100511 BoA Merrill Lynch Global Metals and Mining .../media/bhp/documents/... · Bank of America Merrill Lynch Global Metals & Mining Conference, May 2011 Slide 9 exploration will

BMA, Australia

A tier 1 diversified growth portfolioA tier 1 diversified growth portfolio

Marius Kloppers Chief Executive Officer10 May 201110 May 2011

Disclaimer

Reliance on Third Party InformationThe views expressed herein contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied p y y, p y pupon as a recommendation or forecast by BHP Billiton.

Forward Looking StatementsThis presentation includes forward-looking statements within the meaning of the U.S. Securities Litigation Reform Act of 1995 regarding future events and the future financial performance of BHP Billiton. These forward-looking statements are not 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 causeperformance, 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 the statements contained in this presentation. For more detail on those risks, you should refer to the sections of our annual report on Form 20-F for the year ended 30 June 2010 entitled “Risk factors”, “Forward looking statements” and “Operating and financial review and prospects” filed with the U.S. Securities and Exchange Commission.

Exploration Results, Mineral Resources and Ore ReservesThis presentation includes information on Exploration Results, Mineral Resources and Ore Reserves, which is based on information prepared by the relevant Competent Persons as named in the 2010 Annual Report, and reported under the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (the JORC Code). The Competent Persons verify that this presentation is based on and fairly reflects the information in the supporting documentation and agree with the form and context of the Exploration Results, Mineral Resources and Ore Reserves presented. The Competent Persons are full time employees of BHP Billiton and have the required qualifications and experience to estimate and report Exploration Results, Mineral Resources and Ore Reserves under the JORC Code. The relevant details of the Competentestimate and report Exploration Results, Mineral Resources and Ore Reserves under the JORC Code. The relevant details of the Competent Persons for Mineral Resources and Ore Reserves can be found at: www.bhpbilliton.com. The Competent Persons for Exploration Results are J. Knight (Western Australia Iron Ore – MAIG), A. Paul (Queensland Coal – MAusIMM), D. Dunn (Queensland Coal – MAusIMM), S. O’Connell (Olympic Dam – MAusIMM), J. Des Rivieres (Escondida - FAusIMM) and John McElroy (Potash – MAusIMM).

No Offer of SecuritiesNothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in anyNothing in this presentation should be construed as either an offer to sell or a solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction.

Non-GAAP Financial InformationBHP Billiton results are reported under International Financial Reporting Standards (IFRS). References to Underlying EBIT and EBITDA exclude any exceptional items. A reconciliation to statutory EBIT is contained within the profit announcement, available at our website www.bhpbilliton.com.

Slide 2Bank of America Merrill Lynch Global Metals & Mining Conference, May 2011

Agenda

Supportive long term market fundamentals

Well positioned for diversified, tier 1 growth

Concluding remarks


Supportive long term market fundamentals, but volatility to continue in the near termy

Longer term, global GDP growth to Global GDP growth rate (% per annum)remain robust

Strong emerging market growth continues

(% per annum)

5

6Developed economies

Developing economiescontinues

Developed market data has improved

4

5

However, economic risks remain

Emerging market inflation 2

3

Emerging market inflation

Sovereign debt issues1

2

01900-1920

1920-1930

1930-1940

1940-1950

1950-1960

1960-1970

1970-1980

1980-1990

1990-2000

2000-2010

2010-2020

2020-2025

Source: 1900 to 1980 – J. Bradford De Long (“Estimates of World GDP”, 1998); 1980 to 2010 –IMF World Economic Outlook Database; 2010 to 2025 Forecast – Global Insight.


Chinese GDP is set to grow substantially to 2030

World GDP per capita1

(US$’000 real 2005 PPP)

US

50Bubble size = GDP of US$5 trillion (real 2005 PPP)

(US$ 000, real 2005 PPP)

US

Eurozone

Japan

Australia Canada

30

40

South Korea

China 2030

US 1980 Japan

198020

China

India

Brazil

Chile Russia

South Africa

India 203010

00 200 400 600 800 1,000 1,200 1,400 1,600

PopulationSource: Global Insight; BHP Billiton analysis.1. All figures for 2009 unless mentioned otherwise.

Bank of America Merrill Lynch Global Metals & Mining Conference, May 2011 Slide 5

p(million persons)

Commodity intensity trends evolve with economic developmentp

USA(Intensity index)(Intensity index)

160

180

ElectricityEmerging economies

Developed economies

120

140

100

120

Copper

60

80

Steel

400 5 10 15 20 25 30 35 40 45 50

GDP per capita $


Source: World Bank; Brook Hunt; CRU; IISI; Global Insight; CISA; worldsteel; JBS; IEA; BHP Billiton analysis.

(US$’000, real 2005 PPP)

Commodity prices supported by under delivery of the supply sidepp y

Seaborne traded iron ore supply growthhas failed to meet expectations Against a strong demand

600

has failed to meet expectations (mtpa)

g gbackdrop, supply growth has fallen short of expectations

A d li i i d t id

400

500

~ 55% supply

A decline in industry wide capital expenditure through the global financial crisis has dampened the supply

300

growth not delivered

p pp yresponse

Tight labour markets and l i fl ti

100

200 general inflationary pressure ensures the environment for project development is as challenging as ever

0Aspirational growth for

2008 to 2010Realised growth by

Q3 CY10

challenging as ever

Note: Aspirational iron ore supply based on BHP Billiton analysis as of early 2008.Source: BHP Billiton analysis.


What makes a tier 1 resource

Mineral Inventory

Mi l Ron

Mineral Resource

Range of Potential xplo

ratio

n

Min

eral

isat

io

Mineralisation

(Based on Exploration Results) Ore Reserve

Adva

nced

Ex

scov

ered

M

A

Und

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.


Large mineral inventory creates significant options for growthp g

15 10

15

P t ti l Mi li ti

Legend(bt)

5

10

0

5

S k t h

Potential Mineralisation

Resource

Reserve

Ratio(Years)

Minimum Inventory Life at FY10 Production Rate

40

60

30

40

500

Olympic DamCopper/Uranium

SaskatchewanPotash

15

20

25

Production Rate

100+

0

20

0

10

20

30

0

5

10

15

100+

Western Australia Iron Ore

QueenslandCoal

Escondida Copper

200+ 100+ 100+

Potential Mineralisation, Mineral Resources and Ore Reserves are stated on a 100% basis. The detailed breakdown of Mineral Resources and Ore Reserves are shown in the FY10 Annual Report. The range of Potential Mineralisation (Exploration Targets) is estimated from geological information including boreholes, outcrops and geophysical information, and is shown as a range (black bars). The potential quantity is conceptual in nature, there has been insufficient exploration to define a Mineral Resource and it is uncertain if further

200 100 100

Bank of America Merrill Lynch Global Metals & Mining Conference, May 2011 Slide 9

exploration will result in the determination of a Mineral Resource. It should not be expected that the quality of the Potential Mineralisation is equivalent to that of the Mineral Resource. The ratio in years is the inventory divided by the FY10 production rate (for Potash this is the expected FY20 production rate) and does not imply that any mine planning has been completed. In Mineral Provinces (e.g. Pilbara, Bowen) the inventory life of individual mines may be more or less than the number stated above.

Significant investment underpins our tier 1 growth strategyg gy

Strong pipeline of investment(US$ billion)

80

90

(US$ billion)

Energy Coal

60

70

Potash

PetroleumEnergy

Aluminium

Stainless Steel Materials

30

40

50

Metallurgical Coal

Copper

Non-ferrous

Manganese

10

20

30 Metallurgical Coal

Iron Ore

Ferrous

0Future options Pre-feasibility Feasibility Execution Other growth

capexTotal spend

FY11 to FY15Commodity split

Note: Excluding sustaining capital and exploration expenditure and future investment associated with the acquisition of the Fayetteville Shale.


Development activities clustered around our key hubsy

Underlying EBIT(H1 FY11)

Execution: Daunia

Hay Point Stage 3 ExpansionF ibilit

Queensland CoalExecution:

DauniaHay Point Stage 3 Expansion

F ibilit

Queensland CoalWestern Australia Iron OreOther

Feasibility:Jansen Stage 1

Saskatchewan PotashFeasibility:

Jansen Stage 1

Saskatchewan Potash

Feasibility:Caval Ridge

Pre-feasibility:BMC Wards Well

Goonyella ExpansionP t d R il E i

Feasibility:Caval Ridge

Pre-feasibility:BMC Wards Well

Goonyella ExpansionP t d R il E i

Olympic Dam

EscondidaQueensland Coal

gPre-feasibility:

Jansen Stages 2 & 3 Potash Port Vancouver WA

gPre-feasibility:

Jansen Stages 2 & 3 Potash Port Vancouver WA

Port and Rail ExpansionPort and Rail Expansion

Execution:

Western Australia Iron OreExecution:

Western Australia Iron Ore

Execution:E did O A

Escondida CopperExecution:

E did O A

Escondida Copper

Execution: WAIO Expansion to +220mtpa

Pre-feasibility: Port Hedland Outer Harbour

Central Pilbara Mines

Execution: WAIO Expansion to +220mtpa

Pre-feasibility: Port Hedland Outer Harbour

Central Pilbara Mines

Escondida Ore AccessFeasibility:

Escondida Organic Growth Project 1Escondida Oxide Leach Area Project

Pre-feasibility: Escondida Bioleach Pad Extension IV

Escondida Ore AccessFeasibility:

Escondida Organic Growth Project 1Escondida Oxide Leach Area Project

Pre-feasibility: Escondida Bioleach Pad Extension IV

Feasibility:Olympic Dam Project 1

Pre-feasibility:

Olympic Dam Copper/UraniumFeasibility:

Olympic Dam Project 1Pre-feasibility:

Olympic Dam Copper/Uranium

Escondida Bioleach Pad Extension IVEscondida Bioleach Pad Extension IV Pre feasibility: Olympic Dam Project 2

Pre feasibility: Olympic Dam Project 2


Note: All projects remain under review until such time as they are sanctioned for execution.

Delivering volume growth across key commodities

WA Iron Ore production profile(mtpa 100%)

Metallurgical Coal production profile(mtpa BHP Billiton share1)

Petroleum production profile (mmboe BHP Billiton share)(mtpa, 100%)

300

350

(mtpa, BHP Billiton share )

60

70 250

(mmboe, BHP Billiton share)

200

250

40

50

150

200

150

200

30

40

100

50

100

10

20

50

0

FY07

FY08

FY09

FY10

~FY1

1

~FY1

2

~FY1

5

~FY2

0

0

FY07

FY08

FY09

FY10

~FY1

1

~FY1

2

~FY1

5

~FY2

0

0

FY07

FY08

FY09

FY10

~FY1

1

~FY1

2

~FY1

5

~FY2

0

Note: Production profile for future periods remains subject to approval of projects into execution.Source: BHP Billiton analysis.1. Includes 100% of production from BHP Mitsui Coal. BHP Billiton interest in saleable production is 80%. Excludes weather related impact in FY11.


BHP Billiton is not immune from industry wide capital cost pressuresp p

Western Australia Iron Ore project conveyor belt Capital intensity (US$/t)

Component escalation rateIndex (2000 = 100)

250

300

Capital intensity (US$/t)

350

400 Oil ConcreteStructural steel fabricationPrefabricated buildings

Index (2000 = 100)

200

250

Expansion to 240mtpa1

2 0

300

Prefabricated buildingsMechanical & construction equipmentUS$ to A$

100

150

RGP3 RGP4

200

250

50

100 RGP3RGP2

RGP4

100

150

02002 2004 2006 2008 2010 2012 2014

Source: BHP Billiton announcements.

502000 2002 2004 2006 2008 2010

Note: Size of bubble represents annual production capacity (100% basis).1. Includes debottlenecking for incremental capital investment (of ~US$1 billion)

in addition to already approved capital expenditure.Source: Australian Bureau of Statistics; Energy Information Administration;

Datastream; BHP Billiton analysis.


Input costs have also increased and steepened cost curves

Iron ore cost curve(US$/t 62-63% Fe CIF China equivalent basis)

The cost curve has steepened dramatically over time (US$/t, 62-63% Fe, CIF China equivalent basis)

140

160 2001

2005

2010

Long term price estimates have grown at a similar rate, reflecting the shift in shape of the cost curve and development costs

Our low cost position has been strengthened rather

Western Australia Iron Ore cash costs100

120Long term price forecast - 2001

Long term price forecast - 2005

Long term price forecast - 2010

Our low cost position has been strengthened, rather than weakened over the decade

Cash costs

Royalties

(US$/t)

60

80

20

40

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 1H110

0 350 700 1,050 1,400Cumulative capacity

(mt)(mt)Source: Macquarie Research.Note: Includes seaborne and China domestic.

Source: BHP Billiton analysis.Note: Cash costs exclude freight.


The value of a diversified tier 1 portfolio

High return tier 1 assets The stability of a diversified portfolio

50

Return on capital(%)

EBIT margin1

(%)

100Petroleum AluminiumB M t l D&SP

40

50

75

100 Base Metals D&SPSSM Iron OreManganese Metallurgical CoalEnergy Coal Total

20

30

25

50

0

10

FY06 FY07 FY08 FY09 FY10 H1 FY110

25

FY02² FY03 FY04 FY05 FY06 FY07 FY08 FY09² FY10 H1

1. Calculated on the basis of UKGAAP for periods prior to FY05, except for the exclusion of PRRT from Petroleum's and BHP Billiton Group's results for all periods. All periods exclude third party trading activities. The Exploration and Technology business has been included in BHP Billiton Group's results from

FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 H1 FY11

Peer groupBHP Billiton

Note: Peer group includes Rio Tinto, Vale, Anglo American and Xstrata.Source: Annual Reports, interim press releases and BHP Billiton analysis.

FY02 to FY05 and excluded from Diamonds and Specialty Products (D&SP).2. Negative margins are not shown as the y-axis is set at zero. Stainless Steel

Materials (SSM) had a negative EBIT margin in FY02 and FY09.


A tier 1 diversified growth portfolio

Long term demand growth i b tremains robust

Supply likely to lag in the near term but supply will catch up withterm, but supply will catch up with demand

Capital intensity is increasing asCapital intensity is increasing as new infrastructure is required

Our very large scale resourceOur very large scale resource positions provide for decades of low risk growth and attractive investment returns across a diversified portfolio

Escondida, Chile


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100511 BoA Merrill Lynch Global Metals and Mining .../media/bhp/documents/... · Bank of America Merrill Lynch Global Metals & Mining Conference, May 2011 Slide 9 exploration will