UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
September 24, 2009
| BHP BILLITON LIMITED (ABN 49 004 028 077) (Exact name of Registrant as specified in its charter) |
BHP BILLITON PLC (REG. NO. 3196209) (Exact name of Registrant as specified in its charter) |
|
VICTORIA, AUSTRALIA (Jurisdiction of incorporation or organisation)
180 LONSDALE STREET, MELBOURNE, VICTORIA 3000 AUSTRALIA (Address of principal executive offices) |
ENGLAND AND WALES (Jurisdiction of incorporation or organisation)
NEATHOUSE PLACE, VICTORIA, LONDON, UNITED KINGDOM (Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: x Form 20-F ¨ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: ¨ Yes x No
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BHP Billiton Limited and BHP Billiton Plc | ||||||
| Date: September 24, 2009 | By: | /s/ Jane McAloon | ||||
| Name: | Jane McAloon | |||||
| Title: | Group Company Secretary | |||||
bhp billiton
resourcing the future
Summary Review 2009
BHP Billiton Locations
Petroleum
Ref Country Site/Asset Description Ownership
1 Algeria Ohanet Onshore wet gas development 45%
2 Algeria ROD Onshore oil development, comprising 45% development and production of six oil fields
3 Australia Bass Strait Production of oil, condensate, LPG, natural 50% gas and ethane located in the Gippsland Basin, offshore southern Australia
4 Australia Minerva Operator of offshore gas field development 90% in the Otway Basin of Victoria
5 Australia North West One of Australia’s largest resource projects, 8.33–Shelf producing liquids, LNG and domestic gas 16.67% located offshore northwestern Australia
6 Australia Stybarrow/ Operator of Stybarrow oil development 45–50% Griffin and Griffin oil and gas development located offshore Western Australia
7 Pakistan Zamzama Operator of onshore gas development 38.5% in Sindh province
8 Trinidad Greater Operator of oil and gas field located 45% and Tobago Angostura offshore east Trinidad
9 UK Bruce/Keith Oil and gas production in the UK North Sea 16–31.83%
10 UK Liverpool Operator of oil and gas developments 46.1% Bay in the Irish Sea
11 US Gulf of Interests in several producing assets, Mexico including deepwater oil and gas production at:
• Atlantis 44%
• Shenzi/Genghis Khan 44%
• Mad Dog 23.9%
• Neptune 35% Additional other interests in producing assets and a significant exploration acreage position 4.95–100%
Aluminium
Ref Country Site/Asset Description Ownership
12 Australia Boddington/ Integrated bauxite mine and alumina 86% Worsley refinery in Western Australia
13 Brazil Alumar Integrated alumina refinery, 36–40% aluminium smelter and port facilities in Maranhão province
14 Brazil MRN Bauxite mine in Pará province 14.8%
15 Guinea Guinea Integrated bauxite mine and alumina 33.3% Alumina refinery (currently undertaking Project feasibility study)
16 Mozambique Mozal Aluminium smelter near Maputo 47.1%
17 South Africa Hillside/ Two aluminium smelters at Richards Bay 100% Bayside
18 Suriname Paranam Bauxite mines and alumina refinery* 45%
* Asset sale completed 31 July 2009
Base Metals
Ref Country Site/Asset Description Ownership
19 Australia Cannington Silver, lead and zinc mine in northwest 100% Queensland
20 Australia Olympic Underground copper, uranium, gold 100% Dam and silver mine in South Australia
21 Chile Cerro Open-cut mine producing copper cathode 100% Colorado in Atacama Desert, northern Chile
22 Chile Escondida Copper mines in Atacama Desert, 57.5% northern Chile
23 Chile Spence Open-cut mine producing copper cathode 100% in Atacama Desert, northern Chile
24 Peru Antamina Copper and zinc mine located in the Andes, 33.75% north-central Peru
25 US Pinto Valley Copper mine located in the State of Arizona 100%
Offices
Ref Country Location Ref Country Location
43 Australia Adelaide 59 Netherlands The Hague
44 Australia Brisbane 60 New Noumea
45 Australia Melbourne Caledonia
(Global Headquarters) 61 Philippines Manila
46 Australia Newcastle 62 Russia Moscow
47 Australia Perth 63 Singapore Singapore
48 Australia Sydney 64 South Africa Johannesburg
49 Belgium Antwerp 65 South Africa Richards Bay
50 Brazil Rio de Janeiro 66 South Korea Seoul
51 Canada Vancouver 67 Switzerland Baar
52 Chile Santiago 68 UK London
53 China Shanghai 69 US Houston
54 Colombia Cartagena 70 US Pittsburgh
55 Gabon Libreville
56 India New Delhi
57 Indonesia Jakarta
Corporate/Business Centres Marketing Offices
58 Japan Tokyo Minerals Exploration Offices
Offices Stainless Steel Materials Petroleum Iron Ore Aluminium Manganese Base Metals Metallurgical Coal Diamonds and Specialty Products Energy Coal
26 51 27 70 25 42 69 11 8 54 40 31 18 14 13 24 21 33 23 50 22 52
Diamonds and Specialty Products
Ref Country Site/Asset Description Ownership
26 Canada EKATI Diamond mines in Northwest Territories 80%
27 Canada Potash Greenfield potash projects near 100% Saskatoon, Saskatchewan
28 South Africa Richards Bay Integrated titanium smelter and mineral 50% Minerals sands mine
Stainless Steel Materials
Ref Country Site/Asset Description Ownership
29 Australia Nickel West Nickel assets, including Mt Keith, Leinster 100% and Cliffs operations, Kambalda nickel concentrator, Kalgoorlie nickel smelter, Kwinana nickel refinery, and Ravensthorpe nickel mine and processing facility
30 Australia Yabulu Laterite nickel and cobalt processing plants 100% Refinery northwest of Townsville*
31 Colombia Cerro Integrated ferronickel mining and smelting 99.94% Matoso complex in northern Colombia
* Asset sale completed 31 July 2009
Iron Ore
Ref Country Site/Asset Description Ownership
32 Australia Western Integrated mine, rail and port operations 85–100% Australia in the Pilbara Iron Ore
33 Brazil Samarco Integrated mine, pipeline and port operations 50% producing iron ore pellets in southeast Brazil
Manganese
Ref Country Site/Asset Description Ownership
34 Australia GEMCO Producer of manganese ore in the 60% Northern Territory
35 Australia TEMCO Producer of manganese alloys in Tasmania 60%
36 South Africa Samancor Integrated producer of manganese 60% Manganese ore (Hotazel Manganese Mines), alloy (Metalloys) and manganese metal (Manganese Metal Company)
Metallurgical Coal
Ref Country Site/Asset Description Ownership
37 Australia Illawarra Three underground coal mines in southern 100% Coal New South Wales with access to rail and port facilities
38 Australia Queensland Integrated mine, rail and port operations, 50–80% Coal including a loading terminal at Hay Point, in the Bowen Basin, Central Queensland
Energy Coal
Ref Country Site/Asset Description Ownership
39 Australia Hunter Valley Mt Arthur Coal open-cut mine in 100% Energy Coal Hunter Valley, New South Wales
40 Colombia Cerrejón Export coal mine with integrated rail 33.3% and port facilities in La Guajira province
41 South Africa Energy Coal Three energy coal mines in Witbank 84–100% South Africa region of Mpumalanga province
42 US New Mexico Two mines in New Mexico supplying 100% Coal energy coal to adjacent power stations
9 62 10 68 59 49 67 6 58 2 53 1 7 56 61 15 63 55 57 34 5 30 6 32 19 38 60 64 41 16 44 36 17
28 20 39 29
65 47 46 12 43 48 45 37 4 3 35
In this Summary Review
Our Results at a Glance We are Part of the Community
Includes a snapshot of our results Our responsibility to the communities and five-year summary in which we operate by J Michael Yeager
See page 2 See page 22
Chairman’s Review Board of Directors
The year in review by Don Argus Profiles of our Directors
See page 4 See page 26
Chief Executive Officer’s Report Group Management Committee
Overview of the Group’s activities Profiles of our senior management team by Marius Kloppers See page 29
See page 6
Corporate Governance Customer Sector Group Summary
Performance Governance at BHP Billiton Operational snapshot of BHP Billiton’s See page 30 nine Customer Sector Groups
See page 8 Remuneration Summary and Principles Financial Strength and Marketing
Key principles of our remuneration policy Financial strategy outlined by Alex Vanselow and Marketing See page 31 overview by Alberto Calderon Shareholder Information See page 16 Overview of shareholder information, Strategy of World-Class Assets including key dates and our dividend policy Operational update for Ferrous See page 32 and Coal by Marcus Randolph and Non-Ferrous by Andrew Mackenzie Corporate Directory See page 18 A list of key offices and our share registries
Our People See inside back cover
Our commitment to our people and our safety performance by Karen Wood
See page 20
This Summary Review is designed to provide you with an update on the operations and performance of BHP Billiton over the year ended 30 June 2009 in a concise and easy-to-read format. It is not a summary financial statement for the purposes of the UK Companies Act 2006.
This Summary Review is not intended to provide a guide as to the likely future performance of the Group. Certain statements may be forward-looking statements which are based on current expectations, beliefs and assumptions regarding present and future business strategies and environments in which the Group will operate in the future. Such expectations, beliefs and assumptions may or may not prove to be correct and are subject to a number of known and unknown risks and uncertainties that could cause actual results, performance and achievements to differ materially. The Annual Report 2009 sets out certain risk factors that may cause our results to be materially less favourable than those implied by these forward-looking statements. Past performance cannot be relied on as a guide to future performance.
Nothing in this Summary Review should be construed as either an offer to sell or the solicitation of an offer to buy or sell BHP Billiton securities in any jurisdiction.
This Summary Review is not a substitute for the Annual Report 2009 and does not contain all the information needed to give as full an understanding of the Group’s performance, financial position and future prospects as is provided by the Annual Report 2009, which can be downloaded from the BHP Billiton website at www.bhpbilliton.com. Printed copies of the Annual Report 2009 will be distributed to all shareholders who elected to receive them, and can be requested by contacting the Share Registry.
BHP Billiton Limited. ABN 49 004 028 077. Registered in Australia. Registered office: 180 Lonsdale Street, Melbourne, Victoria 3000, Australia. BHP Billiton Plc. Registration number 3196209. Registered in England and Wales. Registered office: Neathouse Place, London SW1V 1BH, UK. Each of BHP Billiton Limited and BHP Billiton Plc are members of the BHP Billiton Group, which is headquartered in Australia.
We a leading are BHP global Billiton, natural company. resources
Our purpose is to create long-term shareholder value through the discovery, development and conversion of natural resources and the provision of innovative customer and market-focused solutions. For almost a decade, we have been committed to a long-term strategy of investing in low-cost, world-class, expandable and export-oriented operations that reflect diversification across markets and geographic regions.
Today…this strategy remains unchanged.
BHP BILLITON SUMMARY REVIEW 2009 - 1
Our Results at a Glance
• A strong financial result, despite very challenging market conditions.
• Record net operating cash flow of US$18.9 billion.
• Underlying EBIT margin of 40.1 per cent and Underlying return on capital of 24.6 per cent.
• Exceptional items of US$4.8 billion, the majority of which relate to restructuring of the nickel operations.
• Maintained our strong balance sheet, with net debt of US$5.6 billion, gearing of 12.1 per cent and Underlying EBITDA interest cover of 57 times.
• Full year dividend of 82 US cents per share, an increase of 17.1 per cent.
• Capital and exploration expenditure of US$10.7 billion.
• Four projects approved and proposed formation of the Western Australia Iron Ore production joint venture with Rio Tinto announced.
• Seven fatalities occurred in our operations. Our Total Recordable Injury Frequency has improved to 5.6.
Five-year Summary
US$M 2009 2008 2007 2006 2005
Revenue 50,211 59,473 47,473 39,099 31,150 Underlying EBIT (a) 18,214 24,282 20,067 15,277 9,921
Attributable profit – excluding exceptional items 10,722 15,368 13,675 10,154 6,426 Attributable profit – including exceptional items 5,877 15,390 13,416 10,450 6,396
Net operating cash flow (b) 18,863 17,817 15,957 11,325 9,117
Basic EPS – excluding exceptional items
(US cents per share) 192.7 274.9 233.9 168.2 104.9
Basic EPS – including exceptional items
(US cents per share) 105.6 275.3 229.5 173.2 104.4
Dividend per share
BHP Billiton Plc (US cents) 82.0 70.0 47.0 36.0 28.0 BHP Billiton Limited (US cents) 82.0 70.0 47.0 36.0 28.0 Underlying EBITDA interest coverage (a) 56.8 49.4 43.6 33.6 35.6
Gearing (per cent) (c) 12.1 17.8 25.0 27.2 35.8 (a) Underlying EBIT is earnings before net finance costs and taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, impairments and amortisation. We believe that Underlying EBIT and Underlying EBITDA provide useful information, but should not be considered as an indication of, or alternative to, attributable profit as an indicator of operating performance or as an alternative to cash flow as a measure of liquidity. (b) Net operating cash flow is after net interest and taxation.
(c) Gearing is net debt over net debt plus net assets. The measure is inclusive of continuing operations of Group companies and jointly controlled entities.
2 - BHP BILLITON SUMMARY REVIEW 2009
Underlying EBIT
US$18.2B
US$ million
0 5,000 10,000 15,000 20,000 25,000 2005
2006 2007 2008 2009
Attributable profit – excluding exceptional items
US$10.7B
US$ million
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2005
2006 2007 2008 2009
Total returns to shareholders
US$32.5B
10,000
8,000
6,000 million US $ 4,000
2,000 Dividends Share buy-backs Demerger of
0 BHP Steel 2002 2003 2004 2005 2006 2007 2008 2009
Dividends declared
US$4.6B
US$ million
0 1,000 2,000 3,000 4,000 5,000 2005
2006 2007 2008 2009
Market capitalisation at 30 June
US$143.6B
US$ million
0 50,000 100,000 150,000 200,000 250,000 2005
2006 2007 2008 2009
Community contributions
US$197.8M*
210 180 150
million 120 $ US 90
60
30
0 2005 2006 2007 2008 2009
* Incorporates US$60 million into UK-based charitable company (BHP Billiton Sustainable Communities)
Relative share price performance index – five year
500
BHP Billiton Limited BHP Billiton Plc ASX 200 FTSE 100 S&P 500 450
400 350 300 250 200 150 100
50 0
30/6/04 30/6/05 30/6/06 30/6/07 30/6/08 30/6/09
BHP BILLITON SUMMARY REVIEW 2009 - 3
Chairman’s Review
Don Argus
Chairman
We remain committed to achieving the highest level of governance and continue to believe that there is a fundamental link between high-quality governance and the creation of shareholder value.
By any measure, this has been an extraordinary year.
The global financial crisis has created the worst business environment the world has faced in more than 60 years. World economic activity contracted dramatically and commodity prices fell sharply. Accompanying this, volatility has been high and should remain for the immediate future. While the global economy is showing signs of stabilising, the large developed economies are not expected to show real growth until at least the end of 2010.
BHP Billiton’s strategy has served us well during these volatile times. Since the merger of BHP and Billiton in 2001, we have focused on a few key fundamentals. These include owning and operating large, low-cost, long-life tier one assets; a commitment to a solid ‘A’ credit rating; a deep inventory of growth projects; and working hard to be leaders in safety, environmental management and community engagement.
While low commodity prices and less demand for our products led to a fall in profits, our resolute focus on our long-term strategy delivered record operating cash flow of almost US$19 billion, profit from operations, excluding exceptional items, of US$18.2 billion, and margins on this profit of more than 40 per cent. Dividends were increased by 17.1 per cent to 82 US cents per share. We have enviable balance sheet strength. At 30 June 2009, gearing was 12.1 per cent and we have an ‘A’ credit rating with significant funding capacity.
Despite producing strong operating and financial performance during a challenging year, our safety performance was simply unacceptable. This year, we had seven fatalities. The death of a family member at work has a devastating and long-lasting impact not only on the immediate family, but also on a wide community of relatives, friends and work colleagues. The Board has reinforced its emphasis on management creating a workplace free of injury.
4 - BHP BILLITON SUMMARY REVIEW 2009
In environmental management, the Our program of Board renewal continued immediate issue facing the world is climate this year. David Jenkins, after nine years change. BHP Billiton shares the view that on the Board, will retire after the Annual mainstream science is correct in drawing General Meetings. David has made an attention to the high risks associated with outstanding contribution to the work unmitigated climate change. However, we of the Board; and on your behalf, I would also believe that the problem is solvable like to thank David and wish him well and strongly support a global regime for the future. that is endorsed by both developed and We also appointed Wayne Murdy as a major developing countries and provides non-executive Director. Wayne’s experience the clarity and stability necessary to allow will be invaluable to your Board given investment in carbon abatement activities his background as Chairman and Chief to occur. We are determined to play Executive Officer of Newmont Mining our part and see business leadership Corporation and 30 years’ experience as part of our role in achieving low in the mining and petroleum industries. carbon growth. To this end, we support key initiatives like the establishment of binding commitments for all developed and major developing countries. The economic landscape has We remain committed to prudently changed and organisations investing for the future. This is reflected have had to adjust to meet in the agreement we signed with Rio Tinto these unprecedented in June this year to create an iron ore economic challenges. production joint venture in Western Australia. This joint venture represents a significant, strategic investment for We remain committed to achieving the the Group that provides us with the highest level of governance and continue opportunity to capture significant synergies to believe that there is a fundamental that can only come through this unique link between high-quality governance partnership. The agreement is non-binding and the creation of shareholder value. and pre-conditions for its formation include We also recognise that governance regulatory, relevant governmental and is not just a matter for the Board, but shareholder approvals from both Rio Tinto that a good governance culture must and BHP Billiton shareholders. be fostered throughout the Group. Our ability to fund opportunities like these and the Group’s consistent, Undoubtedly, the past year has been solid financial performance during this difficult. The economic landscape has period is testament to the ability of changed and organisations have had Marius Kloppers and his team. Over the to adjust to meet these unprecedented past five years, we have delivered Total economic challenges. In many sectors Shareholder Returns (1) of 220 per cent, of the economy we have witnessed quite outperforming the FTSE 100, ASX 100 and dramatic falls in demand, and there have our peers. There are very few companies been large cutbacks in production across in any sector with such solid financial the commodities sector. We were not and operating strength. immune from this. We reduced production levels from many of our operations in Clearly, as a Board, we have a responsibility response to the lower global commodities to shareholders to ensure we attract, demand and in some instances also made develop and retain the talented people we need to run our business. The way difficult decisions to indefinitely suspend we reward and recognise those people or close operations. is an important part of how we do this. Looking ahead, economies around the Our reward and recognition arrangements world are responding to government-are set out in the Remuneration Report. driven economic stimulus packages, From your Board’s point of view, the the impact of which is difficult to measure; critical issue is that shareholders have the and consequently, there remains a level ability to fully understand remuneration of uncertainty about the rate of economic arrangements, to monitor them and growth over the short term. Having said to express their opinion on their value. that, there is evidence in the US, UK, Aligning executive remuneration with Europe and Australia of increasing stability shareholder value creation is fundamental. in financial systems and economies.
China, which has been the major source of demand for commodities in 2009, is showing early signs of improvement, providing strong support for short-term economic growth.
Over the longer term, we believe that emerging economies such as China and India will contribute the majority of world economic growth as they continue to industrialise, which will see demand for commodities continue to grow. BHP Billiton maintains its unique position in the resources industry. We are able to generate above average returns in this part of the cycle, continue to invest in growth and are well-placed to take advantage of any upturn.
Finally, this will be my last report to you as Chairman.
Jac Nasser will succeed me when I retire. It is your Directors’ view that the choice of the Chairman is the responsibility of the Board. This is why, over the past 18 months, the Board itself has conducted the succession process for the new Chairman and when the Board met, John Buchanan, the Senior Independent Director for BHP Billiton Plc, chaired the meetings. Jac has outstanding skills and experience and will be an excellent Chairman. To ensure an orderly transition, the Board has asked me to stand for re-election at the upcoming Annual General Meetings, although I will not serve a full term and expect to retire from the Board in early 2010. I want to acknowledge and sincerely thank you, our shareholders, for your support over the 13 years I have been on the BHP Billiton Board and my 10 years as Chairman. It has always been my underpinning principle to respect shareholders as the owners of the Company, as it is to you that I am accountable for the governance and performance of BHP Billiton. It has been an outstanding highlight in my life and an extraordinary privilege to serve you as Chairman.
Don Argus
Chairman
(1) Weighted three month average US$ Total Shareholder Returns (TSR) of BHP Billiton Limited and BHP Billiton Plc.
TSR reflects the changes in share price plus dividends over the period.
BHP BILLITON SUMMARY REVIEW 2009 - 5
Chief Executive Officer’s Report
Marius Kloppers
Chief Executive Officer
During the year, we stayed true to our strategy of focusing on long-term value creation.
6 - BHP BILLITON SUMMARY REVIEW 2009
The 2009 financial year was an interesting Managing through the cycle one as it was divided into distinct periods I have already stated that during the year, – the first with rapid growth in demand we stayed true to our strategy of focusing for products at record prices, and the on long-term value creation. Operationally, second in which a global de-stocking however, we continued to seek ways cycle, following the global financial that allow us to be responsive in the short crisis, resulted in diminished demand term. For example, very early on in the and lower prices. global financial crisis and consistent with With aggressive growth plans following the way we have always managed our the preceding year’s record world economic business, we reiterated our commitment growth in our industry, many of our peers to taking swift action in any operation and other companies were forced to make that was cash negative and set to remain an about-turn in strategy in response to so, or for which we did not have sufficient the global economic downturn. In many customers for the particular product. cases, long-term value was sacrificed as a result of short-term pressures.
While the shift in demand and prices Our Group remains in an also presented challenges for BHP Billiton, enviable position in its industry. our long-standing strategy of focusing on a diversified portfolio of tier one, low-cost, long-life assets, allowed us to continue to We acted quickly to curtail production focus on the long-term creation of value, across our metallurgical coal, manganese, in line with our corporate objective. nickel and iron ore pellet operations. Safety Disappointingly, this slowdown in Our workforce contains many talented demand, coupled with the dramatic people who help make this Group fall in nickel prices, led to the indefinite what it is today: a premier global suspension of our Ravensthorpe operation organisation. Given this, I am personally in Western Australia. I can assure you that deeply saddened to report that this year these decisions were carefully considered seven deaths occurred at our operations. and that we are ever mindful of the Any injury is unacceptable and these effects on everyone involved. fatalities highlight the need to do While difficult decisions to reduce more as an organisation to protect the staff numbers were taken in some health and safety of our people. To this areas, we have continued to implement end, we have undertaken a variety of programs that work to attract and retain measures, which have included reviews skilled people. For example, in May we of our management procedures and announced the introduction of uniform, safety systems. minimum paid parental leave benefits Encouragingly, seven of our Customer across our operations. The introduction Sector Groups reported improvements of this initiative actively encourages in Total Recordable Injury Frequency broad inclusion in the workplace, which performance ranging from seven to we believe will ultimately give us a strong 44 per cent. Twenty-four BHP Billiton competitive edge. sites completed 12 months of operations The strong cash flow from our existing without a Lost Time Injury. In aggregate, portfolio along with low levels of financial this amounts to more than 23 million gearing, enabled us to continue with our hours of work without a Lost Time stated strategy of investing in our business Injury. Our challenge is to replicate throughout the cycle, with another four this performance throughout our projects constituting US$5.9 billion of business and we must remain diligent investment being approved during the in continuing our work towards zero year. Together with previously approved workplace injuries. projects it brings our pipeline of projects in execution to approximately US$14 billion.
We intend to invest approximately US$10 billion in capital and exploration expenditure in FY2010.
Additionally, our strong cash flow and low gearing enabled us to contemplate other non-organic
growth opportunities. In this regard, we are very pleased with the recent non-binding agreement with Rio Tinto to combine our iron ore businesses in Western Australia in a 50-50 owned production joint venture. This joint venture will see us invest a further US$5.8 billion in this business beyond the already sanctioned projects.
Looking ahead
The major economies are starting to rebuild their inventories in sequence, led by an early recovery in China; and we may see a more predictable demand scenario for our products in the coming financial year. However, we do not expect a return to the same buoyant demand conditions that prevailed before the global financial crisis, or a return to record global growth rates within our forecasting horizon. Given that China represents approximately 20 per cent of BHP Billiton’s revenue, and up to 50 per cent of the world’s raw material consumption, it merits additional comment. China’s reduction of lending controls in November 2008 has facilitated an increase in real estate and mortgage lending, which in turn has supported an increase in construction and increased demand for products we supply. Also, the infrastructure stimulus measures announced to improve China’s rail, road and air transport links will, in due course, create a need for raw materials. Therefore, we expect the resource intensive nature of Chinese growth to substantially drive global raw materials consumption. The investment plans that I detailed earlier will continue to supply product to meet this demand.
On a final note, I wish to thank all of BHP Billiton’s employees and contractors for their continued commitment, which has enabled the Group to deliver value in very challenging times.
In summary, our Group remains in an enviable position in its industry. Our low gearing, strong cash flow and portfolio of investment options positions us well to create value from the long-term demand for our commodities.
Marius Kloppers
Chief Executive Officer
BHP BILLITON SUMMARY REVIEW 2009 - 7
Group Customer Performance Sector
BHP Billiton operates nine Customer Sector Groups, aligned with the commodities we extract and market.
Diamonds and Stainless Steel Petroleum Aluminium Base Metals Specialty Products Materials
Underlying EBIT Underlying EBIT Underlying EBIT Underlying EBIT Underlying EBIT Decreased Decreased Decreased Decreased Decreased
(25.5)% (86.9)% (83.8)% (23.3)% (167.0)%
US$ million US$ million US$ million US$ million US$ million
Revenue 7,211 Revenue 4,151 Revenue 7,105 Revenue 896 Revenue 2,355 Underlying EBIT 4,085 Underlying EBIT 192 Underlying EBIT 1,292 Underlying EBIT 145 Underlying EBIT (854) Capital expenditure 1,905 Capital expenditure 863 Capital expenditure 1,018 Capital expenditure 112 Capital expenditure 685 Net operating assets 9,056 Net operating assets 6,333 Net operating assets 11,817 Net operating assets 1,781 Net operating assets 3,285
8 - BHP BILLITON SUMMARY REVIEW 2009
• Solid annual production was achieved across the Group despite weak and volatile demand conditions and weather-related interruptions.
• Annual production records in three commodities were achieved across petroleum, copper cathode and iron ore.
• Annual production records were set at six of our assets: Western Australia Iron Ore, North West Shelf and Saraji (all in Australia), Alumar refinery (Brazil), Cerrejón Coal (Colombia) and Zamzama (Pakistan).
• First product was delivered from five Petroleum projects during the financial year, Neptune, Shenzi and Atlantis North
(US), North West Shelf Train 5 and Angel (Australia) and also at the Manganese GEMCO expansion project in Australia.
Iron Ore Manganese Metallurgical Coal Energy Coal
Underlying EBIT Underlying EBIT Underlying EBIT Underlying EBIT Increased Decreased Increased Increased
34.5% (17.9)% 402.8% 38.1%
US$ million US$ million US$ million US$ million
Revenue 10,048 Revenue 2,536 Revenue 8,087 Revenue 6,524 Underlying EBIT 6,229 Underlying EBIT 1,349 Underlying EBIT 4,711 Underlying EBIT 1,460 Capital expenditure 1,922 Capital expenditure 279 Capital expenditure 1,562 Capital expenditure 876 Net operating assets 7,234 Net operating assets 883 Net operating assets 3,680 Net operating assets 2,551
BHP BILLITON SUMMARY REVIEW 2009 - 9
Petroleum
J Michael Yeager
Production volumes up
6%
Petroleum set yet another production record, with production volumes up six per cent from FY2008 to 137.2 million barrels of oil-equivalent. Lower average realised oil prices per barrel saw Underlying EBIT decrease.
Production volumes in FY2009 set yet another record (137.2 million barrels of oil-equivalent), up six per cent on FY2008 volumes, representing a nine per cent compound annual growth rate for production since FY2007. A disciplined approach in production operations resulted in 92 per cent facility and well up-time, despite the impact of major hurricanes that swept through the Gulf of Mexico causing devastating damage. Lower average realised oil prices per barrel saw Underlying EBIT decrease by 25.5 per cent to US$4,085 million.
Petroleum’s project pipeline continued to deliver, bringing five new projects on-stream. BHP Billiton operated Neptune and Shenzi projects and non-operated Atlantis North (US) commenced production during the year. The fifth LNG Train
and the Angel project were also welcome additions to existing North West Shelf operations in Western Australia. Focus on long-term growth was maintained during recent turbulent economic conditions and US$548 million was invested to build our exploration inventory. Exploration rights were acquired in seven deepwater blocks in India and 28 leases in the Gulf of Mexico.
Aluminium
Jon Dudas
Expanding capacity by
2.6 mtpa
Key expansions at Alumar and Worsley will lift refinery capacity by 2.6 million tonnes per annum over the next two years. Lower prices and premiums, higher operating costs and the closure of potlines at Bayside saw Underlying EBIT decrease comparatively.
Underlying EBIT decreased by 86.9 per cent from the corresponding period to US$192 million, impacted by lower London Metal Exchange prices and premiums for aluminium, higher operating costs and the closure of two potlines at Bayside Aluminium.
We are developing capacity through expansion projects at Alumar (Brazil) and Worsley (Western Australia). The Alumar expansion project will raise capacity at the refinery by 1.5 million tonnes per annum to 3.5 million tonnes per annum (100 per cent capacity). First production was announced in July 2009, with full mechanical completion due in October 2009 and full nameplate capacity to be achieved by the second half of CY2009. At Worsley, the Efficiency and Growth Project will raise capacity at the refinery by 1.1 million tonnes per annum to 4.6 million tonnes per annum (100 per cent capacity) and is due for completion in the first half of CY2011.
On 31 July 2009, BHP Billiton Maatschappij Suriname (BMS) was sold to Suralco, an Alcoa subsidiary. As a result of our decision to exit Suriname, the Bakhuis Project was discontinued.
Base Metals
Effective cost management In a period of economic downturn and relative low prices, Base saw Base Metals deliver Metals delivered Underlying EBIT of US$1,292 million (a decrease an Underlying EBIT of of 83.8 per cent on last year), responding quickly and effectively US$1,292 million, despite to capture cost reductions and protect cash flow. lower average realised Record annual copper cathode production was achieved due to prices for all Base Metals the continued ramp-up of Spence and Escondida Sulphide Leach, commodities except gold. and zinc production was higher than all comparative periods due to better grade and an increased proportion of ore containing zinc at Antamina (Peru).
Diego Hernandez
Uranium production increased at Olympic Dam (compared with June 2008 and March 2009 quarters), reflecting record ore milled and improved recoveries. The Olympic Dam Expansion Project released Copper cathode its Draft Environmental Impact Statement, a major milestone in the production increased by development of the project.
16% Exploration activity around Escondida, close to existing infrastructure and facilities, continues to show good results. a new annual record
10 - BHP BILLITON SUMMARY REVIEW 2009
Diamonds and Specialty Products
Extensive greenfield potash Underlying EBIT of US$145 million was impacted by lower diamonds exploration is anticipated sales volumes and a reduction in average realised prices. This was to reap long-term benefits. offset by a stronger US dollar, higher value per carat of production A reduction in diamond and improved plant recoveries. demand and average realised While operating performance at the EKATI Diamond Mine in Canada prices in FY2009 resulted was strong, production continues to be influenced by variability in lower sales volumes and of ore sources due to the mix of open-cut and underground mining. a comparative decrease The Koala Underground mine, commissioned in December 2007, in Underlying EBIT. has been fully ramped-up.
Graham Kerr
We continued advancing the Jansen Project, a greenfield potash project near Saskatoon, Saskatchewan, which has the potential to produce 4–8 million tonnes per annum, and is currently in the
4–8 mtpa pre-feasibility stage. Extensive exploration increased costs. Drilling and a further 3D seismic program was completed in FY2009. mega mine the key focus Meanwhile, we ceased exploration and development activities of exploration for diamonds in Angola and titanium minerals in Mozambique.
Stainless Steel Materials
Stainless Steel Materials Underlying EBIT decreased by US$2,129 million, primarily due to maintained stable sales significantly lower average London Metal Exchange nickel prices volumes and operational costs (US$6.03/lb compared with US$12.93/lb). Sales volumes were in line while managing a multitude with the prior year and production volumes were slightly ahead; however, of challenges in FY2009; from changes in product mix had an adverse impact on Underlying EBIT. the significantly lower London A return to full production rates at Cerro Matoso (Colombia) largely Metal Exchange nickel prices offset lost production associated with the furnace rebuild at the to the indefinite suspension Kalgoorlie Nickel Smelter and maintenance at Kwinana Nickel at Ravensthorpe. Refinery (both in Australia).
Jimmy Wilson*
Operational costs were broadly unchanged, as increased mining costs and inflationary pressures in Australia were offset by a weakening Australian dollar. Underlying EBIT was positively impacted following London Metal Exchange the indefinite suspension of operations at Ravensthorpe. nickel prices fell more than Given the weak market conditions, significant business restructuring and capital reduction continued through the financial year to preserve cash. 50% The divestment of Yabulu was successfully completed on 31 July 2009.
* Gerard Bond assumed the role of Acting President Stainless Steel Materials from 1 September 2009.
Iron Ore
Underlying EBIT increased Underlying EBIT increased significantly, up 34.5 per cent to by 34.5 per cent to US$6,229 million, driven by higher average realised prices. US$6,229 million, driven A ninth consecutive production record was achieved at our iron ore by higher average realised operation in Western Australia. Production was 106.1 million wet prices and a ninth consecutive tonnes, an increase of two per cent on the previous financial year. production record at
Rapid Growth Project 5 was announced in November 2008 and
Western Australia Iron Ore. is expected to increase installed capacity by 50 million tonnes per annum to 205 million tonnes per annum, with a total projected Ian Ashby expenditure of US$4.8 billion.
Samarco operations in Brazil were impacted by the temporary suspension of two out of three pellet plants in response to decreased global demand. While the second and third pellet plants have since 9th been restarted, their continued operation will be subject to ongoing assessment to align with demand. consecutive production
In June, Iron Ore entered into a non-binding agreement to establish record for Western Australia a 50-50 production joint venture combining BHP Billiton and Rio Tinto’s Iron Ore Western Australian iron ore assets.
BHP BILLITON SUMMARY REVIEW 2009 - 11
Manganese
Volatile market conditions Underlying EBIT for the first half of the financial year was saw record demand and sales US$1,245 million, an increase of US$814 million, or 189 per cent, prices for alloy and ore in compared with the first half of FY2008. The increase was mainly the first half offset by a sharp due to record demand and sales prices for alloy and ore. Full year contraction in demand in Underlying EBIT of US$1,349 million, decreased by 17.9 per cent the second half. (US$295 million) compared with the year ending 30 June 2008.
A sharp contraction in demand exacerbated by dramatic de-stocking activities saw ore and alloy prices fall by 63 per cent and 48 per cent respectively in the second half of FY2009. Production and sales Peter Beaven decreased in line with weaker demand. Manganese ore sales were 37.9 per cent lower and alloy sales 37.1 per cent lower than the Underlying EBIT comparative period.
The Groote Eylandt concentrator expansion, which will deliver for the first half an additional one million tonnes per annum of concentrate of FY2009 up (100 per cent capacity), was completed on time and under 189% budget at US$93 million.
Metallurgical Coal
Record prices delivered Record prices for hard and weak coking and thermal coal saw Underlying EBIT in Underlying EBIT up 402.8 per cent to US$4,711 million. Metallurgical Coal Overall, production was slightly above year-end 2008, when severe of US$4,711 million, flooding impacted Queensland Coal, the recovery cost of which an increase of had an unfavourable impact of US$122 million in the period. US$3,774 million. An annual production record was achieved at Saraji in Queensland, with production exceeding 3.5 million tonnes.
In response to weaker market conditions, second half production was Hubrecht van Dalsen reduced, allowing depleted inventories to be rebuilt and necessary maintenance to be brought forward.
Capital expenditure for the year was US$1,562 million, including the purchase of Saraji East in the first half.
Underlying EBIT up
Profits on the sales of Elouera mine (Australia) and Queensland 402.8% coal mining leases were realised in the corresponding period.
Work ceased on the Maruwai Haju trial mine and Lampunut after record prices feasibility study in Indonesia.
Energy Coal
Higher than average export Underlying EBIT was a record for Energy Coal for the second prices, favourable exchange consecutive year, up 38.1 per cent to US$1,460 million, driven by rate movements and earnings higher than average export prices during the first half, favourable on trading activities delivered exchange rate movements and earnings on trading activities. record Underlying EBIT in Record annual production was achieved for the fourth consecutive Energy Coal for the second year at Cerrejón Coal in Colombia and record sales were achieved year running. for FY2009 at Hunter Valley Energy Coal.
Gains were partially offset by lower production at BECSA (South Africa) and higher costs.
Dave Murray*
On 24 July 2009, approval was announced for the Mt Arthur Coal (MAC) mine expansion to increase production of saleable thermal coal from 11.5 million tonnes per annum to approximately 15 million Second consecutive year of tonnes per annum. The project, known as the MAC 20 Project, record Underlying EBIT, up is expected to commence operation in the first half of CY2011 38.1% at an estimated capital investment of US$260 million.
* Jimmy Wilson assumed the role of President of Energy Coal effective from 1 September 2009.
12 - BHP BILLITON SUMMARY REVIEW 2009
Simplicity, Accountability, Effectiveness.
Our Charter makes it clear that as we strive for excellence we must remain forthright in the things we value: safety and the environment, integrity, high performance, win-win relationships, the courage to lead change and respect for each other. In particular, we must remain committed to ensuring the safety of our people and respecting our environment and the communities where we work.
Today.this remains unchanged.
BHP BILLITON SUMMARY REVIEW 2009 - 13
Operating suite of assets a world-class
We own and operate a world-class suite of large, low-cost, long-life, diversified assets. We will continue to focus on tier one assets with products that are primary beneficiaries of global demand.
Olympic Dam, Australia
Multi-mineral orebody producing copper, gold, silver and uranium.
14 - BHP BILLITON SUMMARY REVIEW 2009
Middelburg, South Africa
Energy Coal mine.
Mozal, Mozambique
An aluminium smelter and port terminal facilities.
BHP BILLITON SUMMARY REVIEW 2009 - 15
Our reflects strong financial balance strength sheet and discipline
Our goal is to invest in opportunities that are aligned with our strategic drivers and that achieve returns in excess of the cost of capital over the long term.
Alex Vanselow
Group Executive and Chief Financial Officer
FY2009 proved to be a year that tested and exposed the strategic flaws of many companies in our sector. Against this backdrop, BHP Billiton emerged uniquely positioned with strong operating results and a very strong balance sheet.
Despite the challenging market environment, our credit-rating strength has enabled us to raise significant funds in the capital markets during the year, with the US and European capital markets accessed for US$3.25 billion and 2.25 billion respectively. Through the economic cycle, we are focused on delivering long-term shareholder value by:
Continuing to grow our production base
During the year, we achieved first production in six projects and sanctioned a further four. The investments we made in Iron Ore
16 - BHP BILLITON SUMMARY REVIEW 2009
and Petroleum contributed to the production records we achieved in these two Customer Sector Groups. Our capital and exploration expenditure for FY2009 amounted to US$10.7 billion.
Maintaining balance sheet strength
Our financial strength has differentiated the Group during this severe economic downturn and leaves us well positioned to make opportunistic acquisitions. The iron ore production joint venture we announced with Rio Tinto is an example of our ability to add world-class capacity.
Returning excess capital to shareholders
We have maintained our progressive dividend policy, paying US$4.6 billion to shareholders in FY2009. We declared a full year dividend of 82 US cents per share,
representing a 17.1 per cent increase on the FY2008 full year dividend. The maintenance of our progressive dividend policy distinguishes us from other companies in our sector that have cut or suspended dividends. The Group demonstrated a consistency in delivering strong cash flows and performance despite market pressures. With our low financial leverage and a strong balance sheet, we continued to invest in future growth and deliver above-sector returns to shareholders. This is compelling proof that disciplined execution of a sound strategy does create sustainable shareholder value.
MARKETING
HUBS
SINGAPORE THE HAGUE
ANTWERP
Our business is global, and our marketing professionals are based in strategic commercial centres around the world to serve a wide and dispersed customer base. They work across different commodities, interacting with both customers and suppliers on a daily basis.
Alberto Calderon
Group Executive and Chief Commercial Officer
At BHP Billiton, we take the time to understand how our customers do business. By getting to know our customers’ markets and products, we are in a position to better serve their needs.
To enable us to respond effectively to our customers’ needs, we have designed our organisation around Customer Sector Groups. Marketing activities are centralised in Singapore, The Hague in the Netherlands and Antwerp in Belgium.
• The focus of the Singapore office is on the Asian energy market, base metals, stainless steel materials and carbon steelmaking raw materials.
• The emphasis in The Hague is on aluminium, petroleum and the European energy coal market.
• Our Antwerp office serves our diamond customers around the world.
These three centralised marketing teams incorporate all the functions required to manage product marketing and distribution – from finished goods to final customer delivery.
Our product offering is enhanced by BHP Billiton’s freight capability and by Marketing’s capabilities in trading, commercial structuring, distribution and logistics.
In addition to these central marketing teams, many specialised marketers are located in regional offices around the globe. They are close to the market and understand the environment in which our customers operate.
BHP BILLITON SUMMARY REVIEW 2009 - 17
are World-class at the core operations of our strategy
It is our portfolio of quality assets that, over the long term, generate consistent cash flow throughout the commodity cycle.
This production joint venture will enable us to optimise our strong resource and infrastructure position in Western Australia, with the aim of providing a significant platform for future growth. Importantly, the joint venture will unlock the scale benefits of this resource basin, creating the world’s leading iron ore operations.
Marcus Randolph By combining these assets and associated infrastructure, we will Group Executive and share in the capture of synergies with an estimated value in excess
Chief Executive Ferrous and Coal
of US$10 billion.
Strategic geographic positioning of operations adds to the At the core of our business strategy is our world-class world-class nature of our assets. operations. These operations have large and long-life resource East Asia produces more than half of the world’s steel and basins that are low-cost to operate, are expandable and produce it is the only area that is continuing to expand production. products that are sold globally. BHP Billiton has continuously BHP Billiton, through its iron ore, manganese and metallurgical evolved and upgraded its portfolio with the aim that its coal businesses, provides all the major raw material inputs into operations remain world-
class and we replace depleting the steelmaking process. In all three of these businesses, our key reserves through either discovery or merger and acquisition. production assets are located in Australia. The proximity of our Australian production base to our customers’ steel mills gives The proposed production joint venture between BHP Billiton’s BHP Billiton a major transportation advantage with resulting lower and Rio Tinto’s Western Australian iron ore assets illustrates delivered cost. When combined with a marketing model that seeks the dynamic nature of our operations, and the Group’s ability to price our products based on the delivered cost to China, we to leverage its high-quality assets to strengthen its position. have a sustainable competitive advantage as a low-cost supplier.
18 - BHP BILLITON SUMMARY REVIEW 2009
MORE 100 THAN OPERATIONS IN OVER
COUNTRIES 25
We aim to maintain and maximise the value of our world-class assets to ensure we remain a global leader in the natural resources industry.
Reflecting our preference for developing quality assets for the long term, we have identified the advantage of managing a resource basin rather than isolated deposits. This is highly attractive as it allows multiple expansion options over time. Our potash operation in Canada reflects this approach. Our permit Andrew Mackenzie covers over 7,300 square kilometres of prospective exploration
Group Executive and
Chief Executive Non-Ferrous ground within Saskatchewan, where over 50 per cent of the world’s potash reserves occur. We continue to investigate the basin’s potential with extensive exploration work currently being We continuously review our operations to seek new ways undertaken. This basin could be the next long-life, low-cost, to capitalise and enhance our position through the strength expandable basin operation for the Group, enhancing and ongoing development of our world-class assets. BHP Billiton’s position for future growth.
Our Olympic Dam operation in Australia is one such asset that has Escondida in Chile also continues to reinforce the quality of our further long-term growth potential after many years of operation assets. Although fiscal year production has been impacted by through its major expansion project. The Draft Environmental the mineral grade, Escondida’s extensive mining resources offer Impact Statement has been released for public review and is now several possibilities to increase processing capacity over time. the subject of extensive stakeholder consultation. The project While we have capitalised on the long-term potential of schedule will depend on regulatory approvals and performance some business areas, others have been negatively impacted against our stringent investment criteria, with the final investment by reduced demand. Nickel has been affected, resulting in decision resting with our Board. the Group suspending operations at Ravensthorpe in Australia.
BHP BILLITON SUMMARY REVIEW 2009 - 19
Building the strength our business of our people on
Our people are the foundation of our business and the key ingredient for our success. Our people strategy is founded on the recruitment, development and retention of the talented men and women who run our businesses around the world.
Employees by Region FY2009
Australia 39% South America 24% Southern Africa 23% North America 7% Europe 1% Rest of the world 6%
Contractors Engaged at our Owned and Operated Assets by Region FY2009
Australia and Asia 42% South America 26% Europe, Africa and Middle East 25% North America 7%
Safety
It is paramount that each and every one of our people return to their families at the end of every day safe and well. We did not achieve that in 2009. Seven of our colleagues lost their lives while working as either employees or contractors for BHP Billiton.
Karen Wood Five of those were at our Western Australian iron ore sites. Group Executive and The impact on the seven families directly affected cannot
Chief People Officer
be overestimated. Nor can the impact on the extended families, friends and colleagues of those who lost their lives.
BHP Billiton’s business is the discovery, development and That experience overshadowed some very positive safety conversion, and the sale of natural resources. We are clear that performance in other areas of our business. This includes our to prosper we must work through people who share our vision Base Metals business, which reduced its Total Recordable Injury and our values. We must also earn the trust of our employees. Frequency by over 35 per cent compared with the prior year, and our Petroleum business, which for CY2008 was the only In all that we do we are guided by clear, corporate values.
International Association of Oil and Gas Producers member We have an overriding commitment to health and safety, company to report 12 months without a Lost Time Injury. the environment and sustainable development; integrity; stretching our capabilities to perform at the highest level; At the end of FY2009 the BHP Billiton Total Recordable Injury building relationships focused on value creation; having Frequency reduced to 5.6 per million hours, which is almost half way towards our target of a 50 per cent reduction the courage to face adversity; and respecting each other by (on the 2007 baseline figure) by the end FY2012. embracing diversity, enriched by openness, sharing and trust.
The explicit safety expectations and accountabilities for our Those values are an integral part of The BHP Billiton Way which site leadership teams have been revised during the year, as have explains what we do and how we do it. our Health, Safety, Environment and Community audit processes.
20 - BHP BILLITON SUMMARY REVIEW 2009
40,990
EMPLOYEES
58,000
CONTRACTORS
At every level we are committed to delivering sustained improvement in our safety performance. We will do so through leadership and behaviours, the appropriate use of equipment and adherence to procedures.
These steps will help identify improvement opportunities and Diversity provide focus on the critical safety issues for the business. Diversification by commodity, geography and market is central to BHP Billiton’s strategy. We are a global business and our success Developing our leaders depends on fostering a culture where globally diverse and often At BHP Billiton we believe that our leaders have a set of remotely located people behave in a manner that reflects our responsibilities to the Group, its shareholders, colleagues and values and drives superior performance. Diversity of gender, skill, the communities in which we operate. Those responsibilities thought, experience, ethnicity, style and language are all important include to work in a way that is consistent with our values, elements of our people strategy and are key drivers for our success. lead our people and execute our business. Guidance comes In May 2009, we announced changes to our parental leave policy from The BHP Billiton Way and requires our leaders to visibly as a means of encouraging a more effective balance between family hold themselves and others accountable for living our values; and work responsibilities following the birth or adoption of a child. to put safety first; to inspire by humility and make people We have extended the minimum paid parental leave period to a priority; and to be functionally excellent and work with 18 weeks for the primary caregiver in all of the countries in which discipline to deliver what we agree. Our leaders are recognised we operate. We see this as a positive step in improving equity, and rewarded on how they develop people. and in enhancing the Group’s profile as an employer of choice. Our people strategy helps us recruit, develop and retain the We aim to attract and retain the best people, while managing people needed for success. It focuses on rewarding people our workforce in a way that is consistent with demand for our for what they do and how they do it; ensuring we have strong products. This is a balance that will mean we need to reduce the internal candidates for roles; allowing for deployment decisions number of employees and contractors from time to time. This is based on the skill and experience needed for a role, the behaviours always an unfortunate outcome and one we have had to invoke of the individual and their potential; ensuring performance is during this most recent economic downturn. Some parts of our measured on fact-based outcomes; and aligning our leadership business were unaffected and we have been able to implement development to our Charter values and Leadership Model. job growth where new projects have come online.
BHP BILLITON SUMMARY REVIEW 2009 - 21
Community Investment Expenditure by Geographic Region FY2009
South America 47%
We are part of Australia 34%
Africa 14%
the community North America 3% Asia 2% Europe (incl UK) <1%
We embrace the responsibility that comes with operating globally and remain Community Investment committed to respecting our environment Expenditure by
Program Category FY2009*
and the communities in which we operate. Community Development 51%
Education 22% Health 8% Other 7% Arts/Culture 6% Sport/Recreation 3% Environment 3%
Both charts exclude the US$60 million contributed to BHP Billiton Sustainable Communities.
* Excludes US$16 million contributed to the Antamina Mining Fund.
Climate change
The global community has the potential to reduce the impact of climate change and clearly the greatest benefits will come from acting early to meet this challenge. Alliances to address J Michael Yeager this challenge will need to cross national and cultural boundaries. Group Executive and We believe the key principles of an effective global
Chief Executive Petroleum response include:
• a global regime that prices carbon to allow enough certainty BHP Billiton’s operations touch every corner of the globe. We are for investment in abatement opportunities to occur • strong measures to help avoid deforestation and fund part of the community at the local level at which we operate and reforestation, and at a global level as part of the international community. This instils • policy solutions that promote energy efficiency. upon us a responsibility to consider and respond to the needs of many different stakeholders. We embrace this responsibility; and Business leadership and ingenuity are important to achieving along with host governments, business partners and
employees, lower carbon growth. As a major natural resources company, we work towards making a contribution to the long-term we are committed to working with governments and other sustainability of the communities in which we live and operate. stakeholders in the design of effective climate change policies Our Charter clearly states that we care as much about how to achieve stabilisation of carbon dioxide concentrations results are obtained as we do about delivering good results. in the atmosphere, so that we can avoid the worst impacts In particular, we remain committed to ensuring the safety of global warming. of our people and respecting our environment and the We have set efficiency targets around our greenhouse gas communities in which we work. emissions and energy use to assist in improving our performance.
22 - BHP BILLITON SUMMARY REVIEW 2009
US$
197.8M
COMMUNITY-BASED INVESTED IN PROJECTS
BHP Billiton is an active supporter of the communities in which we operate. In Mozambique, the Mozal Community Development Trust supports initiatives focused on raising the education and skill levels of the Mozal community.
Community programs We aim to deliver community investment programs in partnership In line with our objective of improving the quality of life with communities, non-government organisations and government in our host communities, we continue to invest one per cent agencies wherever possible. Our projects must be implemented in of our pre-tax profits (based on the average of the previous accordance with the ethical requirements in our Code of Business three years’ pre-tax profit publicly reported in each of those Conduct – Working with integrity. years) in community programs. One of the most significant ways we support the efforts of our During FY2009, our voluntary investment totalled US$197.8 million, employees engaged in community activities is through our global comprising cash, in-kind support, administrative costs and Matched Giving Program. This program aims to strengthen local a US$60 million contribution to BHP Billiton Sustainable communities by supporting and encouraging employees who Communities (a new UK-based charitable company registered volunteer, fundraise or donate to not-for-profit organisations. with the UK Charities Commission) established to help manage During FY2009, the Group matched contributions totalling our one per cent community investment target. Despite the global US$6.1 million, which was distributed to over 1,000 not-for-profit financial crisis, our direct expenditure on community programs organisations. This is an increase from US$4.8 million in FY2008 during the year was similar to our expenditure in FY2008. and included matching for some 125,000 hours of volunteering We take care to support community investment projects by employees in their own personal time. Employees were that contribute to long-term sustainable development and not particularly generous in relation to Australian bushfire victims, create dependency. To this end, we require that local communities contributing over US$340,000 to assist in relief efforts, have the opportunity to participate in the development of our which was matched by the Group. community investment strategies and in the associated monitoring of program effectiveness.
BHP BILLITON SUMMARY REVIEW 2009 — 23
varied A unique portfolio and
Our breadth and diversity provides us with the flexibility to manage our growth in line with global demand, and the agility to respond to market conditions.
Western Australia Iron Ore
The decision to create a new iron ore production joint venture with Rio Tinto offers major opportunities to capture unique production and development synergies expected to be in excess of US$10 billion.
24 — BHP BILLITON SUMMARY REVIEW 2009
GEMCO
Upgrades to the existing processing plant at our GEMCO manganese operation in Australia’s north has increased capacity by one million tonnes.
US$
14B
PROJECT IN EXECUTION PIPELINE
Shenzi
First oil and natural gas production commenced from the Shenzi Petroleum development in the deepwater Gulf of Mexico. The tension leg platform has a nominal capacity of 100,000 barrels of oil per day and 50 million cubic feet of natural gas per day.
BHP BILLITON SUMMARY REVIEW 2009 — 25
Board of Directors
Don Argus Marius Kloppers Paul Anderson Alan Boeckmann John Buchanan
Carlos Cordeiro David Crawford Gail de Planque David Jenkins David Morgan
Wayne Murdy Jacques Nasser Keith Rumble John Schubert Jane McAloon
Group Company Secretary
26 — BHP BILLITON SUMMARY REVIEW 2009
Don Argus AO, SF FIN, FCPA, 71 John Buchanan BSc, MSc (Hons 1), PhD, 66
Chairman and independent non-executive Director Independent non-executive Director
Chairman of the Nomination Committee Chairman of the Remuneration Committee Member of the Nomination Committee Director of BHP Limited since November 1996 and Chairman since
April 1999. Chairman of BHP Billiton Limited and BHP Billiton Plc Director of BHP Billiton Limited and BHP Billiton Plc since since June 2001. Mr Argus was last re-elected in 2008 and is retiring February 2003. Dr Buchanan has been designated as and standing for re-election in 2009. the Senior Independent Director of BHP Billiton Plc since his appointment. He was last re-elected in 2008. Don Argus has considerable experience in international business and a strong management background. He has more than 40 years’ Educated at Auckland, Oxford and Harvard, John Buchanan experience in the banking industry and is a former Managing Director has had a wide international business career gained in large and and CEO of the National Australia Bank Limited. complex international businesses. He has substantial experience in the petroleum industry and knowledge of the international investor Marius Kloppers BE (Chem), MBA, PhD (Materials Science), 47 community. He has held various leadership roles in strategic, financial, Chief Executive Officer and executive Director operational and marketing positions, including executive experience Director of BHP Billiton Limited and BHP Billiton Plc since in different countries. He is a former executive Director and Group January 2006. Mr Kloppers was appointed Chief Executive Officer Chief Financial Officer of BP, serving on the BP Board for six years. on 1 October 2007. He was appointed Group President Non-Ferrous Carlos Cordeiro AB, MBA, 53 Materials and executive Director in January 2006 and was previously Independent non-executive Director Chief Commercial Officer. Mr Kloppers was elected in 2006 and Member of the Remuneration Committee will stand for re-election in 2009. Director of BHP Billiton Limited and BHP Billiton Plc since Marius Kloppers has extensive knowledge of the mining industry February 2005. Mr Cordeiro was last re-elected in 2007 and of BHP Billiton’s operations. Active in the mining and resources and is standing for re-election in 2009. industry since 1993, he was appointed Chief Commercial Officer in December 2003. He was previously Chief Marketing Officer, Group Carlos Cordeiro brings to the Board more than 25 years’ experience Executive of Billiton Plc, Chief Executive of Samancor Manganese in providing strategic and financial advice to corporations, financial and held various positions at Billiton Aluminium, including Chief institutions and governments around the world. He was previously Operating Officer and General Manager of Hillside Aluminium. Partner and Managing Director of Goldman Sachs Group Inc.
David Crawford AO, BComm, LLB, FCA, FCPA, FAICD, 65 Paul Anderson BS (Mech Eng), MBA, 64
Independent non-executive Director Independent non-executive Director
Chairman of the Risk and Audit Committee Member of the Sustainability Committee
Director of BHP Limited since May 1994. Director of BHP Billiton Limited Appointed a non-executive Director of BHP Billiton Limited and and BHP Billiton Plc since June 2001. Mr Crawford was last re-elected BHP Billiton Plc on 26 April 2006 with effect from 6 June 2006. in 2008 and is retiring and standing for re-election in 2009.
He was the Chief Executive Officer and Managing Director of BHP Limited from December 1998 until June 2001 and of David Crawford has extensive experience in risk management BHP Billiton Limited and BHP Billiton Plc from June 2001 until and business reorganisation. He has acted as a consultant, scheme July 2002. He was a non-executive Director of BHP Billiton Limited manager, receiver and manager and liquidator to very large and and BHP Billiton Plc from July to November 2002. Mr Anderson complex groups of companies. He was previously Australian National was last re-elected in 2008. Chairman of KPMG, Chartered Accountants. The Board has nominated Mr Crawford as the financial expert of the Risk and Audit Committee Paul Anderson has an extensive background in natural resources for the purposes of the US Securities and Exchange Commission Rules and energy and, as one of the architects of the merger that created and is satisfied that he has recent and relevant financial experience BHP Billiton, has a deep understanding of the strategy behind for the purposes of the UK Listing Authority’s Combined Code. the Group’s success. He retired as Chairman of Spectra Energy Corporation in May 2009 and retired as Chairman of Duke Energy Gail de Planque AB (Mathematics), MS (Physics), PhD (Env Health Sciences), 64 Corporation in January 2007 where he had more than 20 years’
Independent non-executive Director experience at Duke Energy and its predecessors.
Member of the Sustainability Committee BE (Electrical Eng), 61 Member of the Remuneration Committee
Alan Boeckmann Director of BHP Billiton Limited and BHP Billiton Plc since October
Independent non-executive Director
2005. The Hon. E Gail de Planque was last re-elected in 2007 and Member of the
Remuneration Committee is standing for re-election in 2009.
Appointed a Director of BHP Billiton Limited and BHP Billiton Plc
Gail de Planque is an expert in nuclear technology and has in September 2008. Mr Boeckmann was elected at the 2008 Annual over 40 years’ experience as a physicist, adviser and regulator General Meetings. in the field of nuclear energy. She also has significant experience Alan Boeckmann is currently Chairman and Chief Executive Officer as a non-executive Director of global energy companies and is of Fluor Corporation, US, having originally joined Fluor in 1974. a consultant on atomic energy matters. She is a former Commissioner He is a non-executive Director of Burlington Northern Santa Fe of the United States Nuclear Regulatory Commission, a former Corporation. Mr Boeckmann has extensive experience in running Director of the Environmental Measurements Laboratory of the large-scale international industrial companies and experience US Department of Energy, a Fellow and former President of the in the oil and gas industry. He has global experience in engineering, American Nuclear Society, a fellow of the American Association procurement, construction, maintenance and project management of the Advancement of Science and a Member of the across a range of industries, including resources and petroleum. US National Academy of Engineering.
BHP BILLITON SUMMARY REVIEW 2009 — 27
Board of Directors continued
David Jenkins BA, PhD (Geology), 70 Keith Rumble BSc, MSc (Geochemistry), 55
Independent non-executive Director Independent non-executive Director
Member of the Remuneration Committee Member of the Sustainability Committee Member of the Risk and Audit Committee
Appointed a Director of BHP Billiton Limited and BHP Billiton Plc Director of BHP Limited since March 2000. Director of in September 2008. Mr Rumble was elected at the 2008 Annual BHP Billiton Limited and BHP Billiton Plc since June 2001. Dr Jenkins General Meetings. was last re-elected in 2007. Dr Jenkins retires from the Board by Keith Rumble was until recently Chief Executive Officer of SUN rotation at the 2009 Annual General Meetings and has indicated Mining, a wholly-owned entity of the SUN Group, a principal investor that he does not intend to seek re-election. and private equity fund manager in Russia, India and other emerging David Jenkins is a recognised authority on oil and gas technology. and transforming markets.
He has over 30 years’ experience in He was previously Chief Geologist, Director Technology and the resources industry, specifically in titanium and platinum mining, Chief Technology Advisor to BP Plc. He was also a member of the and is a former Chief Executive Officer of Impala Platinum (Pty) Ltd Technology Advisory Committee of the Halliburton Company and the and former Chief Executive Officer of Rio Tinto Iron and Titanium Inc. Advisory Council of Consort Resources and Chairman of the Energy He began his career at Richards Bay Minerals in 1980, and held Advisory Panel of Science Applications International Corporation. various management positions, before becoming Chief Executive Officer in 1996.
David Morgan AO, BEc, MSc, PhD, 62
Independent non-executive Director John Schubert BCh Eng, PhD (Chem Eng), FIEAust, FTSE, 66 Member of the Risk and Audit Committee Independent non-executive Director Chairman of the Sustainability Committee Director of BHP Billiton Limited and BHP Billiton Plc since January Member of the Nomination Committee 2008. Dr Morgan was elected in 2008.
Director of BHP Limited since June 2000 and a Director David Morgan was the Managing Director and Chief Executive Officer of BHP Billiton Limited and BHP Billiton Plc since June 2001. of Westpac Banking Corporation from March 1999 until January 2008.
Dr Schubert was last re-elected in 2008. He has extensive experience in the financial sector, having worked in the International Monetary Fund in Washington DC in the 1970s John Schubert has considerable experience in the international and the Australian Federal Treasury in the 1980s where he headed oil industry including at Chief Executive Officer level. He has all major areas before being appointed Senior Deputy Secretary. had executive mining and financial responsibilities and was Dr Morgan joined Westpac in 1990 where he had responsibility Chief Executive Officer of Pioneer International Limited for six years, for all major operating divisions including Westpac Financial Services, where he operated in the building materials industry in 16 countries. Retail Banking, Commercial Banking, Corporate and Institutional He has experience in mergers, acquisitions and divestments, Banking and International Banking. project analysis and management. He was previously Chairman and Managing Director of Esso Australia Limited and President Wayne Murdy BSc (Business Administration), CPA, 65 of the Business Council of Australia.
Independent non-executive Director
Member of the Risk and Audit Committee Jane McAloon BEc (Hons), LLB, GDipGov, FCIS, 45
Group Company Secretary
Director of BHP Billiton Limited and BHP Billiton Plc since 18 June 2009.
Mr Murdy will seek election at the 2009 Annual General Meetings. Jane McAloon was appointed Group Company Secretary in July 2007 and joined the BHP Billiton Group in September 2006 as Company Wayne Murdy served as the Chief Executive Officer of Newmont Secretary for BHP Billiton Limited.
Mining Corporation from January 2001 to June 2007 and Chairman of Newmont from January 2002 to December 2007. His background Prior to joining BHP Billiton, Jane McAloon held the position is in finance and accounting where he has gained comprehensive of Company Secretary and Group Manager External and Regulatory experience in the financial management of mining, oil and gas Services in the Australian Gas Light Company. She previously held companies during his career with Getty Oil, Apache Corporation and various State and Commonwealth government positions, including Newmont. Mr Murdy is also a former Chairman of the International Director General of the NSW Ministry of Energy and Utilities and Council on Mining and Metals, a former Director of the National Deputy Director General for the NSW Cabinet Office, as well as Mining Association and a former member of the Manufacturing working in private legal practice. She is a Fellow of the Institute Council of the US Department of Commerce. of Chartered Secretaries.
Jacques Nasser AO, BBus, Hon DT, 61
Independent non-executive Director
Member of the Risk and Audit Committee
Appointed a non-executive Director of BHP Billiton Limited and BHP Billiton Plc on 26 April 2006 with effect from 6 June 2006. Mr Nasser was last re-elected in 2008.
Following a 33-year career with Ford in various leadership positions in Europe, Australia, Asia, South America and the US, Jacques Nasser served as a member of the Board of Directors and as President and Chief Executive Officer of Ford Motor Company from 1998 to 2001. He has more than 30 years’ experience in large-scale global businesses.
28 — BHP BILLITON SUMMARY REVIEW 2009
Group Management Committee
The Group Management Committee is the senior management team. Its role is to provide advice to the CEO on matters that are strategic and long term in nature or have the potential to
Marius Kloppers BE (Chem), Alberto Calderon PhD Econ, Andrew Mackenzie
significantly impact the MBA, PhD (Materials Science), 47 M Phil Econ, JD Law, BA Econ, 49 BSc (Geology), PhD (Chemistry), 52 Group’s performance Chief Executive Officer Group Executive and Group Executive and and reputation. and executive Director Chief Commercial Officer Chief Executive Non-Ferrous
Chairman of the Member of the Member of the
Group Management Committee Group Management Committee Group Management Committee Marius Kloppers has been active Alberto Calderon joined the Andrew Mackenzie joined in the mining and resources Group as President Diamonds BHP Billiton in November industry since 1993 and was and Specialty Products in 2008 in his current position appointed Chief Executive February 2006 and was as Chief Executive Non-Ferrous. Officer in October 2007. He was appointed to his current His prior career included time previously Chief Commercial position as Chief Commercial with Rio Tinto, where he was Officer, Chief Marketing Officer, Officer in July 2007. Prior to this, Chief Executive of Diamonds Group Executive of Billiton Plc, he was Chief Executive Officer and Minerals, and with BP, where Chief Executive of Samancor of Cerrejón Coal Company from he held a number of senior roles Manganese and held various July 2002. His previous positions including Group Vice President positions at Billiton Aluminium, include President of Ecopetrol, for Technology and Engineering, among them Chief Operating President of the Power Company and Group Vice President for Officer and General Manager of Bogotá and various senior Chemicals. He is a non-executive of Hillside Aluminium. roles in investment banking and Director of Centrica plc. in the Colombian Government.
Marcus Randolph BSc, MBA, 53 Alex Vanselow BComm, Karen Wood BEd, LLB (Hons), 53 J Michael Yeager BSc, MSc, 56
Group Executive and Wharton AMP, 47 Group Executive and Group Executive and Chief Executive Ferrous and Coal Group Executive and Chief People Officer Chief Executive Petroleum
Member of the Chief Financial Officer Member of the Group Management Member of the
Group Management Committee Member of the Group Management Committee and Chairman of the Group Management Committee Committee and Chairman of the Global Ethics Panel Marcus Randolph was previously Mike Yeager joined the Group Investment Committee and Financial Chief Organisation Development Karen Wood’s previous positions in April 2006 as Chief Executive Risk Management Committee Officer, President Diamonds with BHP Billiton were Chief Petroleum (formerly titled Alex Vanselow joined the Group and Specialty Products, Chief Governance Officer, Group Group President Energy). He in 1989 and was appointed Development Officer Minerals Company Secretary and Special was previously Vice President, Chief Financial Officer in and Chief Strategic Officer Adviser and Head of Group ExxonMobil Development March 2006. He was previously Minerals for BHP Billiton. Secretariat. She is a member of Company with responsibility President Aluminium, Chief His prior career includes Chief the Takeovers Panel (Australia), for major joint venture projects.
Financial Officer of Aluminium,
Executive Officer, First Dynasty a Fellow of the Institute of Other previous roles include Vice President Finance and Mines, Mining and Minerals Chartered Secretaries and a Senior Vice President, Imperial Chief Financial Officer of Executive, Rio Tinto Plc, Director member of the Law Council of Oil Ltd and Chief Executive Orinoco Iron CA, and Manager of Acquisitions and Strategy, Australia and the Law Institute Officer, Imperial Oil Resources, Accounting and Control Kennecott Inc, General Manager of Victoria. Before joining Vice President Africa, ExxonMobil BHP Iron Ore. His prior career Corporacion Minera Nor Peru, BHP Billiton, she was General Production Company, Vice was with Arthur Andersen.
Asarco Inc, and various mine Counsel and Company Secretary President Europe, ExxonMobil operating positions in the for Bonlac Foods Limited. She Production Company and US with Asarco Inc. He has has been in her current position President, Mobil Exploration been in his current position as Chief People Officer since and Production in the US. as Chief Executive Ferrous July 2007. and Coal since July 2007.
BHP BILLITON SUMMARY REVIEW 2009 — 29
Corporate Governance Summary
Governance at BHP Billiton
We are committed to the highest level of governance and strive to foster a culture that values and rewards exemplary ethical standards, personal and corporate integrity and respect for others.
Our approach to governance is predicated on the belief that there is a link between high-quality governance and the creation of long-term shareholder value. It is our view that governance is not just a matter for the Board; a good governance culture must be fostered throughout the organisation.
Our governance assurance
The diagram below highlights key aspects of our governance assurance structures and processes.
BHP Billiton Governance Structure
BOARD
RISK & AUDIT SUSTAINABILITY NOMINATION REMUNERATION COMMITTEE COMMITTEE Delegation COMMITTEE COMMITTEE
External Auditor Accountability
CHIEF EXECUTIVE OFFICER
Group Audit Services
(internal audit) MANAGEMENT GOVERNANCE AND ASSURANCE
Health, Safety, Environment
Group Management Committee ASSURANCE & Community Auditors
Management Committees Policies
Peer Review Customer Sector Group Risk & Audit Standards Major Projects Financial Risk Management Procedures Investment Ore/Oil/Gas Global Ethics Disclosure Reserves Review
Key Board activities during the year Skills and experience of the Directors
A key challenge for the Board has been governing the Group, The Board considers that the executive and non-executive with management, through the current global recession and Directors together have the range of skills, knowledge and depressed commodity markets the likes of which have rarely been experience necessary to enable them to effectively govern the encountered. The Group has a long-held strategy of investing business. The non-executive Directors contribute international and developing long-life, low-cost, expandable, export-oriented, and operational experience; understanding of the sectors tier one assets while maintaining a solid ‘A’ credit rating and, in which we operate; knowledge of world capital markets while we are clearly affected by the downturn in commodity and an understanding of the health, safety, environmental demand, we have a very sound balance sheet and are well and community challenges that we face. The executive Director positioned to take advantage of the recovery as it occurs. brings additional perspectives to the Board’s work through Important decisions made by the Board during the year included a deep understanding of the Group’s business. the decision not to pursue the pre-conditional offers for Rio Tinto in the light of altered risk dimensions, and the subsequent decision Director Industry to sign a non-binding agreement with Rio Tinto to establish Background/Experience a Western Australia Iron Ore production joint venture. Resources, 4 Directors
Energy, 4 Directors
As announced in early August, Jacques Nasser will succeed Banking/Finance, 4 Directors Don Argus as Chairman when Mr Argus retires as Chairman and Engineering, 1 Director
Manufacturing, 1 Director
a non-executive Director in early 2010. The decision to appoint Mr Nasser was agreed by the Board following a comprehensive
18-month selection process. Risk management
We believe that the identification and management of risk
Board Committees is central to achieving the corporate objective of delivering The Board has established Committees to assist it in exercising its long-term value to shareholders. Each year, the Board reviews authority, including monitoring the performance of the business. and considers the risk profile for the whole business. This risk The permanent Committees of the Board are the Risk and profile covers both operational and strategic risks.
Audit Committee, the Sustainability Committee, the Nomination The Board has delegated the oversight of risk management to Committee and the Remuneration Committee. Only independent, the Risk and Audit Committee. In addition, the Board specifically non-executive Directors serve as members of these Committees. requires the CEO to implement a system of control for identifying Other Committees are formed from time to time to deal with and managing risk. The Directors, through the Risk and Audit specific matters. Committee, review the systems that have been established for this purpose and regularly review their effectiveness.
30 — BHP BILLITON SUMMARY REVIEW 2009
Remuneration Summary and Principles
The Remuneration Committee recognises that we operate • link a large component of pay to our performance in a global environment and that our performance depends and the creation of value for our shareholders on the quality of our people. Remuneration is used to reinforce • ensure remuneration arrangements are equitable and facilitate the Group’s strategic objectives and the Committee keeps the deployment of human resources around our businesses the remuneration policy under regular review to
ensure • limit severance payments on termination to pre-established it is appropriate for the needs of the Group. contractual arrangements that do not commit us to making
Key principles of our remuneration policy unjustified payments.
The key principles of our remuneration policy are to: The Committee is confident that these principles, which were • provide competitive rewards to attract, motivate and retain applied in the year under review and are expected to be applied highly-skilled executives willing to work around the world in FY2010 and beyond, continue to meet the Group’s objectives. • apply demanding key performance indicators (KPIs), including financial and non-financial measures of performance
Remuneration for non-executive Directors
Committee Committee Travel and Retirement
US dollars Fees Chair fees membership fees other benefits (1) benefits (2) Total
Paul Anderson 140,000 – 20,000 87,517 – 247,517 Don Argus 1,000,000 – – 85,796 53,636 1,139,432 Alan Boeckmann (3) 116,667 – 8,496 51,000 – 176,163 John Buchanan 170,000 35,000 – 51,000 – 256,000 Carlos Cordeiro 140,000 – 20,000 90,473 – 250,473 David Crawford 140,000 50,000 – 71,406 10,183 271,589 E Gail de Planque 140,000 – 40,000 88,891 – 268,891 David Jenkins 140,000 – 45,000 73,000 – 258,000 David Morgan 140,000 – 25,000 71,406 8,841 245,247 Wayne Murdy (3) 5,056 – 555 – – 5,611 Jacques Nasser 140,000 – 25,000 102,406 – 267,406 Keith Rumble (3) 116,667 – 8,496 96,000 – 221,163 John Schubert 140,000 35,000 – 70,000 9,381 254,381 Notes (1) Other benefits include professional fees and reimbursements of the cost of travel, accommodation and subsistence for the non-executive Director, and where applicable, their spouse.
(2) In respect of retirement benefits, BHP Billiton Limited makes superannuation contributions of nine per cent of fees paid in accordance with Australian superannuation legislation.
(3) Alan Boeckmann and Keith Rumble were appointed Directors of BHP Billiton Limited and BHP Billiton Plc with effect from 1 September 2008. Wayne Murdy was appointed a non-executive Director of BHP Billiton Limited and BHP Billiton Plc with effect from 18 June 2009.
Remuneration for Group Management Committee members
Base Annual Retirement Share-based
US dollars salary (1) cash award Benefits benefits payments Total
Marius Kloppers 2,002,455 1,732,726 40,598 800,982 5,822,828 10,399,589 Alberto Calderon 1,015,615 1,014,338 11,361 355,465 2,482,900 4,879,679 Andrew Mackenzie (2) 549,106 496,392 1,607,929 197,678 2,113,504 4,964,609 Marcus Randolph 1,141,543 927,277 47,377 388,124 3,304,227 5,808,548 Alex Vanselow 990,071 840,827 31,321 376,227 3,481,576 5,720,022 Karen Wood 772,255 718,307 – 265,656 2,648,751 4,404,969 J Michael Yeager 1,130,752 1,102,607 62,901 404,809 3,676,896 6,377,965 Notes (1) Base salaries are generally reviewed on 1 September each year. Amounts shown reflect salary increases paid over the 12-month period ended 30 June 2009. Base salary for Andrew Mackenzie reflects the period 15 November 2008 to 30 June 2009.
(2) Benefits for Andrew Mackenzie consist of a payment of £1,000,000 as compensation for the value foregone of his awards and options under plans operated by his previous employer. The amount was paid on commencement of employment.
BHP BILLITON SUMMARY REVIEW 2009 — 31
Shareholder Information
Annual General Meetings
BHP Billiton Plc – Thursday, 29 October 2009 at 11.00am The Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London, UK.
BHP Billiton Limited – Thursday, 26 November 2009 at 10.30am Brisbane Convention & Exhibition Centre, Cnr Merivale and Glenelg Streets, South Bank, Brisbane, Queensland, Australia.
Change of shareholder details and enquiries
Shareholders may contact the appropriate office of the BHP Billiton Share Registrar or Transfer Office on any matter relating to their shares or American Depositary Receipt holdings.
Dividend policy and payments
We have a progressive dividend policy that seeks to steadily increase or at least to maintain the dividend in US dollars at each half yearly payment provided that we generate sufficient profit and cash flow to do so.
We declare our dividends and other distributions in US dollars as it is our main functional currency. BHP Billiton Limited pays its dividends in Australian dollars, UK pounds sterling, New Zealand dollars or US dollars, depending on the country of residence of the shareholder. BHP Billiton Plc pays its dividends in UK pounds sterling to shareholders registered on its principal register in the UK and in South African rand to shareholders registered on its branch register in South Africa. If shareholders on the UK register wish to receive dividends in US dollars they must complete an appropriate election form and return it to the BHP Billiton Share Registrar no later than close of business on the Dividend Record Date.
BHP Billiton Limited shareholders may have their cash dividends paid directly into a nominated bank, building society or credit union, depending on the shareholder’s country of residence as shown below.
Country where shareholder Financial institution is resident
Australia Bank, building society, credit union UK Bank, building society New Zealand Bank US Bank
Shareholders from the abovementioned locations who do not provide their direct credit details and shareholders with registered addresses outside Australia, UK, New Zealand and US will receive dividend payments by way of a cheque in Australian dollars. BHP Billiton Plc shareholders may have their cash dividends paid directly into a bank or building society by completing a dividend mandate form which is available from the BHP Billiton Share Registrar in the UK or South Africa.
Stock exchange listings
BHP Billiton Limited has a primary listing on the Australian Securities Exchange in Australia. It has secondary listings on the Frankfurt Stock Exchange in Germany and the Swiss Stock Exchange in Switzerland and has notified its intention to delist from both these exchanges. These delistings are expected to be completed in 2010. BHP Billiton Plc has a primary listing on the London Stock Exchange in the UK and a secondary listing on the Johannesburg Stock Exchange in South Africa. In addition, BHP Billiton Limited and BHP Billiton Plc are listed on the New York Stock Exchange (NYSE) in the US. Trading on the NYSE is via American Depositary Shares.
Key dates for shareholders
The following table sets out future dates in the next financial and calendar year of interest to our shareholders. If there are any changes to these dates, all relevant stock exchanges will be notified.
Date Events
25 September 2009 Final Dividend Payment Date
29 October 2009 BHP Billiton Plc Annual General Meeting in London
26 November 2009 BHP Billiton Limited Annual General Meeting in Brisbane
10 February 2010 Interim Results Announced
5 March 2010 Interim Dividend Record Date
23 March 2010 Interim Dividend Payment Date
25 August 2010 Annual Results Announced
Visit www.bhpbilliton.com for up-to-date Group and shareholder information, including:
Online shareholder services Receive your reports electronically. • check your holding The BHP Billiton Group produces an • vote online Annual Report, a Summary Review and a Sustainability Summary Report,
• update direct credit details
• create your own virtual portfolio which are posted on the internet. Shareholders are encouraged to visit
register to receive electronic www.bhpbilliton.com to inspect shareholder communications the electronic versions of these publications and provide feedback
Annual, financial, production to the Company. and sustainability reports
The single parent entity financial News and presentations statements of BHP Billiton Limited Company overview are available on the Company’s website (www.bhpbilliton.com) and are available to shareholders
Governance information on request free of charge.
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32 — BHP BILLITON SUMMARY REVIEW 2009
Corporate Directory
BHP Billiton Group Registered Offices Share Registrars and Transfer Offices United States
Computershare Investor Services
BHP Billiton Limited Australia
2 North LaSalle Street Australia BHP Billiton Limited Registrar Chicago, IL 60602 BHP Billiton Centre Computershare Investor Services Postal Address – PO Box 0289 180 Lonsdale Street Pty Limited Chicago, IL 60690-9569 Melbourne VIC 3000 Yarra Falls, 452 Johnston Street Abbotsford VIC 3067 Telephone +1 888 404 6340 Telephone 1300 554 757 (within Australia) (toll-free within US) +61 3 9609 3333 (outside Australia) Postal Address – GPO Box 2975 Melbourne VIC 3001 Facsimile +1 312 601 4331 Facsimile +61 3 9609 3015 Telephone 1300 656 780 (within Australia) ADR Depositary, Transfer Agent and BHP Billiton Plc +61 3 9415 4020 (outside Australia) Registrar Citibank Shareholder Services United Kingdom Facsimile +61 3 9473 2460 PO Box 43077 Neathouse Place Email enquiries: Providence, RI 02940-3077 London SW1V 1BH web.queries@computershare.com.au Telephone +1 781 575 4555 (outside of US) Telephone +44 20 7802 4000 +1 877 248 4237 (+1-877-CITIADR)
United Kingdom
Facsimile +44 20 7802 4111 (toll-free within US) BHP Billiton Plc Registrar Computershare Investor Services PLC Facsimile +1 201 324 3284
Group Company Secretary
The Pavilions, Bridgwater Road Email enquiries:
Jane McAloon citibank@shareholders-online.com Bristol BS99 6ZY
BHP Billiton Corporate Centres Website: www.citi.com/dr Telephone +44 844 472 7001
South Africa Facsimile +44 870 703 6076 Other Details Provided
6 Hollard Street Email enquiries: to Assist Shareholders Johannesburg 2001 web.queries@computershare.co.uk Germany Telephone +27 11 376 9111 South Africa Trustee Facsimile +27 11 838 4716 BHP Billiton Plc branch register Deutsche Boerse Clearing AG
Computershare Investor Services Dividend-paying bank Chile Deutsche Bank AG
(Pty) Limited Avenida Americo Vespucio Sur # 100
70 Marshall Street
9th Floor Switzerland
Johannesburg 2001
Las Condes Trustee Postal Address – PO Box 61051
Santiago SEGA Schweizerische Marshalltown 2107 Telephone +56 2 330 5000 Effekten-Giro AG
Telephone +27 11 373 0033
Facsimile +56 2 207 6509 Dividend-paying bank Facsimile +27 11 688 5238 UBS AG
United States Credit Suisse First Boston Holders of shares dematerialised 1360 Post Oak Boulevard, Suite 150 into STRATE should contact their CSDP
Houston, TX 77056-3020 or stockbroker. Telephone +1 713 961 8500 Facsimile +1 713 961 8400 New Zealand
Computershare Investor Services Limited BHP Billiton is a Dual Listed Company Marketing Offices Level 2/159 Hurstmere Road comprising BHP Billiton Limited and BHP Billiton Plc. The two entities continue Netherlands Takapuna North Shore City to exist as separate companies but operate Verheeskade 25 Postal Address – Private Bag 92119 as a combined Group known as BHP Billiton. 2521 BE The Hague Auckland 1020 The headquarters of BHP Billiton Limited Telephone +31 70 315 6666 Telephone +64 9 488 8777 and the global headquarters of the combined Facsimile +31 70 315 6767 Facsimile +64 9 488 8787 BHP Billiton Group are located in Melbourne, Australia. BHP Billiton Plc is located in London, Singapore UK. Both companies have identical Boards of #10-01 Capital Tower Directors and are run by a unified management 168 Robinson Road team. Throughout this publication the Boards Singapore 068912 are referred to collectively as the Board. Telephone +65 6349 3333 Shareholders in each company have equivalent Facsimile +65 6349 4000 economic and voting rights in the BHP Billiton Group as a whole.
Belgium
Throughout this Summary Review, the terms BHP Billiton Diamonds (Belgium) N.V.
BHP Billiton, the Company and the Group Hoveniersstraat 30 refer to the combined group, including both 2018 Antwerp BHP Billiton Limited and subsidiary companies Telephone +32 3 201 1090 and BHP Billiton Plc and subsidiary companies. Facsimile +32 3 213 0846
Cover story:
BHP Billiton takes pride in its diverse portfolio of assets. Our cover provides a snapshot of this diversity, highlighting assets from different Customer Sector Groups around the Group.
From top right rotating clockwise: Shenzi, Petroleum, Gulf of Mexico; Illawarra Coal, Metallurgical Coal, Australia; Spence, Base Metals, Chile; TEMCO, Manganese, Australia; Nickel West, Stainless Steel Materials, Australia.
Bhp billiton
Resourcing the future