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BHP on track for 7% volume growth in FY18; guidance intact

BHP on track for 7% volume growth in FY18; guidance intact

Photo by Reuters

18th October 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – The world’s largest mining house BHP Billiton said on Wednesday it remained on track for a 7% volume growth in the 2018 financial year, leaving its full-year 2018 guidance unaltered.

The Melbourne, Australia-based miner reported its operating results for the three months ended September 30, recording a 3% year-on-year drop in iron-ore output to 55.6-million tonnes.

BHP said that improved mine productivity and record volumes at Jimblebar, in Western Australia, were offset by the impact of planned maintenance and lower opening stockpile levels, following the fire at the Mt Whaleback screening plant in June.

Copper output for the three-month period rose 14% to 404 000 t, as increased volumes at Escondida, in Chile, were supported by the start-up of the Los Colorados Extension project and higher average copper grades and throughput.

Meanwhile, BHP reported that steelmaking metallurgical coal remained flat when compared with the year-earlier period at 11-million tonnes; however, steam-generating thermal coal output sagged 2% to seven-million tonnes.

The miner said that record metallurgical coal output at Saraji mine and increased productivity across the major’s Queensland coal mines was offset by lower output at Broadmeadow. Strong performance at the New South Wales energy coal division was offset by the impacts of unfavourable weather at Cerrejón, in Colombia.

On the petroleum front, BHP saw output fall 8% to 50-million barrels of oil equivalent, as lower volumes reflected natural field decline and the impact of Hurricane Harvey on its US petroleum assets. In onshore US, BHP’s operated rig count increased from five to nine during the September quarter.

It said that divestment of a small portion of the Hawkville acreage was completed during the quarter, with work under way to exit its remaining onshore US assets for value.

In petroleum exploration, the company is evaluating the positive drilling results from Wildling-2, with a side track also encountering oil in multiple horizons that will assist with establishing the scale of the discovery.

“We manage the portfolio for value and returns. Our transition to lower-cost, high-return, latent capacity projects is delivering results, with first copper production achieved from the Los Colorados Extension project at Escondida and Olympic Dam’s Southern Mining Area during the quarter,” CEO Andrew Mackenzie said in a statement.

“Major development work has commenced on the recently approved growth projects, Mad Dog Phase 2 and the Spence growth option, with both set to become operational as their respective markets in oil and copper rebalance.”

On August 17, the BHP board approved an investment of $2.5-billion for the development of the Spence Growth Option, at the Spence opencut copper mine, in northern Chile.

At the end of the September quarter, BHP had four major projects under development in petroleum, copper and potash, with a combined budget of $7.5-billion over the life of the projects.

According to BHP’s ‘Economic Contribution Report’ published in September, BHP’s contribution globally in the 2017 financial year was $26.1-billion, which includes $4.7-billion in taxes, royalties and other payments to governments.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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