By Rhiannon Hoyle
SYDNEY-- BHP Billiton Ltd. said iron-ore production surpassed
expectations last fiscal year, as it forecast another increase in
output in the year ahead.
On Wednesday, the Anglo-Australian miner said its output of iron
ore rose 14% to a record 233 million metric tons in the year
through June, above an earlier, upgraded projection of 230 million
tons announced in April. BHP, the world's No. 3 exporter of iron
ore, forecast another 6% rise in production in the year ahead, to
247 million tons.
In recent years, the miner expanded its vast iron-ore operations
as breakneck growth in China sent demand for the commodity to
record levels. BHP is now further increasing its output by working
those mines harder.
The strategy has been criticized by some smaller producers and
some investors, as analysts forecast a ballooning surplus of the
raw material. The iron-ore price recently crashed to a decade-low
of roughly $44 a ton, down two-thirds on the start of last
year.
BHP executives have argued iron-ore is a commodity traded
globally in a free market. They say their expansion, planned years
ago, was in the best interests of their shareholders, and they are
now increasing production largely through productivity
improvements.
The Melbourne-based miner operates an expansive network of
iron-ore mines, railway and port terminals in Australia's remote
northwest, and has iron-ore interests in Brazil. BHP's Australian
competitors, Rio Tinto PLC and Fortescue Metals Group Ltd., have
been increasing production as well.
BHP's production of other commodities during last fiscal year
was mixed.
Output of metallurgical coal, also used for steelmaking, was 13%
higher last fiscal year at 43 million tons, while production of
copper and thermal coal declined 1% and 5%, respectively.
BHP reported a 4% rise in full-year petroleum production to 256
million barrels of oil-equivalent, but said it expects output in
the coming year to fall 7% as it defers development of some gas
fields.
The company meanwhile outlined expectations of further one-off
charges.
BHP said it expects underlying attributable profit for the six
months through June to be weighed by between $350 million and $650
million of additional charges, relating to impairments on assets,
including its Cerro Colorado copper mine in Chile, redundancies
mostly in its copper business and a reduction in the number of rigs
being used within its onshore U.S. petroleum unit. Earlier this
month, BHP announced expectations of a roughly $2 billion post-tax
write down against its onshore U.S. assets.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
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