The world’s biggest mining company BHP Billiton has said it could invest as much as $25 billion in Australia’s economy over the next decade.
Potential expansion projects include the Caval Ridge coking coal mine in Queensland and South Australia’s Olympic Dam copper mine. By the early 2020s BHP will also need to find new mining assets to replace lost iron ore output from ageing mines in Western Australia.
However, speaking to Bloomberg last week, BHP CFO Peter Beaven suggested that taxes might have to fall before these plans can get the green light:
“We will not invest in these projects unless the returns are better than returning cash to shareholders. We cannot assume that investment in Australia is guaranteed,” he said.
He also warned that the market should prepare for lower iron ore prices, driven by a slowdown in Chinese stimulus spending, much of which has been directed at infrastructure.