Or more specifically, Pilbara iron ore, Escondida copper, onshore US petroleum and Queensland coal.
These four businesses account for 89% of BHP’s resources.
Presenting yesterday at the Bank of America Merrill Lynch 2013 Global Metals, Mining and Steel Conference in Barcelona, Mackenzie also singled out the company’s Jansen potash project in Saskatchewan.
“It provides us with a valuable option that could possibly in the longer term evolve into the fifth pillar for the group,” he said.
Mackenzie said it was his aim to have fewer assets while maintaining a “uniquely diversified” portfolio.
That means assets such as Nickel West, Worsley, Cannington and even Olympic Dam could be on the chopping block.
“While I won’t be drawn on the likely future candidates for divestments, I can assure you this is an ongoing process, which when seen through to its natural conclusion, I believe will retain the benefits of diversification while increasing our average EBIT margin,” Mackenzie said.
He said capital expenditure of about $US22 billion this financial year would be the peak of investment for the company, with FY14 capex expected to drop to about $18 billion and drop further to $15 billion within 2-3 years.
Exploration and evaluation expenditure will be significantly reduced with the mineral exploration division rolled into the Santiago-based copper business to reflect the company’s focus on greenfields exploration in the Andes.
Mackenzie said the company had some of the best orebodies on earth, which would sustain it.
Likewise, the petroleum exploration division will report directly to the petroleum business.
Mackenzie said assets would have to compete for capital in the future.
“Arguably I will spend less to grow the company more,” he said.
Jansen is expected to have capital costs of more than $1 billion, but Mackenzie said the company continued to review the 3 billion tonne project.
“It has to perform. It has to compete for a smaller amount of capital,” he said.
“We continue to maintain the speed with which we can exercise that option through constructing the shaft into the orebody.
“Jansen has to meet the mark.”
Meanwhile, Mackenzie spoke of his “passion” for productivity and promised to unlock more cash by “pulling the productivity lever hard”
He said the company delivered $1.9 billion in controllable cost savings in the first half of the 2013 financial year.
Mackenzie also pledged to keep shareholders informed of progress on productivity.
“They can track us rather than trust us,” he said.
“Clearly this journey has only just begun and while we can’t expect significant savings during every reporting period, we will continue to act decisively and we will hold our businesses accountable for the factors they control – safety, volume and cost, and critically, remuneration will be tied to the bulk of this performance.”
Mackenzie took over from Marius Kloppers on Friday.
