21st Jan 2015 06:31
MELBOURNE (Alliance News) - Mining giant BHP Billiton Ltd said Tuesday that its global iron ore production for the second quarter grew 16% year-over-year, but edged down 1% sequentially. Production of metallurgical coal grew 17%. Total iron ore production for the first half of 2015 increased 16%. The company also maintained its full-year production guidance for petroleum, copper, iron ore and coal businesses.
"Our operational performance over the last six months has been strong. We are reducing costs and improving both operating and capital productivity across the Group faster than originally planned. These improvements will help mitigate some of the impact of lower commodity prices and we remain alert to opportunities to further increase free cash flow," CEO Andrew Mackenzie said in a statement.
Meanwhile, smaller rival Rio Tinto PLC reported Wednesday that its global iron ore production for the fourth quarter grew 12% from last year.
Issuing its production report for the second quarter ended December 31, 2014, BHP said it recorded a 16% increase in production of iron ore to 56.35 million tons from the year-ago period. However, production edged down 1% from the prior quarter.
The world's largest mining company also reported a 16% increase in first half production to 113.44 million tons from last year. Iron ore is the main raw material used for steel production. The company said it achieved first half production records across eight operations and five commodities.
BHP's second-quarter production of metallurgical coal, which is also used in steel making, grew 17% from last year to 13.54 million tons, and increased 6% from the first quarter. Production for the first half increased 21% to 26.31 million tons.
Energy coal production grew 5% from the prior-year quarter to 18.62 million tons. Meanwhile, it decreased 3% for the first half to 36.46 million tons.
The miner said its total petroleum production for the second quarter increased 10% from the year-ago period to 63.6 million barrels of oil equivalent or boe. Total petroleum production grew 9% in the first half.
The company's alumina production grew 3% to 1.40 million tons from last year. Meanwhile, aluminum production for the quarter decreased 15% to 0.27 million tons from the year-ago period.
The company's copper production for the second quarter decreased 4% to 423,700 tons, and production of Nickel declined 10% to 34,200 tons from last year.
For the first half of 2015, BHP's petroleum exploration expenditure was USD268 million, of which USD244 million was expensed. The company spent USD154 million on minerals exploration, of which USD115 million was expensed.
The company noted that production guidance for 2015 remains unchanged and is on track to deliver Group production growth of 16% over the two years to the end of the 2015 financial year.
Looking ahead to the full-year 2015, the company continues to expect total iron ore production of 225 million tonnes, total petroleum production of about 255 million barrels of oil equivalent, copper production of 1.8 million tonnes, total metallurgical coal production of 47 million tonnes and total energy coal production of 73 million tonnes.
BHP Billiton also said it expects underlying attributable profit in the first half to include impairment charges in the range of about USD200 million to USD250 million recognized as a result of the divestment of conventional petroleum assets in North Louisiana and unconventional gas assets in the Pecos field in the Permian.
Further, the company noted that it continues to believe that its planned demerger will help support further improvements in operating performance in both the core BHP Billiton and South32 assets. Within BHP Billiton, it would allow it to identify and deploy best practice across our assets more quickly and simplify our organisation to reduce overheads.
On December 8, 2014, BHP Billiton announced that the new company it intends to create through its proposed demerger will be called South32. A final board decision on the proposed demerger will be made once all necessary third party approvals are secured on satisfactory terms.
The demerger remains on track to be completed in the first half of the 2015 calendar year, with a shareholder vote taking place in early May 2015.
Copyright RTT News/dpa-AFX
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