BHP Billiton (BHP) has set itself optimistic production targets for the year ahead as it ramps up its pursuit of capacity in the face of sustained weakness in the iron ore price.
In the quarter to June 30, the miner's attributable iron ore production came in at 56.6 million tonnes, a 19% lift on the previous corresponding period and well above analyst expectations of 48.9 million tonnes.
This brings full-year iron ore production to 203.6 million tonnes, a 20% lift on the previous year and 8% higher than initial full-year guidance.
The miner sees total iron ore production in fiscal 2015 increasing to 225 million tonnes.
Western Australian iron ore (WAIO) production in the full-year came to 225 million tonnes, ahead of guidance of 217 million tonnes, largely on the back of the early commissioning of the Jimblebar mine. In fiscal 2015 WAIO production is seen increasing by a further 20 million tonnes to 245 million tonnes.
The miner said a low-cost option to expand Jimblebar to 55 million tonnes per annum (on a 100% basis) as well as a broader debottlenecking of the supply chain are expected to underpin further growth in capacity towards a nameplate production rate of 270 million tonnes per annum, though it declined to put a timeline on meeting the goal.
The mining sector has come under increasing pressure this year as the iron ore price continues to weaken. Benchmark iron ore for immediate delivery to the port of Tianjin in China is trading at $US95.40 a tonne today, down from $US96.00 in the previous session.
The iron ore price dropped to as low as $US89 a tonne in June and so far this year has lost more than 30%. Of the miners though, BHP is the second most insulated with a break-even price of $US45 a tonne, behind only rival Rio Tinto at $US43 a tonne.
Full-year petroleum production gained 4% year-on-year to 246 million barrels of oil equivalent (mmboe) on the back of a 9% lift in fourth-quarter production to 64.7 mmboe. Analysts had expected full-year production of 245 mmboe.
In copper, a modest 2% lift on the previous corresponding period pushed full-year production to 1.7 million tonnes. This was a 9% increase on the previous year and slightly ahead of analysts' full-year forecast of 245 million tonnes.
The miner's chief executive Andrew Mackenzie said BHP expected to maintain strong momentum group output growth of 16% by the end of fiscal 2015, after achieving a 9% increase in group production in fiscal 2014.
"In petroleum, we are investing in our highest-return acreage while a broader improvement in productivity is expected to underpin stronger iron ore, copper and metallurgical coal volumes," he said.
"We will remain focused on value over volume as we prioritise our brownfield development options and consider the next phase of portfolio simplification."