BHP Billiton posts record iron ore, coal production results

BHP Billiton produced 16 per cent more iron ore in the December 2014 half year to post a new record.

BHP revealed it produced 113 million tonnes in the half year, and said guidance for the 2015 financial year remains unchanged at 225 million tonnes.

Western Australia Iron Ore (WAIO) production increased by 15 per cent in the half year to a record 124 Mt as the ramp up at BHP’s Jimblebar mine continued.

The miner revealed WAIO also achieved record sales volumes of 126 Mt due to the company’s strategy of increasing the percentage of direct to ship ore which has unlocked further port capacity.

BHP said a ramp up to 270 Mtpa is expected to be achieved without the need for additional fixed plant investment.

“Beyond that, the Inner Harbour Debottlenecking and Jimblebar Phase 2 projects have the potential to increase total capacity to 290 Mtpa by the end of the 2017 financial year at very low capital costs,” the miner said.

In other production results, BHP said metallurgical coal production increased by 21 per cent to a record 26 Mt. The company retained guidance of 47 Mt for the 2015 financial year.

BHP said record production at its mines in Queensland contributed to the strong result, while Illawarra Coal also delivered record production and sales volumes.

However, production of energy coal decreased by three per cent to 36 Mt, but BHP said guidance of 73 Mt for the 2015 financial year remains unchanged.

The closure of BHP’s Perseverance mine affected nickel production, which was 11 per cent lower in the half year.

Total copper production decreased by two per cent in the half to 813 kt but guidance remains unchanged at 1.8 Mt.

In petroleum, BHP said it had to move quickly to respond to lower prices by reducing the number of rigs it operates in the US shale fields by 40 per cent by the end of this financial year.

Total petroleum production increased by nine per cent in the half to a record 131 MMboe, with guidance unchanged at 225 MMboe.

BHP CEO Andrew Mackenzie said he was pleased with the company’s results.

“Our operational performance over the last six months has been strong. We are reducing costs and improving both operating and capital productivity across the group faster than originally planned,” Mackenzie said.

“These improvements will help mitigate some of the impact of lower commodity prices and we remain alert to opportunities to further increase free cash flow.”

Mackenzie said the company was making good progress on the planned demerger, which will create South32.

BHP will put will demerger plans before shareholders for a vote in May.

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