BHP Billiton ups guidance on strong iron performance

The world's largest miner BHP Billiton has announced 11 per cent production growth in the third quarter ending 30 September, raising its 2014 financial year guidance to 212m tonnes for Western Australian Iron Ore (WAIO). Iron ore production rose by 23 per cent in the quarter to September to 49m tonnes. (Release)

BHP Billiton chief executive officer, Andrew Mackenzie, said: "Our pursuit of productivity gains and operating excellence is already yielding strong results. There is no better example than in our Iron Ore business, where the deployment of mobile crushing units and the continued debottlenecking of the supply chain has underpinned a five million tonne increase in Western Australia Iron Ore's production guidance for the 2014 financial year."

Total petroleum production was at a record 62.7m barrels of oil equivalent for the period.

Operations in Australia continue to do well - the WAIO Jimblebar Mine Expansion was completed around six months ahead of schedule. Queensland Coal is still benefitting from its focus on productivity, the company reported, with an annualised production rate of 61m tonnes (100 per cent basis) in the quarter to September.

In the financial year 2013, BHP saw a $2.7bn (£1.67) reduction in controllable cash costs, with a 25 per cent reduction in capital and exploration expenditure to $16bn made in the 2014 financial year increasing, says Mackenzie, internal competition for capital. He adds, "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 or we will not invest."

Since the start of the 2013 financial year BHP has completed major transactions totalling $6.5bn, including $2.2bn received in the financial year to date. Mckenzie said, "with strong production growth and our overriding commitment to substantially increase free cash flow, we are well positioned to grow returns to our shareholders."

The company made the decision yesterday to pull out of some of its oil and gas interests in India, following regulatory delays.