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RPT-BHP Billiton sees strong earnings growth even in low carbon world

Published 30/09/2015, 08:14 am
RPT-BHP Billiton sees strong earnings growth even in low carbon world
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(Repeats story published late Tuesday; no changes to text)

MELBOURNE, Sept 29 (Reuters) - BHP Billiton BHP.AX BLT.L , the world's largest miner, said on Tuesday it sees its earnings doubling over the next 15 years, even in a world where carbon emissions are cut to limit global warming to 2 degrees Celsius.

Under pressure from UK investors who fear fossil fuel assets could become worthless under tough climate policies, BHP released analyses of its copper, coal, oil, gas, potash, uranium and iron ore assets showing the company will hold up well under what it considers the most realistic scenarios.

Even with the 2 degrees C limit - equivalent to a rise of about 3.5 degrees Fahrenheit - that has been set for UN climate talks later this year, demand in 2030 for all of BHP's commodities except thermal coal would be higher than in 2014.

Uranium would be the biggest winner as more nuclear power would be needed, BHP said.

"In this scenario, our portfolio remains resilient, and our analysis indicates that margins remain strong and even increase in some commodities," Chief Commercial Officer Dean Dalla Valle told reporters ahead of an investor briefing in London.

In the central case that it plans for, BHP says it sees earnings before interest, tax, depreciation and amortisation (EBITDA) more than doubling between 2016 and 2030, without citing any dollar figures.

Under that scenario, it assumes carbon emissions priced at $24 a tonne in 2030 and the world on track for 3 degrees C warming.

In a model assuming strong economic growth, policies to limit global warming to 2 degrees C after 2030, including a carbon price of $50 a tonne in 2030 and use of technology like carbon capture and storage, BHP sees earnings growing just slightly less than in its central case.

In a "shock" scenario with the 2 degrees C target reached by 2030 with deep cuts in carbon emissions, a carbon price of $80 and more rapid advances in technology, it expects its earnings to grow more than 75 percent over the next 15 years.

"Our commodity diversification, the competitiveness of our production and the quality of our resource base minimises the risk of stranded assets," Dalla Valle said.

BHP's carbon price forecasts are much higher than the current price of 8 euros ($9) in the world's biggest carbon market, the EU's emissions trading system. However, an ambitious U.N. climate deal in Paris this year to cut emissions aggressively would fuel a rise in carbon prices. ($1 = 0.8901 euros)

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