BHP Billiton sees fragile global economy near-term

MELBOURNE (Reuters) - Top global miner BHP Billiton <BHP.AX> sees the global economy remaining fragile in the near term and warned that economic growth could slow in the medium term, echoing recent comments from rival Rio Tinto <RIO.AX>.

BHP Billiton Chairman Jacques Nasser said on Monday that moves by the United States and Europe eventually to raise interest rates to tame inflation could come when their economies remain vulnerable.

"In the short term, although many economies are recovering, the world remains in a fragile state with persistent levels of unemployment and threats of inflation," BHP Chairman Jacques Nasser said at a business lunch.

"For the medium term, we should be prepared for further downside as global monetary and fiscal tightening and economic restructuring take hold," he said.

BHP plans to spend $80 billion over five years to expand iron ore, coal, copper and uranium production to meet soaring Asian demand, undeterred by day-to-day commodity price swings.


Chief Executive Marius Kloppers said last week he did not expect Japan's nuclear crisis to affect the expansion plan, and Nasser said the world would need a range of energy sources to meet rising demand while cutting carbon emissions.

Nasser warned against hasty moves to clamp down on nuclear energy following a call by Japan's Prime Minister Naoto Kan to close a nuclear plant in central Japan following the worst nuclear crisis in 25 years.

"I don't think an over-reaction at this point is valuable for the world and for energy solutions," he told reporters.

"I still think that there is, inside of the whole energy mix solution for the world, a place for safe nuclear generation of power," Nasser said, matching comments by Rio Tinto's chairman, Jan du Plessis, last week.

After failing on three major deals since 2007 -- a full takeover of Rio Tinto, an iron ore joint venture with Rio and a takeover of Potash Corp <POT.N> -- BHP has been quiet on the acquisitions front, focusing instead on its own projects.

Nasser said BHP would be willing to work with the Chinese on projects, like Rio Tinto has done with Chinalco's Chalco <2600.HK> unit on the Simandou iron ore project in Guinea, but only if the partner brought unique advantages to the venture.

"We're not against sitting down and looking for ways to improve our performance by partnering with other people. We just want to be convinced that when we do that, we're doing it for a good reason," he said.

BHP's shares rose 0.5 percent on Monday, outpacing a 0.3 percent rise in the broader market.

(Reporting by Sonali Paul and Miranda Maxwell; Editing by Ed Davies and Dhara Ranasinghe)