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BHP lifts production outlook

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BHP Billiton has raised its full year guidance for iron ore and metallurgical coal production after achieving record output so far this fiscal year.

The world’s largest diversified miner raised production guidance for its Pilbara iron ore business by five million tonnes to 217 million tonnes for the year.

Olympic Dam copper production for the nine months ended March 2014 increased by 10 per cent, underpinned by record mining and hoisting rates.

Full-year copper production at the South Australian mine is expected to be broadly unchanged from the 2013 financial year, due to reduced output during planned maintenance over a 20-day period in the June 2014 quarter.

BHP increased iron ore exports for the March quarter by 23 per cent to 57.6 million tonnes, with its equity share 49.6 million tonnes.

When BHP’s smaller Brazilian iron ore operations are added, that will total more than 227 million tonnes for the year, having produced 171 million tonnes for the year to date.

BHP is the world’s third largest producer of the steelmaking commodity for export.

It achieved global sales of 57 million tonnes for the quarter and more than 170 million for the first nine months of the year.

BHP’s metallurgical coal guidance has been raised by 2.5 million tonnes to 43.5 million tonnes.

Production of metallurgical coal – also used in steelmaking production – in the quarter was up 28 per cent on the same period last year to 11.5 million tonnes and is at a record 33 million tonnes for the nine months to date.

Guidance for BHP’s second biggest earner, petroleum, has been reduced from 250 million to 245 million barrels of oil equivalent (mmboe).

That is due to the sale of its UK Liverpool Bay project and well repair activities at its US Hawkville shale asset.

Total petroleum production is up 10 per cent for the quarter, compared with the same time last year, to 61 mmboe.

Copper production for the quarter declined 5.0 per cent to 414,000 tonnes but was up two per cent for the year to date to 1.3 million tonnes.

BHP also announced a 28 per cent increase in the size of the resource at Chile’s Escondida mine which it operates and is already the world’s largest copper mine.

BHP’s chief executive Andrew Mackenzie said the company’s productivity agenda was delivering outstanding results, underpinning a 10 per cent increase in production so far this year.

“We continue to expect cumulative production growth of 16 per cent over the two years to the end of the 2015 financial year,” he said.

Group capital and exploration expenditure was on track to decline by 25 per cent in the 2014 financial year, before declining again next year.

He reinforced a focus on iron Ore, copper, coal and petroleum, following recent reports the company is considering a demerger of other assets: aluminium, nickel, zinc and energy coal in South Africa.

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