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BHP Billiton Achieves Record Production in Iron Ore, Coal and Petroleum

BHP Billiton(ASX:BHP) is continuing to impress investors. The Australian company posted record production output in three commodities -- iron ore, coal ...

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|Jul 23|magazine6 min read

BHP Billiton (ASX:BHP) is continuing to impress investors. The Australian company posted record production output in three commodities -- iron ore, coal and petroleum --for the second quarter of June, as well as boosting its guidance for the year.

BHP achieved production of 225 million tons of iron ore for the quarter, up 19 percent from the same period last year. The company is now expected to produce 245 million tons in the current 2015 financial year.

Investors responded confidently to production reports as shares for BHP hit a four-month high of $39.22 on the Australian Securities Exchange. It’s the 14th consecutive year BHP has recorded higher-than-expected production numbers.

“Our focus on productivity has resulted in a significant improvement in operating performance at each of our major businesses this year, with a nine per cent increase in group production and record output at 12 operations,” chief executive Andrew Mackenzie said.

BHP also increased its metallurgical coal by nine percent in the quarter to 11.89 million tons. Despite a 20 percent fall in prices for hard coking coal, the company improved its full year production to 45.08 million tons, beating its guidance of 43.5 million tons.

“Western Australia Iron Ore and Queensland Coal annual production exceeded guidance, with both rising by more than 20 per cent as we delivered more tons from existing infrastructure and growth projects ahead of schedule,” said Mackenzie.

BHP rounded out the trifecta by increasing its petroleum production by nine percent to a record 64.7 million barrels in the June quarter. The company produced 246 million barrels for the year, squeezing by it guidance of 245 million barrels.

"In petroleum, we are investing in our highest-return acreage while a broader improvement in productivity is expected to underpin stronger iron ore, copper and metallurgical coal volumes," said Mackenzie.

"We will remain focused on value over volume as we prioritize our brownfield development options and consider the next phase of portfolio simplification."

According to BHP, the end of the 2014 financial year, it had eight projects under development with a combined budget of $14.1 billion.