Iron ore shipments hit record, BHP Billiton says
Source : The Wall Street Journal
Published on : 20th Jan 2011
Global miners saw booming prices for their products in 2010, with iron ore, copper, gold, silver, platinum and tin hitting long-term records as demand recovered from the post-financial crisis slump. However, adverse weather over the Australian wet season threatens some of the major producing regions for the world's largest miner.
Above-average cyclone activity is expected in the Pilbara over the next few months and the company has declared force majeure on some of its coal products from its Queensland mines.
Total coking coal output was 7.8 million metric tons in the three months to December 31, a 12 per cent fall on the year, but iron ore output rose 4 per cent to 33.7m tons over the same period, BHP said in the statement. Thermal coal production from BHP's mines in Australia, South Africa, Colombia and the US rose 7 per cent on the year to 16.5m tons.
BHP is the world's largest producer of coking coal and silver and a top-three producer of iron ore, copper, nickel, lead and uranium.
BHP is the third of the major miners in Australia's Bowen Basin coal-producing region to report results since flooding hit the region in December, leading to fears of a spike in prices of the steelmaking commodity from halted production.
Rio Tinto on Tuesday said its coking coal output fell 6 per cent between the September and December quarters but Wesfarmers said yesterday that production rose 25 per cent at its Curragh mine, although Wesfarmers anticipates more serious effects from the floods in the March quarter.
BHP said that iron ore production and shipments hit records, with iron ore shipments from the Pilbara rising to 148m tons a year on an annualised basis, but added that the scope of its planned expansion to its Pilbara operations was still under review. BHP rivals Rio Tinto and Fortescue Metals Group earlier this week said that plans to upgrade their production from the Pilbara were on-track.
The period for BHP was marked as much by major failed corporate transactions as by its production activities. A long-idled joint venture of its Pilbara iron ore operations with Rio Tinto was abandoned in the face of opposition from European Union regulators, while a $US39bn bid for Potash Corp of Saskatchewan was dropped after Canadian politicians indicated they would not approve the deal.
But booming prices for the company's core steelmaking materials of coking coal and iron ore have supported prospects for global miners. Each ton of steel requires around 0.6 tons of coking coal and 1.5 tons of iron ore.
Copper production, which many miners have seen as challenging over the past year, despite booming prices for the commodity, rose 11 per cent to 302,300 tons, despite an expected output decline from the Escondida mine, the world's largest, of 5-10 per cent.
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