BHP Billiton Iron Ore Output Slips as Commodities Output Broadly Lower
July 19 2016 - 7:30PM
Dow Jones News
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)
Copyright (c) 2016 Dow Jones & Company, Inc.
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