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UPDATE 1-BHP beats full-yr iron ore output guidance by 4 pct
July 22, 2014 / 11:35 PM / in 3 years

UPDATE 1-BHP beats full-yr iron ore output guidance by 4 pct

* BHP says beats FY2014 iron ore target by 4 percent

* Says FY2015 iron ore output to rise further 20 mln/t to 245 million

* Copper, metallurgical coal output also set to rise in FY2015 (Adds details, prices, CEO quotes)

By James Regan

SYDNEY, July 23 (Reuters) - BHP Billiton beat its own guidance for full-year iron ore output, saying it mined a record 225 million tonnes in fiscal 2014, 4 percent ahead of its forecast, leading productivity gains across a number of businesses.

The world’s third-biggest supplier of iron ore forecast a further climb in production of the steelmaking material in fiscal 2015 to 245 million tonnes as it continues expansion work in Australia’s Pilbara iron ore belt.

“Our focus on productivity has resulted in a significant improvement in operating performance at each of our major businesses this year, with a 9 percent increase in group production and record output at 12 operations,” BHP’s chief executive, Andrew Mackenzie said in the group’s production report.

“We expect to maintain strong momentum and remain on track to generate group production growth of 16 percent over the two years to the end of the 2015 financial year,” he said.

Iron ore output in the final quarter of the fiscal period rose 19 percent to 56.6 million tonnes versus the same period a year ago, BHP said.

The miner is relying on iron ore for the lion’s share of fiscal 2014 earnings, which face pressure from weaker-than-expected ore prices, which fell 30 percent between Jan. 1 and June 30.

Iron ore for immediate delivery to China .IO62-CNI=SI stood at $95.40 a tonne on Wednesday, recovering modestly from a mid-June low of $89, the lowest in 21 months.

BHP, which needs an iron ore price of about $45 a tonne to stay in the black, said it sold its iron ore for an average $103 a tonne in fiscal 2014, down 6 percent on the $110 average sales price the prior year.

Despite the price volatility, mega miners such as BHP, Rio Tinto and Brazil’s Vale are ramping up output, aiming drive down production costs through economies of scale.

BHP said its metallurgical coal production of 45 million tonnes in fiscal 2014 exceeded full-year guidance, with its Queensland Coal division in Australia hitting record production and sales volumes. It expects to produce 47 million tonnes in fiscal 2015.

Copper production increased to 1.7 million tonnes in fiscal 2014 and would rise to 1.8 million in the current year, BHP said.

BHP said it would take a charge of $900 million to $1.3 billion in its second-half EBIT (earnings before interest and tax) in relation to costs for mine rehabilitation work, redundancies and business closures.

Reporting by James Regan; Editing by Richard Pullin

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