BHP breaks production records, but copper output drops

Frik Els | January 21, 2015 | 12:05 am Base Metals Energy Australia Coal Copper Iron Ore Uranium 
BHP warns more cost cuts, management shake up before demerger

World number one miner BHP Billiton on Wednesday in Australia announced overall production increases of 9% during the December 2014 half year with records achieved for eight operations and five commodities.

The Melbourne-based firm also kept its production guidance unchanged saying it is on track to deliver production growth of 16% over the two years to the end of the 2015 financial year.

  • Metallurgical coal production increased by 21% to 26 Mt in the December 2014 half year as Queensland Coal and Illawarra Coal both achieved record half year volumes.
  • Western Australia Iron Ore production increased by 15% to a record of 124 Mt (100% basis) in the December 2014 half year as the ramp-up of Jimblebar continued and we improved the availability, utilisation and rate of our integrated supply chain.
  • Petroleum production increased by 9% to a record 131 MMboe in the December 2014 half year supported by a 71% increase in Onshore US liquids volumes to 24.4 MMboe.
  • Copper production decreased by 2% to 813 kt as strong underlying operating performance across the business was offset by lower grades at Antamina.
  • Record manganese ore and alumina production was underpinned by strong performances at both Hotazel and the Alumar refinery.

Chief Executive Officer, Andrew Mackenzie, said in response to lower oils prices the company will reduce the number of rigs it  operate in its onshore US business by approximately 40% by the end of this financial year and reiterated its commitment to a demerger:

“We continue to believe that our planned demerger will help support further improvements in operating performance in both the core BHP Billiton and South32 assets. Within BHP Billiton, it would allow us to identify and deploy best practice across our assets more quickly and simplify our organisation to reduce overheads. We are making good progress towards securing the approvals we require to put the proposal to a shareholder vote in May and remain on track to complete the process before the end of the financial year.”

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