Strong growth at BHP Billiton

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MariusKloppers111 REUTERS Marius Kloppers, chief executive of BHP Billiton.

Johannesburg - The release of latent capacity at a number of BHP Billiton’s (BIL) highest margin businesses and strong growth across its broader portfolio is expected to deliver a compound annual growth rate of 10% in copper equivalent terms over the two years to the end of the 2014 financial year‚ the miner said on Wednesday.

Releasing its production report for the half year ended December 2012‚ BHP Billiton noted that Western Australia Iron Ore (WAIO) delivered a twelfth consecutive December half year production and sales record.

First ore was received by the fifth car dumper‚ which is the last major piece of infrastructure required to increase WAIO port capacity to 220 million tonnes per annum (100% basis)‚ it said.

WAIO production guidance remains unchanged with a 5% increase anticipated in the 2013 financial year.

Petroleum production of 121 million barrels of oil equivalent during the December 2012 half year underpins full year guidance‚ which remains unchanged at 240 million barrels of oil equivalent‚ it said.

Copper in concentrate production at Escondida increased by 70% in the December 2012 half year when compared with the prior corresponding period. Total Escondida copper production is on track to increase by 20% in the 2013 financial year.

At the end of the December 2012 quarter‚ Queensland Coal production was approaching full supply chain capacity. The associated increase in productivity‚ broader economies of scale and the closure of high cost capacity is expected to deliver a substantial reduction in unit costs in the second half of the 2013 financial year.

In its aluminium division‚ the group noted that metal production increased by 10 per cent from the September 2012 quarter as Hillside (South Africa) production returned to full technical capacity‚ ahead of schedule.

BHP Billiton has agreed to sell its diamonds business‚ comprising its interests in the EKATI Diamond Mine and Diamonds Marketing operations‚ to Harry Winston Diamond Mines Ltd for an aggregate cash consideration of US$500 million. The transactions are subject to regulatory approval and other customary conditions. Completion is expected in the first half of calendar year 2013.

Greenfield minerals exploration is focused on advancing copper targets within Chile and Peru. Minerals exploration expenditure for the December 2012 half year was US$363 million‚ of which US$272 million was expensed.

Petroleum exploration expenditure for the December 2012 half year was US$308 million‚ of which US$276 million was expensed. Petroleum exploration expenditure of approximately US$775 million is anticipated in the 2013 financial year with the majority of drilling activity scheduled to occur in the Gulf of Mexico‚ it said. - I-Net Bridge


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