BHP shows strength in iron ore & petroleum production
The latest production report from BHP Billiton shows impact of its growth projects and positive results in its high grade crude operations following the commencement of the Pyrenees project.
image courtesy of BHP Billiton
Record petroleum production was achieved for the nine months ended March 2010 supported by strong performances from operations in the Gulf of Mexico.
Probably the biggest news this year was the miner’s move away from the iron ore benchmark pricing system. BHP Billiton reached agreement with the majority of its ironore customers to permanently move existing contracts to index based prices on a landed equivalent basis.
Year-to-date production records were set for iron ore on the back of projects delivered from BHP’s deep inventory of ongoing expansions. Western Australia Iron Ore and Samarco (Brazil) also achieved year-to-date production records.
However, iron ore and metallurgical coal production was impacted by weather related disruptions.
Metallurgical coal production for the quarter was impacted by wet weather at Queensland Coal and planned longwall moves at Illawarra Coal. Cyclone activity resulted in the suspension of shipments from the Hay Point Coal Terminal from March 11th. Hay Point Coal Terminal resumed loading on April 2nd from one berth and on April 7th from both berths.
Energy coal production was higher than all comparative periods mainly due to the continuing ramp up of the Klipspruit (South Africa) expansion and record production at Hunter Valley Energy Coal. During the March 2010 quarter, long vessel queues at the Newcastle Port delayed export sales from Hunter Valley Energy Coal.
Copper production for the nine months and quarter ended March 2010 was down mainly due to the Olympic Dam Clark Shaft incident, industrial action at Spence (Chile), and lower grades at Cerro Colorado (Chile) and Antamina (Peru). This was in part offset by the successful repair of the Escondida (Chile) Laguna Seca SAG mill in the September 2009 quarter.
Production in the March 2010 quarter was also impacted by lower grade and safety issues at Escondida.
Recommissioning of the Clark Shaft is expected to return to normal operation by the end of the June quarter.
According to BHP Billiton, it also achieved year-to-date production records for nickel, alumina and zinc, and at North West Shelf, Hunter Valley Energy Coal, Nickel West and Worsley, Mad Dog (USA), Alumar refinery (Brazil) and Zamzama (Pakistan).
In its simultaneously released Exploration & Development Report, BHP stated it has spent US$346 million on minerals exploration in the nine months ended March 31st, 2010.
It also said that it is co-operating with US government officials regarding “possible violations of applicable anti-corruption laws” relating to certain terminated minerals exploration projects. BHP said it is also conducting and internal investigation and could not comment further on the scope or duration of the investigations.
Sourced from www.theajmonline.com.au