BHP Billiton , the world's biggest miner, said it expects commodity markets to cool further and that investors had lost confidence in the longer-term health of the global economy.  

The Reuters-Jefferies CRB index, a closely followed indicator for commodities, has slid more than 11 percent since hitting a five-month peak in late February amid a broader sell-off in financial markets driven by concerns about the European debt crisis.

"The tail winds of high commodity prices have contributed to record growth in the sector. Now we have a period where those tail winds are moderating and we expect further easing over time," Chairman Jacques Nasser said in a speech to a business lunch in Sydney.

The sell-off has not yet knocked the confidence or spending plans of BHP, which is less than one year into a five-year $80 billion expenditure program to beef up its iron ore, coal, energy and base metals divisions.

Nasser said Australia, where BHP has the bulk of its iron ore and coal operations, was becoming one of the higher costs countries in the world to do business.

Australia's policies on industrial relations and tax needed to support investment, he said.

"What we have in Australia is not a perfect system and on a global basis we are at the upper end of overall taxation levels. That means we are not competitive - however what matters more at this point in time is stability.

"If Australia doesn't get both of these policy levers right - industrial relations and taxation - we will not drive improvements in economic prosperity that we should expect of our country."

Shares in BHP fell 3.6 percent on Wednesday, the lowest since July 2009. The broader market was down 2.2 percent.

In March, BHP said it saw signs of flattening in demand for iron ore from China, but remained upbeat on the long-term demand outlook.  

Much of BHP's earnings hinges on demand growth in China, the biggest importer of iron ore, copper, nickel and other industrial staples needed to support mass urbanization underway in the world's No 2 economy.  - Reuters