The company would also continue to divest non-core assets that don’t perform to its strict performance parameters, he said.

“We have embedded $US4.9 billion ($A5.2 billion) of sustainable productivity gains which will increase to $5.5 billion by the end of this financial year,” he said.

“In the first half of the 2014 financial year, average truck utilisation, compared with last year, improved by 8%. The average utilisation of our diggers increased by 10%, and we have reset the performance benchmark higher so a clear opportunity remains across the Group.”

The company has also reduced capital expenditure by 25% and its spend will decline again in the 2015 financial year.

It now expects an average rate of return of more than 20% for its portfolio of low-risk, largely brownfield development options, Mackenzie said.

“The case for continued simplification of our portfolio is compelling, and this remains a priority. In the last two years we have completed $6.5 billion of divestments at attractive valuations,” he said.

“We continue to study the next phase of simplification, including structural options, but no decisions have been made. We will only pursue options that maximise value for BHP Billiton shareholders.

“By doing what we said we would do in the first half of the year, we increased free cashflow by $7.8 billion and underlying return on capital to 22%.

“Over the past 10 years, we have built a strong track record of capital management. Today, our balance sheet is strong, and getting stronger.

“We have a solid A credit rating and our progressive base dividend is comfortably covered by free cashflow.”