FTSE 100-listed BHP Billiton’s share price surged over four per cent yesterday, after the mining giant posted a strong quarterly operational update and lifted its full-year iron ore production guidance.
Four major projects started production during the quarter, including the expansion of the Jimblebar iron ore mine, which commenced six months ahead of schedule. The full-year target for Jimblebar has been lifted from 207m tonnes to 212m tonnes.
However, copper output fell 13 per cent to 285,000 tonnes, well below Deutsche Bank’s estimate of 314,000 tonnes, due to operational issues at a number of mines.
Like many other miners, BHP has undergone an intensive cost-cutting strategy to recover its balance sheet after commodities prices fell to earth.
The company reduced costs by $2.7bn (£1.7bn) this year and chief executive Andrew Mackenzie said that it is targeting a further 25 per cent reduction in the 2014 fiscal year.
“Our rate of expenditure will decline again next year and our investment criteria cannot be met in any one project, product or geography, we will redirect our capital elsewhere,” said Mackenzie.