Ann: Interim Results Presentation, page-39

Crimpy

There is now talk of the RBA further reducing its interest rate - perhaps down as low as 1%. If that happens and the bulk commodity prices do not totally collapse in the near term so that BHP can continue to maintain its dividend, then I think we are unlikely to see $30 in the next few months. In the short term BHP can also cut expenditure, which it is doing, by not proceeding with projects, and this will help meet its dividend payments and repayment of debt.

However over the next few years I think bulk commodity prices can go substantially lower, ie closer to the marginal cost of production of the big producers (RIO, BHP, Vale) and then BHP will not be able to maintain its dividend and the share price will go back a lot. A lot will also depend on what OPEC does about the price of oil (BHP is an oil producer), which no one cay predict accurately.

loki