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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
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 4
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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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 5
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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 6
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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 7
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)
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 8
Source: Global Insight; BHP Billiton analysis.
1. All figures for 2009 unless mentioned otherwise.
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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 9
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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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 11
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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 14
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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 18
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
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 19
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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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 21
Source: BP Statistical Review of World Energy June 2010.
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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 22
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Discovery technology then,
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 23
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. and now
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 24
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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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 25
Source: US Geological Survey (1900-83), Brook Hunt (1984 onwards).
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Technology - transportation
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 26
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Technology - metals substitution
high voltage copper cable high voltage aluminium cable
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 27
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%
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 28
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
Andrew Mackenzie, Group Executive and Chief Executive Non-Ferrous Slide 29
metallurgical coal mining
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