16th Apr 2014 05:32
LONDON (Alliance News) - BHP Billiton Ltd on Wednesday raised its full-year production outlook for iron ore and metallurgical coal after production of the commodities during the third quarter rose 23% and 28% year-over year respectively. However, the mining giant's copper production for the third quarter declined 5% from last year.
Andrew Mackenzie, Chief Executive Officer of BHP Billiton, said in a statement, "Our productivity agenda continues to deliver outstanding results, underpinning a 10% increase in production so far this year. Having achieved record iron ore and metallurgical coal production during the first nine months of this year, we have raised full-year guidance for both commodities."
Meanwhile, smaller rival Rio Tinto PLC reported Tuesday that its global iron ore production for the first quarter grew 8% from last year. The company maintained its full-year 2014 production guidance.
Issuing its production report for the third quarter ended March 31, 2014, BHP said production of iron ore rose 23% from the year-ago period to 49.57 million tons. Production also edged up 1% from the prior quarter.
The world's largest mining company reported a 21% increase in iron ore production for the nine-month period from last year to 147.39 million tons. This includes a 23% increase in Western Australia Iron Ore or WAIO production. Iron ore is the main raw material used for steel production.
BHP Billiton said that for the nine-month period, it achieved record production for four commodities and at ten operations.
BHP's third-quarter production of metallurgical coal, which is also used in steel making, grew 28% from last year to 11.47 million tons, but declined 1% from the second quarter. Production for the nine months increased 24% to 33.19 million tons.
Meanwhile, energy coal production increased 11% from the prior-year quarter to 17.72 million tons.
The miner said total petroleum production for the third quarter grew 10% from the year-ago period to 60.9 million barrels of oil equivalent or MMboe.
The company's alumina production for the quarter grew 3% from last year to 1.25 million tons. Meanwhile, aluminum production for the quarter decreased 6% from the year-ago quarter to 286 million tons.
Copper production for the third quarter declined 5% to 413,900 tons, while production of nickel decreased 19% from last year to 34,100 tons.
For the nine months of 2014, BHP's petroleum exploration expenditure was USD434 million, of which USD231 million was expensed. The company said it plans a USD600 million exploration program for the 2014 financial year that will be largely focused on the Gulf of Mexico and Western Australia.
The company also spent USD282 million on minerals exploration in the nine months ended March 2014, of which USD242 million was expensed.
BHP also announced a 28% increase in the size of the resource at Chile's Escondida copper mine, compared to a previous estimate as at June 30, 2013. The increase largely reflects the inclusion of 46 km of in-fill drilling that has continued to delineate the Escondida Este deposit, which is adjacent to the Escondida mine, already the world's largest copper mine.
Looking ahead to full-year 2014, BHP Billiton raised its raised iron-ore production guidance to 197 million tons from the prior forecast of 192 million tons. The company now projects total metallurgical coal production for the year of 43.5 million tonnes, up from the prior forecast of 41 million tons.
However, the company maintained its full-year copper production guidance at 1.7 million tonnes, but anticipates a strong June 2014 quarter.
Meanwhile, BHP lowered its petroleum production guidance for 2014 to 245 MMboe from 250 MMboe. The 2% reduction to previous guidance reflects the company's divestment of the Liverpool Bay project in the UK as well as lower gas and natural gas liquids production in the Hawkville area of the Eagle Ford.
BHP Billiton also noted that its share of capital and exploration expenditure for the 2014 financial year is expected to decline by 25% to USD16.1 billion, as planned.
Mackenzie added, "By maintaining strict financial discipline and a focus on our four pillars of Iron Ore, Copper, Coal and Petroleum, we continue to believe that an average rate of return of greater than 20% is achievable for our major development options."
BHP closed Tuesday's regular trading session on the NYSE at USD70.07, down USD1.17 or 1.64% on a volume of 2.59 million shares.
In Wednesday's trading on the Australian Securities Exchange, BHP.AX is trading at AUD37.68, down AUD0.10 or 0.26% on a volume of 2.08 million shares.
Copyright RTT News/dpa-AFX
Related Shares:
BHP Group