SANTIAGO, July 28 (Reuters) - BHP Billiton , the world’s largest miner, is betting on strong returns from the copper business even though the price of the metal is unlikely to rise in the near term, the company’s chief executive told a Chilean newspaper.
Global copper output is likely to increase, keeping prices stable or triggering a slight drop soon, but that will be offset by strong demand in the long run, according to an interview with BHP Billiton CEO Andrew Mackenzie published on Sunday.
“Copper is a key part of our strategy for the future, as is iron, coal and oil,” Mackenzie told El Mercurio newspaper. “There could be a preference to invest more in copper than in other commodities in the future because we see that in the long run it might have better returns.”
Global demand for the red metal will likely rise 3 percent per year, he said. BHP Billiton on July 25, announced a $3.43 billion investment in a sea-water desalination plant at the Escondida mine it controls in Chile, the world’s largest copper supplier.
Mackenzie, who took control of the Australia-based company in May, said China, the world’s top copper buyer, is in a stage of economic transition. The world’s No. 2 economy is shifting from construction growth to a consumer-led economy.
“This might not be as bad for copper as had been thought,” Mackenzie said. “I don’t like to comment on prices, but we have to prepare for a copper outlook around the current price, or perhaps a bit lower, that is around $3 per pound,” he said.