Mining giant BHP Billiton has said that its exploration and capital expenditure for the 2014 financial year will decline significantly to approximately $18 billion as the company looks to reduce costs.
The company is further forecasting that expenditure is “expected to decline substantially thereafter”.
“You will recognise my passion for our productivity agenda and this extends to our development projects. We must challenge ourselves to increase returns from new investment, in the same way that we need to squeeze returns from our installed infrastructure,” he said.
Mr Mackenzie said that reducing annual spending and increasing internal competition for capital would result in productivity increases and bolster shareholder returns.
“We believe our strategy will deliver stronger margins throughout the economic cycle, a simpler and more efficient structure, a substantial increase in free cash flow and growth in shareholder value.”