20th Jan 2016 06:35
MELBOURNE (Alliance News) - Mining giant BHP Billiton PLC reported that its iron ore production for the second-quarter rose 1% year-over-year to 56.96 million tons, but it cut its financial 2016 total iron ore production guidance by 10 million tons to 237 million tons due to the suspension of production at its Samarco joint venture in Brazil.
BHP said it expects underlying attributable profit in the December 2015 half year to include additional charges in a range of about USD300 million to USD450 million.
Total iron ore production for the December 2015 half year increased by 4% to 118 million tons from the prior year.
Samarco production for the December 2015 half year decreased 25% to 11 million tons on a 100% basis. Mining and processing operations at Samarco remain suspended following the breach of the Fundão tailings dam and Santarém water dam on November 5 that killed at least 17 people. Pellets continued to be shipped from port stockpiles during the December 2015 quarter with the final shipment of pellets expected in January 2016.
Production for the 2016 financial year is now expected to be 237 million tons, 4% lower than prior guidance, and reflects the suspension of operations at Samarco.
BHP Billiton expects underlying attributable profit in the December 2015 half year to include additional charges in a range of approximately USD300 million to USD450 million related to redundancies largely associated with the simplification of business, rig terminations in Onshore US and closure of the Crinum coal mine; inventory write-downs reflecting significantly weaker commodity prices; and global royalty and taxation matters.
Earlier this month, BHP Billiton announced that it expects to recognise an impairment charge of approximately USD4.9 billion post-tax, or approximately USD7.2 billion pre-tax, against the carrying value of its Onshore US assets. The impairment reflected changes to price assumptions, discount rates and development plans. This follows significant volatility and much weaker prices experienced in the oil and gas industry which have more than offset our substantial productivity improvements.
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