BHP Billiton ups Q3 Australian iron ore output
The determination of global iron ore mining majors to achieve greater economies of scale in a declining world market is reflected in the third quarter 2014 production results of BHP Billiton. The group's 17 per cent ore production increase and reaffirmed "relentless" determination to slash unit costs – by at least 25 per cent to less than US$20 per tonne – will loom like a tidal wave to small iron ore producers. (One of them, West African miner London Mining Plc, is already into administration.) To top it all, BHP also reported a 25 per cent rise in third-quarter production of coking coal – another essential ingredient in world steel production. – GK
Sydney, Australia | AFP | Wednesday 10/22/2014
The world's biggest miner reported a 17 percent increase in iron ore production to 57.1 million tonnes in the three months to September compared to the previous year.
"Robust operating performance across our diversified portfolio in the September 2014 quarter delivered a 9.0 percent increase in production with records achieved for eight operations and four commodities," BHP chief executive Andrew Mackenzie said.
"With production guidance maintained across all operations and businesses, we remain on track to generate group production growth of 16 percent over the two years to the end of the 2015 financial year."
BHP said its Western Australian iron ore production guidance for the 2015 financial year remained unchanged at 245 million tonnes.
The miner reported a 25 percent rise in coking coal production to 12.8 million tonnes compared with the previous September quarter, while total petroleum output jumped by 7.0 percent to 67.4 million barrels of oil.
Copper production slipped by 3 percent to 389,400 tonnes as industrial action, a power outage in northern Chile and declining ore grades hurt output.
BHP vowed to maintain its "relentless focus on costs", as the firm said it no longer had any major iron ore projects in Western Australia in the pipeline.
"With our focus now on maximising the value of existing infrastructure, we plan to reduce costs and invest judiciously in very low capital cost debottlenecking initiatives," Mackenzie said.
He added that BHP planned to reduce unit costs for iron ore, a key ingredient in steel making, by at least 25 percent to less than US$20 per tonne.
Iron ore prices have slumped by 40 percent this year, hitting a five-year low amid the continued rise in output from mining giants such as BHP, Rio Tinto and Brazilian mining powerhouse Vale.