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BHP sees jump in production year on year

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BHP Billiton has seen a huge spike in its iron ore and coking coal output year on year, and has forecast continued growth.

In its operational review for the end of year the miner saw an across the board production increase of nine per cent, with Western Australian iron ore setting its fourteenth consecutive annual production record.

BHP head Andrew Mackenzie said “our focus on productivity has resulted in significant improvement in operating performance at each of our major businesses this year, with a nine per cent increase in group production and record output at 12 operations”.

“We expect to maintain a strong momentum and remain on track to generate group production growth of 16 per cent overt the two years to the end of the 2015 financial year.”

The WA region’s operations saw volumes increased to 225 million tonnes, exceeding the miner’s previously set full year guidance, and outdoing the previous six months to date by 20 per cent.

According to BHP CEO Andrew Mackenzie this was due to “the early commissioning of Jimblebar and our productivity agenda [which] raised the capacity of our integrated supply chain”.

“The ramp-up of Jimblebar to 35 million tonnes per annum is now expected before the end of the 2014 calendar year and will support a further 30 million tonnes increase in WAIOP production to approximately 245 million tonnes in the 2015 financial year.

A low-cost option to expand Jimblebar to 55 mtpa and broader debottlenecking of the supply chain are expected to underpin further growth in capacity towards 270 mtpa.”

It has forecast an 11 per cent increase for next year.

This is supported by a 13 per cent increase in mineral resources, at a 54 per cent Fe cut-off rate, at its Western Australian Iron Ore operation compared to the previous 30 June 2013 estimates.

The miner also saw a massive growth in its metallurgical coal operations, spiking 20 per cent in output compared to the previous six months of 2013.

This was pinned on first production from Caval Ridge, the successful ramp-up of Daunia, and record production rates at Peak Downs, Saraji, South Walker Creek, and Poitrel.

BHP expects continued growth in this area with metallurgical coal production slated to increase by four per cent in the 2015 financial year to 47 million tonnes as the ramp-up of Caval Ridge is completed.

However the news was not as good for the miner south of the border in NSW, where its Illawarra coal production fell by five per cent due to an extended outage at Dendrobium caused by a roof collapse – the third in four years at the mine.

In regards to thermal coal the miner saw a very slight one per cent increase in the first half of the year, although it recorded a one per cent drop quarter on quarter.

BHP saw a huge dip in nickel production, both in terms of the first half and corresponding periods.

It fell seven per cent in the first half due to kiln and furnace outages, as well as lower nickel grades, at its Cerro Matoso mine.

Australian nickel operations also took a battering due to the closure of the Perseverance underground mine late last year after ongoing safety concerns.

BHP confirmed that it is continuing a review of its Nickel West business, comprising the Mt Keith, Cliffs, and Leinster mines, concentrators, the Kalgoorlie Smelter, and the Kwinana refinery.

“The review is considering all options for the long-term future of Nickel West, including the potential sale of all or part of the business,” it said in a company release.

Gold has also an increase, with its Olympic Dam operations increasing output from 113 240 ounces to 121 335 ounces year on year.

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