111214_a mackenzie geological society of london presentation

8/3/2019 111214_A Mackenzie Geological Society of London Presentation

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Mineral Deposits and theirGlobal Strategic Supply

Group Executive and Chief Executive Non-Ferrous14 December 2011


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Disclaimer

Reliance on Third Party Information

independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of theinformation. This presentation should not be relied upon as a recommendation or forecast by BHP Billiton.

This presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of1995 regarding future events and the future financial performance of BHP Billiton. These forward-looking statements arenot 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 thes a emen s con a ne n s presen a on. or more e a on ose r s s, you s ou re er o e sec ons o our annua

report on Form 20-F for the year ended 30 June 2011 entitled Risk factors, Forward looking statements and Operatingand financial review and prospects filed with the U.S. Securities and Exchange Commission.

Nothing in this release should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billitonsecurities in any jurisdiction.


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Agenda

Growin ros erit for more eo le

Everything we need to grow is abundant in the Earths crustIneffective natural resource governance may limit supply

uman ngenu y n s new ways o supp y na ura resources

Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 3


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Agenda






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Population growth

World population(million)

7,000

8,000

5,000

6,000

2,000

3,000

,

0

1,000

Year


Source: US Census Bureau, UN Statistics.


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Rising living standards

Global GDP per capita(2005 real US$000, PPP basis)

25

30Actual

Forecast

20

10

0

5

Sources:GDP data for 1700-2000 from De Long, 1998, "Estimates of World GDP, One Million B.C. - Present" (Dept Economics, U.C. Berkeley).

Year


GDP Data for 2000-2040 from Global Insight WES.Population data for 1800-1950 from Grubler, Arnulf. 2008. "Energy transitions." In: Encyclopaedia of Earth. Eds. Cutler J. Cleveland (Washington, D.C. National Council for Science and the Environment).

Population data for 1950-2100 from Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: The 2010 Revision.


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Long term economic growth despite shortterm volatilit

Global GDP growth rate(% per annum)

5

6Developed economies

Developing economies

4

2

0

1

-1920

-1930

-1940

-1950

-1960

-1970

-1980

-1990

-2000

-2010

-2020

-2025

Year


Source: 1900 to1980 J. Bradford De Long (Estimates of World GDP, 1998); 1980 to 2010 IMF World Economic Outlook Database; 2010 to 2025 Forecast Global Insight.


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Chinese GDP is set to grow substantiallyto 2030

Global GDP per capita 1(2005 real US$000, PPP basis)

US

50Bubble size = GDP of US$5 trillion (real 2005 PPP)

EurozoneJapan

Canada

China30

Korea

ChileRussia

2030US1980Japan

198020

China

IndiaBrazil

South Africa

n a2030

0

10

0 200 400 600 800 1,000 1,200 1,400 1,600

Population(million persons)


Source: Global Insight; BHP Billiton analysis.

1. All figures for 2009 unless mentioned otherwise.


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Agenda






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Commodity intensity evolve witheconomic develo ment

Demand index 1

250Emerging

economiesDevelopedeconomies

Corn and soybean

200

Electricit

Meat

150

Copper

50

Steel

0 5 10 15 20 25 30 35 40 45 50

GDP per capita(2005 real US$000, PPP basis)

Slide 10

Source: World Bank; Brook Hunt; CRU; IISI; Global Insight; CISA; worldsteel; JBS; IEA; BHP Billiton analysis.

1. The demand intensity index represents the volume consumption per capita consumption, 1968 as 100 for each of the commodities, based on the USA experience.

Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous


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Crustal abundance of some key commodities

Economic value in-situ in large scale mines

1,000,000Precious Metals Base Metals Bulk Commodities

U ZnMn K

Fe

10,000

100,000Cu

Pb

100

1,000 Ag

10 Range of economic valuesin-situ in large scale mines

Au

0

0 0 0 1 10 100 1,000 10,000 100,0000.10.010.001

Average Crustal Abundancearts er million


Source: Crustal abundance for precious & base metals Levinson A.A. (1974) Introduction to Exploration Geochemistry (Applied Publishing, Calgary), BHP Billiton analysis.


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What we know about crustal resources

Mineral Inventory

n

nera esource

Range of Potential x p l o r a

t i o n

i n e r a

l i s a

t i

Mineralisation

(Based on Exploration Results) Ore Reserve

d v a n c e d

E

s c o v e r e

d

U n

d i

Increasing geological knowledge and confidence

The range of Potential Mineralisation is estimated from geological information including boreholes, outcrops and geophysical information. The potential quantity is conceptual in nature, there has been

insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Slide 12Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous


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What we will discover about crustalresources

Mineral Inventory

Range of PotentialMineralisation

(Based on Exploration Results) Ore Reserve

A d v a n c e

d E x p

l o r a

t i o n

U n

d i s c o v e r e

d M i n e r a

l i s a

t i o n

Mineral Resource

undiscovered mineralisation

Increasing geologicalknowledge and confidence

Increasing geological knowledge and confidence

Slide 13Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous


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Estimated available iron ore

70

20

240

10120

1055100

Years of global supply

Iron Ore Province5


BHP Billiton estimates of available iron ore from selected basins assuming material >30% Fe is economic in the future. Around 50% of the current global supply of iron is derived from direct ship ores at grades of>60% Fe. In some locations, ores at grades as low as 30% (eg China, Canada and Russia) are currently mined for domestic markets. This estimate assumes that, over time, cut-off grades migrate towards 30%

Fe and that 2-3% of the volume of the iron bearing sedimentary formations of the major basins is ultimately extractable. This implies a potential for ~500 years of supply based on current demand.


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Estimated available metallurgical coal

8

5

2 20

100

Years of lobal su l

315

1

Metallurgical coal basins

Slide 15

BHP Billiton estimates for available metallurgical coal including hard (HCC), semi-hard (SHCC), semi-soft (SSCC) coking and pulverised coal injection (PCI) qualities. Rates assumed for conversion of in-situ resource to

product vary from basin to basin in the range of 10-70% depending on nature and disposition of known geology and washery yields. Total is estimated as ~80 years of supply at current rates of consumption.



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Estimated available copper

5

20

55

5

8

Years of global supply

55

13

4

Copper province

Slide 16

BHP Billiton estimates of copper available from selected provinces. Extrapolations from estimated reserves and resources published by the USGS (2010) with the application of factors to convert in-situ metal to product

depending on knowledge of deposit styles and likely geological disposition. Total is 175 years including 10 years of supply from deep ocean sources.



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Estimated supply

Expressed as years of estimated global supply at current production rates

Estimated mine lifeEstimated orebody

lifeEstimated available

supply

Iron Ore 75 190 500

Copper 40 220 175

Potash 285 1670 500


Sources: based on US Geological Survey (2010) for reserves and resources (in italics). Other data is BHP Billiton estimates. Estimated mine-life and estimated orebody life are based on in-situ material whereasestimated future supply allows for conversion of in-situ mineralization to product.


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Agenda






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Resource governance affects prices

Spot Price of OilUS$ per barrel

100

120Price Nominal (US$/barrel)

Price Real (US$/barrel Jan 2011)

80

60

20

01945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Year

Slide 20

Source: 1945-1983 Arabian Light posted at Ras Tanura; 1984-2010 Brent dated.



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Resource governance affects inventory

-

123

176

67

166

87181

763 832 1029

Year


Source: BP Statistical Review of World Energy June 2010.


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Agenda






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Discovery technology then,



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. and now



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Technology extraction

Copper production(million tonnes per annum)

Run of mine grade(Cu %)

4.0%

4.5%

25

30Cu production

Run of Mine grade

Direct oreReverberatory

furnace

3.0%

3.5%

20

o a on

1.5%

2.0%

2.5%

10

15 Acidic leach, solventextraction,

electrowinning

Central AfricaCopper Belt peakBulk open pitmining

0.5%

1.0%5

Bacterial leaching

In pit crushing

0.0%01900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030


Source: US Geological Survey (1900-83), Brook Hunt (1984 onwards).


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Technology - transportation



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Technology - metals substitution

high voltage copper cable high voltage aluminium cable


steel engine block aluminium engine block


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Recycling a source of secondary supply

Energy saving relative to primary metal production UK recycling rates for metals

Zinc

Steel

Copper

Aluminium

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%


Source: British Metals Recycling Association.


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Environmental outcomes

Direct impacts of mineral supply

Commencing mine rehabilitation after

Indirect impacts of mineral demand

Low carbon emission electricity generation


metallurgical coal mining


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