BHP BHP Group Limited

   By Rhiannon Hoyle 
 

SYDNEY--BHP Billiton Ltd. (BHP.AU) produced less iron ore than anticipated over the past year--even after downgrading its output estimates earlier in 2016--because its Australian operations were disrupted by bad weather and the start of a rail maintenance program.

The suspension of its Brazilian joint venture with Vale SA (VALE) after a dam failure in November also weighed on global sales.

BHP, the world's No. 3 exporter of iron ore, the key ingredient in steel, said a total of 257 million metric tons of the commodity was dug up from the vast network of mines it runs in northwest Australia in the year through June. That was a record and up 2% on the year prior, but short of an April estimate of 260 million tons that had already been downgraded 4% from a prior forecast.

The miner said its share of iron-ore output from mining interests globally--stripping out the share of partners--was 227 million tons during the year, down 2%. BHP had in April cut its forecast to 229 million tons from 237 million tons previously.

BHP said output had been affected by poor weather conditions in Australia's remote northwest earlier in the year and the start of a maintenance program on its rail network. The final shipment of stockpiles from its Brazilian joint venture, where the catastrophic dam failure killed 19 people and polluted hundreds of miles of rivers in Brazil last year, occurred in its final fiscal quarter, it said.

Still, the miner forecast higher iron-ore output in the year ahead--projecting total production from its Australian business of 265 million-275 million tons, and estimating its share of output globally will come to 228 million-237 million, excluding the Samarco venture in Brazil. BHP also couldn't yet estimate the financial cost of the incident in Brazil.

A day earlier, rival Rio Tinto PLC (RIO.LN) reported a rebound in quarterly iron ore output for the three months through June after it too experienced disruptions from poor weather earlier in the year. It stuck with an earlier projection that it will ship about 330 million tons of iron ore from its Australian mines in 2016.

BHP's annual production of other commodities were mostly lower.

They company recorded petroleum production of 240 million barrels of oil equivalent, a 6% drop on the previous 12 months. Volumes have fallen after BHP reduced its spending on oil and natural gas, including reducing the number of rigs it operates, a move designed to conserve cash and reserves amid an oil-price downturn.

Copper output was down 8% at 1.58 million tons while energy coal production declined 16% to 34 million tons. Metallurgical coal, used in steelmaking, was the only commodity in which it reported an increase in annual output, with a mere 1% lift to 43 million tons.

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

July 19, 2016 19:15 ET (23:15 GMT)

BHP (ASX:BHP)
Historical Stock Chart
From Mar 2024 to Apr 2024

BHP (ASX:BHP)
Historical Stock Chart
From Apr 2023 to Apr 2024