* BHP signals well placed to reward shareholders
* Production up 10 percent in December half
* Quarterly iron ore output rises 16 pct
SYDNEY, Jan 22 BHP Billiton ,
the world's biggest miner, posted strong rises in iron ore and
metallurgical coal output in the December quarter and said it
was well positioned to reward shareholders as productivity
BHP reported a 16 percent increase in iron ore production in
the December quarter to 48.9 million tonnes and maintained its
guidance for fiscal 2014, while its Queensland coal business hit
Investors in big mining companies, including fund manger
BlackRock have called on miners to consider higher
shareholder returns as the era of high construction costs to
build new mines now shifts into production phases.
BHP Chief Executive Andrew Mackenzie said the company aimed
to boost returns through financial discipline and internal
competition for funds.
"This strategy leaves us well positioned to deliver a
substantial increase in free cash flow and higher returns to
shareholders," he said in the December production report.
Analysts have previously flagged share buybacks would be
possible in the 2015 financial year as free cash flow increases
with higher output from recently completed projects.
A share buyback is generally seen as the preferred form of
capital management for BHP Billiton as its stock is listed on
both the Australian and London stock exchanges.
Iron ore and coal have been designated by Mackenzie as two
of the four "pillars" underpinning growth by the world's biggest
mining house. The others are copper and petroleum.
BHP reported a 4 percent decline in quarterly output from
its petroleum division but held its fiscal 2014 guidance of 250
million barrels of oil equivalent.
Unlike rival global miners like Rio Tinto ,
BHP has long relied on its petroleum business to offset soft
periods in metal and coal markets. Its footprint in the sector
has grown with the advent of shale gas and oil exploitation in
the United States.
Oil and gas accounted for $13.2 billion in revenue for BHP
last year, second only to the $20.2 billion generated by iron