BHP Billiton's Coal Production Exceeds Expectations
The world's largest mining company - BHP Billiton - reported today better-than-expected production of steel-making coal, which it hopes to bring into full recovery by year-end.
This is welcome news on the heels of Tueday's announcement of the company's 11th record production of iron ore. The company disclosure said output of steel-making or coking coal jumped 19 percent from the previous quarter to 7.9 million tonnes, above expectations for 7 million tonnes, but output was still 28 percent below year-ago levels as mines continued to run below peak capacity.
"While production did improve in the June 2011 quarter ... we continue to expect production, sales and unit costs to be impacted, to some extent, for the remainder of the 2011 calendar year," BHP said in its fiscal fourth quarter production report.
The firm's coal production facilities in Queensland's Bowen Basin were severely damaged by floods earlier in the year.
Coal production for its closest rival Rio Tinto is likewise still down. In its guidance, Rio Tinto projects this year's coal production at 8 million tonnes, down from last year's 9.3.
BHP warned that it could take the rest of the year to achieve full production. However, with the company exceeding analysts' predictions on several commodities, the company may be set to achieve record profits of approximately $US21 billion ($A19.5 billion) this year.
Colin Whitehead, an analyst in Sydney, said in a related Reuters report that this may be part of the company's strategy of under-promise and yet an over-delivery. Mr Whitehead said: "I would think the market will take a more optimistic view on the back of this."
BHP, unlike Rio Tinto, does not issue production guidance for its products. Market analysts have to make their own estimates for the company's 10 product lines.