Bhp Billiton 12 months operations review

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).

Bhp Billiton yesterday reported a strong production performance for their full year with a 9% increase in Group output and annual records achieved across 12 operations and four commodities.

 

Western Australia Iron Ore achieved a fourteenth consecutive annual production record as volumes increased to 225 Mt on a 100% basis, significantly exceeding initial full-year guidance.  Management now expect production of 245 Mt on a 100% basis from the Pilbara in the 2015 financial year.  Iron ore production was up 20% on the year, but average prices declined 6%, expectations for the current year is for an 11% increase in production.

 

Metallurgical coal production of 45 Mt exceeded full-year guidance as Queensland Coal achieved record production and sales volumes.  Metallurgical coal production was up 20% on the year, but average prices declined 20% for hard coking and 14% for weak coking, expectations for the current year is for a 4% increase in production. 

 

Copper production increased to 1.7 Mt as an improvement in mill throughput and concentrator utilisation offset grade decline at a number of operations.  Copper production was up 2% on the year, but average prices declined 5%, expectations for the current year is for a 5% increase in production.

 

Petroleum production increased to a record 246 MMboe with an 18% increase in liquids volumes underpinned by significant growth at Onshore US and Atlantis.  Petroleum production was up 4% on the year, but average oil prices declined 4% although gas prices were buoyant up 16% (US 25%), expectations for the current year is for a 5% increase in production. 

 

Management say they expect to maintain strong momentum and remain on track to generate Group production growth of 16% over the two years to the end of the 2015 financial year.

 

Today it was reported in the WSJ that BHP Billiton and Anglo American are in talks to sell their jointly-owned portfolio of manganese assets in South Africa and Australia.  The assets under discussion are reported to include two mines in South Africa, one in Australia, and processing plants in both countries.  BLT owns 60% and AAL 40% of the operations.