Iron ore solid but floods hit BHP Billiton coal

Rebecca Le May From: AAP January 20, 2011 4:28PM
Billiton has smashed its half-year and quarterly iron ore production and shipment records.
Rival mining giant Rio Tinto also this week reported it had set records in iron ore production.
BHP Billiton's Australian shares were down 92 cents, or 2 per cent, at $45.13 at 1533 AEDT.
But this did not necessarily mean investors were unimpressed with BHP Billiton's first-half production report, which was in line with expectations, CMC Markets market analyst Ben Le Brun said.
Mr Le Brun said BHP Billiton's London-listed shares were down overnight amid concern about the impact of the floods on the miner's coal production.
IG Markets research analyst Ben Potter said weak commodity price leads overnight had also dented BHP Billiton shares today.
BHP Billiton said it produced 33.6 million tonnes (Mt) of iron ore in the three months to December 31, up 5 per cent on the September quarter.
Start of sidebar. Skip to end of sidebar.End of sidebar. Return to start of sidebar.This took first half output to 65.6 Mt, a 5 per cent increase on the prior corresponding period.
Shipments of iron ore from its flagship West Australian operations rose to an annualised rate of 148 Mt per annum during the December quarter.
BHP Billiton is pursuing plans to lift Pilbara output to 240 Mtpa by 2013.
Persistent rain in the December quarter saw Queensland coal production fall by 30 per cent from the September quarter, while sales were down 15 per cent.
"Heavy rainfall that persisted for much of the December 2010 half year has significantly restricted overburden removal," the miner said.
"When combined with disruption to external infrastructure, we expect an ongoing impact on production, sales and unit costs for the remainder of the 2011 financial year."
The impact of Queensland's extreme weather continued to be assessed, and BHP Billiton confirmed it had declared force majeure over the majority of its Bowen Basin products, including Goonyella Riverside, Peak Downs, Norwich Park, Gregory Crinum, South Walker and Blackwater.
BHP Billiton said it remained confident in the fundamentals of its core products amid supply side constraints that have been exacerbated by weather-related disruptions in Australia, Colombia and South Africa.
"Robust growth in developing economies remains the primary driver of commodity demand and further positive signs are emerging in the United States following the Federal Reserve's ongoing efforts to stimulate the economy," the company said in a statement.
BHP Billiton also on Thursday said it had approved increased capital spending on the Esso-operated Kipper and Turrum petroleum projects in the Gippsland Basin off Victoria's coast.
BHP Billiton's contribution to the Kipper project has risen to $US900 million, up from a December 2007 forecast of about $US500 million.
The Kipper facilities, which were originally slated to be completed this year, are now expected to be completed in calendar 2012.
BHP Billiton will now spend $US1.35 billion on Turrum, compared with a mid-2008 estimate of $US625 million.
Turrum was previously expected to start-up in 2011, but is now forecast to be completed in 2013.
BHP Billiton's petroleum production in the six months to December 31 last year was flat compared to the previous corresponding period, with output totalling 80.3 million barrels of oil equivalent.
Permit delays in the Gulf of Mexico caused a deferral of production well drilling, the company said, while there was a decline in seasonal petroleum demand in eastern Australia.
Strong liquefied natural gas production at the North West Shelf joint venture in Western Australia was offset by severe flooding in Pakistan, where
BHP Billiton began exploring for gas in the mid 1990s.
The company said it expected production volumes for the 2011 financial year would be in line with the 2010 financial year.
Base metals production was higher in the half year compared with the corresponding prior period, except for zinc, which was down 27 per cent.
sourced heraldsun.com.au