BHP CEO Andrew Mackenzie
Photo by: Bloomberg
PERTH (miningweekly.com) – Mining giant BHP Billiton has reported record production across four commodities and eight operations during the quarter ended September, including from its Pilbara iron-ore operations.
Iron-ore production for the three months under review increased by 1% on the previous quarter, and 17% on the previous corresponding quarter, to a record 62-million tonnes, as the ramp-up of the Jimblebar mine continued ahead of schedule.
“Our relentless focus on productivity continues to yield strong results. At Western Australia iron-ore, we have completed our major supply chain investment and, for the first time in a decade, we have no major projects in execution,” said BHP CEO Andrew Mackenzie.
“With our focus now on maximising the value of existing infrastructure, we plan to reduce costs and invest judiciously in very low capital cost debottlenecking initiatives. These plans are expected to increase total supply chain capacity to 290-million tonnes a year by the end of the 2017 financial year and reduce unit costs by at least 25% to less than $20/t.”
BHP’s iron-ore production was expected to reach 225-million tonnes a year by the end of the 2015 financial year.
The miner on Wednesday also reported record production from its petroleum division, with output up by 4% on the previous quarter and up 7% on the previous corresponding period, to 67.4-million barrels of oil equivalent.
The increase in petroleum production was ascribed to a 49% increase in onshore US liquids volumes, which reached a record 11.5-million barrels oil equivalent during the quarter under review.
Furthermore, natural gas production increased by 2% on the June quarter, to 218.9 bcf, reflecting higher seasonal demand and strong uptime performance from the North West Shelf project, following a period of planned maintenance.
BHP reported that copper production during the quarter under review had declined by 17% on the June quarter, and by 3% compared with the previous corresponding period, as the Escondida operation, in Chile, encountered lower-grade ores.
During the quarter, BHP produced 389 400 t of copper.
The Escondida mine produced 269 000 t of copper during the three months to September, as grades declined by 12%, and industrial activity and a power outage throughout Northern Chile also affected operations.
BHP told shareholders that the temporary reduction in ore grades had been anticipated, ensuring that the production guidance remained unchanged at 1.27-million tonnes of copper for 2015.
Meanwhile, metallurgical coal production for the quarter was up 25% on the previous corresponding period and 7% on the June quarter, to 13-million tonnes, as the Queensland coal operations achieved record production and sales volume.
The new Caval Ridge mine operated at capacity during the period, while the Duania and South Walker Creek mines also reached record outputs, BHP reported.
Energy coal production, meanwhile, decreased by 9% from the September quarter of last year, and by 3% when compared with the June quarter, to reach only 17.8-million tonnes.
The energy coal operations were adversely affected by weather conditions, which constrained production at both the Cerrejon and New South Wales energy coal operations.
BHP maintained its production guidance for all operations for the full year, with Mackenzie saying that the company remained on track to generate a group production growth of 16% over the two years until the end of 2015.
The company was also positioning itself to reduce cash costs by more than $2.3-billion and to deliver volume productivity gains of at least $1.2-billion at the end of the 2017 financial year, Mackenzie said.