Global Trends in the Natural Resource Sector C W Goodyear Chief Executive Officer 10 th St. Petersburg International Economic Forum St. Petersburg, 13 June 2006
1990 Industry structure BHP Rio Tinto Anglo Am. De Beers Gencor Alcoa Newmont Alcan Amplats Placer Dome Reynolds Driefontein WMC Barrick GFSA Noranda Minorco Inco Pechiney MIM 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 In 1990 the top five companies accounted for less than 25% of total resource equity market value Market value of minerals industry US$150 bn Value of Top Five US$36 bn Market Cap. at end of 1990 (US$B) Slide 2
BHP Billiton is now the world s largest diversified resource company Petroleum Aluminium Base Metals Carbon Steel Materials Diamonds & Spec Prod Energy Coal Stainless Steel Materials Slide 3
10 year historical Chinese demand 000 tonnes 4,000 % 25% million tonnes % 350,000 35% 3,500 3,000 2,500 2,000 1,500 Chinese refi ned copper consumption % share of world refi ned copper consumption (right hand scale) 20% 15% 10% 300,000 250,000 200,000 150,000 Chinese crude steel consumption % share of global crude steel consumpti on (right hand scal e) 30% 25% 20% 15% 1,000 500 5% 100,000 50,000 10% 5% 0 95 96 97 98 99 00 01 02 03 04 05 Data: BHP Billiton 000 tonnes 0% % 0 0% 95 96 97 98 99 00 01 02 03 04 '05 Data: IISI, CISA, BHP Billiton (NB: 05 is based on estimate figures as final figures are not yet released) 000 tonnes % 250 18% 8,000 25% 200 150 100 Chinese primary nickel consumpti on % share of world primary ni ckel consumpti on (ri ght hand scale) 16% 14% 12% 10% 8% 6% 7,000 6,000 5,000 4,000 3,000 Chinese alumi nium consumption % share of global al uminium consumption (right hand scal e) 20% 15% 10% 50 4% 2% 2,000 1,000 5% 0 95 96 97 98 99 00 01 02 03 04 05 Data: INSG 0% 0 Data: BH, CRU 95 96 97 98 99 00 01 02 03 04 '05 0% Slide 4
Steel intensity of use 1200.0 Steel Intensity per Capita Kg Steel/Capita 1000.0 800.0 600.0 USA (1900-2004) Japan (1950-2004) S. Korea (1970-2004) Taiwan (1970-2004) China (1970-2004) 400.0 200.0 0.0 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 GDP/Capita (PPP, Jan. 2006 US$'000) Slide 5 Source: World Bank, OECD (GDP at Purchasing Power Parity), IISI
Energy intensity of use Energy Use per Capita (Oil Equivalent tonnes) 10.0 8.0 6.0 4.0 2.0 USA (1960-2004) Japan (1960-2004) S. Korea (1965-2004) Germany (1965-2004) Taiwan (1965-2004) China (1965-2004) Energy Intensity per Capita Slide 6 0.0 0 5000 10000 15000 20000 25000 30000 35000 40000 45000 GDP/Capita (PPP, Jan. 2006 US$'000) Source: World Bank, OECD (GDP at Purchasing Power Parity), BP Statistical Review
2006 - industry structure Shenhua Alcoa Newmont Norilsk Barrick Xstrata AngloPlat Alcan Phelps Dodge Peabody Energy Teck Cominco Anglogold Falconbridge Cameco SPCC Freeport CVRD Rio Tinto Anglo American BHPB 140 130 120 110 100 90 80 70 60 50 40 30 Market Cap. on 21 April 2006 (US$Bn) 20 10 0 Today the top five companies account for over 40% of total resource equity market value Market value of minerals industry US$795bn Value of Top Four US$329bn Slide 7
Worsley DCP BMA Phase 2 Blackw ater CPP Deep inventory of growth projects Esc da Sulphide Zamzama Phase 2 WA Iron Ore RGP 2 Douglas Middelburg Atlantis North Yabulu Koala UG WA Iron Ore RGP 3 Samarco Alumar Worsley E&G NWS T5 B R O W N F I E L D NWS Angel As at 15 February 2006 Size of bubble indicates proposed capital expenditure; bold outer border signifies sanctioned project. WA Iron Ore RGP 4+ $US 200M Y2006 2007 2008 2009 2010 2011 Atlantis South Spence Ravensthorpe Neptune Stybarrow Pyrenees Maruwai Shenzi Alumina Base Metals Iron Ore Met. Coal Diamonds Energy Coal Nickel Petroleum Slide 8 G R E E N F I E L D
Escondida Slide 9
Mozal Slide 10
Olympic Dam World-class copper-uranium-gold-silver mineral resource. 34% of world s uranium reserves. BHP Billiton ideally placed to meet increasing demand for uranium. 000 tonnes of U 3 O 8 2000 Olympic Dam 1500 The world s top twenty uranium deposits by remaining resources 1000 500 Operating Mine Construction Undeveloped 0 Olympic Dam McArthur River Inkai Rossing Jabiluka Cigar Lake Aflease Rio Cristalino Itatiaia Ranger Yeelirrie Valhalla McClean Lake Kintyre Akouta Langer Heinrich Dieter Lake Beverly Arlit Gurvanbulag Slide 11 Source: Internal Global Deposit Database
BHP Billiton-Norilsk Nickel Alliance Alliance between world's largest diversified resources company and Russia's largest mining company Significant growth opportunities - geographical diversification for BHP Billiton and commodity diversification for Norilsk Nickel Initial focus on exploration - an area that has received insufficient attention in recent years A win-win relationship building on strengths of both partners: Norilsk Nickel is Russia s leading mining company and has the in-country knowledge and experience that is essential for success in Russia. BHP Billiton offers global exploration and project development expertise, world-class technology and global marketing organisation Slide 12
A sustainable future What BHP Billiton brings to Russia: A model based on developing and sustaining relationships with both local businesses and local communities A track record of in-country expansion and re-investment ensuring long term prosperity for all partners A long term partnership based on sustainable development Slide 13
Conclusion Market Needs + Norilsk Nickel + BHP Billiton + Communities = Win Win Win Win Slide 14
Global Trends in the Natural Resource Sector C W Goodyear Chief Executive Officer 10 th St. Petersburg International Economic Forum St. Petersburg, 13 June 2006