BHP Billiton talks up its iron ore productivity drive

BHP Billiton will today outline the productivity drives it has been pushing at its Western Australia Iron Ore business in order to produce record tonnes of the commodity.

Speaking in Perth at the annual Global Iron Ore and Steel Forecast Conference, BHP Billiton President Iron Ore, Jimmy Wilson, is set to highlight the way in which the company has maximised returns on installed capacity at its mining operations.

“The effectiveness of our approach is validated by our robust financial and operating results despite the challenging market conditions,” Wilson said.

“For the first half of this financial year the team has delivered a solid underlying EBIT margin of 49 per cent and a return on assets of 34 per cent.”

BHP said Wilson will also reiterate WAIO is on track to achieve unit cash costs of less than $US20 per tonne through a pursuit of equipment availability and utilisation, efficient procurement and supply management and capital and workforce productivity.

Wilson is also set to spruik BHP’s position in the Pilbara, which the company labels as “strong and differentiated.”

“Not only is our concentrated resource position a competitive advantage, but the quality and high-grade characteristics of our orebodies translates into premium products in the market,” Wilson said.

“The majority are high Fe Brockman and Marra Mamba ores, with low impurities and a high proportion of lump, around which we optimise our mine plans to maximise our profit margin.

“We can deliver high-quality product that our customers value, through existing hub infrastructure, at a low operating cost. Our footprint also means that we won’t need to invest in new mining hubs to sustain current operations for decades.”

BHP has invested over $25 billion over the last decade to build capacity at its WAIO operations.

WAIO achieved record production of 124 million tonnes in the first half and is on track to deliver 245 million tonnes in the 2015 financial year (100 per cent basis).

BHP plans to grow its iron ore capacity even further, targeting production of 290 million tonnes a year by 2017.

However the company said it will not develop any new projects to achieve this, but instead focus on making existing infrastructure more productive.

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