BHP Billiton PLC BLT BHP Billiton Limited 2012 AGM Speeches

  BHP Billiton PLC (BLT) - BHP Billiton Limited 2012 AGM Speeches

RNS Number : 2719S
BHP Billiton PLC
28 November 2012




Company Secretariat











29 November 2012















To: Australian Securities Exchange cc: New York Stock Exchange
    London Stock Exchange              JSE Limited

                                      

                                      

                        For announcement to the market



Please find attached addresses to shareholders to be delivered by the Chairman
and the Chief Executive Officer at BHP Billiton Limited's Annual General
Meeting today in Sydney.

As part  of the  Dual Listed  Company  structure of  the Group,  the  business 
conducted at the  Annual General Meetings  is determined by  polls. The  poll 
results will be released  to the market after  the conclusion of BHP  Billiton 
Limited's Annual General Meeting.



Further information on BHP Billiton can be found at: www.bhpbilliton.com. 





Jane McAloon

Group Company Secretary

















      BHP Billiton Limited ABN 49 004 028
      077 BHP Billiton Plc
      Registration number 3196209
      Registered in
      Australia
      Registered in England and Wales
      Registered Office: 180 Lonsdale Street Melbourne Victoria
      3000 Registered Office: Neathouse Place, London
      SW1V 1BH United Kingdom

        

        The BHP Billiton Group is headquartered in Australia











                 BHP Billiton Limited Annual General Meeting

                Speeches by Jac Nasser, Chairman, BHP Billiton
                                     and
            Marius Kloppers, Chief Executive Officer, BHP Billiton

                               29 November 2012

                                      

                 BHP Billiton Limited Annual General Meeting

                               29 November 2012

                                      

Jac Nasser, Chairman, BHP Billiton



Good morning ladies and gentlemen.  My name is Jac  Nasser. May I draw  your 
attention to the disclaimer we show every year.



Welcome to the  2012 Annual General  Meeting of BHP  Billiton Limited. I  also 
extend a welcome to shareholders who are online.



I would like to ask Donna Ingram, Cultural Representative of the  Metropolitan 
Local Aboriginal  Land Council,  to give  a Welcome  to Country.  Thank  you, 
Donna. I would like to acknowledge the Gardigal people of the Eora nation and
pay respect  to elders  past and  present  and extend  that respect  to  other 
Aboriginal people present.



New South Wales is a  very important State to  BHP Billiton. We have  180,000 
New South Wales-based shareholders and we thank you for your support. I would
also like to recognise the contribution of BHP Billiton's 6,000 people in  New 
South Wales who work in  our coal mining operations  in the Hunter Valley  and 
the Illawarra.



All your Directors  are here, including  Pat Davies, who  joined the Board  in 
June. Pat was the Chief  Executive of Sasol, a  global oil, gas and  chemical 
company. Welcome Pat to your first BHP Billiton Limited AGM. In addition  to 
our Chief Executive  Officer, Marius  Kloppers, we have  our Group  Management 
Committee with us today. During the year, we appointed two executives to  the 
team: Graham  Kerr and  Mike Henry.  All of  our operational  executives  run 
global businesses that  are world class  in terms of  their size, quality  and 
complexity.



Three  of  the  four  Australian-based  members  of  our  Forum  on  Corporate 
Responsibility are here today.  Let me welcome  Simon Longstaff, James  Ensor 
and Greg Bourne. All Forum members are leaders in their own communities. They
bring a range of views  on environmental, indigenous, social and  geopolitical 
issues. Thank you for your contribution.



Our fourth Australian  member, Professor  Mick Dodson, joined  the Forum  this 
year. He sends his apologies today. Mick  is a member of the Yawuru  people, 
the traditional Aboriginal owners of land and waters in the Broome area of the
southern Kimberleys. He  is Director  of the National  Centre for  Indigenous 
Studies and a Professor of Law at the Australian National University. Mick is
a prominent advocate on land rights and other issues affecting Aboriginal  and 
Torres Strait Islander  people. He  has worked  for the  rights of  Indigenous 
people worldwide through various roles with the United Nations and, as you all
know, in 2009 Mick was named Australian of the Year.



Global Economy



Let me begin today on the global outlook. While there are some signs that the
global economy is stabilising, uncertainty  and high government debt  continue 
to be the most pressing challenges.  The free flow of information, trade  and 
capital means that economic issues  once contained within regional  boundaries 
are now felt across  the world. This  is evident in  Europe where growth  has 
been negative.

Financial and economic problems  continue, and it's  difficult to predict  how 
and when they will be resolved but we do expect it to take considerable time.
In the United States, while some positive signs have emerged, consumers  there 
remain  cautious,  unemployment  levels  continue  to  be  high  and  a  sharp 
improvement in economic growth remains unlikely. 



The re-election of President Obama has resolved some of the uncertainty in the
outlook for the US, but the structural imbalance between the country's revenue
and spending remains the biggest issue.  High public debt levels in both  the 
US and Europe will need to be addressed if a firm recovery in these  economies 
is to be realised. Most of the developed economies are in the midst of a slow
and uneven recovery, with much work still ahead.



The economic outlook for the rest of the world is mixed, with China  remaining 
the driver of growth.  However, even in  China, in recent  times the rate  of 
economic growth has  been slower.  This is  primarily driven  by the  Chinese 
Government steering the economy to  more sustainable long-term growth. It  is 
also due to  the cyclical and  structural challenges being  faced in both  the 
domestic Chinese  economy  and  global  markets.  This  in  turn  has  raised 
questions about China's future demand for natural resources.



Xi Jinping has been appointed General Secretary of the Chinese Communist Party
and is expected to become China's President in March. We also anticipate that
the Chinese Government will  continue with its  current Five-Year Plan,  which 
was introduced last year. This plan emphasises continued economic reforms and
increased  domestic  consumption,  and  should  ensure  China's  middle  class 
continues to grow. While we don't expect the growth levels of the past decade
to continue, we do believe that further urbanisation and industrialisation  in 
China will support future growth in demand for commodities.



We generally agree with the  conclusions of the Australian Government's  white 
paper on the Asian Century. We believe that Asia's rise will continue to lift
millions of people out of poverty and,  over time, will see the region  become 
home to most of the world's middle class. However, we also believe the United
States and Europe  will remain, along  with China, major  engines of  economic 
growth. The unprecedented phase of growth in Asia, together with the recovery
in the  US  and  Europe,  should  provide  an  extraordinary  opportunity  for 
Australia as a trading nation.



In the case of Australia,  what I believe we are  trying to achieve is a  more 
sustainable,  safer   country  with   improved   living  standards   for   all 
Australians. The only way we will achieve this vision is by all of us working
together to make Australia efficient, productive, stable and competitive. 



Rising living  standards across  the region  will require  energy and  mineral 
resources to  support sustainable  growth.  For instance,  the  International 
Energy Agency recently estimated that global  energy demand will grow by  more 
than one-third over the period to 2035, with China, India and the Middle  East 
accounting for 60 per  cent of that increase.  These global shifts in  demand 
reflect the trend of millions of people  working their way out of poverty  and 
your  company  is  playing  a   critical  role  in  this  important   change. 
Improvements in living standards  in Asia will, over  time, change the  demand 
mix for commodities in our  portfolio, as they have  over the long history  of 
BHP Billiton.



BHP Billiton in context



One of the  strengths of your  company has  been its ability  to innovate  and 
adapt to changes in demand  for well over 100  years. That strength has  come 
from the quality  of the  men and  women who led,  and continue  to lead,  the 
company.



From the early 20^th century, BHP's  iron ore, coal and steel underpinned  the 
development of infrastructure such as  bridges, buildings and railways,  while 
Billiton's minerals and  aluminium helped  build the cars  and consumer  goods 
that industrialised economies needed as national incomes rose. As demand  for 
modern communications, industrial machinery and energy grew, we looked for new
opportunities in new countries and new commodities.



In the 1960s, BHP's board  and management decided to  explore for oil in  Bass 
Strait in  partnership  with  Esso.  Deciding to  search  for  oil  when  the 
company's core business was  steel was not only  profound, but challenged  the 
established view of shareholders and employees of BHP. This decision was good
for shareholders and it actually helped insulate Australia from the oil shocks
in the  1970s. From  a longer  term perspective,  that decision  created  our 
Petroleum business, which today accounts for over 20 per cent of our profit.



Then, in  the mid-1980s  the  company took  a  decision that  made  Australian 
history and transformed BHP. We acquired Utah International from GE for A$2.4
billion. To put this  into context, the acquisition  was about equal to  BHP's 
market value prior  to the  transaction. This  transformed BHP  into a  major 
global minerals company and established us in the copper business.



Today, our  Base Metals  business, of  which copper  is the  primary  product, 
generates 15 per cent of our profit. It is also a good example of how we play
a crucial role in the development of emerging economies and living standards.
That's because  copper is  critical to  power supply,  telecommunications  and 
electronic devices,  and  is directly  linked  to economic  development.  For 
example, six years  ago China  consumed about 25  per cent  of global  copper, 
today it consumes more than 40 per cent. On this basis the supply and  demand 
dynamics for copper look positive for the future.



Fast forward to  2011 and our  decision to enter  the US onshore  oil and  gas 
industry. This decision was  made with the same  long-term focus to build  on 
the quality and  diversity of our  resource base that  we saw in  the 60s  and 
80s.



In a similar  way, our focus  on potash  also reflects a  long-term view  that 
urbanisation and increasing world population  will drive growth in demand  for 
food. While potash  is a new  sector for us,  like oil, gas  and copper  once 
were, it is mined using traditional methods; BHP Billiton's core expertise.



It is important to  view the long-term investments  we make, like onshore  oil 
and gas  and  potash, through  the  prism of  how  decisions like  these  have 
transformed the  company. These  have generated  much of  today's profit  and 
created shareholder value over a very long time.



Business Performance



Let me now turn  to our financial  results. I am pleased  to report that  BHP 
Billiton is in a strong financial position. This is despite the challenges  of 
higher capital  and operating  costs, stronger  producer currencies  and  more 
regulation, as well as volatility in commodity prices.



Within this difficult environment, our profit and net operating cash flows are
the second highest  in our  history, while our  dividend is  the highest.  We 
reported a  profit  of US$15.4  billion  after  exceptional items  and  a  net 
operating cash flow of over US$24 billion. Our balance sheet is strong and we
retain a solid A credit rating.



We declared a full-year dividend of US$6 billion or 112 US cents per share, an
increase of  11 per  cent,  extending the  unbroken  record of  a  progressive 
dividend over the past 10 years. We also achieved a total shareholder  return 
of 342 per cent  compared to an ASX200  return of 117 per  cent over the  last 
decade, and over  that period we  have also outperformed  other global  mining 
companies. This means  that if  you invested A$1,000  ten years  ago and  you 
reinvested all your dividends, today you would have A$3,420.



At a time when the life span of companies seems to be getting shorter, I think
it is worth  making the point  that in the  127 year history  of BHP, now  BHP 
Billiton, we have only missed paying dividends in seven years. The last  time 
that happened was in 1931.



Impairments



Within an overall good performance we wrote down our US Fayetteville gas asset
by US$1.8 billion after tax. Writing down  the value of any asset is  clearly 
disappointing for the  Board, management  and shareholders.  This write  down 
resulted from a  significant drop in  gas prices following  an unusually  warm 
winter in the US  and increased natural gas  supply, which together caused  an 
imbalance in the gas market.



As I said earlier, we remain of the view that investing in US onshore  natural 
gas and liquids is the right decision for BHP Billiton shareholders, and  that 
is why  we  subsequently  acquired  Petrohawk. The  onshore  assets  that  we 
acquired with Petrohawk and Fayetteville  complement our existing oil and  gas 
business. Onshore natural  gas and  liquids form a  critical part  of the  US 
Government's commitment  to be  energy independent  and your  company is  well 
positioned to benefit from this transformation.



Building this business was one of  our most important recent investments,  but 
what I  believe is  more important  is that,  over the  last five  years,  BHP 
Billiton has become a safer, more diversified and stronger company.



Today we  are  four  years  into  the  global  financial  crisis.  Given  the 
fundamental shifts taking place,  the low levels of  growth in many  developed 
countries and the  volatility in just  about every facet  of life, from  stock 
markets to politics to the weather, the  business world is as tough as  ever. 
Our industry is particularly challenging. The investments we need to make are
larger and they are longer term. Our industry is cyclical, heavily  regulated 
and has high environmental and community expectations.



Despite that, since 2007 we have:



· reduced the injury rate by 36 per cent;

· cut our Greenhouse Gas emissions by over 19 per cent;

· continued to invest to create shareholder value;

· set production records at 10 or more of our operations every year;

· generated an average EBIT margin of over 40 per cent;

· achieved an average return on capital of 30 per cent; and

· created a unique operating model with clear accountabilities for all our
people and standard operating procedures across our global businesses.



In the face of the global financial  crisis, your company has also become  one 
of the  world's most  valuable companies.  This sort  of performance  doesn't 
happen by accident. It is a credit to every one of our 100,000 people led  by 
Marius and his team.



Community Contribution



Critical to our ongoing success is a genuine commitment to health, safety  and 
the environment  and  our  ability  to  make  a  positive  difference  in  the 
communities in which we operate. We understand the need to responsibly manage
the social and environmental  aspects of our operations.  While we don't  get 
everything right, we work hard to  listen to people, respect their rights  and 
take their views and concerns into account in our decision-making. When we do
that well,  our  stakeholders value  the  relationship with  us  and  everyone 
benefits.



In line with our commitment to invest  one per cent of our pre-tax profits  in 
community programs,  we  have  invested  more than  US$1.3  billion  into  the 
community over the  past decade. For  example, in 2011  we began a  five-year 
partnership with the international not-for-profit organisation PATH. We  have 
committed US$25 million to this project that will improve critical health  and 
development services in  Mozambique and  South Africa for  pregnant women  and 
babies. We have  also helped  many children across  the world  to start,  and 
complete, a formal education.



Here in Australia, last year we contributed US$86 million to local community
programs which supported:



· a science education program  for school children through the  University 
of Wollongong;

· counseling  services and  other social  support programs  in the  Hunter 
Valley; and

· the preservation of Aboriginal culture across the Canning Stock Route in
Western Australia.



Of course, in addition to supporting these programs, we also make an important
financial  contribution  through  tax,   royalty  payments,  procurement   and 
employment.



Last year, we paid US$12 billion to governments around the world in taxes  and 
royalties. Of these, our  largest payments were made  in Australia, where  we 
paid over  US$9 billion.  In addition,  across our  Australian operations  we 
spent US$20  billion sourcing  85 per  cent of  our products  from  Australian 
businesses. Taken together, that means we generate over one hundred and fifty
thousand jobs across the Australian economy.



I think all  shareholders can  take pride in  the contribution  that both  the 
company and our people make to the community.



Conclusion



Let me  conclude  by  saying that  we  are  playing a  critical  role  in  the 
development of the global economy at an extraordinary time in world  history. 
We are  all part  of  an industry  that supplies  the  resources that  make  a 
positive difference in improving the lives of hundreds of millions of people.
I believe as shareholders you have every reason to feel proud of your company.



On your  behalf  I want  to  thank  all of  our  people at  over  one  hundred 
operations for their continued  efforts. I would also  like to thank you,  as 
shareholders, for your commitment to BHP Billiton. We will continue to govern
the company in your interests.



Marius Kloppers, Chief Executive Officer, BHP Billiton



Thank you Jac and good morning everyone.



This morning I would like to talk about three broad themes:



· the performance of your company in the 2012 financial year;

· the market conditions we are facing, including the economic outlook; and

· how BHP Billiton is placed  to meet the conditions currently facing  the 
industry and what we are doing in response.



But first, let me start as I always do with safety, our overriding value. Our
Charter is  at the  heart of  everything  we do.  It clearly  emphasises  the 
importance of  putting  health  and  safety first,  the  importance  of  being 
environmentally responsible  and  the role  that  we play  in  supporting  the 
communities in which we operate.



While we saw a six per cent reduction in our total recordable injury frequency
to the lowest level on record, tragically we had three fatalities in the  2012 
financial year  and  another  fatality  in September  of  this  year.  It  is 
devastating for the family, friends and colleagues of these workers, and it is
a very sobering and  salient reminder that we  must make elimination of  fatal 
risks our first priority each and  every day. No fatality is ever  acceptable 
and on behalf of  everyone at BHP  Billiton I would like  to offer my  sincere 
condolences.



Performance



Turning to our performance, I am pleased  to say that your company achieved  a 
very robust  set  of  financial results  despite  significant  volatility  and 
uncertainty in the external environment during the 2012 financial year.



We delivered  Attributable profit  of US$15.4  billion, underlying  EBITDA  of 
US$33.7 billion and underlying EBIT of US$27.2 billion. This was all achieved
during a  time  of falling  commodity  prices and  rising  costs, as  well  as 
temporary, one-off impacts  that significantly affected  three of our  largest 
and highest margin businesses: Escondida in Chile, our Petroleum operations in
the Gulf of Mexico, and Queensland Coal. Our result was not only robust in an
absolute sense, but also relative to our peers.



We were especially pleased  to report very strong  net operating cash flow  of 
US$24.4 billion, which represented only a modest reduction of one per cent  in 
the June 2012 half year when  compared with the first half. This  demonstrates 
how we  are continuing  to generate  strong  results that  enable us  to  keep 
investing in the business throughout  the cycle. These financial results  can 
only be  achieved through  disciplined  management and  excellent  operational 
performance.



Our overall  strong  performance  is  testament  to  the  reliability  of  our 
operations, our  highly  skilled  operators  and  the  successful  ramp-up  of 
expanded capacity.  We  achieved  annual  production records  at  10  of  our 
operations, including  a  twelfth  consecutive production  record  at  Western 
Australia Iron Ore.  I make specific  mention of Iron  Ore purely because  it 
demonstrates the value of our strategy of investing throughout the cycle:  we 
chose to invest US$4.8 billion  in our Iron Ore business  at the depth of  the 
global financial crisis and we are now seeing the benefits of that decision.



This commitment of continued investment throughout the cycle is one of the key
elements of our broader strategy that sets us apart from our peers. In  fact, 
we now have a total of 19 predominantly brownfield projects that are on-budget
and on-schedule, with the majority delivering first production before the  end 
of the  2015  financial  year.  With  this  extensive  pipeline  of  projects 
currently in  execution,  and capital  and  exploration expenditure  of  US$22 
billion for the Group in the 2013  financial year, we are fully committed  and 
no major project approvals are anticipated over this timeframe.



The completion  of  these projects  and  the  release of  latent  capacity  in 
Escondida, Queensland Coal and the Gulf  of Mexico as they recover from  those 
temporary production issues,  will underpin  a compound  annual volume  growth 
rate of around 10 per cent this year and next.



It would  be  remiss  of  me  not  to  recognise  that  our  continued  strong 
performance is  only  made  possible  by  the  support  we  receive  from  the 
communities in which we operate. We are successful when our communities value
their relationship with us  and we are  able to leave  a positive and  lasting 
legacy wherever we  operate. It is  part of this  commitment that drives  our 
voluntary community investments, which I am proud to say in the 2012 financial
year totalled  US$214  million.  As  a  large  organisation  that  leaves  an 
indelible footprint wherever we  operate, we believe we  have an economic  and 
social responsibility  to  make  positive contributions  to  the  communities, 
regions and countries where we work.



Let me now turn to the changing environment in which we are now operating.



Market Conditions



First, I will address the short-term volatility we have experienced in  recent 
months, before making a couple of comments on the longer term outlook. In the
last six months,  prices for iron  ore, and to  a lesser extent  metallurgical 
coal, were impacted by destocking activity in China. This destocking, coupled
with lower steel demand from Europe, India and the Middle East, led to a sharp
decrease in  the price  of  steelmaking raw  materials. Subsequent  to  these 
events, restocking has commenced and is  largely complete; as a result, we  do 
not anticipate any material pricing upside in the near term.



Likewise, over  the same  period, we  have seen  short-term movements  in  the 
pricing of tradeable metals.  This was largely fuelled  by the United  States' 
third round  of quantitative  easing  and the  resulting lower  interest  rate 
environment.  This  increase  occurred  despite  no  fundamental  change   in 
underlying demand  and, as  a  result, prices  have subsequently  declined  to 
previous levels.



As we look  to the longer  term, China's recent  slowdown is directionally  in 
line with what  was expected  and what  the Chinese  Government had  indicated 
would occur. It is aligned  with the path taken  by other major economies  as 
they have developed, and is what we believe is required to support sustainable
growth in China over the longer term.



China's GDP growth is expected  to range between seven  and eight per cent  in 
the coming years.  While this is  lower than the  double digit growth  rates 
seen over the past decade, it is coming off a much larger base and will  still 
underpin strong underlying growth in  commodities demand. China's unique  and 
substantial industrialisation and urbanisation continues to give us confidence
in the long-term outlook.



Over the past  decade we have  experienced unsustainably high  prices in  some 
commodities such as iron ore and metallurgical coal, as growth in demand  from 
China and other developing nations outweighed the pace of new low-cost  supply 
additions.



At the same time, we have experienced very significant cost escalation in  the 
industry, compounded by  a strengthening  in the currencies  of key  producing 
countries. In the face of  higher prices, we have  also seen a trend  towards 
some governments seeking to increase royalties and taxes, which placed further
pressure on costs. Nowhere was this more evident than here in Australia.



With the shortage of low-cost supply  now well advanced towards being  filled, 
prices for  those  commodities  that experienced  the  greatest  supply-demand 
shortage, and therefore the  greatest price increases,  are expected to  'mean 
revert' in the period ahead.



The companies and regions who will do well in the current environment will  be 
those who  sit at  the low  end of  the cost  curve, who  are able  to  expand 
production in a  timely and  disciplined fashion, and  who can  invest in  the 
right portfolio  of  commodities.  For governments  this  means  providing  a 
framework that readily supports speed, stability and competitiveness.



How BHP Billiton is positioned to meet the challenges and opportunities



This leads me  to the  BHP Billiton strategy  of owning  and operating  large, 
long-life, low-cost,  expandable, upstream  assets diversified  by  commodity, 
geography and market. This strategy has been largely unchanged for more  than 
a decade.



Our diversification  strategy reduces  our exposure  to any  one commodity  or 
currency -  the value  of this  has  been demonstrated  time and  again,  most 
recently over the  past year  where your  company has  outperformed its  peers 
across  a  number   of  dimensions.  Combined   with  disciplined   financial 
management, it is this diversification  strategy that helps deliver  resilient 
cash flows, allowing  us to invest  in our business  throughout the  commodity 
cycle.



We have a uniquely diversified portfolio.  No other peer company has the  mix 
of minerals and oil and gas within their portfolios as we do, and the value of
this  level  of  diversification  is  particularly  evident  during  times  of 
significant market volatility. For example, over the last financial year when
global economic volatility was  significant, we had  a robust underlying  EBIT 
margin of  39 per  cent.  Illustrating the  value of  diversification:  while 
market commentators and many of our competitors were more materially  impacted 
by the decline  in iron  ore prices during  that period,  stronger prices  for 
crude oil,  liquefied natural  gas and  thermal coal  delivered a  substantial 
boost to our profits.



The diversification of our portfolio also  means we are poised to capture  the 
opportunities presented by  markets in  all stages  of the  demand cycle.  To 
highlight this point, China's  growth over the past  decade has been based  on 
the need for new cities,  buildings, roads, housing and  so on to support  the 
industrialisation and  urbanisation. As  has been  witnessed in  other  major 
economies as they have developed, this build out of the capital stock in China
will begin to plateau in due course. China's future needs will change and  the 
focus will gradually switch toward greater mechanisation to drive productivity
growth and to the next level of  consumer goods, such as white goods,  heating 
and air-conditioning, cars, stoves, and other similar goods. This progressive
transition from an investment-led to a more consumption-led economy in  China, 
and  other  developing  economies,  will  naturally  result  in  an   eventual 
moderation of demand for commodities such as iron ore and coal, but  sustained 
increases in demand  for commodities such  as copper and  the suite of  energy 
products.



As the  middle  class continues  to  increase as  a  proportion of  the  total 
population, and in the face of  constraints to arable land, better diets  will 
also likely lead to a demand increase for fertiliser products such as  potash. 
So it is important to understand that the market will still offer substantial
opportunities for  those  companies  that can  supply  the  right  commodities 
competitively. In fact, we expect  commodity demand to grow  by 50 to 80  per 
cent in the next  15 years, and  BHP Billiton is in  the enviable position  of 
having the commodities in our portfolio to meet the demands of every stage  of 
the industrialisation cycle.



However, as I said earlier, as prices for some commodities mean revert in real
terms it is  even more  critical that  we ensure  that our  costs remain  very 
competitive and at the low end of the US dollar cost curve.



In response to the changing environment  we have taken decisive and  proactive 
action to ensure we remain at the lower end of the cost curve and our focus in
this regard is ongoing. To  this end, you will  have seen us re-sequence  our 
growth portfolio,  slow down  or  stop some  development projects,  shut  down 
several higher cost operations  and commence a  significant and targeted  cost 
reduction program across  the Group. This  program will substantially  reduce 
operating costs and non-essential expenditure which is critical in the current
environment.



More specifically, in Australia at  our Metallurgical Coal business we  ceased 
production at Norwich  Park and  Gregory mine  in Queensland  and delayed  the 
expansion of Peak Downs while  still pursuing other substantial reductions  in 
operating costs and non-essential expenditure.



All of these actions are driven by  the need to ensure the competitiveness  of 
existing and  future  operations  in  this  changing  environment.  While  we 
recognise it is our role to carry the bulk of the task, the reality is that we
cannot do the heavy  lifting on competitiveness  alone. The cost  environment 
within which  we  operate  is  heavily influenced  by  government  policy  and 
regulation. It is  important for Governments  to provide stable,  predictable 
policy regimes in our key operating jurisdictions that support our own efforts
to  reduce  costs.  Governments  must  ensure  those  elements  of  the  cost 
environment they control provide a  competitive framework within which  future 
investment is  encouraged.  This  extends  to  royalties,  taxes,  regulatory 
burdens and productivity-related policies. Collaboration between industry and
government is critical to restoring cost competitiveness in our sector.  This 
will be to the benefit of both industry and the broader economy.



Conclusion



In summary, despite the  last financial year  being sometimes challenging  for 
the industry,  with substantial  volatility and  uncertainty in  the  external 
environment, BHP  Billiton  delivered  a  very robust  set  of  financial  and 
operational results.



Our unchanged strategy  and disciplined financial  and operational  management 
not only benefits us in the present but also means we are uniquely  positioned 
to capture the opportunities that will exist in the future.



We have  an  unrivalled  portfolio  of  high  quality,  long-term  development 
options. This includes 19 major  growth projects currently in execution  that 
are largely  low-risk, brownfield  expansions, in  the same  assets that  have 
generated industry leading returns over more than a decade. On average, these
projects in execution are expected to deliver a 15 per cent rate of return  on 
investment. As our expenditure  on these projects reduces  over time and  our 
level of flexibility increases, we will continue to allocate future capital to
those projects  that have  the most  attractive risk/return  metrics. We  are 
committed to our long-held strategy of investing through the cycle.



We have delivered strong total shareholder  returns of more than 600 per  cent 
over the decade to the end of the 2012 financial year. This is  approximately 
double that of our core peer group.  We have grown the dividend and  returned 
approximately US$54 billion to shareholders over that timeframe, equivalent to
about 50 per cent of our underlying earnings.



Our portfolio is perfectly suited to  the economic conditions that lie  ahead, 
and it is for this  reason we are even better  placed to outperform our  peers 
over the next decade, and well into the future.



In concluding, I would like to thank you, our owners. We value your continued
support and always welcome your contributions.



Finally, I would like to finish by thanking our more than 46,000 employees and
78,000 contractors  around  the  world who  have  been  at the  heart  of  our 
success.



Jac Nasser, Chairman, BHP Billiton



I would like to say a few words about succession. As you know, there has been
a lot of comment recently about succession at BHP Billiton. So let me take  a 
few moments to give you our  position on executive development and  succession 
planning.



I believe the Board's most important task is the development of our people and
ensuring we have  the right people  in the right  roles at all  levels of  the 
company. Succession planning and executive  development is a process and  not 
an event, and at BHP Billiton this process is ongoing and thorough. It starts
from the first day the CEO and his team are appointed. It involves  assessing 
the skills and experiences  that will be required  and, in turn, focusing  our 
development actions to  make sure we  have those skills  and experiences  when 
they are needed.  This is  not only  good people  practice, it  is good  risk 
mitigation.



As part of the executive development process we identify high potential people
at various levels both inside and outside the company on an ongoing basis. We
use our own  human resources  people and we  also use  external advisors.  The 
external advisors  help us  benchmark our  internal talent  and enable  us  to 
identify the best talent outside our company.



This succession  process  is  ongoing  at all  levels  of  the  company.  For 
instance, in the past year, Graham Kerr, a long-time employee, took over  from 
Alex Vanselow  as Chief  Financial Officer.  This is  a good  example of  our 
executive development  and succession  planning process.  The performance  of 
your company over recent years demonstrates how well our process works.



We have a world class leadership  team headed by Marius that has  successfully 
guided the company  through very  difficult conditions;  conditions that  have 
negatively impacted many  of our  peers and  many other  companies around  the 
world.



In terms of CEO succession,  where we are now, is  where any company would  be 
two, five or more years  into the tenure of a  CEO. That is, we continue  our 
commitment to the succession planning process we put in place when our CEO was
appointed.



Our executive development and succession planning has worked very well for us.
I believe you should have every confidence it will continue to work well  for 
the company and shareholders in the future.



The Chairman then conducted the formal  items of business, including the  item 
on the Remuneration Report as follows.



Remuneration Report



We are committed to clear reporting and effective governance of compensation.
Shareholders have the right to understand how compensation is structured,  and 
we support the actions of both the Australian and UK Governments to  introduce 
more transparency and shareholder involvement in executive pay.



We have provided information in our Remuneration Report that demonstrates  the 
linkages between executive pay,  the Group's strategy  and the performance  of 
BHP Billiton. We have also reported actual  pay of the CEO and the  executive 
team.



What our  shareholders tell  us about  our pay  policy and  practices is  very 
important to us. We know  that there are many  views; however, over the  last 
few years our pay practices have been strongly supported by shareholders, with
more than 96 per cent voting in favour.



Your Board spends considerable time balancing  the need to attract and  retain 
key executives while ensuring the  alignment of interests with  shareholders. 
We  pay  a  combination  of  fixed  pay  together  with  short  and  long-term 
incentives, both of which are at risk. First, we link pay to the wellbeing of
the company in the shorter  term. This means that  we take into account  both 
the financial and non-financial effect senior executives have on BHP  Billiton 
and our stakeholders. These factors  include health, safety, environment  and 
community  relationships,  as  well   as  business  performance  and   capital 
investments. Bonuses this  year to our  senior executives were  significantly 
lower than  last  year;  they ranged  from  zero  to half  the  maximum  bonus 
available.



We also look at the longer term. We were one of the first companies to put in
place an incentive plan that  measures performance at the  end of a five  year 
time frame. We believe that by measuring performance over five years our plan
better aligns executive and shareholders' interests, and we remain only one of
three companies in the ASX30 and the FTSE100 to do this.



Closing Remarks



In closing, let me again thank you for your support and commitment.



We value  your comments  and ideas  and will  continue to  strive for  ongoing 
improvement on your behalf.



The poll results will be notified to  stock exchanges later today and will  be 
posted on our website.



Thank you for  coming along  today and I  hope you  have time to  join us  for 
refreshments.

                     This information is provided by RNS
           The company news service from the London Stock Exchange

END


AGMLFFVVLRLTFIF -0- Nov/29/2012 07:00 GMT