Anglo-Australian mining corporation BHP Billiton announced a record half-year ore production from Western Australia in its operational review for the half-year ended 31 December 2013, but refrained from giving full-year outlook due to bad weather risks.
According to the news article on Yahoo, BHP Billiton managed to achieve a record production of 108 million tons of iron ore in the resource-rich Pilbara region in the half-year to December 2013, despite the unfavourable weather conditions and an increase in planned maintenance.
“Our Western Australia iron-ore business continues to perform strongly, however we have maintained production guidance of 212 million metric tons for the 2014 financial year (ending June 2014) given the general uncertainty that exists as we enter the wet season,” it says in BHP’s operational review.
According to data, Rio Tinto has managed to achieve a 5% increase in both production and shipment of iron ore in 2013, with analysts expecting an upgraded forecast from BHP.
“There had been an expectation that we could have seen an upgrade to full year production guidance but we’ve actually just seen full year guidance remaining the same,” said Julia Lee, Bell Direct equities analyst.
BHP Billion announced that strong operating performances across the company’s diversified portfolio in the past six months have delivered a 10% increase in production, with volumes expected to grow by 16% over the two years to the end of the 2015 financial year.
“Iron ore and metallurgical coal were particularly strong and are very well positioned to achieve guidance, notwithstanding the general uncertainty that exists as we enter the wet season,” said Chief Executive Andrew Mackenzie.
The company’s operational review for the half-year ended 21 December 2013 also underlines the record production in Queensland Coal which amounted to 68 million tons, increased production of Petroleum liquids by 9%, as well as the delivery of first production from two major ongoing projects.
“Our productivity continues to improve and this was most clearly demonstrated by our Queensland Coal business which ran at an annualised rate of 68 million tonnes in the December 2013 quarter. Our productivity agenda is in full swing and we expect to carry strong momentum into the second half of the financial year,” said Mr Mackenzie.
“During the period, six of our major projects delivered first production and our 10 remaining projects, which are largely low risk, brownfield expansions, are tracking to plan. By maintaining strict financial discipline and increasing internal competition for capital we intend to further differentiate ourselves by achieving a superior rate of return on incremental investment. We also remain committed to actively managing our portfolio for value. This strategy leaves us well positioned to deliver a substantial increase in free cash flow and higher returns to shareholders.”
The full details of the company’s operational review are available at: http://www.bhpbilliton.com/home/investors/news/Documents/2014/140122_BHPBillitonOperationalReviewfortheHalfYearEnded31December2013.pdf