BHP Billiton Ltd (BHP) on Wednesday reported a strong performance in its fourth quarter ended June 30, with production of iron ore and metallurgical coal both up 16% on a year before.
BHP Billiton Ltd (BHP) on Wednesday reported a strong performance in its
fourth quarter ended June 30, with production of iron ore and metallurgical
coal both up 16% on a year before.
The world's biggest miner produced 31.2 million metric tons of iron ore in the
fourth quarter of its reporting year and 125.0 million tons over the year, it
said in its year-end production report.
Iron ore accounted for around a third of BHP's earnings in the previous
financial year, followed by petroleum and metallurgical coal.
Against a backdrop of record prices for the commodity, BHP's iron ore
production was flat against the third quarter, a result that was "a little
bit lighter than it could have been," said O'Connor.
BHP followed its smaller rival Rio Tinto Ltd. (RTP) in sounding a cautious
outlook for the global economy.
"Uncertainty surrounds the near-term prospects for growth in the developed
world" due to the end of fiscal stimulus programs and increase in
sovereign debt, the company said.
"Within
China
,
measures introduced to reduce growth to more sustainable levels mean volatility
in commodity end-demand is likely to persist."
The latest report largely met broker expectations. "It's very much in
line," said Peter O'Connor, a resources analyst at Bank of America-Merrill
Lynch. "Some of the readings are a bit over."
The only disappointments, O'Connor said, were the lack of detailed guidance on
the implications of a drilling moratorium in the
Gulf
of Mexico
and the failure to lift iron ore production in the
June quarter.
The company reported its third consecutive annual production record for
petroleum despite the problems in the
Gulf of Mexico
.
The
U.S.
government imposed a moratorium on deepwater drilling in the Gulf following the
oil spill at BP PLC's (BP) Macondo well in April, and revised the ban last week
after the original moratorium was overturned by a federal appeals court.
The company said it "continues to monitor and assess the impact" of
the six-month suspension of permitting and drilling activities in the Gulf.
Overall, crude oil, condensate and natural gas liquids output gained 18% on
year to 25.7 million barrels in the quarter while natural gas output fell 6% to
91.0 billion cubic feet.
The company also reported success in moving metallurgical coal contracts to a
shorter-term basis.
Coal used in steelmaking has traditionally been priced based on an annual
benchmark derived from the first major producer-consumer contract price.
BHP--the world's largest supplier of seaborne hard coking coal--has been
pushing to move that to a quarterly system based on spot prices, in line with a
concurrent shift in iron ore pricing.
The majority of product sold in the past three months was on a shorter-term
basis, BHP said, as was 34% of the total sold during the reporting year.
Production was up 3% for the year at 37.4 million tons, and up 16% on year in
the fourth quarter at 11.0 million tons.
For iron ore, 39% of shipments from
Western
Australia
were still based on annual benchmarks, the company
said.
Energy coal was also flat versus the previous quarter, and fell 8% on year, to
16.3 million tons. Production totaled 66.1 million tons for the year.
Base metals production was mixed, with strong performances at mines in
Chile
and
the return of full production at
Australia
's
Olympic Dam mine, affected since late 2009 by mine shaft problems.
Copper production fell 5% on the year to 291,100 tons in the fourth quarter,
while lead production grew 7% to 62,900 tons, and zinc rose 3% to 45,400 tons.
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