BHP Billiton Forecasts Rise in FY18 Production
July 18 2017 - 7:29PM
Dow Jones News
By Robb M. Stewart
MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) forecast a rise
in overall production over the year ahead as it continues to lift
iron-ore output and anticipates a rebound in copper and coking-coal
volumes.
Still, oil and gas production is expected to fall further in the
year through June, 2018, despite an increase in U.S. onshore shale
activity.
The quarterly production update comes as BHP faces criticism
from activist investors over its underperformance and accusations
long-serving directors stood by while billions of dollars were
misspent on acquisitions and mistimed share buybacks. New York
hedge fund Elliott Management Corp. has led a series of attacks in
recent months, calling for a sweeping overhaul of the world's
largest-listed mining company.
Iron-ore production rose by 4% to 231 million metric tons in the
just-ended fiscal year, with record volumes at BHP's mines in
Western Australia. BHP said it expected output to increase by
between 3% and 5% this year.
Production of coking coal, used alongside iron ore to produce
steel, fell by 6% to 40 million tons in fiscal 2017, in line with a
target that was cut in April due to storm damage to the rail
network serving its operations. BHP said production was expected to
climb by 10%-15% this year.
Output of thermal coal, used by power stations, was 7% higher at
29 million tons and is forecast to be steady to 3% higher this
year. Copper production is expected to jump by 25%-35% this year
after falling by 16% in fiscal 2017 to 1.33 million tons--the lower
end of revised guidance after output was held back by a 44-day
strike at the Escondida mine in Chile as well as disruptions at its
Olympic Dam mine in South Australia due to maintenance and a major
power outage.
The petroleum division's production declined by 13% in the
latest year to 208 million barrels of oil equivalent, and BHP said
it is likely to fall by 9%-13% in fiscal 2018.
"Our people have stepped up to unlock low-cost latent capacity
and achieve strong productivity gains across our tier one assets,"
Chief Executive Andrew Mackenzie said.
In copper-equivalent terms, BHP said production across its
operations was expected to increase by 7% in the 2018 fiscal
year.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
July 18, 2017 19:14 ET (23:14 GMT)
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