BHP Billiton Cuts FY16 Iron Ore Production Outlook

(RTTNews) - BHP Billiton Ltd. (BHP.AX, BLT.L, BBL, BHP) said it cut its fiscal year 2016 iron ore production outlook for its Australian mines by 10 million tonnes to 260 million tonnes due to adverse weather and the initiation of an accelerated rail network maintenance.

"The productivity of our company continues to improve notwithstanding the disruption largely caused by adverse weather this quarter," Chief Executive Officer Andrew Mackenzie said in the statement.

Total iron ore production for the nine months ended March 2016 was broadly unchanged at 171 million tonnes. Production for the 2016 financial year is now expected to be approximately 229 million tonnes, three per cent below prior guidance, and reflects a reduction in guidance at Western Australia Iron ore or WAIO.

WAIO production for the nine months ended March 2016 increased by two per cent to a record 193 million tonnes (100 per cent basis) and reflected the Jimblebar mining hub operating at full capacity and improved ore handling plant utilisation at Newman. This was partially offset by one-off operational issues in the December 2015 quarter, along with the impact of adverse weather conditions and the initiation of an accelerated rail network maintenance program in the March 2016 quarter.

WAIO production of approximately 260 million tonnes is now anticipated for the 2016 financial year, four per cent below prior guidance, however unit cost guidance remains unchanged at US$15 per tonne.

Samarco production for the nine months ended March 2016 was 11 million tonnes (100 per cent basis). Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015. Sales from the final shipment of pellets from stockpiles will be settled in the June 2016 quarter.

Total petroleum production for the nine months ended March 2016 decreased by four per cent to 184.1 MMboe. Guidance for the 2016 financial year remains unchanged at 237 Million Barrels of Oil Equivalents or MMboe as the strong performance by Conventional business offset the reduction in Onshore US activity and the divestment of our gas business in Pakistan.

Crude oil, condensate and natural gas liquids production for the nine months ended March 2016 decreased by four per cent to 89.7 MMboe.

Natural gas - Natural gas production for the nine months ended March 2016 declined by five per cent to 567 bcf.

Petroleum capital expenditure of approximately US$2.7 billion is planned for the 2016 financial year. This includes Conventional capital expenditure of US$1.4 billion, which remains focused on high-return infill drilling opportunities in the Gulf of Mexico and life extension projects at Bass Strait and North West Shelf, and Onshore US capital expenditure of US$1.3 billion, of which approximately US$300 million relates to a reduction in capital creditors.

Total copper production for the nine months ended March 2016 decreased by eight per cent to 1.2 million tonnes as continued strong operating performance across the business was offset by grade decline at Escondida, as anticipated. Guidance for the 2016 financial year remains unchanged at 1.5 million tonnes.

Metallurgical coal production for the nine months ended March 2016 remained broadly in line at 31 million tonnes. Guidance for the 2016 financial year remains unchanged at 40 million tonnes.