BHP ups output of 11 commodities

[] — BHP BILLITON PLC posted a 6% rise in quarterly iron ore output on Wednesday and said it was running most of its assets at full capacity as suppliers struggle to keep pace with the global appetite for industrial raw materials.

The world’s biggest miner said overall it saw increased production for 11 separate commodities, including record petroleum production, in the three months to September 30.

“Despite ongoing uncertainty in the developed world, BHP Billiton remains positive on the prospects for many of its core commodities and the underlying performance of its business due to strength in the emerging economies and the ongoing delay in the supply side response,” the company in its production report.

Strong international capital flows were reinforcing already powerful domestic credit creation in emerging markets, according to UBS.

“That should flow through to robust, commodity-intensive growth in emerging markets, while the developed world struggles in the face of higher commodity prices,” it said in a report this week.

BHP Billiton’s iron ore output for the September quarter rose 6% to 31.98 million tonnes versus the year-ago period, as the company pushed to extract more ore from its Australian mines.

Iron ore prices tracked by Thomson Reuters are near 5-month highs .IO62-CNI=SI, suggesting BHP and other producers will see higher sales margins.

Most ore is sold on a quarterly system based on the previous quarter’s average price.

BHP Billiton is Australia’s second-biggest iron ore miner behind Rio Tinto, which last week posted record quarterly iron ore production. In copper, overall production was in line with the previous quarter with a strong operating performance at the Olympic Dam mine following repair to a damaged shaft last year.

But this was partially offset by lower ore grades that crimped output at the company’s Antamina mine in Peru and Escondida lode in Chile.

BHP Billiton has already flagged that Escondida production will drop 5% to 10% this year because of lower ore grading.

It also posted a 10% rise in output of metallurgical coal used in steelmaking, but blamed a 5% drop in energy coal production on heavy rains near its mines.