Develop open pit production build greenfield
2 concentrator and 350 9 400
+3Mtpa +2Mtpa +2Mtpa (100ktpa con) hyrdometallurgy circuits sell
+20Mtpa (200ktpa con) excess concentrate
Expand on site smelter to 9 400
+20Mtpa 3 350 800ktpa
20Mtpa 52Mtpa 72Mtpa
Expand open pit add
Green-fields 4 greenfield concentrator and hydrometallurgy circuits 540 14 600
+20Mtpa
Further expansion of open pit, build new concentrator
Notes: Unless specified all capacities 5 730 19 800 and hydrometallurgy circuit are in tonnes of ore. +20Mtpa (800ktpa con) Sell excess concentrate Actual timing of Underground phase out is not yet +20Mtpa
+ Further growth opportunities determined Less than 20% of the uranium will be shipped in copper concentrate the remainder will
+20Mtpa (800ktpa con) be processed at Olympic Dam.
Slide 51
Scale: A very large open pit
Estimated Escondida Mine Final Pit
Depth: 1,055 m
Depth: 885 m
Estimated Olympic Dam
Depth: 1,220 m
Final Pit 1 km
Slide 52
Olympic Dam Resource
U3O8 >300ppm Au >0.3g/t Cu >0.5% Cu >1.0% Cu >2.0%
Pit @ 100 yrs
Slide 53
Simplification:
Five-fold increase in ore volume, doubling of plant footprint
Existing Process Plant 12 Mtpa1
New Process Plant 60 Mtpa
Processing Facility after Stage 5
Notes: 1- Potential capacity after optimisation, current capacity 10Mtpa.
Slide 54
Process Plant Project Staging
Stage 2 Stage 4 Stage 5
Slide 55
Shipping copper concentrate and not cathode allows capital intensive smelter to move to China
1
2 Commercial agreement needed to import concentrate into China. Discussions positive, work plan in place. Significant Get concentrate out of capital savings (ballpark
Australia, in front of figures) schedule:
Final process report handed to ASNO 3
Transport concentrate across the seas, in front of schedule: AMSA has written a transport schedule that the team is comfortable we can deliver
Note: ASNO – Australian Safeguards and Non-Proliferation Office.
AMSA – Australian Maritime Safety Authority.
Slide 56
Autonomous Mining Systems
Why?
• Potential step change in risk exposure
• Reduced mining cost
Technology
• DARPA Urban Challenge
• Autonomy trials at a number of different mine sites
• Technology is well advanced. Integration remaining
BHP Billiton
• Development contract signed with Caterpillar for trucks and drills
• Truck testing started at Caterpillar facilities
• Extensive pilot program planned
Slide 57
Environmental Impact Statement (EIS) Status
• Documentation completed for internal review
• Subject to above review
First release to Governments end of 2008 (permission to print)
Public display April/May 2009
Submit response document Oct 2009
Ministers’ decisions Feb 2010 (timing subject to political processes)
• Approving Ministers
Federal – Environment Minister – Peter Garrett
South Australia – Planning Minister – Paul Holloway
Northern Territory – Infrastructure Minister—Delia Lawrie
Slide 58
Project Schedule
• Stage 1 in production by 2013
• EIS approval to take between 12 and 18 months
• Development of open pit to take 5 years
• Ore Processing expansion developed in three stages
Slide 59
Strong Future for the Uranium Business
Graeme Hunt
President Uranium and Olympic Dam Development
Yeelirrie: A large undeveloped resource
Good news
• Australia’s second largest undeveloped uranium resource
Yeelirrie
• 130km North of BHP Billiton’s Mount Keith Mount Keith Nickel infrastructure
Leinster Nickel
• 100% BHP Billiton owned
• Approximately 35kt U @ 0.15% (~ 70kt U @ 0.05%)
• Discovered in early 1970’s
Kalgoorlie Nickel Smelter
• State agreement still in place Kambalda Nickel
Concentrator
Fremantle Port
Kwinana Nickel Refinery
Esperance Port
What’s Next? Ravensthorpe Nickel
• Upgrade resource to JORC compliance
• Update feasibility study to determine the preferred development path
Slide 61
Yeelirrie is flat and the deposit shallow
Relative surface level (m)
Overburden thickness (m)
Slide 62
Yeelirrie is well drilled and has great grades, further work required to develop JORC compliant resource
Previous Drilling
Outline of 50m grid (Class 1)
1000m
U308 Grade Profile (g/t)
Slide 63
Key Messages
• We have a strong team managing our uranium business
• Olympic Dam is a unique resource
– Will support a multi-generational business
• Longer term demand outlook is strong
• Olympic Dam is a good business today
• Yeelirrie is another outstanding long term opportunity
• We have experience in large projects and integrating other businesses
Slide 64
bhp billiton
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: 3 November 2008 | By: | Jane McAloon | ||||
|
| ||||||
| Name: | Jane McAloon | |||||
| Title: | Group Company Secretary | |||||