BHP chief backs China growth plan
Chinese demand for Australia's natural resources may prove to be stronger than currently believed, according to BHP Billiton chief executive Andrew Mackenzie.
Speaking at the opening of the mining giant's new headquarters in Melbourne, Mr Mackenzie said early indications from the Chinese government's recent economic policy summit were positive for Australia and its mining industry.
"If you read the small print - and no doubt we will hear more about this in a couple of weeks - from the third plenum that has just happened in China, I think even more than we might think they are going to require us to supply the resources to continue to develop not just China but much of north Asia as well," he said.
"These resources are going to be fundamental to them securing the economic prosperity they crave for themselves and their citizens."
The speech was delivered to a high-powered audience of current and former political leaders, including former prime minister Paul Keating, former treasurer Peter Costello and current parliamentary secretary to the Treasury Steve Ciobo, who read a message from Prime Minister Tony Abbott.
Business leaders in attendance included ANZ chief executive Mike Smith, Qantas chairman Leigh Clifford, Seven West Media chief Kerry Stokes and trucking magnate Lindsay Fox.
"I would say to you the Australian resources industry is worth backing," Mr Mackenzie said.
He had not previously shared his view of the recent third plenary session in China, but his comments were similar to some of his comments earlier this year. In June, Mr Mackenzie revealed Premier Li Keqiang had personally assured him of China's ongoing need for the raw materials that BHP produces.
And in August, Mr Mackenzie told the Asia Society in Melbourne demand for commodities would remain strong, and Australia should worry more about its ability to remain competitive as a supplier.
The past five months have already seen stronger than expected prices for BHP's most lucrative product - the iron ore that is exported from the Pilbara region. Those strong prices have forced up profit expectations for BHP and fellow Pilbara exporters Rio Tinto, Fortescue Metals Group and Atlas Iron.
The strong iron ore prices have followed a stronger than expected year for Chinese steel in 2013, with UBS analyst Glyn Lawcock noting from China this week that the likes of Baosteel had seen their expectations for steel demand "equalled or surpassed".
Demand for steel in household appliances and vehicles has been particularly strong in China. The same trend has not been seen in coal markets, where commodity prices remain depressed, while copper and gold prices have also trended lower.