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08:00 GMT, Sunday, 24 August 2008 09:00 UK

BHP eyes 10% yearly output growth

Man working in front of steel furnace

Mining giant BHP Billiton expects to grow production volumes over the next year by 10% despite a slight slowdown from its main driver for demand, China.

The EU is probing the Anglo-Australian firm's hostile bid for rival Rio Tinto.

BHP's boss Marius Kloppers told ABC Television in Australia the bid of 3.4 BHP shares for every Rio Tinto share was attractive.

On Friday the Australian competition watchdog said a merger could harm competition in the iron ore market.

Chinese demand

BHP's growth plans are at the core of its hostile approach for rival Rio Tinto

"We've definitely seen some slowdown in the Chinese economy," Mr Kloppers told ABC.

But he said China's economy was growing four or five times faster than the economies of the developed world.

It was also more reliant on basic industrial commodities such as iron ore, used for steel-making, and copper, he added.

He said BHP had previously been grown at about 7% per year in volume terms, and now wanted to grow at 10% over the next year.

Last week the BHP saw profits rise by 12.4% to $15.4bn (£8.2bn) in the year to the end of June.

Iron ore

Rio Tinto has repeatedly rejected the BHP Billiton bid, saying it greatly undervalues the company.

Mr Kloppers refused to say if the deal would go ahead without the merger of the two companies' iron ore businesses.

"It's very hard to speculate on things that we don't think are going to happen and that are not the base line that we are planning around," he said.

Rio Tinto is due to report its half-year results on Tuesday.




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Related to this story:
Record profits for BHP Billiton (18 Aug 08 |  Business )
Rio Tinto 'beats' iron ore record (16 Jul 08 |  Business )
EU probe into BHP targeting Rio (04 Jul 08 |  Business )
BHP almost doubles Chinese prices (04 Jul 08 |  Business )
Rio shares up on bid speculation (30 Jun 08 |  Business )
BHP formalises Rio takeover offer (05 Feb 08 |  Business )

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