bhp billiton on lookout for acquisitions

BHP Billiton on lookout for acquisitions

August 27, 2006 - 6:09PM

BHP Billiton Ltd, the world's biggest diversified miner, remains on the lookout for further growth through acquisitions or by organic opportunities, chief executive Chip Goodyear said.

Mr Goodyear said BHP Billiton has between $14 billion to $15 billion in the kitty and if there was a target that fitted in with its portfolio then the miner would be interested.

"If there's something that fits our portfolio, fits well with us, we will be the best owner, we will certainly be competitive," he told the ABC.

"Size is not our objective - business performance, long term values of performance, and if there is an acquisition that can make that work, fine.

"If not, we've got a lot of organic opportunities, about $14 to $15 billion in our portfolio to execute."

Referring to the strike at its Escondida copper mine in Chile where workers are demanding a 13 per cent raise and a $US30,000 ($A39,400) net bonus each, Mr Goodyear said the group's wages bill is going up along with other costs.

"We find that our tax payments are going up significantly, royalty payments are going up significantly, our wages bills certainly go up, both in the underlying wage as well as bonuses," he said.

"We have to share the performance of the organisation to those that are important to make our business work, that's critical for us.

"But we do have to make sure we do it in a way that is flexible, that benefits when prices are good, and when they're not good we have to have a sustainable business and so building in fixed cost structures is a real challenge for us."

Last week BHP Billiton demolished its own Australian earnings record with an annual net profit topping $US10 billion ($A13.14 billion), and it says prices show no signs of imminent retreat.

It also unveiled a much hoped-for $US3 billion share buyback to take total cash returned to shareholders last year to $US5 billion.