BHP lines up for 10% copper, iron ore, oil growth

[miningmx.com] – BHP BILLITON forecast annual compound growth of 10% until the end of the 2014 fiscal year based on higher output in copper, iron ore and petroleum, said Bloomberg News citing BHP comments in its December quarter production figures.

BHP said total output at Chile’s Escondida copper mine, the world’s biggest, was on track to rise 20% this fiscal year, while Australian iron ore production is forecast to gain 5%.

For the December quarter, BHP Billiton’s iron ore production rose 3% to 42.2 million tons (Mt) while copper production rose to 295,200 tons after output at Escondida increased 70% during the six months to December 31.

BHP’s oil and gas production in the quarter was 59.9 million barrels of oil equivalent, the company said. It left annual output guidance unchanged at 240 million barrels, reported Bloomberg News.

Production of coking coal, used to make steel, rose 5% to 8.9Mt compared to the same quarter last year. Thermal coal production rose 8% to 18Mt.

“This growth is real, and it’s fair and it’s going to drive earnings, but a lot of it is just return of capacity that’s been lost for whatever reason,’ Adrian Wood, a Sydney- based resources analyst with Macquarie Group Ltd. told Bloomberg News.

“The three key divisions, iron ore, copper and petroleum, guidance in all of those has been reiterated today. Halfway through the year they look to be comfortably on track to meet them,’ he said.

The price of iron ore hit a 15-month high of $158.50/ton this month after the biggest importer, China, announced new spending plans for roads and sewers.

“The rapid turnaround in Chinese sentiment has seen a similar move in iron ore expectations, bolstered by a strong Chinese restock,’ Macquarie Securities (Australia) Ltd. said in a Jan. 11 report. “We expect the price to hold above $100/t through 2017.’

China’s economy is forecast to accelerate to grow 8.1% this year, up from 7.9% during 2012, according to data compiled by Bloomberg. The recovery has extended to manufacturing activity, which has expanded for three consecutive months, the Purchasing Managers’ Index shows.