BHP Cuts Iron-Ore Output Target; Plans Petroleum Exploration Program
April 19 2016 - 7:19PM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Billiton Ltd. (BHP.AU) said it will produce less
iron ore than expected this fiscal year, as it reported a fall in
quarterly shipments.
The world's third-biggest iron-ore exporter on Wednesday said
its global output of the commodity, stripping out the share of
partners, was 53 million metric tons for the three months through
March, down 7% on the previous quarter. Production was down 10%
on-year.
The company consequently lowered its forecast for the year
through June to 229 million tons, from 237 million tons
previously.
The miner said its sales of iron ore, the main ingredient in
steelmaking, were disrupted by bad weather in northwest Australia
in late January, as well as the start of a rail maintenance
program.
BHP said output from its key Western Australia iron-ore mining
unit, including the share of partners, fell 4% on-quarter to 61
million tons. The company cut its annual target for that business
to 260 million tons from an earlier projection of 270 million.
A day earlier, Anglo-Australian rival Rio Tinto PLC (RIO.LN)
also reported a sharp fall in quarterly shipments, which it blamed
in part on a tropical cyclone.
BHP's iron-ore production was additionally weighed by the
shutdown of the Samarco mining operation it owns in Brazil with
Vale SA (VALE). The miner said the final shipment of existing
stockpiles from that site--shut since a deadly tailings-dam
collapse in November--is expected to settle this quarter.
Output of other commodities was mostly lower as well. BHP
recorded petroleum production of 59.4 million barrels of oil
equivalent, a 1% drop on the prior quarter and 3% fall on a year
ago. Volumes have declined after BHP reduced its spending on
oil-and-gas, including cutting the number of rigs it operates, a
move designed to conserve cash and reserves amid an oil-price
downturn.
On Wednesday, however, BHP said a US$640 million exploration
program is now planned this year for "testing of our future growth
opportunities."
Production of coking coal, also used in steelmaking, was down 4%
on-quarter, while the miner's output of copper, its so-called
fourth "pillar," was up 5%.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
April 19, 2016 19:04 ET (23:04 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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