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BHP to lift iron-ore output 5% in 2013, petroleum output hits record
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17th October 2012
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PERTH ( – Mining giant BHP Billiton has maintained its guidance of a 5% iron-ore production increase from its Western Australian operations in the 2013 financial year, despite warning of slower economic growth in China.

BHP, the world’s third-largest iron-ore producer after Vale and Rio Tinto, said in its September quarterly report on Wednesday that it had produced 39.7-million tons of iron-ore in the three-month period.

This is a 1% increase on its production in the September 2011 quarter and a 3% decrease on the June quarter, with its Western Australian output impacted on by a planned shutdown associated with the Inner Harbour expansion project.

CEO Marius Kloppers said in a speech delivered in Brisbane that steel intensity use would continue to moderate, causing iron-ore and coal growth rates to slow on the back of weaker gross domestic product growth in China.

BHP expects the global iron-ore market to grow by some 650-million tons this decade, compared with the 800-million-ton increase seen over the last ten years.

Meanwhile, BHP Billiton reported record petroleum production for the quarter ended September, while energy coal, copper, nickel and alumina production also increased. Its metallurgical coal production came in lower than a year earlier.

Total petroleum production for the three months under review reached 666 000 barrels of oil equivalent as the Atlantis and Mad Dog facilities in the Gulf of Mexico restarted production. This was a 19% increase on the previous corresponding period and a 9% increase on the June quarter results.

BHP said reduced levels of planned maintenance at Bass Strait and the North West Shelf, both in Australia, as well as development drilling at the Shenzi operation, in the US, and at Pyranees, also in Australia, further contributed to the strong results.

Copper production for the quarter increased by 24% compared with the previous corresponding period, reaching 273 900 t. The mining major said the increased production reflected the mining of higher grade ore at the Escondida operation, in Chile, and the impact of an industrial action in the previous corresponding period.

Record quarterly production was also achieved at the Antamina project, in Peru, as milling rates continued to exceed the recently expanded ore processing capacity.

Despite the increased production figures, BHP reported that a reduction in smelter throughput affected the Olympic Dam operation, in Australia, with a 27-day smelter outage also scheduled for the December quarter.

Nickel production for the quarter under review increased by 5%, compared with the previous corresponding period, to reach 37 000 t, while alumina production increased by 10% year-on-year, to reach 1.1-million tons. Aluminium production declined by 14%, to reach 270 000 t, as the company’s Hillside operation, in South Africa, continued to recover from a major unplanned outage in the March quarter.

The company’s manganese production increased by 6% year-on-year, and by 4% compared with the quarter ended June, rising to 2.1-million tons.

Metallurgical coal production decreased by 4% year-on-year, and showed a 10% increase compared with the June quarter. The Queensland coal operation increased output by 20% as latent capacity was released across the supply chain.

Total metallurgical coal production reached 8.9-million tons during the three months to September.

BHP noted that production at its joint venture operations with Mitsubishi also benefited from a reduction in industrial activity, with no significant work stoppages experienced since July this year.

Energy coal production was 6% higher quarter-on-quarter and year-on-year, to 19.6-million tons.

The mining major noted that the New South Wales operation achieved a record quarterly production following the completion of the RX1 project in the June quarter, ahead of schedule. The San Juan coal mine, in the US, also benefited from a full quarter of production following the resumption of longwall mining in the June quarter.

Edited by: Mariaan Webb


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