BHP hits record iron ore production

BHP Billiton has reached record Australian iron ore production in the past six months of 2016, the company said on Wednesday, allowing the world’s largest miner to benefit from the recent price surge.

Commodity prices for key metals such as iron ore have jumped in recent months after a slump, bolstering producers such as Anglo-Australian BHP.

Its Western Australia mines had produced record volumes of 118-million tonnes in the second half of 2016, up 4% from the same period in 2015, the company said.

Iron ore prices surged 28% to $55 between the two periods, BHP said.

For the December quarter, the output of iron ore rose 9% to 60-million tonnes compared to the previous year.

“We have performed well during a period of higher prices, with record iron ore volumes achieved at [Western Australia Iron Ore],” BHP Billiton chief Andrew Mackenzie said.

“Our consistent delivery of operating and capital productivity, and strict adherence to our capital allocation framework have positioned us to maximise shareholder value.”

As it ramps up iron ore production, BHP has wound back petroleum output as it deferred developments at onshore US fields on the back of falling prices. The miner reported a 15% decline in total petroleum output to 105.9-million barrels of oil equivalent for the six months to December 31. BHP added that it was not yet able to provide an update on the financial effect of Brazil’s Samarco dam disaster for the half year to December.

BHP and Vale, which co-own Samarco, said last week they had struck a deal with prosecutors to negotiate by June 30 the settlement of a 155-billion reals ($47.5bn) claim over the fatal mine collapse.