BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “Full year production and unit cost guidance remains unchanged. Safety and productivity continue to improve with our new operating model helping us identify and replicate best practice more quickly. “We have seen early signs of markets rebalancing. Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term. Together, the combination of steadier markets, continued capital discipline, improved productivity and increased volumes in copper, iron ore and metallurgical coal should further support strong free cash flow generation this financial year.”
And for iron ore:
Iron ore – Total iron ore production for the September 2016 quarter was unchanged at 58 Mt on a BHP Billiton share basis, or 67 Mt on a 100 per cent basis. Guidance for the 2017 financial year remains unchanged at between 228 and 237 Mt on a BHP Billiton share basis, or between 265 and 275 Mt on a 100 per cent basis, with volumes weighted to the last three quarters of the year. WAIO production for the September 2016 quarter was flat as the ramp-up of additional capacity at Jimblebar offset lower volumes at Yandi. The 24 month rail renewal and maintenance program, which will support the integrated supply chain’s long-term reliability, is progressing on schedule. Completion of rail renewal works near Newman underpinned a four per cent increase in volumes from the June 2016 quarter. The installation of the new primary crusher and additional conveying capacity at Jimblebar is expected to be completed in the December 2016 quarter, with all associated spend included within WAIO’s long-term average annual sustaining capital expenditure of approximately US$4 per tonne. Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015. During the September 2016 quarter 12 kt of pellet feed was sold, with additional sales expected in the December 2016 quarter.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
