BHP Billiton has seen iron ore output surge in the third quarter, lifting 23 per cent to 49 million tonnes compared to the same time last year.
Releasing its quarterly results, efforts to streamline the company’s Western Australian iron ore supply chain are being realised with an extra 220 million tonnes per annum capacity added.
Deploying mobile crushing units and eliminating bottlenecks in its WA supply chain has underpinned a five million tonne increase in Western Australia Iron Ore’s production guidance for the 2014 financial year, BHP Billiton chief executive Andrew Mackenzie said.
“Our pursuit of productivity gains and operating excellence is already yielding strong results,” he said.
Mackenzie said cash rationalisation measures will continue into the 2014 financial year.
“A 25 per cent reduction in capital and exploration expenditure to US$16 billion in the 2014 financial year has significantly increased internal competition for capital,” he said.
“Our rate of expenditure will decline again next year and if our investment criteria cannot be met in any one project, product or geography, we will redirect our capital elsewhere or we will not invest.”
Total iron ore output lifted 2 per cent from quarter two, with four projects delivering first production in the September quarter, including the Jimblebar mine expansion.
Ramping up Jimblebar to 35 million tonnes per annum is expected to be completed by the end of the 2015 financial year.
Productivity gains also saw BHP’s Queensland coal operations sustain an annualised production rate of 61 million tonnes.
The company said the result was underpinned by the continued ramp up of Daunia mine, record quarterly production at South Walker Creek and improved Coal Preparation Plant performance at Blackwater and Saraji.
But the company’s coal business also suffered a number of setbacks during the September quarter, including a planned longwall move at Crinum mine and scheduled Coal Preparation Plant maintenance at Goonyella Riverside and Peak Downs.
An extended outage and a roof collapse at Dendrobium mine, as well as a scheduled longwall move at West Cliff saw Illawarra Coal’s production drop 39 per cent from the June 2013 quarter.
The company said Illawarra Coal production is expected to improve in the December 2013 quarter.