Connect to share and comment

BHP affirms targets despite weather disruptions

PlacardEnlarge
(Globalpost/GlobalPost)

Mining giant BHP Billiton affirmed full-year guidance for its major products Wednesday, reporting a "robust" quarter of output despite weather issues at its premier Australian businesses.

The world's largest miner said it expected to meet full-year targets, with solid performance at its iron ore and coal sites in the face of cyclones at its Pilbara iron ore project and adverse weather hitting Queensland coal.

"Full-year production guidance is retained for our major businesses following another quarter of robust operating performance," the miner said.

BHP's first-half net profit plunged 58 percent in February to US$4.2 billion as commodity prices slumped owing to a slowdown in major market China, and new chief Andrew MacKenzie is targeting increased productivity and cost savings.

BHP said it was on track to produce 183 million tonnes of iron ore for the year to June 30 after output of 40.2 million tonnes in the January-March quarter capped a record nine months.

Though a six percent improvement on the previous March quarter, production was down five percent from the three months ending December 31 due to "cyclone-related downtime during the period", BHP said.

Steelmaking coal production was nine million tonnes, just one percent higher than in the December quarter due to adverse weather conditions, though BHP noted new flood mitigation measures had allowed it to bounce back quickly.

The new infrastructure was introduced after floods that killed 33 people and devastated vast swathes of Queensland in 2011 swamped the region's coal mines, crippling production for months.

Energy coal, burned to produce power, had production of 15.5 million tonnes in the quarter, a fall of 10 percent from the March period of last year and 15 percent lower than in the three months to December, also due to weather issues.

BHP affirmed petroleum production guidance of 240 million barrels of oil equivalent (BOE) for the full year, reporting output of 55.42 million BOE for the quarter.

That was down two percent from the previous corresponding period and seven percent lower quarter-on-quarter, also impacted by Western Australia's cyclones and delays or maintenance at its Gulf of Mexico operations.

Major rival Rio Tinto this week forecast global iron ore production of 265 million tonnes, reporting record output in the March quarter and a "solid" performance across its businesses.

ajc/mp/dan

http://www.globalpost.com/dispatch/news/afp/130416/bhp-affirms-targets-despite-weather-disruptions