Global diversified miner BHP Billiton last week reported that it had recorded record quarterly production in its iron-ore and coal divisions, and warned that output from its Olympic Dam uranium/copper mine would be affected by a damaged shaft.

The company said in a statement that iron-ore production had risen to 30,1-million tons during the September quarter, a 1% improvement on the production during the previous corresponding period.

Production was higher than for the June quarter, reflecting improved performance at Western Australia Iron Ore and all three pellet plants at Samarco, in Brazil, which have been operating since July.

Rival Rio Tinto also reported record iron-ore output in the September quarter, producing 47,5-million tons during the three-month period.

BHP Billiton, led by CEO Marius Kloppers, said that the group had started to see positive impacts of the restocking of pipelines, particularly in steelmaking raw materials, after a period “where demand essentially disappeared”.

BHP Billiton reported a 2% increase in the production of metallurgical coal, producing 9,4-million tons in the September quarter. Coal shipments continued to increase in response to stronger demand conditions.

Quarterly production records were achieved at the North West Shelf and Hunter Valley coal operations, in Australia, as well as at Zamzama, in Pakistan.

Copper/Uranium Disruption

Meanwhile, BHP Billiton said that it expected output from its Olympic Dam mine, in Australia, to be affected by the haulage system in the Clark shaft that was damaged earlier this month.

The fully automated haulage system at the Clark shaft, which is the primary system used to transport ore from underground to the surface for processing, had failed during operations on October 6.

Hoisting was continuing at the secondary Whenan shaft, but the group said ore hoisting would be at about 25% of capacity until full production resumed in the third quarter of the 2010 financial year.

Macquarie Bank was quoted by Reuters earlier this month as saying that the world copper market could lose about 50 000 t of supply this year, as a result of the incident at Olympic Dam.

BHP Billiton’s copper production during the September quarter dropped by 8%, to 283 900 t, and was impacted on by maintenance activities at Olympic Dam and Escondida, in Chile.

The repairs to Escondida’s Laguna Seca SAG mill were successfully completed in August.

BHP Billiton said it expected output from the copper mine, which it jointly owned with Rio Tinto, to increase by 5% to 10% in the 2010 financial year, owing to the mill repairs and a higher average grade.

Lead production at 61 370 t was higher than for both comparative periods as a result of a higher grade and improved recoveries at Cannington, in Australia, while zinc production increased by 11%, to 46 425 t, owing to a better grade and an increased proportion of ore containing zinc at Antamina, in Peru.

BHP reported that silver production was 5% higher than for the September 2008 quarter at 10 769 t, owing to a higher grade at Cannington and Antamina.

Meanwhile, uranium production was also in line with all comparative periods at 1 130 t. However, the company warned that the Olympic Dam incident would impact on production.

The group produced 35 400 t of nickel in the quarter. It said that output was impacted on by a restriction in hydrogen supply at Kwinana nickel refinery, in Australia, and planned maintenance at Cerro Matoso, in Colombia.

BHP Billiton’s manganese ore output fell by 37% and manganese alloy production fell by 69% in the September quarter, compared with figures for the corresponding three-month period in 2008. However, it said that market conditions for manganese ore had progressively recovered during the quarter. The group said it would be operating near full capacity towards the end of the December 2009 quarter.

As demand conditions for manganese alloy improved, stockpiles were drawn down and furnaces were restarted during the September 2009 quarter.

“We expect to be operating at about 65% of capacity towards the end of the December 2009 quarter,” the diversified miner stated.

Alumina production for the quarter fell by 2%, to 841 t, owing to an unplanned calciner outage at the Worsley operation, in Australia. Aluminium production across all operations was in line with production for the comparative periods at 313 t.

Market Conditions

Meanwhile, BHP Billiton said that Chinese economic growth continued to be robust on the back of strong domestic-focused consumption and infrastructure-based stimulus spending.

China’s restocking of commodities was essentially complete and there was now evidence of higher-than-normal stockpiles across the supply chain, BHP Billiton said.

“We continue to look for Chinese imports to more closely reflect real demand over the remainder of the 2009 calendar year.”

The miner also said that, despite the low metal inventories in developed economies, there was little evidence yet of sustainable demand for metals emerging after the northern summer.

“We continue to stress that this developed economy improvement is not without volati- lity and is from a very low base. We maintain our view that real demand follow-through in developed economies may not be transparent until the mid-2010 calendar year.”

Exploration

BHP Billiton continued to identify and prioritise various exploration activities.

Grassroots exploration continued on copper targets in Chile, Argentina and Zambia; nickel targets in Australia; manganese targets in Gabon; and diamond targets in Canada.

Exploration for iron-ore, coal, bauxite and manganese was undertaken in a number of regions, including Australia, South America, Russia and West Africa.

For the quarter ended September 2009, BHP Billiton spent $104-million on minerals exploration, of which $95-million was spent.

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