BHP Billiton made better progress on cost reductions in 2013/14 than in any year over the past decade

John Robertson


BHP Billiton made better progress on cost reductions in 2013/14 than in any year over the past decade. However, since 2004/05, costs have risen $8.9 billion while volume gains have contributed just $6.0 billion to EBIT suggesting persist productivity deterioration through the cycle until markets forced a change. Much of the most recent cost reductions came from a 40% cut in Queensland coal cash costs from their peak according to CFO Graham Kerr. At one level, this is a good outcome but, at another, it begs an important question about the management of the company through the cycle. Clawing back old mistakes is less inspiring management than preventing the problems in the first instance. One of the challenges for the new BHP is to show that it is in better operational control than it has been in the past.

John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...


No areas of expertise

I would like to

Only to be used for sending genuine email enquiries to the Contributor. Livewire Markets Pty Ltd reserves its right to take any legal or other appropriate action in relation to misuse of this service.

Personal Information Collection Statement
Your personal information will be passed to the Contributor and/or its authorised service provider to assist the Contributor to contact you about your investment enquiry. They are required not to use your information for any other purpose. Our privacy policy explains how we store personal information and how you may access, correct or complain about the handling of personal information.