Posted on 24 Jul 2014
BHP Billiton beat its own guidance for
full-year iron ore output, saying it mined a record 225 million tonnes in
fiscal 2014, 4% ahead of its forecast, leading productivity gains across a
number of businesses.
The world's third biggest supplier of iron
ore forecast a further climb in production of the steelmaking material in
fiscal 2015 to 245 million tonnes as it continues expansion work in Australia's
Pilbara iron ore belt.
"Our focus on productivity has
resulted in a significant improvement in operating performance at each of our
major businesses this year, with a 9% increase in group production and record
output at 12 operations," BHP's chief executive, Andrew Mackenzie said in
the group's production report.
"We expect to maintain strong momentum
and remain on track to generate group production growth of 16 percent over the
two years to the end of the 2015 financial year," he said.
Iron ore output in the final quarter of the
fiscal period rose 19% to 56.6 million tonnes versus the same period a year
ago, BHP said.
The miner is relying on iron ore for the
lion's share of fiscal 2014 earnings, which face pressure from
weaker-than-expected ore prices, which fell 30% between Jan 1 and June 30.
Iron ore for immediate delivery to China
stood at US$95.40 a tonne on Wednesday, recovering modestly from a mid-June low
of US$89, the lowest in 21 months.
BHP, which needs an iron ore price of about
US$45 a tonne to stay in the black, said it sold its iron ore for an average
US$103 a tonne in fiscal 2014, down 6% on the US$110 average sales price the
prior year.
Despite the price volatility, mega miners
such as BHP, Rio Tinto and Brazil's Vale are ramping up output, aiming drive
down production costs through economies of scale.
BHP said its metallurgical coal production
of 45 million tonnes in fiscal 2014 exceeded full-year guidance, with its
Queensland Coal division in Australia hitting record production and sales
volumes. It expects to produce 47 million tonnes in fiscal 2015.
Copper production increased to 1.7 million
tonnes in fiscal 2014 and would rise to 1.8 million in the current year, BHP
said.
BHP said it would take a charge of
US$900mil to US$1.3bil in its second-half EBIT (earnings before interest and
tax) in relation to costs for mine rehabilitation work, redundancies and
business closures. – Reuters
