Diversified miner BHP Billiton has beat market expectations with an overall production increase of 9% for the 2013/14 financial year.
Releasing its operational review this morning, BHP produced 204 million tonnes of iron ore in the 12 months to June 30, a 20% increase year-on-year and beating full-year guidance by more than 8%.
But BHP boss Andrew Mackenzie said developing existing operations will be the company’s focus over developing greenfields assets and possible operations sales could still be in the pipeline.
“We will remain focused on value over volume as we prioritise our brownfield development options and consider the next phase of portfolio simplification,” Mackenzie said.
At June 30 the miner had eight brownfields projects in the development stage with a combined budget of $US14.1 billion.
CMC Markets chief analyst Ric Spooner said, “BHP’s strong production report will be supportive for the materials sector. At this stage, the big miners are beating market expectations on production and cost control, vindicating the strategy of increasing production despite weakening prices”.
BHP expects volumes from its Pilbara operations in Western Australia to lift to 225 million tonnes for this financial year with its Jimblebar mine in the region continuing its ramp up.
The company said there is also a “low-cost” option to expand Jimblebar from 35 million tonnes a year to 55 million tonnes as well as more supply chain bottlenecks which can be straightened out to further boost WA’s capacity to 270 million tonnes of iron ore a year.
Metallurgical coal production hit 45 million tonnes for the year, with BHP’s Queensland operations achieving record production volumes. Once its Caval Ridge project finishes ramping up BHP forecasts met coal will increase four per cent to 47 million tonnes in the 2015 financial year.
Mackenzie said the company’s focus on productivity is driving operational performance improvements and it is now expecting overall production to grow 16 per cent over the next two years to the end of the 2015 financial year.
BHP shares were trading up 1.66% to $39.15 on the ASX a short time ago.