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 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.
Lynas revenue jumps 21% as rare earth prices jump
Australian miner Lynas Rare Earths posted a 20.6% rise in revenue in the March quarter as selling prices for the key metals it mines hit record highs amid strong demand, particularly for neodymium and praseodymium (NdPr).
NdPr is used in magnets for electric vehicles and windfarms, in consumer goods like smartphones, and in military equipment such as jet engines and missile guidance systems.
The company said it plans to maintain production at 75% however, as it seeks to continue to meet covid-19 safety protocols and grapples with shipping difficulties. Shares in Lynas fell 6.1% after the results.
“They have faced a few logistics issues, and it would be good to know when they are going to start lifting their utilisation rates a bit,” said portfolio manager Andy Forster of Argo Investments in Sydney.
“Pricing has been pretty strong although it may have peeled back a bit recently. I still think the medium, long-term outlook is pretty good for their suite of products.”
Lynas post ed revenue of A$110mn ($85.37mn) for the three months to the end of March, up from A$91.2mn a year earlier as prices soared.
It said its full product range garnered average selling prices of A$35.5/kg during the March quarter, up from $23.7 in the first half of the financial year. “While the persistence of the covid crisis, especially in Europe, calls for careful forecasts for our business ahead, we see the rare earth market recovering very quickly,” said Lynas, the world’s largest rare earths producer outside China.
Freight demand has spiked during the pandemic, while the blockage of the Suez Canal in March delayed a shipment to April.
Lynas’ output of 4,463 tonnes of rare earth oxide (REO) during the quarter was marginally lower than 4,465 tonnes from a year earlier.