BHP Billiton Ltd is cautious about the state of the world economy and is warning governments to be careful about tax changes and winding back stimulus packages.
The world's largest resources company plans to spend about $20 billion on capital expenditure next year, BHP Billiton chairman Don Argus said in his final letter to shareholders before his retirement on March 30.
"We remain cautious about the state of the global economy and note the recent International Monetary Fund (IMF) report, which highlighted the gap in growth between developed and developing economies," Mr Argus said.
"The IMF predicts that between 2007 and 2011 the output from advanced economies will grow by just 1.9 per cent, while the developing countries will be 22.1 per cent," he said.
Mr Argus said most countries had difficult decisions to make regarding winding back stimulus packages and, in a possible reference to Australia's Henry taxation review, warned them about making tax changes.
According to the reports, the Henry review, which was handed to the federal government in December, recommended scrapping state-based royalties on mining projects and replacing them with a resource rent tax (RRT) set at 40 per cent.
The tax change would raise billions of dollars more in revenue than the current system and could reportedly cost mining giants BHP Billiton Ltd and Rio Tinto Ltd a combined $US5 billion ($A5.42 billion) in earnings each year.
"It is imperative that the impact of any policy and tax changes of governments around the world on sectors of economies should be well understood and do not hinder investment and the capacity of economies to grow," Mr Argus said.
"Ultimately policies which reduce free cash flow available from profits generated after paying tax could affect a company's capacity to pay future dividends to shareholders," he said.
Mr Argus praised incoming chairman Jac Nasser and said he had no doubt that his replacement, in conjunction with chief executive Marius Kloppers, would deliver long-term value to shareholders.
Shares in BHP Billiton closed down 14 cents to $43.16.
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