bhp on the prowl

BHP Billiton boss Marius Kloppers says the world's biggest miner is eyeing small takeover targets made vulnerable by the global share market turmoil.

Speaking at BHP's annual meeting for British shareholders in London on Thursday, Mr Kloppers said the crisis in funding for mining projects as commodity prices fall and banks tighten lending had created acquisition opportunities for BHP.

"There are some companies sitting on tier-one resources, but projects cannot really be financed at the moment by those smaller companies," he said.

BHP's willingness to consider small acquisitions comes as the miner pushes ahead with a $97 billion hostile bid for rival miner Rio Tinto, which was first made public in November last year at the height of the mining boom.

Ord Minnett analyst Peter Arden said BHP would most likely be interested in adding new assets in bulk commodities, such as iron ore and coal.

Possible candidates include Pilbara iron ore producers Brockman Resources and Atlas Iron because of their proximity to BHP's mines and railways. Coal producers in Queensland's Bowen Basin and New South Wales's Illawarra regions could also be on the radar.

Mr Kloppers said BHP planned to maintain production capacity at its mines and proceed with expansion projects that had already been approved.

Mr Kloppers said BHP was reviewing a further $US90 billion ($A138.89 billion) in projects on which a final commitment had been made.

Rio, Anglo American, Freeport McMoran, Alcoa and ArcelorMittal are rethinking expansion plans and laying off production capacity in the expectation the global economic slowdown will shrink demand.

And the South African competition body also gave the tick of approval to BHP's 3.4-for-one all-share offer for Rio provided that the merged entity sell its stake in the Coega aluminium smelter project in that country.

BHP will hold its annual meeting for Australian shareholders in Melbourne on November 27