Despite reporting volume and productivity gains for the six months to December, top tier miner BHP Billiton remains focused on improving shareholder returns and implementing cost control initiatives.
BHP CEO Andrew Mackenzie said the company’s value equation and belt-tightening program is still high on his agenda.
“By maintaining strict financial discipline and increasing internal competition for capital we intend to further differentiate ourselves by achieving a superior rate of return on incremental investment,” he said.
“We also remain committed to actively managing our portfolio for value.
“This strategy leaves us well positioned to deliver a substantial increase in free cash flow and higher returns to shareholders.”
Production across the company’s diversified portfolio increased 10 per cent over the six months.
“Volumes are expected to grow by 16 per cent over the two years to the end of the 2015 financial year,” Mackenzie said.
“Iron ore and metallurgical coal were particularly strong and are very well positioned to achieve guidance, notwithstanding the general uncertainty that exists as we enter the wet season.”
The diversified miner’s iron ore division achieved record production of 108 million tonnes for the second half of 2013 with early production from Jimblebar mine pushing the figures over the line.
Uncertainty surrounding wild wet season weather and a jump in maintenance tasks means BHP’s iron ore production guidance will remain unchanged at 212 million tonnes for FY2014.
Investing $301 million in two new shiploaders at the company’s Nelson Point operations in Port Hedland will see additional port capacity created with BHP looking to increase supply chain capacity to between 260 and 270 million tonnes per annum.
Productivity improvements saw annualised production across BHP’s Queensland coal operations jump to 68 million tonnes over the December quarter.
“Our productivity agenda is in full swing and we expect to carry strong momentum into the second half of the financial year,” Mackenzie said.
While thermal coal outputs were generally inline with 2012’s half year results, metallurgical coal production increased 22 per cent to 22 million tonnes in the six months to December.
Copper production guidance remain unchanged at 1.7 million tonnes for the 2014 financial year, with the majority of remaining outputs expected to be weighted in the June quarter.
Improvements at Olympic Dam’s smelter lifted results in the December quarter but planned maintenance is expected to hit smelting operations over 20 days in the second half of the 2014 financial year.