11-20-13 9:49 PM EST | Email Article

By Rhiannon Hoyle


PERTH--A slowdown in China's manufacturing activity and trade is acting as a brake on revenue growth for resources giant BHP Billiton Ltd. (BHP.AU), although urbanization and continued income growth will be positive drivers for the years ahead, its chairman said.

"In China, which accounts for about 30% of our revenue, weaker trade and softer manufacturing activity have been a slight drag on growth relative to expectations," Jac Nasser said in a speech to the company's annual general meeting in Perth Thursday.

Still, BHP expects China's economy to grow by more than 7% next year, and about 250 million people are expected to move to cities from the countryside by 2028, supporting demand for industrial commodities, Mr. Nasser said.

"We believe the Chinese government has the room and flexibility to pursue reforms that support its policy of stable, long-term growth," he added.

Mr. Nasser said BHP was also confident of a continued recovery in the U.S., though he highlighted some risk from central-bank plans to taper monetary stimulus.

The company reiterated expectations that China and other emerging economies would drive up the demand for some commodities by 75% over the next 15 years.

BHP estimates demand for potash, a fertilizer used in agricultural production, will increase by 2-3% a year until 2030. Speaking to shareholders at the meeting, Chief Executive Andrew Mackenzie said that growth will be underpinned by a rising population and greater economic prosperity, "which will change the patterns of food consumption, requiring higher yields from increasingly constrained arable land."

BHP gave the go-ahead earlier this year to invest $2.6 billion in its Jansen potash project but refrained from giving a timeline for when the project will start production. Mr. Mackenzie said BHP would spend around $800 million a year investing in the commodity.


Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com


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(END) Dow Jones Newswires

November 20, 2013 21:49 ET (02:49 GMT)

Copyright (c) 2013 Dow Jones & Company, Inc.
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