[MELBOURNE] BHP Billiton stepped up its cost-cutting plans on Monday as the world's biggest miner battles a sharp slide in iron ore, coal and oil prices.
BHP expects to reap savings of US$4 billion by June 2017, up from an earlier forecast for US$3.5 billion, in cost cuts over the next three years, according to slides prepared for an investor presentation on Monday.
It also trimmed its forecast for capital spending by 4 per cent to US$14.2 billion for the current financial year and said capital spending in the 2016 financial year would fall to US$13 billion, helped by plans to spin off its aluminium, manganese and silver businesses into a separate company in mid-2015.
BHP's biggest business, iron ore, has suffered from a 48 per cent plunge in prices this year, largely due to BHP and rivals Rio Tinto and Fortescue Metals Group flooding the market with low-cost ore.
At the same time, prices for two of its other major commodities, coal and oil, have also plunged, with coal at 5-1/2-year lows and oil near four-year lows, forcing the company to put off plans to return capital to shareholders.
To help boost its profitability, BHP is on track to spin off its smaller aluminium, manganese and silver assets and some coal and nickel assets into a separate company next year, so it can focus on its iron ore, copper, coal and petroleum businesses.