22/04/2009 - 08:37

BHP iron output dips on safety accidents

22/04/2009 - 08:37

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BHP Billiton has reported a dip in iron ore production for the March quarter, admitting today safety accidents had a part to play.

BHP Billiton has reported a dip in iron ore production for the March quarter, admitting today safety accidents had a part to play.

For the three months to the end of March, iron ore output was down 4 per cent on the previous quarter to 28.18 million tonnes. The production figure was down 1 per cent from the previous corresponding period.

"Current quarter production at Western Australia Iron Ore was affected by cyclone interruptions and the temporary suspension of operations following safety incidents," BHP said in its report.

During the period, BHP halted its Pilbara operations after a worker was killed in March, its fifth fatality this financial year.

The incident prompted state Mines Minister Norman Moore to take the unprecedented step of ordering stop work notices for any workplace breaches related to BHP sites.

Meantime, BHP said it received requests for deferral of long-term iron ore contracts but had managed to sell the deferred tonnes on the spot market.

The miner said that for the nine month ended March 2009, 72 per cent of WA iron ore shipments were based on annually agreed pricing.

Over the same period, BHP reported record iron ore production of 87.4mt, up 6 per cent on the previous corresponding period.

Fat Prophets senior analyst Gavin Wendt said the report was in line with expectations.

"There weren't too many surprises there. It was a very solid report," Mr Wendt said.

He said it was curious to see BHP's quarterly iron ore production was only down minimally, when Rio Tinto's recent production report showed a 15 per cent drop in the same period due to poor weather.

"It was quite intriguing given they work in the same area," Mr Wendt said.

BHP's copper production was sharply down on the corresponding period last year, off 14 per cent at 282,8000 tonnes on the effect of lower grade ore and reduced operations at the giant Escondida mine in Chile.

For the financial year to date, copper production declined by nine per cent to about 899,900 tonnes.

Production of lead was down 30 per cent on last year to 47.2 million tonnes, and off 14 per cent for the first nine months of this financial year.

Zinc production for the March quarter was up ten per cent on the corresponding period last year, with 39,397 tonnes, while uranium production was off eleven per cent on the back of lower grades at Olympic Dam.

Lower head grade at Cannington and wet weather were blamed for a big drop in silver production, down 22 per cent on the corresponding period last year, to 8.73 million ounces, and down eleven per cent for the financial year to date to 30.55 million ounces.

Metallurgical coal production was up eleven per cent on the March 2008 quarter to 7.6 million tonnes and up three per cent for the three quarters, after a recovery from Queensland flooding last year.

In its quarterly exploration and development report, also released on Wednesday, the company said there had been no significant change to BHP Billiton's financial position other than the issue of $US3.25 billion ($A4.58 billion) in global bonds.

The report said that in the nine months to March 2009 the company had spent $US514 million ($A723.94 million) on minerals exploration.

Shares in BHP Billiton closed down seven cents, at $31.49.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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