TORONTO (miningweekly.com) – BHP Billiton produced 32,45-million tons of iron-ore in the last three months of 2009, an increase of 11% compared with the same period a year earlier, after Chinese demand for the steelmaking ingredient increased.

“During the December quarter, we saw strong price recovery across the commodity suite driven by demand in China and restocking in the developed world,” BHP said in a production report on Wednesday.

“Government stimulus measures appear to have supported a gradual return to normalised global trade, albeit from a low base, and most key indicators across the developed economies showed improvement.”

Looking ahead, the speed of recovery in developed economies remains “uncertain”, while the impact of measures to control loan growth in China is yet to be determined.

“Consequently, we expect some degree of volatility in the short-term outlook for our commodities,” BHP said.

The diversified miner's iron-ore production mirrored strong output from rival Rio Tinto, which last week reported a 49% jump in fourth-quarter output to 47,2-million tons.

BHP, led by CEO Marius Kloppers, reported a 20% year-on-year increase in nickel production for the December quarter, thanks to a record performance from its Nickel West operation in Australia.

The Kalgoorlie nickel smelter achieved record quarterly production after a major furnace rebuild a year earlier.

Back to ferrous metals, manganese ore production for the December 2009 quarter was higher in line with improved demand, BHP said.

Manganese alloy output was 28% lower in the quarter than in the same period of 2008, but furnaces restarted since the September quarter are progressively ramping up as the demand environment improves, the group said.

Production is expected to be at full capacity towards the end of March.

Metallurgical coal output was 12% lower in the December quarter, reflecting planned maintenance at Queensland Coal and planned longwall moves at Illawarra Coal, both in Australia.

On the energy coal side, production declined 3% year-on-year in the October-to-December period, after several operations were affected by planned and unplanned interruptions.

“Production at Cerrejon (Colombia) was constrained by lower demand. New Mexico (US) was impacted on by planned outages and South African mines were impacted on by unplanned maintenance and weather interruptions,” the group said.

BHP said copper production decreased 12% compared with the December quarter in 2008, mainly due to the Clark Shaft outage at Olympic Dam, in Australia, and industrial action at Spence, in Chile.

“Olympic Dam ore hoisting continued to operate at approximately 25% of capacity,” the company said.

Mining of higher grade ore zones has been prioritised following the Clark Shaft incident and repairs to the Clark Shaft haulage system are progressing well, it reported.

“Currently, Clark Shaft production is expected to resume in the March 2010 quarter, however, we will regularly review the repairs development.”

Alumina production for the December quarter rose 5%, while aluminium output was up just 1%.

Alumina output levels were helped by the continued ramp-up of the Alumar refinery expansion, the company said.

Alumar  is currently operating at 80% of its new nameplate capacity and is expected to reach full capacity by the end of June 2010.

BHP said its petroleum unit achieved record production in the six months ended December 31, attributing gains to the ramp up of its Shenzi operation, in the US, strong reservoir performance from Atlantis and no weather-related interruptions.

However, the December 2009 quarter production decreased compared with the previous quarter owing to lower seasonal demand in eastern Australia and planned downtime at assets in the Gulf of Mexico.

Diamond production rose 28% year-on-year, due to an increase in ore processed and the full ramp-up of the Koala underground mine, in Canada, which contains a larger proportion of higher-value carats.

“Production continues to be influenced by variability of ore sources due to the mix of openpit and underground mining,” the company added.

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