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Production falls but still solid, BHP

BHP Billiton’s production has declined in the third quarter as global demand for commodities continues to dry up.

The miner said in its fiscal third-quarter production report that the company had achieved sound operational results against a backdrop of weak demand.

BHP produced 87.4 million tonnes of iron ore in the three months to March, a 1% decline from the corresponding period the year before.

Record production and shipments for the nine months ended March 2009 were achieved due to the delivery of expansion projects across all of its iron ore operations, the miner said in a statement.

Production at Western Australia Iron Ore was impacted by tie-in activities related to growth projects and the temporary suspension of operations following the death of a worker in March, the fifth fatality this financial year.

Energy Coal output fell 7% but metallurgical coal production rose 11%, thanks to Queensland’s recovery from the January 2008 floods which left several mines under water and out of action.

According to the miner, operations are now well positioned to respond to market conditions.

“As announced in the previous report, production in the 2009 financial year is expected to be 10 to 15 per cent below current capacity on an annualised basis. We have been re-building depleted inventories and reducing activities as inventories approach normal levels,” BHP said in its production report.

”This quarter’s production reflects management’s proactive and decisive actions in response to the challenging market conditions.”

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