PERTH (miningweekly.com) – Mining heavyweight BHP Billiton has reported a 9% increase in group production for the full-year ended June, driven by higher iron-ore, petroleum and metallurgical coal output.

“Our business performed well over the 2015 financial year. We have improved the performance of our equipment, reduced costs and increased volumes despite a significant reduction in capital spend.

“Our simpler portfolio following the demerger of South32 will help us maintain the pace of operational improvement, further supporting gash generation, margins and returns” said BHP CEO Andrew Mackenzie on Wednesday.

BHP reported a 13% increase in iron-ore production to a record 254-million tonnes for the year. The higher output was underpinned by productivity gains across the integrated supply chain, as well as the successful ramp-up of the Jimblebar operation.

This was the fifteenth consecutive yearly production record set at BHP’s Pilbara operations.

For the fourth quarter ended June, iron-ore production reached 60-million tonnes, which was up by 6% on the previous corresponding period.

“Better productivity will be the sole source of volume growth at Western Australian iron-ore in the 2016 financial year, with production forecast to increase by 7% and unit costs expected to fall to $16/t,” Mackenzie said.

For the 2016 financial year, BHP expected to produce some 270-million tonnes of iron-ore, as a result of improved processing efficiency at Mining Area C and the Newman operation.

Further production improvements were expected to eventually contribute to an increase in capacity to some 290-million tonnes a year.

Meanwhile, BHP said its petroleum production for the full year increased by 4% to a record 256-million barrels of oil equivalent, supported by a 67% increase in onshore US liquid volumes, which reached 56-million barrels of oil equivalent at the end of June.

For the three months ended June, BHP produced 63.2-million barrels of oil equivalent.

However, the miner warned that petroleum production was forecast to decrease by some 7% to 237-million barrels of oil equivalent in the 2016 financial year, as a result of some planned maintenance programmes and natural field decline.

“In petroleum, through improved recoveries and lower drilling costs, we expect to maintain production in the Black Hawk and Permian in the 2016 financial year, despite cutting annual shale investment by over 50%.

“Although our decision to cut spending in the onshore US will mean deferring gas volumes in the near term, we expect to realise greater value by developing our acreage later,” Mackenzie told shareholders.

Meanwhile, copper production for the full-year remained unchanged at 1.7-million tonnes, as strong operating performance from the Escondida mine, in Chile, was offset by the impact of a mill outage at the Olympic Dam operation, in South Australia.

Copper production for the quarter ended June reached 435 000 t, which was some 7% below the figures reported in the previous corresponding period.

For the 2016 financial year, copper production was expected to decrease by 12%, to 1.5-million tonnes on the back of an expected 27% decline in grades at the Escondida mine.

Metallurgical coal production for the year reached 43-million tonnes, a 13% increase on the 2014 production figures, while energy coal production declined by 5% in the full-year, to 41-million tonnes.

BHP had, meanwhile, flagged additional impairments of between $350-million and $650-million for the six months ended June, relating to impairments on its copper productions and a rig termination at its onshore US business.

These impairments were in addition to the near $2-billion being written off against the onshore US assets during the six months.