Johannesburg — BHP Billiton CEO Chip Goodyear said yesterday the sell-off of global resources shares in the midst of the US subprime mortgage crisis showed that markets were misreading the importance of the U.S. market to the resources sector. He said the Chinese industrialisation that had driven demand for resources was likely to persist for a decade.

Trends in India were similar, although India's development was considered to be 10-15 years behind China's.

As the resources industry had under-invested for many years and lead times for new projects were lengthening, supply and demand imbalances would continue to favour companies such as Billiton, he said.

Billiton had canvassed the views of its major customers in the past week on how the squeeze on credit in the U.S. would affect China and India. Their response was that while U.S. growth could moderate, China and India were still focusing on the shortage of raw materials needed for their domestic growth, which remained intact.

Another consequence of the U.S. crisis could be a squeeze on credit, if Billiton wished to finance a major acquisition. But Goodyear said Billiton's financial position was stronger than it had ever been and, with its quality margins, cash flows and portfolio of assets he doubted whether raising financing would be a constraint on acquisitions.

More important would be whether acquisitions would fit into Billiton.

Viwe Tlaleane edits The Bottom Line