Massive Mining Company Lifts Its Forecast For Iron Ore Production

Anglo-Australian mining giant BHP Billiton on Tuesday raised its iron ore production forecast after operations in Western Australia achieved record output in July-September.

The world’s biggest diversified miner said overall production for all commodities had increased 11 per cent year on year in the three months to September 30.

The upbeat numbers sent BHP’s share price up 2.35 per cent to close at Aus$37.05.

In an operational review the firm said petroleum production for the quarter came in at a record 62.7 million barrels of oil equivalent, underscored by growth in United States volumes and the start-up of a new production well.

On iron ore, BHP lifted its production guidance for the 2014 financial year to 212 million tonnes, thanks to expanding production in Western Australia’s resource-rich Pilbara region designed to meet demand from Asia.

BHP said the Western Australian Iron Ore (WAIO) business achieved record production of 54 million tonnes for the quarter.

Full year production guidance for petroleum, copper and coal was maintained.

“Our pursuit of productivity gains and operating excellence is already yielding strong results,” chief executive Andrew Mackenzie said.

“There is no better example than in our iron ore business, where the deployment of mobile crushing units and the continued de-bottlenecking of the supply chain has underpinned a five million tonne increase in Western Australia iron ore’s production guidance for the 2014 financial year.”

BHP said it remained focussed on the four pillars of petroleum, copper, coal and iron ore — a commodity that has been subject to volatile prices over the past 18 months due to a slowdown in activity in China.

“In addition, a 25 per cent reduction in capital and exploration expenditure to US$16 billion in the 2014 financial year has significantly increased internal competition for capital,” the company said.

“Our rate of expenditure will decline again next year and if our investment criteria cannot be met in any one project, product or geography, we will redirect our capital elsewhere or we will not invest.”

BHP’s report comes after rival Rio Tinto last week posted solid third-quarter production across its commodities, with strong growth in energy coal and copper and record output at its flagship Australian iron ore operations

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