BHP Billiton lowers FY 2016 iron ore output guidance as Q3 output plummets

By Paul Ploumis (ScrapMonster Author)

April 20, 2016 02:28:04 AM

SEATTLE (Scrap Monster): Melbourne-based iron ore mining major, BHP Billiton has reported weakest quarterly production in Western Australia in two years. Based on the lower output during Q3 FY 2016, the company has revised downwards its production guidance for the entire fiscal.

BHP Billiton’s production including the share of its joint venture partners totaled 61 million mt of iron ore during the January-March quarter. This is significantly down by 5% when compared with the output during the corresponding quarter last year. Also, the Q3 output was down by 4% when matched with the output during the Oct-Dec ’15 quarter. The quarterly production was the lowest in two years. The Western Australian production had hit the lowest level of 54.8 million mt during January-March 2014 quarter.

Based on lower production during the quarter, the company has lowered its production guidance for Western Australian region by 10 million mt. The guidance has now been reduced from earlier 270 million mt to 260 million mt now. BHP's share of this total is expected to be 229 million mt, down 3% from earlier guidance of 237 million mt.

Meantime, the cumulative output during the initial three quarters of FY 2016 were up marginally by 2% at 193 million mt, primarily on account of ramp up in production from Jimblebar mine in the Pilbara.

It must be noted that another major player, Rio Tinto had announced drastic cut to its iron ore production guidance for 2017. The iron ore production by Rio Tinto during the March quarter had dropped sharply by nearly 12% over the previous quarter, mainly on account of cyclone which hit the Pilbara mines during the month of January this year. Rio Tinto had cut its production guidance for 2017 by 20 million tonnes. According to them, the Pilbara production is now expected to be in the range of 330-340 million tonnes in 2017, as against the earlier guidance of 350 million tonnes.