Good morning.

My name is Don Argus, and I will Chair today's meeting. Welcome to the 2004 annual general meeting of BHP Billiton.

It is now three years since you and other shareholders voted to merge the two companies. While this year's financial results demonstrate just how sound your decision was, I hope you get a real sense of just how much momentum the new company has from today's meeting.

I propose to take the Notice of Meeting as read. If you need a copy of the Notice, please ask one of the attendants. Minutes of our last meeting are available for inspection in the registration area outside.

Let me now introduce your directors. You can read full details of their backgrounds and qualifications in the Annual Report.

On your far right is Mike Salamon, an executive Director and Group President Non-Ferrous Materials. Next to Mike is David Jenkins then Michael Chaney, David Crawford, John Buchanan and Chip Goodyear, who is also our Chief Executive Officer.

On my right is our Company Secretary, Karen Wood. Karen is sitting next to Chris Lynch, our Chief Financial Officer; next to Chris is our Chief Legal Counsel, John Fast, then John Schubert, Lord Renwick and Dave Brink.

Also here this morning are representatives from the Group's external auditors, KPMG. We have Jimmy Daboo, Peter Nash and Chris Jenkins.

Let me now run through today's agenda.

I would like to talk briefly about the financial results for the 2004 year, a year in which BHP Billiton more than delivered on all the commitments we made to you when you voted on the merger just three years ago.

I'll ask our Chief Executive Officer, Chip Goodyear, to address that by talking about the operations, how they are performing, our growth pipeline and what areas of the business you can expect to see expand.

At the end of the meeting, the directors and the management team would like you to join us for some light refreshments.

Turning to the results. At the outset I remind you that all references to dollar figures are in U.S dollars unless otherwise stated. As you know, we operate and report in US dollars so Chip and I will remain consistent with that today.

In 2004, BHP Billiton delivered on the commitments we made to you at our merger meeting in 2001. This year's results demonstrated the significant potential that this unique company is yet to fully realise.

While I'm sure you've seen the details of the numbers in the annual report and in the media, let me take you through a few of the highlights.

What you can see from the charts on the screen is that BHP Billiton has delivered sound, profitable growth over the last three years since the merger.

While the Board declared a final dividend of 9.5 cents per share, a full two-cents per share, or a 27 per cent increase over the final dividend last year, your overall payout for last year actually increased by 79 per cent.

That is because there were actually three dividend payments, totalling 26 cents a share, during the year. This was part of the realignment of our dividend declarations with our half and full-year results announcements.

In September the Board announced details of the first phase of a $2 billion capital management program.

We announced this Tuesday the successful completion of this first phase. BHP Billiton repurchased 180.7 million shares worth US$1.780 billion under the buy-back, representing 2.9 per cent of the issued share capital of the BHP Billiton Group. Due to strong demand, the amount was over 50 per cent higher than initial expectations. The final price for the buy-back was A$12.57 per share, representing a discount of 12 per cent to the volume weighted average price of BHP Billiton Limited shares.

The Board believes this was the most efficient and value-enhancing way to return capital to all BHP Billiton shareholders around the world, because of the enhanced value of the remaining shares through the increased earnings, cash flow and return on equity.

While the BHP Billiton group has over 330 thousand shareholders, most of our shares are held by large superannuation and investments funds. So we know that many millions of people around the world have placed their trust in us to protect their future.

As Chip said at the time we announced the 2004 profit, these results are the outcome of preparation meeting opportunity.

Many analysts who have followed resource stocks for any length of time have often complained that they have seen resource companies make great profits in good times and then waste that cash in unproductive capital projects.

There was often criticism that resource stocks struggled to generate a return above their weighted cost of capital.

Here you now have a company generating a return of 21.4 per cent on the capital invested and a pipeline of projects that enables us to approach the future with confidence.

Quite a remarkable story.

This is an industry where it is possible to create significant value for shareholders but where shareholder value can also be significantly destroyed.

The extent of that future profit growth depends on three things.

• What is the expected revenue growth from the pipeline of projects being developed;

• What is the expected growth in production from existing operations and; finally,

• What productivity gains can be made in the existing operations that will deliver more product at a lower cost.

You can see on this graph how BHP Billiton, since the merger, outperformed the FTSE 100 index by 106 per cent as at the 30th June 2004, and by 134 per cent as at the end of October this year.

The next slide shows that an investment of PDS1000 in BHP Billiton Plc at the time of the merger is worth today around 1,770 pounds.

I have just talked about how BHP Billiton is making sure that shareholders benefit directly from the company's growth.

But we have a broader responsibility.

As well as being shareholders, all of us have an increasingly strong interest in how the companies we invest in manage their social, community and environmental responsibilities and how they add value in these areas.

I hope that from the video screened at the opening of this meeting, you will have at least a fleeting impression of some of the remote regions and communities in which we operate. The difference between most companies and large resource companies is that we are a vital part of the fabric of these communities.

Increasingly, we are expanding our operations into parts of the world where local communities need support in health, education, local infrastructure and general improvement in living standards.

If we are to prove our worth to these local communities and make sure they value our presence, we need to do more than simply provide jobs and pay taxes.

Some part of this is financial. Each year we commit to a global target of one per cent of our annual pre-tax profit, on a rolling 3-year average, to community programs.

What this means is that the more successful we are and the greater our profit, the more we put directly into the community.

In 2004, we actually spent 1.3 per cent or US$46.5million.

Several of the programs we support have been commended by external groups. You can see more details of our major programs in our HSEC report on the website.

While we're proud of these successes, we do have some challenges ahead of us in the health, safety, environment and community area.

We take our commitment to Zero Harm very seriously. So all of us have been devastated by the 17 deaths across our operations during the year.

The death of each of those people had an incredible and enduring impact on their families, their workmates and the communities where they lived.

While an enormous effort has been made at every level of the business to make the workplace safer, all of us on the Board and every single manager has a renewed commitment to the only acceptable safety standard; that is Zero Harm.

As the world's largest diversified resources company we also understand the responsibility we have to be a leader in the way in which we approach the environmental and social aspects of our work.

We have success stories and some not so successful cases. If you have not already seen our Health, Safety, Environment and Community Report then I urge you to have a look at what is a very candid report on our activities.

I would, however, like to take a few minutes to explain how we have managed a project for which we have probably received more criticism than any other - that is the Ok Tedi mine in Papua New Guinea.

BHP commenced mining in PNG in 1984. By the late 1990s it was apparent that the potential for further environmental damage was significant and could only be mitigated by closing the mine.

Regrettably, our preferred option of early closure was not considered an acceptable option by the PNG Government because of the very significant economic and social benefits the mine brings to the people of PNG.

Faced with that outcome, BHP set about developing a strategy that would enable the company to leave the project in a responsible way. This involved the transfer of the company's 52% holding to the PNG Sustainable Development Program Company.

The Program Company was established to develop and deliver sustainable development projects for the people of PNG. The Company has a board of seven directors, three of whom are appointed by BHP Billiton.

In exiting the mine, we also made sure that the occupants of affected villages would continue to receive direct compensation for environmental damage caused by mining activity, and that funds were made available to manage ongoing environmental impact and the eventual mine closure.

The activities of the Program Company are controlled by its board. BHP Billiton does not - and cannot - control those activities. It is also important to note that BHP Billiton does not receive any income from Ok Tedi or the Program Company.

To date the Sustainable Development Program Company has received US$137 million in dividends from the mine. These funds are being applied to short and long-term projects in the areas of health and education, food production and agribusiness and forestry. The company is structured in a way that will ensure that funds continue to be disbursed for up to 40 years after the end of mine life.

It was a responsible exit from a complex situation, and one fully consistent with our Charter. But it is not a situation we would ever expect to find BHP Billiton in again.

The nature of mining activity means that whole communities are often impacted. Far from being universally negative, mining activity is frequently the lifeblood of many communities around the world.

Our coal joint venture with Anglo American and Glencore in Colombia has presented us with issues related to the relocation of a local community.

The process of relocating the community of Tabaco, to enable mine expansion, started in 1997, three years before we acquired an interest.

Issues have also been raised about the impact our operations have had on the community of Tamaquitos, also in Colombia. This community is located 7 km from the mine and has not been impacted. Claims that the Company has been pressuring local landowners to sell their properties are not true. The last land we purchased was bought in 1997 and we have no desire to purchase any more land in the area.

We know only too well that our continuing licence to operate depends on balancing the often competing demands of all of the stakeholders in our business.

Let me give you a brief view on how we see the year ahead.

As the IMF noted in its recent outlook, the performance of the global economy is at near three-decade highs with strong activity and low inflation.

Strong demand growth in the US and China has had flow on effects to the rest of the world. Europe, Japan and Asia have all been beneficiaries of the improvement in global trade, while commodity producing nations have benefited from stronger prices.

More recently, indicators point to an easing in growth across the world, as monetary and fiscal policies are tightened, there is slowing in economic activity in China from the frenetic pace of earlier in the year, and high oil prices begin to affect spending.