Bhp Billiton production report

A diversified natural resources company and among the world’s largest producers of major commodities, including aluminium, coal, copper, iron ore, manganese, nickel, silver and uranium, and has substantial interests in oil and gas.  I have a holding in my income portfolio (epic code: BLT).

BLT issued their production report for the 4th quarter and the year ended 30 June 2013. They had a strong year of production as two of their major assets, Western Australia Iron Ore and Escondida, exceeded production guidance and annual records were achieved across seven operations and five commodities.

 

Of note was that although they increased petroleum production by 6%, this was constrained by extended maintenance and drilling delays at their Gulf of Mexico assets. 

 

Copper production was up 10% for the year with good results from Escondida (Chile) where production increased by 28%, they expect to continue at this current level in 2014, before increasing production there by 18% in 2015.

 

Iron ore production increased by 7% for the year and 19% over the March quarter, the quarterly comparison was probably in response to Chinese steel mills restocking in the June quarter.  Western Australia Iron Ore (the majority of output) is expected to increase production by over 10% in 2014 and they state that Longer term, the progressive debottlenecking of the supply chain is expected to underpin substantial low cost growth in their Western Australia Iron Ore business.  This contrasts with Glencore Xstrata that announced yesterday that they are closing their iron ore operations in Australia; the expectation is that more small high cost producers will follow suit.

 

Although Metallurgical and energy coal were good performers with production increasing by 13% & 3% respectively, production will be affected in the next quarter due to a longwall move (where they move to a new seam of rock underground) at Crinum and scheduled maintenance at Goonyella Riverside and Peak Downs.

 

In a separate announcement on exploration and development, they state that the majority of BLT's 18 low risk, largely brownfield, major projects are scheduled to deliver first production before the end of the 2015 financial year.