BHP Billiton plans foray into mining

Has applied for prospecting licence for two bauxite mines in Orissa.

BHP Billiton, the world's largest diversified resource company, is looking to foray into mining of iron ore, bauxite, coal and hydro carbon to propel its business growth in the country.

"We are in the process of evaluating a range of projects in several states including Orissa, Chhattisgarh, Jharkhand and Andhra Pradesh," Bob Kirkby, the executive group president of BHP Billiton, Melbourne, told Business Standard.

The projects include bauxite/alumina/aluminium and iron ore mining as well as base metals and diamond exploration. It will also include downstream value addition and infrastructure development, where ever applicable, Kirkby said.

He, however, declined to reveal the exact scope and investment proposed in the projects, saying discussion with various state governments in this regard are in currently at a preliminary stage.

Kirkby was here to attend the inauguration of Bhubaneswar Eye Institute (BEI), to which the company has contributed Rs 2.2 crore as part of its community development initiative.

Though the company has been supplying different metallurgical commodities to Indian companies over the last three decades, it is yet to get a foothold in mining operations, one of its core areas of interest, here.

"Of all the resources available in India, we have identified four initial focus areas "� iron ore, bauxite, coal and hydro carbon," Kirkby said.

Towards this objective, the company has applied for prospecting licence for two bauxite mines at Kalarapat (Kalhandi district) and Sashubohumali (Koraput district) in Orissa. It also proposes to set up a 3 million tonne alumina refinery in Kalahandi district at an estimated investment of $3 billion.

The company, whose Indian operation yielded about $1 billion last year, has more than doubled its sales turnover in India in 2005-06 compared with the previous year.

For the 2006 half year (ended December 2005), sales in India accounted for about 2.8 per cent of BHP's total global turnover. This compares to 1.1 per cent of global turnover for the same period the year before.

According to Aditya Narayan, president and CEO of BHP Billiton, India, the growth of the mining sector in the country has been stunted vis-à-vis the global scenario. The mining sector grew by 1 to 2 per cent in India compared to 6-7 per cent in the manufacturing sector, he pointed out.

"This is because no reform programmes have been undertaken for the sector for a long time," Narayan said.

He hoped that with the government trying to take various initiatives to overhaul the sector, BHP can see a greater role for itself in resource exploration and mining in the coming days.

Kirkby said the global economy is currently growing, driven mostly by demands from China. "All our businesses across the board are now running in full capacity," he said. This buoyancy in the metal market will continue, at least in the medium-term, due to growth prospects in China and India.

"In the context, our objective is to continue running the existing facilities on a sustained basis and look for new areas of opportunity," he added.