BHP Billiton expects continued volatility in markets

BHP Billiton's chairman said the miner expects economic volatility to persist as the US, Europe and China face challenging transitions.

At BHP's annual meeting in Melbourne, chairman Ken MacKenzie said economic conditions had improved in many countries but that "we continue to expect significant volatility across various markets". The transition of the world's three biggest economies – the US, Europe and China – will be the backdrop for other market developments, he said.

MacKenzie said: "The US is now operating at close to full employment. However, policy changes and the unwinding of low interest rates remain the key driver of global uncertainty. In Europe, the slow progress in Brexit discussions raises issues as to how 'hard' the separation will be and how it will impact the economic recovery.

"The largest consumer of commodities globally, China, has endeavoured to maintain growth by addressing financial sector and credit market risks. The Chinese government is likely to remain focused on protecting against geopolitical and economic volatility to enable it to continue on its growth path."

MacKenzie warned against protectionism, which would lead to lower productivity and more expensive goods for citizens. "Over the longer term, we remain optimistic that a healthy global trade environment will be supported by agreements that are both inclusive and fair," he said.

BHP's chief executive, Andrew Mackenzie, said after a period of weak prices some of BHP's commodities were trading above long-term price forecasts. He also struck a note of caution about economic and political conditions.

"Some challenges do remain in terms of geopolitical uncertainty and protectionism, which has the potential to hinder international trade, weigh on business confidence and restrain job creation and investment. However, our long-term view for markets remains positive."

Both men pledged to make safety their top priority after accidents that killed three employees since the start of the 2017 financial year. BHP was also joint owner of Samarco, a mining company whose dam in Brazil collapsed in 2015. The disaster killed at least 19 people and destroyed two towns.

Chairman MacKenzie said: "We are determined to learn from, and share, the lessons from this tragedy – not only within our own company, but across the industry – in order to improve tailings dam management standards globally."