BHP Billiton CEO says to keep marketing hub in Singapore

By Silvia Antonioli

LONDON (Reuters) - BHP Billiton (BHP.AX) (BLT.L) will keep its main trading office in Singapore for market reasons and not for tax purposes, Chief Executive Andrew Mackenzie said on Tuesday.

Australia is pursuing the mining firm and rival Rio Tinto (RIO.AX) (RIO.L) for shifting billions of dollars in iron ore profits through marketing hubs in Singapore that pay almost no tax.

BHP, the world's largest mining company, is Australia's biggest single taxpayer.

"It has got nothing to do with the tax situation. It's to do with the fact that our customers expect us to be in Asia and we will stay in Asia. And Singapore is good location for us," Mackenzie said in a call with Reuters when asked whether he would consider moving the group's trading centre.

China is by far the largest buyer of raw materials such as iron ore and copper, which BHP mines in Australia and elsewhere.

"The choice to be based in Singapore is to have more intimacy with our customers. And that intimacy drives higher volumes and higher prices and benefits our shareholders and benefits Australia," Mackenzie added.

BHP is contesting A$522 million (£265.5 million) in Australian tax bills on its Singapore marketing operations up to 2010, after having paid almost no tax in Singapore since 2006.

On Tuesday Australia proposed new legislation to tighten tax loopholes that the government says have allowed around 30 of the world's largest multinational companies to avoid paying taxes.

Mackenzie dismissed calls from rival Fortescue Metals Group (FMG.AX) Chairman Andrew "Twiggy" Forrest for Australians to urge the government to block expansion plans by BHP and Rio.

"I believe we have been responsible developer of the iron ore resource of Australia... Australia is committed to free markets and free trade."

Fortescue, a higher cost producer than both Rio and BHP, has come under serious pressure from falling iron ore prices on the back of oversupply.

(Additional reporting by Sonali Paul in Melbourne; Editing by Keith Weir)