BHP Bil­li­ton’s iron ore out­put jumps

The China Post - - WORLD BUSINESS -

Min­ing gi­ant BHP Bil­li­ton Wed­nes­day said to­tal iron ore pro­duc­tion for the nine months to March jumped to a new high as prices re­mained near a decade­low, but de­ferred a project to boost out­put of the com­mod­ity to save costs.

In an op­er­a­tional re­view for the nine-month pe­riod, the world’s big­gest miner said it ex­pected iron ore out­put for the 2015 fi­nan­cial year to in­crease by 2 per­cent to 230 mil­lion tons from its pre­vi­ous guid­ance.

The de­ferred project, which in­volved plans to re­duce bot­tle­necks at a West­ern Australia port, was post­poned as the out­put from ex­ist­ing in­fra­struc­ture con­tin­ued to ex­ceed ex­pec­ta­tions, the miner said.

Mackenzie said BHP acted quickly to boost its pro­duc­tion as Chi­nese de­mand for the metal soared over the past decade, with the in­creased out­put help­ing the firm de­spite re­cent sharp falls in the ore price.

The iron ore price has tum­bled by 60 per­cent over the past year and hit a decade-low of US$47.08 (NT$1,461) in early April. It was buy­ing just above US$51 early Wed­nes­day.

Some of the world’s big­gest iron ore min­ers, in­clud­ing BHP, were last week placed on “credit watch neg­a­tive” by rat­ings agency Stan­dard & Poor’s amid the div­ing price.

S&P Wed­nes­day low­ered the credit rat­ing of Australia’s Fortes­cue Met­als, the world’s fourth­largest iron ore miner, from BB+ to BB and gave it a neg­a­tive out­look. It also low­ered its debt rat­ings.

Fat Prophets re­sources an­a­lyst David Len­nox told AFP BHP’s re- sult was “pretty sound,” adding: “There was noth­ing in there that was sur­pris­ing.

Iron ore out­put soared by 17 per­cent in the nine months to March com­pared to the pre­vi­ous pe­riod while petroleum pro­duc­tion rose 6 per­cent.

Met­al­lur­gi­cal coal out­put jumped by 14 per­cent and cop­per pro­duc­tion edged higher by 1 per­cent. Alu­minum and nickel out­put fell by 15 per­cent and 9 per­cent re­spec­tively.

The An­glo-Aus­tralian firm said its plans to de­merge parts of its busi­ness, in­clud­ing alu­minum, man­ganese, sil­ver and se­lected coal and nickel op­er­a­tions, into a com­pany called South32 was on track later this year.

Len­nox said BHP’s plans to de­fer the “de­bot­tle­neck­ing project” was a re­flec­tion of the weak iron ore price.

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