BHP boosts coal, iron ore production, sounds China warning

21st July 2010, Comments 0 comments

Mining giant BHP Billiton Wednesday announced a 16 percent rise in iron ore and metallurgical coal output for the fourth quarter, but warned growth containment measures in China could hit demand.

The world's biggest miner produced 31.2 million tonnes of iron ore in the fourth quarter, a 16 percent increase on the same quarter last year, and 125 million tonnes in the 12 months to June 30, a nine percent rise, BHP said.

"Western Australia iron ore achieved its tenth consecutive annual production record," BHP told the Australian stock exchange.

Metallurgical coal, a key ingredient in steelmaking, was also up 16 percent on quarter, at 11 million tonnes, and 37.4 million tonnes on year, three percent higher.

But the miner said it remained cautious about the short-term outlook for the global economy, particularly the impact on the resources industry of measures taken by China to cool growth.

"Uncertainty surrounds the near-term prospects for growth in the developed world as governments adjust fiscal policies following a period of significant stimulus and subsequent increase in sovereign debt levels," BHP said.

"Within China, measures designed to reduce growth to more sustainable levels means volatility in commodity end-demand is likely to persist," it added.

Both iron ore and coal were moved from annual pricing to shorter-term contracts in March in a landmark shift away from the old system, which had been in use for decades.

BHP said 34 percent of coal shipments for the year to June 30 had been priced under the new system, while 39 percent of Western Australian iron ore shipments still lagged on the annual system.

Despite a moratorium on drilling in the leak-ravaged Gulf of Mexico, BHP managed an annual production record for petroleum.

"BHP Billiton continues to monitor and assess the impact of the six month suspension of certain permitting and drilling activities in the Gulf of Mexico," it said.

Overall, crude oil, condensate and natural gas liquids output gained 18 percent on year to 25.7 million barrels in the quarter, while natural gas output fell six percent to 91.0 billion cubic feet.

-- Dow Jones Newswires contributed to this report --

© 2010 AFP

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