BHP Billiton Forecasts Rise in FY18 Production

   By Robb M. Stewart 
 

MELBOURNE, Australia--BHP Billiton Ltd. (BHP.AU) forecast a rise in overall production over the year ahead as it continues to lift iron-ore output and anticipates a rebound in copper and coking-coal volumes.

Still, oil and gas production is expected to fall further in the year through June, 2018, despite an increase in U.S. onshore shale activity.

The quarterly production update comes as BHP faces criticism from activist investors over its underperformance and accusations long-serving directors stood by while billions of dollars were misspent on acquisitions and mistimed share buybacks. New York hedge fund Elliott Management Corp. has led a series of attacks in recent months, calling for a sweeping overhaul of the world's largest-listed mining company.

Iron-ore production rose by 4% to 231 million metric tons in the just-ended fiscal year, with record volumes at BHP's mines in Western Australia. BHP said it expected output to increase by between 3% and 5% this year.

Production of coking coal, used alongside iron ore to produce steel, fell by 6% to 40 million tons in fiscal 2017, in line with a target that was cut in April due to storm damage to the rail network serving its operations. BHP said production was expected to climb by 10%-15% this year.

Output of thermal coal, used by power stations, was 7% higher at 29 million tons and is forecast to be steady to 3% higher this year. Copper production is expected to jump by 25%-35% this year after falling by 16% in fiscal 2017 to 1.33 million tons--the lower end of revised guidance after output was held back by a 44-day strike at the Escondida mine in Chile as well as disruptions at its Olympic Dam mine in South Australia due to maintenance and a major power outage.

The petroleum division's production declined by 13% in the latest year to 208 million barrels of oil equivalent, and BHP said it is likely to fall by 9%-13% in fiscal 2018.

"Our people have stepped up to unlock low-cost latent capacity and achieve strong productivity gains across our tier one assets," Chief Executive Andrew Mackenzie said.

In copper-equivalent terms, BHP said production across its operations was expected to increase by 7% in the 2018 fiscal year.

Write to Robb M. Stewart at [e-mail]

(END) Dow Jones Newswires

July 18, 2017 19:14 ET (23:14 GMT)

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