22nd Apr 2015 08:41
LONDON (Alliance News) - BHP Billiton Ltd Wednesday said production mainly rose across all of its segments in the third quarter and the first nine-months of the year and said it is on track to beat its original production guidance and to achieve group production growth of 16% over a two-year period before the end of 2015.
The world's biggest miner said iron ore production for the third quarter rose 20% year on year to 59.0 million tonnes, whilst production for the nine months ended March 31 totalled 172.4 million tonnes, which is up 17% from a year earlier.
Iron ore production for the 2015 financial year is expected to be around 2% higher than the company's previous guidance of 230.0 million tonnes.
"In iron ore, our focus remains on producing at the lowest possible cost with Western Australia iron ore unit costs now below USD20 per tonne as we continue to improve productivity," said the company. "Despite the subsequent increase in supply-side competition, our low-cost expansions continue to deliver attractive margins and returns through the cycle."
Third quarter production of metallurgical coal, which is used in steel making, remained flat with last year at 11.5 million tonnes, but over the nine-month period production rose by 14% to 37.8 million tonnes. Energy coal production in the third quarter increased 11% to 19.7 million tonnes and rose 2% in the nine-month period to 56.2 million tonnes.
The resources giant said its total petroleum production for the third quarter increased 1% from a year ago to 61.5 million barrels of oil equivalent, taking production in the first three quarters to 192.5 million barrels, representing a 6% rise from the same period in 2013.
"In petroleum, we have responded quickly to current market conditions by reducing the number of rigs operated in our onshore US business by 35% over the March 2015 quarter. We continue to review our drilling and development program as we seek to maximise the value of our resource base. With higher oil prices expected over the medium term, we believe deferring development will create more value than producing today," said Chief Executive Andrew Mackenzie.
The company's alumina production for the third quarter remained essentially flat at 1.25 million tonnes and experienced a minor 1% rise in the nine month period to 3.9 million tonnes.
Copper production for the third quarter surged 11% to 460,000 tons, but only rose by 1% over the first three quarters to 1.3 million tonnes, while nickel production declined 5% to 32,500 tonnes in the quarter and totalled 102,400 tonnes for the nine-month period, which is down 9% from a year earlier.
BHP Billiton Chief Executive Andrew Mackenzie said: "Our teams continue to exceed expectations and deliver strong operating performance. Our commitment to sustainably improve productivity and lower costs is helping mitigate the impact of subdued commodity prices and supporting returns for our shareholders."
BHP Billiton said it remains on track to deliver group production growth of 16% over the two years to the end of the 2015 financial year.
Outside of production, BHP said the proposed demerger of the company into two separate companies, BHP and South32, is on track and reiterated its call to shareholders to approve the demerger at its general meeting on May 6.
"With a more focused portfolio, BHP Billiton will have the potential to unlock further shareholder value, while creating a new global diversified metals and mining company with a significant industry presence in each of its major commodities," said Mackenzie.
BHP currently has interests in assets across 13 countries in six continents. The miner is proposing retaining its core portfolio of 19 assets based in eight countries over three continents, which generated 96% of the company's underlying earnings before interest and tax in 2014, and separating its less profitable assets to South32.
If separated, the majority of South 32's assets will be based in the southern hemisphere, mainly focusing on Australia and South Africa to produce alumina, aluminium, coal, nickel, manganese, silver, lead and zinc.
In total, South 32 would be operating in Australia, South Africa, Mozambique, Brazil and Colombia with ten already producing assets.
That would leave BHP focusing on on oil and gas assets in the UK North Sea, Algeria, Pakistan, Venezuela and Australia, alongside the New Mexico coal project in the US. BHP would also retain its numerous copper assets in Chile and Peru.
BHP shares were trading down 0.1% on Wednesday morning at 1,462.00 pence per share.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
BHP Billiton PLC