OECD 'holds key to commodity prices'

BHP Billiton’s chief executive sounded a cautionary note at the group’s annual general meeting yesterday, saying that it will be the middle of next year before the world’s biggest mining group would know if demand for commodities had stabilised. Marius Kloppers said Chinese demand had largely accounted for the growth in commodity prices in the last six months, but while Chinese stockpiling was largely complete, he said, growth in 2010 depended on demand from OECD countries.

“The key driver of incremental commodities demand in the near term will be to what extent the OECD experiences a more usual post recession restocking, or whether the restocking will be more lethargic this time around. It is our view that we will come out of this recession less strongly than in previous cycles. We therefore believe it won’t be until mid 2010 before we see clean underlying demand that is not masked by inventory effects.”

Mr Kloppers stressed that while the recovery would be sluggish, the group had a strong cash position, adding that BHP was likely to invest $10bn in capital projects in 2010.

Pointing to the group’s iron ore joint venture with rival Rio Tinto in Western Australia, Mr Kloppers added that the company was always looking for merger and acquisition opportunities: “Our strategy basically constrains us to large, low-cost, long-life, expandable assets that are export orientated, and these assets only comet o market very very seldom,” he said.

“You shouldn’t expect that we do transactions of smaller companies with smaller assets, but from time to time we’re going to do things like the Rio Tinto JV.”

The two groups signed the iron ore joint venture in Australia after BHP Billiton failed to secure a takeover of its rival. Earlier this month, the two scrapped plans to jointly market 25 per cent of the operation’s output. There have been unconfirmed reports that the two companies are in talks about a $1bn merger of their Canadian diamond operations.

Outgoing chairman Don Argus was forced to defend Mr Kloppers’ pay at the meeting. Mr Kloppers received a total of $10.4m in salary, bonuses and other benefits last year. The award, which is up from $6.9m last year comes after the group recorded an annual pre-exceptional profit of $5.9bn, a 61.8 per cent drop on its 2008 numbers.

While shareholders were paid an 82 cent per share dividend, a 17.1 per cent increase on last year, Mr Kloppers’ basic salary rose by 19 per cent to more than $2m. His annual cash bonus fell by a little under $100,000 to $1.7m

Mr Argus told shareholders there had been “misinformed reporting” of Mr Kloppers’ pay and most of his remuneration package was made up of incentive payments, which were dependent on BHP’s financial performance. “I want to assure you that despite what has been reported Marius did not receive a 51 per cent increase in his pay,” he said.

“Year on year his actual total remuneration was constant and his short-term incentive decreased. His base salary was also frozen for this current financial year that is 2009/2010, as were all directors’ fees.”

Mr Argus will step down next year.

Start your day with The Independent, sign up for daily news emails
Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'