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BHP Billiton Base Metals: India On The Global Map?
BHP Billiton Base Metals: India On The Global Map?
BHP Billiton Base Metals: India On The Global Map?
EVA (US$ million) and EROC (%) - All Mining and Metals
15000 6
Cumulative EVA (US$56B)
Economic Value Added (EVA) - US$M
0 0
-5000 -2
-10000 -4
-15000 EROC -6
-20000 -8
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001
EROC (%) = ROIC – WACC Aggregate data for >200 mining and metals companies (excludes former East Bloc)
EVA ($) = Net Assets x (ROIC – WACC) Source: CRU
This presentation addresses two high level aspects of
copper demand…
1. Intensity of use
1990 trend
100
1966
1982 2003
1993 Note: A steeper slope represents
90 2.5 kg Cu per person
a stronger rise in use of copper in
relation to economic activity – a
80 gentle slope indicates lower
‘intensity of use’
1955 1973 and 1979 Oil Price Shocks Collapse of Soviet
70 and 1982 Inflationary Recession central economy and
Major focus on reduced unit use 1993 recession
of metals, including copper
60
Source: BHP Billiton,
1950
1.2 kg Cu per person Macquarie Research
50
USA
25
Japan
20
(kg/person)
15
10
0
0 5000 10000 15000 20000 25000 30000 35000 40000
GDP per Capita (2002 US$/person)
Source: BHP Billiton
Industrialising countries have followed two distinctive
intensity paths…which path are they following today?
Copper Demand Intensity of GDP (1950-2002)
30
Refined Cu Consumption per Capita
USA
25 South Korea
Taiwan
Japan
20
(kg/person)
15
10
0
0 5000 10000 15000 20000 25000 30000 35000 40000
GDP per Capita (2002 US$/person)
Source: BHP Billiton
Industrialising countries have followed two distinctive
intensity paths…which path are they following today?
Copper Demand Intensity of GDP (1950-2002)
30
USA
Refined Cu Consumption per Capita
25 South Korea
Taiwan
Japan
20
(kg/person)
15
10
India’s 0
position 0 5000 10000 15000 20000 25000 30000 35000 40000
today GDP per Capita (2002 US$/person)
Source: BHP Billiton
China’s
position today
Although India’s copper consumption has grown strongly
in recent years, it has not matched China
Asia, excluding Japan, is responsible for virtually all of the growth in world
refined copper consumption (‘first use’ of copper) in the past 20 years, driven by
Korea and Taiwan…and more recently China
Demand for Refined Copper (excl. direct melt scrap)* * Note: Does not
accurately reflect the
16000 ‘final’ consumption of
Market Share in: 1970 1980 1990 2003 copper in copper
China 3% 3% 6% 20% containing products.
14000 Japan 11% 12% 15% 8% Data unavailable for
‘final consumption’
Other Asia 1% 3% 11% 19% before 1990
'000 tonnes Refined Cu
1965
1970
1975
1980
1985
1990
1995
2000
Is India another China waiting in the wings?
Similar land area and population…but India’s economy not yet at
‘lift off’ and dominated by Agriculture and Services…
India China
Population (mill.) 1,031 1,283
GDP (US$B) 515 1,281
GDP Per Capita (US$) 500 1,000
Average % p.a. GDP Growth (10 Years) 6 9