20th Jan 2016 07:51
LONDON (Alliance News) - BHP Billiton PLC Wednesday said further productivity improvements has supported a "robust" period of production in the first half of the financial year as it reiterated its full year production guidance across its commodities except for iron ore.
The multi-commodity giant said petroleum, copper and coal all remain on track to deliver production results in the financial year due to end in June that will meet expectations, however, it warned iron ore will be lower than previously expected.
In the first half of the year, petroleum production totalled 125.0 million barrels of oil equivalent, which was down 5% from 2014, reflecting the company's deferral of development activity onshore US and natural field declines, it said.
"Our operated assets continued to perform well over the last six months. The strong performance of our conventional petroleum assets has offset lower shale volumes following a reduction in investment to preserve the value of our acreage in current market conditions," said Chief Executive Andrew Mackenzie.
Copper production in the half totalled 762,000 tonnes, down 6% year-on-year as a ramp up in production from the Escondida mine in Chile partly offset a fall in grades.
Iron ore production totalled 118.0 million tonnes, a rise of 4% compared to a year earlier as the Jimblebar mining hub in Australia reached full capacity.
"Increased throughput at Escondida helped mitigate the impact of expected grade decline and better productivity supported production at Queensland Coal. These efforts have allowed us to maintain production guidance for petroleum, copper, coal and Western Australia iron ore," said Mackenzie.
Although Western Australia iron ore remains on track, BHP is expecting iron ore production to be 10.0 million tonnes below guidance for the full year due to the suspension of production at Samarco operation in Brazil which was shut down after a dam burst, devastating the local area and killing numerous individuals.
Full year iron ore production guidance has been lowered to 237.0 million tonnes from 247.0 million tonnes.
Metallurgical coal production totalled 21.0 million tonnes in the half, falling 3% year-on-year as record production from four mines in Australia was offset by a convergence event at the Broadmeadow mine and planned closure of the Crinum mine, both in Australia.
Energy coal production in the half also fell 3% year-on-year to 19.0 million tonnes as unfavourable weather conditions hampered operations in the period.
"Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector. We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business. In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term," said Mackenzie.
BHP said its underlying profit for the first half will include charges in the range of USD300.0 to USD450.0 million.
By Joshua Warner; [email protected]; @JoshAlliance
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