A media report last month suggested BHP was considering a spin-off of its non-core assets, with the company confirming it was looking at “simplification”, which included “structural options”

“The case for continued simplification of our portfolio is compelling, and this remains a priority,” Mackenzie told the Bank of America Merrill Lynch Metals, Mining & Steel Conference in Miami overnight.

“In the last two years we have completed $US6.5 billion of divestments at attractive valuations.

“We continue to study the next phase of simplification, including structural options, but no decisions have been made.

“We will only pursue options that maximise value for BHP Billiton shareholders.”

Mackenzie emphasised the company’s focus on the four pillars of iron ore, coal, copper and petroleum, which he said generated the highest margins and delivered a superior return on investment.

He said it was about creating a simpler, more productive and capital-efficient organisation.

Mackenzie said BHP was changing the way it worked, using common systems and processes to boost productivity.

“We have embedded $4.9 billion of sustainable productivity gains which will increase to $5.5 billion by the end of this financial year,” he said.

“In the first half of the 2014 financial year, average truck utilisation, compared with last year, improved by 8%.

“The average utilisation of our diggers increased by 10%, and we have reset the performance benchmark higher so a clear opportunity remains across the group.”

The gains have allowed BHP to up its Western Australian iron ore guidance by 10 million tonnes to 217Mt and its metallurgical coal guidance by 2.5Mt to 43.5Mt.

“We have also reduced capital expenditure by 25% and our spend will decline again in the 2015 financial year,” Mackenzie said.

“By reducing the rate of investment, we have created strong competition for capital, and now expect an average rate of return of more than 20% for our portfolio of low-risk, largely brownfield development options.”

Mackenzie said the company’s balance sheet was continuing to strengthen.

“By doing what we said we would do in the first half of the year, we increased free cash flow by $7.8 billion and underlying return on capital to 22%,” he said.

“We have a solid A credit rating and our progressive base dividend is comfortably covered by free cashflow.”

Shares in BHP were last trading 0.4% higher at $A38.13.