BHP Downplays Softening Market Condition, Reveals Growth Plans

BHP Billiton remains upbeat on its outlook despite recent indications of retreating demands for its commodity offerings, specifically the global miner's iron ore shipments to its number one customer -- China.

Chief executive Marius Kloppers brushed aside suggestions that key markets for his company's offerings have been softening, though he admitted some declines in resources companies' valuation.

Amidst the recent trend of dipping iron ore prices, Kloppers announced on Thursday that BHP is in fact heading to path of expansion, with up to $80 billion of fresh investments for an array of "organic growth projects."

Addressing the mining firm's yearly meeting in London Thursday, the BHP chief revealed that the company is in the mood for financing growth projects, which were recently highlighted by the $20 billion acquisition of Petrohawk Energy and Chesapeake Energy's interest in the Fayetteville Shale.

Kloppers, however, refused to delve on circulating talks about BHP's intent to add Brazil's Ferrous Resources to its vast collection of iron ore mining assets spread all over the world, declaring that commenting on speculative topics would prove unwise at the moment.

Instead, the BHP boss preferred discussing the company's prospects, which he noted remains encouraging notwithstanding the uncertainties recently signalled by global markets, especially on the part of BHP's customers.

"We have seen a softening of prices over the last months as customers behave conservatively in the light of global uncertainty," Kloppers allowed as he added that unsettling macroeconomic conditions mostly rattled the overall picture.

Yet in the midst of all these uncertainties, Kloppers assured that "our book is sold out for the rest of our financial year ... and we actually see strong interest in buying by our customers."

In China's case, the country's current commodity inventories would soon require replenishments, according to Kloppers, which he said generate more steady demands for BHP's products with specific emphasis on more copper shipments.

Overall, BHP is more alarmed over the situation in Europe than in China, Kloppers said, wherein the former has instituted significant reduction of iron ore purchases, no thanks to declining steel production in some euro countries.