Mining giant BHP Billiton Ltd. (BHP,BHP.AX,BBL,BLT.L) said it expects production from the core portfolio to grow by 23 per cent over the two years to the end of the 2015 financial year as the company completes high-return, brownfield projects and embeds productivity-led volume gains. BHP Billiton remains on track to meet all 2015 financial year production guidance.
BHP Billiton said with a simpler portfolio it will maximise value and shareholder returns by reducing operating costs and improving capital efficiency.
The Group stated that it has cut unit costs across all its mineral businesses and expects further reductions across the core portfolio. Unit costs atWestern Australia Iron Ore fell 12per cent in the second half of the 2014 financial year and a 25 per cent reduction is expected in the medium term.
According to the company, production costs in the Copper business have also fallen despite grade decline. Escondida unit costs declined by 22 per cent in the last two years and the company forecasts another five per cent reduction in the 2015 financial year.
Also, at Queensland Coal, a 24 per cent reduction in operating costs has re-established the business and the company said it expects to reduce unit costs by a further 10 per cent, to below US$90 per tonne,in the 2015 financial year as it continues to increase throughput from the installed infrastructure.
In Petroleum, forensic benchmarking of every component of the Onshore US drilling program has significantly improved capital productivity. Onshore US operating costs are also expected to improve with a 10 per cent reduction forecast in the 2015 financial year, the company stated.
BHP Billiton Chief Executive Officer,Andrew Mackenzie,said: "We are confident that our productivity drive will be accelerated by the demerger proposal we announced in August. A simpler portfolio,focused on our 19 core assets, will retain an optimal level of diversification while generating even stronger growth and margins."
For comments and feedback contact: editorial@rttnews.com
Business News