BHP Says Work Underway to Fix Iron Ore Infrastructure Hiccup -- Commodity Comment

   By Rhiannon Hoyle 
 

SYDNEY--BHP Billiton Ltd., the world's largest listed mining company by market value, released its third-quarter operational report on Thursday. BHP trimmed its fiscal-year iron-ore production estimate because of an infrastructure-linked setback, and also cut forecast production from its Olympic Dam copper mine. Here are some remarks from the company's report:

On iron ore production:

"At WAIO [Western Australia Iron Ore], increased production was supported by record production at Jimblebar and Mining Area C, and improved rail reliability. This was partially offset by the impact of lower opening stockpile levels following the Mt Whaleback fire in June 2017, planned maintenance and port debottlenecking activities in the first half of the financial year. Volumes decreased by 6% from the December 2017 quarter reflecting impacts from Cyclone Joyce and unplanned car dumper maintenance, despite improved rail reliability and an increase in peak performance in the number of rakes per day. With the system constraint now at the port, a program of work is underway to improve car dumper availability and performance."

On metallurgical coal output:

"At Queensland Coal, production was lower due to challenging roof conditions at Broadmeadow and geotechnical issues triggered by wet weather at Blackwater. This was partially offset by record production at four mines, underpinned by improved stripping and truck performance, higher wash-plant throughput from debottlenecking activities and utilisation of latent dragline capacity at Caval Ridge. Mining operations at Blackwater stabilized in the current quarter and are expected to return to full capacity during the June 2018 quarter as inventory levels are rebuilt."

On Olympic Dam:

"Olympic Dam copper production decreased by 18% to 95,000 tons as a result of the planned major smelter maintenance campaign in the first half of the financial year. Production guidance for the 2018 financial year has been reduced from 150,000 tons to approximately 135,000 tons due to a slower than planned ramp-up during the March 2018 quarter. A return to full capacity is now expected over the course of the June 2018 quarter."

On petroleum operations:

"Onshore U.S. drilling and development expenditure for the nine months ended March 2018 was US$648 million. Our operated rig count declined from nine to seven during the March 2018 quarter. In the Permian, we continue to see strong results from larger completions. We expect rig count to remain unchanged through the June 2018 quarter as we focus on meeting 'hold by production' obligations and progressing sub-surface trials. In the Eagle Ford, early trial results from wells with longer laterals in the Hawkville have exceeded expectations and early results in the Austin Chalk horizon have been positive."

-Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

April 18, 2018 21:33 ET (01:33 GMT)

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