BHP Quarterly Iron Ore Output Rises 17% to Beat Estimates
BHP Billiton Ltd. (BHP), the world’s biggest mining company, said fourth-quarter iron ore production gained 17 percent as the company expands operations in Australia to deliver a 13th annual output record.
Production was 47.7 million metric tons in the three months ended June 30, from 40.9 million tons a year earlier, Melbourne-based BHP said today in a statement. That beat the 43.2 million ton median estimate of five analysts surveyed by Bloomberg.
The result compares with the 7 percent increase at Rio Tinto Group (RIO)’s iron ore operations, which also beat analyst estimates when announced yesterday. Growth in China, the biggest metals buyers, slowed for a second quarter, as the government reins in credit expansion to reduce the danger of a financial crisis.
“There’s no doubt that while the rate of growth in China has slowed, the demand for iron ore continues to increase,” Michael McCarthy, chief market strategist at CMC Markets Australia, said. “Those volume increases will at least to some extent offset the fall in revenues that comes from lower commodity prices.”
BHP shares gained 2.3 percent to A$34.19 at the close of trading in Sydney. Rio, the world’s second-largest miner, rose 1.1 percent.
The price of iron ore has dropped 18 percent since January, and is forecast to decline until at least 2016, according to data compiled by Bloomberg.
“A strong year of production as two of our major assets, Western Australia Iron Ore and Escondida, exceeded production guidance and annual records were achieved across seven operations and five commodities,” BHP said in the statement.
While iron ore production beat estimates, the company’s total petroleum output of 59.2 million barrels of oil equivalent, up 5 percent from a year earlier, missed analyst guidance of 63.7 million barrels.
Output of coking coal, BHP’s fourth-largest source of revenue, rose 34 percent to 11 million tons.
Thermal coal output gained 6 percent to 20 million tons, BHP said. Copper gained 7 percent to 333,200 tons from higher production at the Escondida mine in Chile.
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