Zijin Mining to take 9.9% stake in Montage Gold
As part of the deal, the Lundin Family Trust also agreed increase its stake in the company from 17.7% to 19.9%.
BHP Billiton (ASX,LON,NYSE:BHP), the world’s biggest miner by market value, posted Wednesday a weaker than expected September quarter from its West Australian iron ore mines as the company’s work on expansion plans affected production figures.
The Melbourne-based company, however, countered those results by delivering record oil and gas production and robust coking coal output from its Queensland mines as significant work stoppages ended in July.
But given the progressively tougher market conditions and a drop in commodity prices, BHP said it is unlikely to expand its Australian coal business.
A mix of higher taxes, royalties, a strong Australian dollar and decreasing productivity mean that even though BHP’s metallurgical coal deposits in Queensland state are of a high quality “further investment to grow these operations is much less likely,” the company announced.
The miner’s metallurgical coal production saw a 4% year-on-year decrease in the quarter ended September at 8.9 million tons. It was however‚ 10% better than the total produced in the quarter ended June this year.
BHP reported a 19% jump in the total of petroleum products produced in the quarter ended September this year to a quarterly record of 666,000 barrels a day, 61.25 million barrels of oil equivalent a year, as production resumed in the Gulf of Mexico and maintenance work on some Australian operations was reduced.
Bullish on iron ore
The diversified miner remains optimistic about the demand for iron ore, despite forecasting a slow down in steel demand from China, the main consumer of the steel making material.
The company predicts growth in the global iron ore market will slow to 650 million tonnes this decade, down from 800 million tonnes in the past ten years.
Production volumes of iron ore, the main driver of the company’s earnings, were up 1% on the same quarter a year earlier to 39.8 million metric tons and BHP is maintaining its target of increasing production in Western Australia by 5% in the financial year through to June next year.
Chief executive Marius Kloppers said that while China’s steel consumption had now peaked, demand for commodities, such as copper, will still grow as the Asian superpower moves from an investment-led to a consumption-led economy.
Losing its shine?
The diamond division did not contribute to BHP’s quarterly results, as precious gems production dropped 32% at 313‚000 carats, mainly due to the temporarily restricted mining conditions and unscheduled maintenance at its Ekati mine in Canada.
“While production is expected to recover in the December 2012 quarter‚ it is forecast to remain constrained in the medium term as the operation extracts lower grade material‚ consistent with the mine plan‚” BHP said.
