BHP raises iron ore target after record output

 
Suzie Neuwirth

BHP BILLITON yesterday lifted its full-year production guidance for iron ore and metallurgical coal, having achieved record levels during the first nine months of the year.

The FTSE 100-listed mining giant said the continued ramp-up of the Jimblebar mine in western Australia and the relatively limited impact of the wet season meant it is raising its iron ore guidance a further 5m tonnes to 217m tonnes for 2014. It is ramping up metallurgical coal production to 43.5m tonnes for the year.

A number of large miners have increased production of certain commodities due to weak prices, in order to take advantage of economies of scale, bringing down unit costs. But some fear that this will inevitably cause a glut of supply in the market and push down prices even further.

“Our productivity agenda continues to deliver outstanding results, underpinning a 10 per cent increase in production so far this year,” said chief executive Andrew Mackenzie.

“Having achieved record iron ore and metallurgical coal production during the first nine months of this year, we have raised full-year guidance for both commodities...We continue to expect cumulative production growth of 16 per cent over the two years to the end of the 2015 financial year.”

Oil production increased by 16 per cent, boosted by onshore US activities. But full-year guidance was downgraded due to remediation work.

Full-year copper guidance was unchanged.

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