BHP won't approve new major projects this financial year

WAVES of investment into Central Queensland from BHP Billiton have already started to recede, but comments from chief executive Andrew Mackenzie suggest it could be a while before that tide comes back in.

BHP invested $8.7 billion into Bowen Basin projects in the past five years alone.

These include the gigantic Daunia and Caval Ridge projects and expansions to its Broadmeadow Mine and Hay Point Coal Terminal.

Daunia and Broadmeadow are due to begin operating by year's end, while Hay Point and Caval Ridge are due to be have construction finished before the end of 2014.

That work and those dollars mean BHP is now exporting 13.5 million tonnes of coal, almost 40% more than before the work began.

Mr Mackenzie told a conference in Spain this week BHP had already committed to approve no new major projects in this financial year.

Rather than investing billions into new or greenfields project, BHP will work harder at "sweating" its assets - that is, pushing every mine, every piece of infrastructure and every worker harder to increase the miner's productivity.

"We have a tremendous opportunity to pursue substantial productivity gains at Queensland Coal, where, arguably, we have the need to move quickest, now that the business is again producing at supply-chain capacity, having overcome the challenges of flooding and difficult industrial relations," he said.

For some this may mean more work, but for contractors seen as too costly by BHP, it will mean something different altogether.

"As part of this drive, we will continue to review contractor arrangements, as we have done in iron ore in the past, to ensure our operations remain cost-competitive.

"At Peak Downs (south-east of Moranbah), we are now transitioning to a new contractor, having completed a review of how we conduct pre-strip activities."

In April, BHP cut short a contract worth $260 million to Leightons Contractors, replacing them with HSE Mining.

BHP declined to discuss what Mr Mackenzie's comments meant for the Bowen Basin specifically although former chief executive Marius Kloppers told a Brisbane conference late last year new projects for Queensland were "impossible to justify" in current market conditions.

In his speech, Mr Mackenzie said he could not be specific on just how far BHP's project spending would fall, except to say all decisions would be subject to its board approval process.