BHP's plans to boost production could cost $80bn over 10 years

BHP Billiton could spend up to $80 billion (R576 billion) in capital over the next 10 years to expand the production of its metal, minerals and oil to meet growing global demand, especially from China and India. Marius Kloppers, who takes over as BHP Billiton chief executive next month following the retirement of Chip Goodyear, said yesterday that the group could triple its iron ore output to 300 million tons a year by 2015, at a cost of about $20 billion, if the firm "pushed hard". The $80 billion capital spend over the next 10 years was "probably not impossible" but it would be a stretch, he said. "We are confident about the outlook for demand growth from China and we like what we see in India," Kloppers said. He said the world was in a new era of demand growth. If China and India continued to grow at their present rates, they could together make up 40 percent of the global economy by 2025. In the long term, if demand for commodities was sustained, BHP Billiton could expand its Olympic Dam mine in Australia to produce, on an annual basis, 750 000 tons of copper, 20 000 tons of uranium and between 700 000 and 800 000 ounces of gold. Expansion to these levels would be achieved over a period of 15 years and could cost more than $5 billion, Kloppers said. At the moment, Olympic Dam produces more than 200 000 tons of copper a year. BHP Billiton is conducting a prefeasibility study regarding the possible expansion of Olympic Dam, which may involve doubling the size of the mine to 500 000 tons of copper a year. The company has disposed of $6 billion worth of assets over the last couple of years. It would continue to sell off the group's smaller assets to increase its focus on long-life, low-cost assets, said Kloppers. The group is planning to expand its production volumes by an average of 9 percent a year. The volume growth that BHP Billiton was planning "excluded major mergers and acquisitions", Kloppers added. But he did not preclude the chance of BHP Billiton concluding a major acquisition when he takes over at the group.