BHP Billiton maintains production guidance
BY ROBB M. STEWART
MELBOURNE -- BHP Billiton held to production guidance for its biggest businesses as it continues to ramp-up operations spanning remote iron ore deposits in Western Australia and shale oil fields in the southern United States.
BHP said that its output of the steelmaking commodity rose 6% on year to 40.2 MMmt in the three months through March. That was achieved in spite of tropical cyclones halting shipping from Australian ports.
Iron ore production was 5% lower than in the prior quarter, but the company said it continued to expect output of 183 MMt this fiscal year.
Total petroleum production for the quarter fell 2% on a year ago to 55.4 MMboe, dented by the cyclones that hit Australia's west coast as well as maintenance and drilling delays at wells in the United States Gulf of Mexico operated by partners. Production for the six months through March was up 6%, and BHP said it still anticipated producing about 240 MMbbl for the year.
BHP's petroleum division accounted for almost a third of earnings before one-time items and tax in the six months through December, dwarfed only by the iron ore operations that made up nearly 50% of earnings.
Among other commodities produced by BHP, output of copper was 9% higher on the year at 307,100 tons, and the company said its majority owned Escondida mine in Chile was on track to lift output 20% this fiscal year. Production of metallurgical coal used to produce steel rose 22% on the same quarter last year, while energy coal output fell 10%, the company said.
Expectations of softer commodities demand in countries like China and a prolonged period of lower prices has forced major mining companies to shelve expansion projects, close unprofitable mines and cut jobs. BHP in late August said no major new projects would be approved before mid-2013, postponing board decisions that were due on several multi-billion dollar developments, including the proposed Jansen potash mine in Canada that analysts have estimated could cost about $10 billion to build.
BHP said it continued to push ahead with 19 major projects that largely are due to deliver first production before the end of the 2015 fiscal year, and anticipates spending $4 billion on drilling and development of its onshore United States petroleum assets.
Marius Kloppers, CEO of the company for more than five years, is set to retire next month and hand over to Andrew Mackenzie, who has led BHP's nonferrous minerals division. Mr. Mackenzie has cautioned against expecting a change in strategy at BHP, but has said he will focus on productivity and capital discipline.
Dow Jones Newswires