BHP posts record iron ore, coking coal production

BHP Billiton has achieved record coal and iron ore production in the September quarter, attributing the results to its “relentless” focus on productivity.

Company-wide, production increased by 9 per cent in the three months to September 30, with records achieved for eight operations and four commodities.

Iron ore was one of these, with a production increase of 17 per cent to a record 57Mt.

Western Australian Iron Ore (WAIO) production increased by 15 per cent to a record 62Mt as the ramp-up of Jimblebar continued ahead of schedule.

BHP expects production at WAIO for 2015 to total 245 Mt.

The company also posted a record quarter for metallurgical coal which increased by 25 per cent to a 13Mt.

BHP said record coal production at its Queensland mines was underpinned by strong operational performance across the business.

The company’s new Caval Ridge mine operated at capacity during the period, as did Daunia and South Walker Creek Mines.

Its Illawarra Coal mines also increased production by 64 per cent.

Metallurgical coal is forecast to increase by 4 per cent in fiscal 2015 to 47 million tonnes.

Production of energy coal fell 9 per cent to 17.83 million tonnes.

At NSW energy coal, BHP said adverse weather and unplanned wash plant outages resulted in a 12 per cent decline.

In line with prior guidance, the company expects total energy coal production to total 71 Mt.

In other commodities, the company increased its petroleum production by 7 per cent in the September quarter to 67.4 MMboe.

Copper production was 389,400 tonnes, a 3 per cent fall on the previous corresponding quarter.

Nickel production saw a decline of 12 per cent to 36 kt as a result of the closure of Perseverance mine. Consistent with prior guidance, BHP said saleable nickel production at Nickel West will decline by four per cent.

BHP CEO Andrew Mackenzie used the release of the September quarterly report to talk up the company's gains and plans for its iron ore business.

Mackenzie said that with no major projects in execution for the first time in a decade, WAIO has turned its focus on maximising the value of existing infrastructure that will see a reduction of costs.

“These plans are expected to increase total supply chain capacity to 290 Mtpa by the end of 2017 fiscal year and reduce unit costs by at least 25 per cent to less than $US20 a tonne,” Mackenzie said.

“When combined with other initiatives across our portfolio we are very well positioned to reduce cash costs by more than $US2.3 billion and deliver volume-related productivity gains of at least $US1.7 billion by the end of the 2017 financial year.”

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