In his first Australian speech as BHP Billiton's (ASX: BHP) chief executive, Andrew Mackenzie has stated that those nations prepared to improve performance in crucial areas will still enjoy strong wealth flows from the resources industry.
Whilst there has been much concern expressed regarding Australia's current standing without a dominant resources industry, Mackenzie reinforced his position that Australia is still in the "pole position" to benefit enormously from increased global demand for resources, as long as we put in the hard work and continue to compete with resources-rich nations.
He stated that "there are even greater opportunities ahead. Global demand for commodities is expected to grow by up to 75% over the next 15 years."
His comments come as the market awaits the earnings reports of Australia's largest miners. Rio Tinto's (ASX: RIO) earnings report will be released this afternoon, whilst investors interested in BHP will have to wait until August 20.
Analysts are expecting that Rio Tinto's profits will sink from US$5.2 billion to US$4.23 billion for the company's first half (a fall of 18.6%), whilst BHP's profits are expected to fall 26% from US$17.1 billion to US$12.5 billion.
Foolish takeaway
In order to ensure a sustainable future, both companies have maintained a heavy focus on increasing shareholder returns and minimizing unnecessary capital spending. Although heavy demand for commodities is still expected, each companies' respective executive teams recognise the need to increase competitiveness as the years of easy profits are over.
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More reading
- Rio shareholders brace themselves for tomorrow's report
- Mining profits expected to fall
- BHP chief plays down China's plea for lower prices
- BHP's profit expected to drop 26%
Motley Fool contributor Ryan Newman does not own shares in any of the companies mentioned in this article.
