Johannesburg — HP Billiton , the world's largest mining group, said yesterday that it would use its strong cash position to capitalise on the recovery in commodities to fund new projects as most companies were cutting back their investments.

CEO Marius Kloppers said at BHP's annual meeting in Australia the company would invest about 10bn in capital and exploration projects to take advantage of the expected surge in demand from major consuming markets.

This was in addition to the 14bn BHP had committed to similar projects in the previous financial year.

Kloppers did not spell out details of the new ventures.

The investment by the group, which has significant operations in SA, follows a revival in optimism that some economies had begun to respond to stimulus measures to counter the global recession. BHP said two months ago that SA was one of the countries where it was considering new investments because the risk was lower than in other parts of Africa.

The group said it was not likely to invest in new projects in Africa in the next five years to avoid "putting risk on risk".

Since the global economic downturn began it had spent about 1,4bn on two big coal projects in SA, Klipspruit and the Douglas-Middelburg Optimisation project.

Kloppers said the group's cash flow and balance sheet strength had enabled it to invest 11bn, or more than 30m a day, in capital and exploration projects in the past financial year. "We remain uniquely positioned to capitalise on the opportunities before us.

"Our low gearing, strong cash flow and portfolio of investment options means we will continue to create sustainable, real value from the long-term demand for our commodities," he said.

Disciplined capital management helped the group through the downturn and to continue to invest substantially in growth.

Chairman Don Argus said: "While we believe the global recovery will be sluggish, we also continue to believe there will be strong long-term demand for our products from the Asian region."

Kloppers said he was upbeat about prospects for global recovery, saying major economies were starting to rebuild inventories, led by an early recovery in China.

He said there had been a significant rebound in commodity prices over the past six months, and in particular "the velocity of the recovery in China has indeed been surprising".

"China has been the major and sometimes only source of demand for commodities in 2009.

"While this demand represented both restocking and underlying demand, we do believe restocking in China is now essentially complete."

The resilience of the Chinese steel sector had been surprising, he said.

Outside China, steel capacity usage had fallen to 50% in the three leading steel markets of the US, Europe and Japan, and restocking had been cautious, Kloppers said.