BHP Billiton Poised to Meet Production Guidance, Preps Expansions
Global miner BHP Billiton is all set to achieve a record full-year following its incredible iron ore output jump in the first half of the current financial year, the latest production report issued by BHP on Wednesday showed.
As of December last year, BHP upped its iron ore production by 23 per cent to 41,072 million tonnes, sustaining growth consistently seen in the previous quarters and pushing the company much ahead of its nearest competitor, Rio Tinto, in terms of quarterly iron ore output.
Buoyed by the first six months performance of its mining sites, the world's biggest mining firm expressed optimism that production targets earlier set for financial year 2011-2012 will be met.
"Full year production is now forecast to marginally exceed prior guidance of 159 million tonnes per annum," BHP said on its report.
On the back of its positive production outlook, market experts said that BHP Billiton is well on its way to post earnings before interest and tax (EBIT) of $32 billion by end of June 2012, far exceeding the $23 billion that Rio Tinto is expected to report.
However, the company's base metal productions suffered manageable setbacks in the past six months, with copper output retreating by 16 per cent when compared with hauls seen in the same period in 2010.
Also, zinc production dipped by 33 per cent while silver mining produced 15 per cent lesser, with lead output declining by 9 per cent over the same period.
Coking coal production jumped by 9 per cent, also in December, while petroleum production increased by 36 per cent overall in the last six months, which the company attributed to new acquisitions in the United States as well as better yields realised from existing oil fields.
Other activities pretty much highlighted the company's incredible hauls or at least flat outputs that prepared BHP for another record performance amidst questions of dwindling demands coming from its key customers.
Slowdowns registered in China prompted analysts to warn that commodities may take deep earning cuts this year but judging from the latest BHP numbers, which will be finalised by the second week of February, the snags, in the event they would come at all, will occur much later this year.
BHP is in fact unmindful of any gloomy outlook in the market that it has decided to reserve big part of its $80 billon expansion war chest to further explore and mine enormous amount of ores over the next five years.
The same is true with Rio Tinto and Fortescue Metals Group, which according to Reuters, have reserved billions for capital expenditures in order to dramatically increase their productions.