BHP Billiton

BHP BillitonSuccessfully implementing large-scale aluminiumsmelter projectsSADC Regional Electricity Investment ConferenceNamibia, 19 September 2005Kevin Morgan

DisclaimerThe views expressed here contain information derived from publiclyavailable sources that have not been independently verified. Norepresentation or warranty is made as to the accuracy,completeness or reliability of the information.Any forward looking information in this presentation has beenprepared on the basis of a number of assumptions which may proveto be incorrect. This presentation should not be relied upon as arecommendation or forecast by BHP Billiton.Nothing in this release should be construed as either an offer to sellor a solicitation of an offer to buy or sell shares in any jurisdiction.Page 2

BHPBilliton - The largest company in a consolidating sector…AlcoaShenhuaNewmontNorilskXstrataBarrickAlcanPhelps DodgeAngloPlatAnglogoldPeabody EnergyFalconbridgeCamecoIncoTeck ComincoSPCCAnglo AmericanCVRDRio TintoBHPBPage 310095908580757065605550454035302520151050Market value of minerals industry US$572bnValue of Top Five US$241bnValue of BHP Billiton US$ 92bnMarket Cap. on 19/08/05 (US$Bn)Source: Datastream

… with a global, diversified footprint…PetroleumAluminiumBase MetalsCarbon Steel MaterialsDiamonds & Spec ProdEnergy CoalStainless Steel MaterialsPage 4

… and a strong commitment to AfricaPage 5

Criteria for investment• Similar to other multi-national resource companiesPage 6– Viable and sustainable project– Favourable investment climate– In line with company Policies, Standards and Guidelines– Acceptable country risk• Essential conditions for building and successfully operating a modern,large-scale aluminium smelter include:– Secure power supply for a period of 40 years at an internationallycompetitive price– A suitable site sufficient for the footprint of the whole facility andfuture expansions– A deep sea port with a suitable berth for importing bulk materialand export of aluminium– Advantageous fiscal conditions

Bayside Aluminium• 0pened in 1971 with 52 kt/acapacity• Expanded through severalphases to 180 kt/a• At this stage was the onlyaluminium producer in SouthAfrica• Elimination of tariff protectionduring early 90’s exposed thesmelter as high cost producerto international competition• Very successful renewalprocess ensured viabilityPage 7

Hillside AluminiumA world-class project realised in partnership with Eskom and IDC• 2-Potline AP30smelter• Start-up 1996• Design capacity466 kt• 2003 production523 kt• 850 MVA Power(4% of SAconsumption)• 1050 employeesPage 8

Hillside AluminiumA win-win-win• Government– 16,300 permanent jobs (IDC study)– US$ 380 M pa impact on national GDP– US$ 220 M pa net impact on current account of balance of payment– US$ 100 M pa increased government revenue earnings through taxes• Region (KwaZulu/Natal)– Substantial infrastructure development (US$ 165 M, incl. 1000 housing units)– Regional tax base increased by 300%– US$ 1 M pa ongoing Community Development Programme•IDC– Very successful project– Sold its shares at good profit margin– Created financial resources for further investment in Southern Africa (e.g. Mozal)•Eskom– Utilising its excess generation capacity– Gained a valuable customer and healthy long term profitsPage 9

The Mozal SmelterThe same win-win-win philosophy was applied successfully in partnershipwith the Mozambican Government, Mitsubishi and IDC• 253 kt AP30 smelter• Located near Maputo, Mozambique• Shareholding– BHP Billiton 47%– Mitsubishi 25%– IDC 24%– Government of– Mozambique 4%• Power Partnership Motraco,• a tri-national joint venture– Electricidade de– Mozambique– Eskom– Swaziland Electricity– BoardPage 10

MozalA win-win-win• Government– Mozambique - Winner as shareholder and country– Job creation (construction 9000 on site, permanent 750 on site plus 2700 secondary jobs)– Development of local small and medium enterprises– US$ 125 M pa Forex earnings, Exports tripled to US$ 600 M pa– Local infrastructure upgrade US$ 31 M– US$ 2 M pa Community Development Programme– Established Mozambique as country where mega projects can succeed• Region– Strengthened Swaziland’s power system•IDC– IDC making its first major external investment•Eskom– Utilising excess generation capacity– Gaining another very valuable customer and US$ based profits• South Africa– >US$ 460 M spent with SA companies for goods and servicesPage 11

The Success Story Doesn’t End Here…Mozal 2– Brownfield expansionextending capacity by253 000 tons/annum– Project budget US$860 M (BHP BillitonShare US$ 405 M)– Full production fromend 2003– One of the mostefficient smelters inthe worldPage 12

The Hillside 3 Expansion – again establishing new recordsExpansion Budget US$ 499MCompletion 6 months ahead of schedule and US$ 38Munder budgetCurrent Hillside production: 680 000 t/a

These winning partnerships result in Southern Africaproducing 5% of the world’s primary aluminium[ 000 TONS PRIMARY PRODUCTION]2531305322629721355In just 10 yearsBHP Billitongrew its operatedSA Aluminiumcapacity by770%178Bayside Hillside Mozal Sub total Mozal 2 Hillside 3 TotalPage 14

Conclusions• Strong partnerships are vital for the successful implementation of largescale industrial projectsPage 15– Government– Electricity utility– Development agency– International Finance Institutions– Strategic shareholders• Sustainability is assured through winning partnerships and carefulconsideration of economic, environmental and social impacts• Africa features prominently for the growth of BHP Billiton’s aluminiumassets: We have our roots in Africa• Importance of public-private partnerships in successfully realising largescale,capital-intensive projects in developing countries cannot beunderestimated

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