BHP Billiton Ltd. said iron-ore production surpassed expectations last fiscal year, as it forecast another increase in output in the year ahead.
On Wednesday, the Anglo-Australian miner said its output of iron ore rose 14% to a record 233 million metric tons in the year through June, above an earlier, upgraded projection of 230 million tons announced in April. BHP, the world’s No. 3 exporter of iron ore, forecast another 6% rise in production in the year ahead, to 247 million tons.
In recent years, the miner expanded its vast iron-ore operations as breakneck growth in China sent demand for the commodity to record levels. BHP is now further increasing its output by working those mines harder.
The strategy has been criticized by some smaller producers and some investors, as analysts forecast a ballooning surplus of the raw material. The iron-ore price recently crashed to a decade-low of roughly $44 a ton, down two-thirds on the start of last year.
BHP executives have argued iron-ore is a commodity traded globally in a free market. They say their expansion, planned years ago, was in the best interests of their shareholders, and they are now increasing production largely through productivity improvements.
The Melbourne-based miner operates an expansive network of iron-ore mines, railway and port terminals in Australia’s remote northwest, and has iron-ore interests in Brazil. BHP’s Australian competitors, Rio Tinto PLC and Fortescue Metals Group Ltd. , have been increasing production as well.
BHP’s production of other commodities during last fiscal year was mixed.
Output of metallurgical coal, also used for steelmaking, was 13% higher last fiscal year at 43 million tons, while production of copper and thermal coal declined 1% and 5%, respectively.
BHP reported a 4% rise in full-year petroleum production to 256 million barrels of oil-equivalent, but said it expects output in the coming year to fall 7% as it defers development of some gas fields.
The company meanwhile outlined expectations of further one-off charges.
BHP said it expects underlying attributable profit for the six months through June to be weighed by between $350 million and $650 million of additional charges, relating to impairments on assets, including its Cerro Colorado copper mine in Chile, redundancies mostly in its copper business and a reduction in the number of rigs being used within its onshore U.S. petroleum unit. Earlier this month, BHP announced expectations of a roughly $2 billion post-tax write down against its onshore U.S. assets.
source: The Wall Street Journal
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.