BHP's iron ore output has been dragged down by the Brazil mine disaster

A photo taken just after the Samarco mine disaster. Image: BHP

BHP’s full year iron ore production for 2016 was down 2% to 227 million tonnes because of the fatal mine disaster in Brazil in November.

The dip from the Samarco mine was partly offset by record production in Western Australia.

BHP expects iron ore output is expected to increase to between 228 million tonnes and 237 million tonnes in the 2017 financial year.

CEO Andrew Mackenzie expects volumes and costs over the next 12 months will benefit from improve productivity.

“We can create significant value through further cost reductions, taking advantage of latent capacity in our assets and investing in low-capital projects,” he says.

“These initiatives are expected to grow production by 5% in copper, up to 4% in iron ore and 3% in metallurgical coal in the next financial year.”

In 2016, iron ore production in Western Australia rose 2% to a record 257 million tonnes. The June quarter output was 7% lower at 55 million tonnes.

Samarco production for the year was 11 million tonnes.

The iron ore mine’s tailings dam collapsed on November 5, sending a wave of mud downstream, killing 17 people, including five from a village of 12 working at the mine. Two people who were working on the dams are still unaccounted for.

BHP is fighting an $8 billion civil suit in Brazil.

Full details on BHP’s 2016 production and 2017 guidance:

Source: BHP

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at