BHP's iron ore production has hit a record just as prices rise

Imported iron ore in Nantong, China. Feature China / Barcroft Images / Barcroft Media via Getty Images

BHP’s iron ore production from the Pilbara hit a record in the first half of the financial year, capitalising on stronger prices from surging steel demand in China.

The world’s biggest miner put the feat down to its more streamlined operation created to deal with a low commodity price world.

And more iron ore revenue is on the way. BHP’s average realised price for iron ore during the six months was $US55 a tonne. This week the spot price for benchmark 62% fines is about $US82.69 a tonne.

“We have performed well during a period of higher prices, with record iron ore volumes achieved at WAIO (Western Australia Iron Ore),” CEO Andrew Mackenzie.

“Our simpler organisational structure has freed our assets to focus on what matters most and to deliver safer and more productive operations.”

For the six months, BHP recorded iron ore production of 136 million tonnes from Western Australia, up 4% on the same period the year before.

The company is maintaining full year guidance of between 265 million tonnes and 275 million tonnes.

Here’s BHP’s full half year production and guidance for 2017:

In petroleum, BHP is accelerating its counter-cyclical oil exploration effort this year.

However, half year production was down 15% to 106 MMboe as BHP stopped onshore wells in the US.

Copper was down 7% to 712 kt with lower volumes at Olympic Dam in South Australia.

The company says underlying profit in the December half year is expected to include gains of $US150 million to $US200 million from the sale of assets.

BHP also expects an exceptional item of $US164 million related to the cancellation of the Caroona exploration licence.

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