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What's new? To dig an enormous hole in South Australia, or not to dig? That is the question for the BHP Billiton chief executive Marius Kloppers.

What's new? To dig an enormous hole in South Australia, or not to dig? That is the question for the BHP Billiton chief executive Marius Kloppers.

The company is due to make its final investment decision on the $US30 billion Olympic Dam expansion project by the end of this year, but it may delay the call.

As world economic growth slows, demand for commodities follows, bringing prices down. That changes the investment-return calculations for all resources projects.

Such a confluence of factors moving in the wrong direction is giving BHP cause for pause over not only the Olympic Dam expansion but possibly some of its other major projects such as the outer harbour development at Port Hedland.

It is important to remember that BHP has a treasure trove of world-class ore bodies that will be developed when conditions are right. Chinese GDP growth is in a deliberate deceleration from above 10 per cent to the more sustainable target level of about 7.5 per cent, but BHP believes the long-term demand for steelmaking ingredients iron ore, metallurgical coal and manganese remains firmly entrenched.

BHP's recent foray into the US shale-gas rush may face an embarrassing writedown on the investment, but here again the long-term prognosis for this industry is very appealing.

The US economy will use the enormous shale-gas reserves to reignite its industrial base, reduce its dependence on imported oil and transform its power and transport industries all based on cheaper fuel.

Outlook

BHP is due to announce its annual financial result on August 22.

The numbers may not appear as eye-popping as the commodity price-spiked record result from last year, but they will be impressive enough.

The real interest will be in the commentary surrounding the company's cash-flow forecast, which in turn will depend on the planned capital-investment program.

Early last year, the company was parading its plans to invest $US80 billion over five years across a range of projects based on the cash-flow boom from the previous few years. That strategy now looks like it needs to change.

Price

From almost $50 a share in April 2011, BHP's share price has steadily slipped to the low $30 mark and now sits just above that at $31.60.

The stock has underperformed the broader ASX200 index so far this year by 12.5 per cent.

Worth buying?

If your definition of long term is the time until your next flat white, this stock is not for you.

BHP's assets take years to plan and develop, billions of dollars to build and then decades to extract the prodigious quantities of ore and petroleum.

If your superannuation portfolio is also a good few years away from harvesting, then make sure you have BHP in it.

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