BHP Billiton confident over demand from Asia

Mining giant BHP Billiton has sought to reassure investors on Asian demand, which it says will hold up despite the global financial crisis.

"While we expect commodity markets to remain volatile in the short term, we are confident that longer-term market fundamentals should support growth in commodity demand and, therefore, our revenues," chairman Don Argus says in the company's US annual report.

Argus said BHP had "no doubt" Asian economic growth would slow at some point, but the slowdown would be concentrated in regions orientated to the light-export sector.

"We expect Asian demand for our products to continue," he added.

Mining stocks have struggled since May on the economic uncertainty, a fall in some key commodities prices and a slowdown in demand in China, largely because of the Olympics, during which many Chinese construction works were put on hold.

Argus acknowledged the "significant de-rating", saying: "This is disappointing for the management and shareholders."

Meanwhile, chief executive Marius Kloppers appeared to be softening shareholders for a possible failure in BHP's $140 billion (£77.84 billion) tilt at rival Rio Tinto.

"BHP Billiton does not need Rio Tinto to have a great future, but we believe the two companies combined will be better-placed to meet the world's future need for our products," he said in the report.

Argus was last year awarded a 12.4% pay increase to $920,475 while Kloppers took home a total of
$6.87 million, up from $4 million
the previous year.