BHP Billiton sees coal and iron figures hit by rain and strikes

BHP Billiton yesterday reported a fall in iron ore output after bad weather took its toll.

Like rival Rio Tinto, the FTSE 100 miner saw production dip in the first quarter of 2012.

Iron ore production was 37.9m tonnes – eight per cent lower compared to the previous quarter.

Coal output fell 14 per cent to 7.3m tonnes in the three months to the end of March due to torrential rain which hit the company’s operations in Queensland, Australia.

The company has also been hit by industrial action as unions have staged a series of strikes at its mines in Western Australia over working conditions. “'The extent to which industrial action will continue to affect production, sales and unit costs is difficult to predict, however with inventories now severely depleted, the impact on future quarters may be significant,” BHP warned.

The company’s coal mining joint venture with Japan’s Mitsubishi, BHP Mitsubishi Alliance was earlier this month declared a force majeure – allowing the parties to dissolve contracts – at all seven of its Bowen Basin mines because ongoing strikes had made the business unviable.

The company said copper production was flat at 281,400 tonnes.

In a separate announcement covering the nine months to the end of March the miner said Western Australia iron ore achieved record production – with a 22 per cent increase. BHP Billiton said the sale of its diamond business is ongoing.

The company’s natural gas production was up 120 per cent after the company stepped up its investments in shale gas projects.