No demand for metals until '10-BHP CEO

BHP Billiton Ltd/Plc , the world's largest miner, said on Thursday it did not expect to see "clean demand" for the global metals sector until early 2010 as a global slowdown bites. Chief Executive Marius Kloppers said nickel and aluminium would not contribute as much to the group's business this year. The mining giant reported a slide in annual profit earlier this month due to a slump in metal prices and demand. Kloppers said the last 12 months had been a rollercoaster of high demand, which later fell sharply and it would be hard to see real demand until early next year. "We won't see clean demand for metals until early next year," Chief Executive Marius Kloppers told a media briefing. He said after intensive destocking, there was emerging demand in North America, Europe and Japan, but said it would be at least until early next year before a clean set of underlying demand figures could come through. "It is fair to say petroleum, iron ore, base metals, plus our coal business, will contribute more than our nickel and aluminium this year." Last week BHP reported January-June net profit before one-offs falling to $4.59 billion from $9.37 billion, but still ahead of analysts' forecasts for around $4.1 billion (2.48 billion pounds). In spite of a year that saw massive writedowns on nickel plants, results beat market forecasts as base metals earnings were not as weak as expected and cashflow was strong. Kloppers said the company had not yet taken a decision on whether to sell its Ravensthorpe nickel operation. A source with direct knowledge of the matter said last Friday the mine would be sold and could fetch $1 billion. "There is no official decision to sell yet, we are not sure when we will decide on it," he said. But he said the group was keen to expand into the potash business, and would consider spending cash to grow it. "We are hoping we can put a bit of capital to work on that project in the next few years," he said. On acquisitions, Kloppers said the company was keen to buy assets that replenish its resources in the long term, which in most cases were assets that were not yet fully developed. "We want to keep a simple company with extremely long life, low cost assets. Those assets come to market relatively rarely, and it's extremely difficult to predict that timing," he said. "We will always be acquiring things, but we don't want to profile this company as being primarily positioned to take advantage of the M&A market." He said BHP had a wide range of good assets that were cash generative in good and bad economic times, and could help the company sustain dividend payments and invest even in hard times. The company was not selling any large assets, he said. SEES DEMAND FROM INDIA In a wide ranging briefing, Kloppers said he viewed India as a big giant in terms of future demand, mainly for the company's energy products, and reaffirmed BHP Billiton's plans to build a large aluminium smelter in the Democratic Republic of Congo. The plant was still in the feasibility study stages. "The hydro potential in that area is large. This is a project still in its early stages of being studied," he said. Kloppers said BHP Billiton was interested in platinum mining, but was not ready to enter into the mining of the metal, in which South Africa is the biggest producer, because of safety concerns. The sector has been hit by mining deaths that have marred its image and caused stoppages after accidents hurt output. He said BHP would remain on the sidelines unless the mining technology changes to improve workers' safety. "The platinum business would be something that is interesting, but we can't get over the fact that platinum mining has certain safety issues where you have a large number of workers exposed to deep underground mining," he said. (Reporting by James Macharia; Editing Bernard Orr)