Posted on 23 Apr 2009
The world's largest miner BHP Billiton Wednesday posted a slump in iron ore and base metals output in the March quarter amid slowing global demand and economic uncertainty.
BHP reported a one per cent drop in iron ore production year-on-year for the three months to March, saying it was working "against a backdrop of weak demand" and challenging market conditions.
"In the medium term we expect that market conditions will remain uncertain," BHP said in a statement to the Australian Stock Exchange.
"Consistent with the way we have managed our business to date, our operations will remain under review. We will continue to take appropriate actions in any business that is cash-negative and set to remain so, or where there is lack of demand."
In a sign of the slowdown, the Anglo-Australian miner said it had received deferral requests for long-term iron ore contracts, and sold the deferred tons on the spot market.
BHP said quarterly copper production slumped 14 per cent, and flagged a 30 per cent decline in output at its Escondida copper mine in
Output of petroleum products eased three per cent to the equivalent of 31.67 million barrels of oil, while lead and silver each slumped by more than 20 per cent and aluminium by four per cent.
Nickel and metallurgical coal lifted 10 and 11 per cent respectively, but the miner in January shut its flagship Ravensthorpe nickel mine and said it would cut Australian coal production by up to 15 per cent
Rival and former takeover target Rio Tinto last week posted a 15 per cent fall in iron ore production, also citing reduced demand and bad weather in the Pilbara region.
But
Fat Prophets analyst Gavin Wendt said BHP's quarterly production report was roughly in line with expectations.
"Iron ore output held up well, considering the bad weather in the Pilbara, and compares well to Rio Tinto's quarterly output, where heavy rain cut output by about 15 per cent," Wendt said.
