Open up to foreign investors, BHP chief says

Marius Kloppers said Australian mining companies need to open themselves up to foreign investment to reap the benefits of the global resources boom. He argued that limited capital is a critical issue and that continued foreign funding will be needed to support the sector.

Kloppers pointed to a large pipeline of projects — 74 projects worth some $80 billion in advanced planning — and said there isn’t enough domestic capital to fund them. He believes continued foreign investment is part of the solution.

Kloppers briefly acknowledged the "sensitivities" around state-controlled investment and the article notes that Chinese investments were seen as the "elephant in the room." These concerns can introduce political and strategic implications into deal discussions.

The article referenced Rio Tinto’s failed US$19.5 billion tie-up with Chinalco, a deal that BHP lobbied against in Canberra, illustrating how foreign equity proposals — especially involving state-linked parties — can become contentious.

According to the article, BHP obtains all its debt financing from global bond markets. For investors, that underlines BHP’s reliance on international capital markets for borrowing, rather than only domestic lenders.

Kloppers said Australia needs to work hard to "maintain our seat at the global resources table," which includes being open to foreign investment even when deals carry immediate or strategic implications.

The article suggests investors should be aware that mining companies may seek foreign funding to develop large projects, and that political sensitivities around state-controlled or Chinese investment can influence deal outcomes and corporate strategy.

No. Kloppers acknowledged it’s not simple, but he said part of the solution lies in continued foreign investment, implying it’s one important but complex element in addressing limited capital for big projects.