BHP Billiton to cut capital expenditures by $600m in financial year 2015

The group said it would trim $600m from its planned capital spending to $14.2bn in the 2014-15 financial year and by $1bn to $13bn in the following 12 months.

“Improved capital productivity gives us additional flexibility,” said Andrew Mackenzie, the group chief executive.

“We are reducing the cost of bringing on new production and can lower our investment without slowing volume growth.”

The world’s biggest miner added that it plans to tax an additional $500m of costs, as it aims to reach $4bn of annualised productivity gains from its main operations by the end of the 2016-17 financial year.

The decline in commodity prices has seen smaller miners put their expansion plans on hold and reduce production, while the likes of BHP and Rio Tinto have moved in the opposite direction, by ramping up production.

Meanwhile, Mackenzie added that the firm, which will spin-off some of its assets into a separate mining firm in 2015, will reorganise its management ranks.

Daniel Malchuk, currently head of the group’s aluminium manganese and nickel division will take charge of the copper operations, overseeing production at the group’s Olympic Dam mine in South Australia.

BHP added the decision to reshuffle its senior management will allow the group to implement a pay freeze across its executive roles.