Speaking to the company’s annual general meeting in London, Nasser said while the US was experiencing a moderate recovery, conditions in Europe were still challenging.
But despite a $US9 billion hit to its bottom line in the 2012 financial year on the back of lower commodity prices, Nasser said the company saw strong growth in Asia.
“In Japan, the renewed policy push is positive for medium-term growth, if the government can achieve its stated objectives,” he said.
“In China, which accounts for about 30% of our revenue, weaker trade and softer manufacturing activity have been a slight drag on growth relative to expectations.”
Nasser noted that 650 million people in China alone had been lifted out of poverty over the past two decades.
“Over the next 15 years, it is expected that around 250 million more people will move from the Chinese countryside to cities, while Asia’s middle class will reach about three billion people,” he said.
“With employment conditions and income growth remaining resilient, we believe the Chinese government has room to pursue reforms that support its agenda of stable, long-term growth.
“Domestic demand, as well as the types of goods and services produced in China, will continue to underpin a rise in the absolute demand levels for commodities.”
BHP is forecasting 7% growth in China next year.
“China and other emerging economies will be the major drivers of economic growth in the long term, which could deliver up to a 75% increase in demand for some commodities over the next 15 years,” Nasser said.
Emphasising his key message since becoming CEO this year, Andrew Mackenzie said the company had to become more productive to remain competitive.
“Our businesses are focused on maximising the outputs of their installed capacity to deliver volume growth and lower unit costs,” he told the AGM.
“We have also reduced our planned capital expenditure by 25% to $16 billion for the 2014 financial year and our level of expenditure will decline again next year.”
Mackenzie said employees were “energised” by the productivity challenge ahead and were delivering great results, as seen on Tuesday when the company upped its full-year iron ore guidance by 5 million tonnes to 212Mt.
“For example, by sharing best practice in the performance of shovels in our coal business, our iron ore team increased the performance of their shovels by 20%, reducing mining costs per tonne,” he said.
“And, by analysing every step of the production process at one of our coal mines in the Bowen Basin in Queensland, the team increased throughput and decreased downtime at the processing plant to deliver 7% volume growth. “
BHP is aiming to increase productivity by 8% per annum over the next two years, on a copper equivalent basis.
Mackenzie emphasised the focus on the “four pillars” – iron ore, petroleum, copper and coal, with the possible fifth pillar, potash.
“And we continue to operate our aluminium, manganese and nickel businesses as efficiently as possible,” he said.
Mackenzie also addressed climate change, as Nasser recommended shareholders vote against the election to the board of former coal executive and environmental activist Ian Dunlop.
“As a significant user of energy, we are working to drive down our greenhouse gas intensity and we are seeing results,” he said.
“Our current emissions are below our 2006 baseline, despite the substantial growth of our business since then.”
BHP will hold its Australian AGM in Perth next month.
