BHP Billiton's new chief Andrew Mackenzie explains the growth dynamics for the BHP Billiton of the future New BHP Billiton chief executive Andrew Mackenzie talking with Terry McCrann. Picture: Mike Keating Source: Sunday Herald Sun ABOUT 7.5 million Australians own $20 billion worth of shares in BHP Billiton. Its new chief executive, the softly spoken but steely minded Andrew Mackenzie, is absolutely committed to their best interests. They are absolutely counting on us - we never forget that - to provide returns. And for them, it is cash returns, not more tonnes dug out of the grounds," he says in an exclusive interview. This is clearly the key identifying characteristic of today's and tomorrow's BHPB under Mackenzie. "One of the misconceptions," he emphasises, "is that for us growth is only about tonnes. It is about growth in value. Growth in cash. I can grow cash by making what I've got more productive as much as by making new investments. My argument is that there's more growth in cash to be got by driving productivity than necessarily adding things. It is all cash. But the Mackenzie view is not a narrow sterile one of simply screwing down on costs, sweating - my words not his - the company's existing operations, and closing up shop to new investment or expansion. It is precisely directed at best positioning BHPB to optimise its expansion growth opportunities as well, off the foundation of its productivity-driven growth. As Mackenzie explains it - we have a very good and indeed plentiful option set (of possible projects). With world population growing to nine billion - maybe half of those, by some projections, middle class - in the medium term it is mainly an energy game. Energy coal, uranium, conventional gas, LNG. We are watching how the world is going to get its energy. With our unique portfolio mix, we can see right across the energy space. We believe we can figure out a little bit in advance where it's headed," he says. Where are the best returns, the best cash returns for our owners? He comes back to his core theme. In the medium term, we can be operationally excellent in everything we do, and the prize there is huge. But we also have a good options set, most of which are relatively low cost to retain," he says. Which options and when we exercise them will reflect the world's energy choices, and the pace at which the world grows. But as he explained, he remains confident the world will grow - with demand for commodities increasing by up to 75 per cent over the next 15 years. Future demand growth will be different, but maybe less different than some commentators project, he says. There will still be maybe 250 million Chinese moving from the countryside to cities - and "it's bigger than just China." In preparing to seize those growth opportunities, Mackenzie projects a mix of anticipation and reaction. We are now going to force the pace. We believe in our future. We see strong growth into the provision of energy and food supply," he says. But then, he agrees that it's "wise not to be in a hurry." I suggest the adage "measure twice, cut once." He responds: "Yes, yes, it applies on all scales, on all scales. All my experience on running major projects is that if you take your time up front, you get better outcomes. He cites projects that have been on the list for five to six years. Their cost numbers now were much smaller. You have the engineers, "all the time, scrubbing, scrubbing the price; maybe doing small trials." The synthesis of what I might term his anticipatory caution, is that when the market starts to move, you can be ready to pounce. You can move quickly to do something with very high returns. So his relentless, even obsessive emphasis on getting greater productivity out of the existing operations is as much about best positioning BHPB Billiton for an expansion growth future, as it is about generating today's cash growth. You keep an option set - hopefully close to optimal, as you see the world. You work to ensure the lowest obligation to government to maintain those resources. Always polishing, scrubbing, to get the cost down. Be ready to move really quickly when you are absolutely sure about the patterns of demand," he says. So what does that all mean for the two big decisions, developing Olympic Dam and Canadian potash? He demurs, saying he'll have more to say on that at the profit report later in the month. He's optimistic about demand growth. He's also optimistic about the public understanding of the importance of the resources industry. People are talking with one voice about the importance of productivity. It is important to keep stressing that. Actually, this is stuff that Australia does very well; and we've been doing it for some time," he says. He concedes that Australia had entertained a level of cost inflation. But there's no reason way that can't in some ways be reversed - which is another way of talking about productivity. The bottom line is that there is a lot of supply out there. The competition is fierce. We might take the view that we had "the best stuff," so we could count on it always having a market. That's wrong," he says with emphasis. If they decided to make it unworkable for these resources to be developed, the world would get it from somewhere. It is all still to play for. But as I said (in his first public speech in Australia as CEO), we are in pole position to win markets. We will have a conversation with whomever wins the next election.