“Since the royalty agreement was entered into in 1994 the basis upon which iron ore is marketed and sold has changed significantly, for example with volume sold primarily on a blended basis and incorporating appropriate freight and insurance adjustments”, the miner said in a regulatory filing.
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BHP Billiton said it is targeting production of around 270 million tonnes in the 2016 financial year and an ultimate rise in capacity to 290 million tonnes over time.
“The project will mitigate the risk of a channel blockage by ensuring the continued safe escort of vessels in and out of the Port Hedland Inner Harbour”, commented BHP Billiton Iron Ore President, Jimmy Wilson.
The Anglo-Australian firm said ore output for the three months to June rose by six percent from the previous quarter last year, taking the overall increase for the 2015 financial year to 14 percent for a record 233 million tonnes of iron ore.
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said, “Our businesses performed well over the 2015 financial year”.
The jump clear of $US50 a tonne will be welcomed by the sector as most mid-tier and junior miners are marginal, at best, below $US50 a tonne, with Vale, Rio Tinto and BHP Billiton the only ones able to turn a significant profit at such levels.
The Melbourne-based company also announced it has taken an impairment of $350 million to $650 million, mainly on its copper assets, including its Cerro Colorado mine in Chile, and a reduction in the number of rigs being used within its onshore US petroleum unit. The company lifted petroleum production four per cent to 256 million barrels of oil equivalent (mmboe) thanks to an increase in output from its shale business.
Average realised prices of commodities produced by BHP Billiton were lower over the financial year with the exception of nickel, which was flat.
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Metallurgical coal production for the fiscal 2015 increased 13% to a record 42.6 million tons. “Our simpler portfolio following the demerger of South32 will help us maintain the pace of operational improvement, further supporting cash generation, margins and returns”.
