BHP Billiton share price: Group joins Rio Tinto in slashing iron ore output
BHP Billiton (LON:BHP) has posted its nine-month operational review this morning, unveiling plans to trim its iron ore output.
**Highlights from BHP’s statement:**
· On track to deliver an average unit cost improvement of 14% across our major assets(1) as productivity gains continue to be realised.
· Full year production guidance maintained for Petroleum, Copper and Coal.
· Guidance at Western Australia Iron Ore (WAIO) reduced by 10 Mt to approximately 260 Mt (100% basis) as a result of adverse weather and the initiation of an accelerated rail network maintenance program.
· In Petroleum, a US$640 million exploration program is now planned for the 2016 financial year to fund additional access and testing of our future growth opportunities.
· Four major projects under development are tracking to plan. The Escondida Bioleach Pad Extension project was completed as planned during the March 2016 quarter.
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “The productivity of our Company continues to improve notwithstanding the disruption largely caused by adverse weather this quarter. Over the last 12 months, we have taken a number of steps to strengthen BHP Billiton, including asset sales and the deferral of investment for long-term value. While these measures will reduce our output this year, they have increased our focus on our highest-quality operations and will support stronger margins and returns.
“We have the potential to significantly grow the value of our Company. Our simpler organisational structure will promote greater efficiency, rapid sharing of best practice and adoption of new technology to deliver the next level of safe productivity. Debottlenecking our assets at very low cost will generate high returns and substantial value. We have a pipeline of projects in copper and oil that allow us to bring high-margin volumes to market when the time is right. And as others cut back on exploration, our investment will go further and help create new options for the future.”
On 2 March 2016, Samarco Mineração S.A and its two shareholders, Vale S.A and BHP Billiton Brasil LTDA, entered into an agreement with the Federal Attorney General of Brazil, the States of Espírito Santo and Minas Gerais and certain other public authorities for the restoration of the environment and communities affected by the Samarco dam failure on 5 November 2015. The Agreement provides a long-term remedial and compensation framework for responding to the impact of the Samarco tragedy.
As of 07:23 BST, Wednesday, 20 April, BHP Billiton plc share price is 964.50p.