BHP boss bullish on commodities demand

Chief executive Andrew Mackenzie calls for consultation on productivity and a modern industrial relations framework.

BHP Billiton Ltd chief executive officer Andrew Mackenzie is calling for a rethink of industrial relations policy and greater consultation on productivity to shore up the miner's operations against emerging suppliers.

Speaking at an Asia Society Australia lunch in his first speech since taking the helm, Mr Mackenzie also predicted a rise in demand for commodities on the back of a continuing increase in steel consumption over the next 10 years.

"We expect stronger demand for commodities used in energy and food production," Mr Mackenzie said.

He said a "modern industrial relations framework" was needed to help the miner compete against new suppliers. 

However, he was upbeat about the miner's local operating environment (see Robert Gottliebsen's Making BHP more like CBA), saying "I cannot think of a better time to run a resources company in Australia than now".

Asked whether he agreed with his predecessor Marius Kloppers that Australia needed a price on carbon, Mr Mackenzie said it would be ideal to have a global solution, but a number of local solutions would likely be necessary.

"Let's do something that doesn't harm Australia's competitiveness and ensures we really extract carbon from the atmosphere," he said.

Mr Mackenzie declined to comment on the High Court's dismissal of Fortescue Metals Ltd's challenge to the legality of the mineral resources rent tax.

Asked about the coalition's plan to cut the company tax rate from 30% to 28.5%, Mr Mackenzie said he thought BHP paid an appropriate amount of tax, and tax should be included in discussions about Australia's competitiveness.

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