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BHP Billiton reports coal production results for end of financial year

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World Coal,

BHP Billiton has reported its coal production results for year-end 30 June 2017.

The company’s metallurgical coal production for the 2017 financial year decreased by 6% to 40 million t. Production is expected to increase to between 44 – 46 million t in the 2018 financial year.

At Queensland coal, production for the 2017 financial year was lower as a result of damage caused by Cyclone Debbie to the network infrastructure of rail track provider Aurizon. Mine operations recovered quickly after the cyclone, as dewatering infrastructure installed after the 2011 floods worked as designed. Force majeure was declared for all Queensland Coal products on 5 April 2017 and was lifted on 1 July 2017. Despite the impacts of Cyclone Debbie, Peak Downs and Saraji achieved record annual production underpinned by improved stripping and mining performance, and utilisation of latent wash plant capacity, including approximately 2 million t trucked to Caval Ridge (100%). Three additional mines were on track for record production prior to Cyclone Debbie.

The Caval Ridge Southern Circuit latent capacity project is progressing according to plan, with production expected to ramp-up early in the 2019 financial year.

In terms of BHP’s thermal coal production for the 2017 financial year, this increased by 7% to 29 million t. Production is expected to remain broadly unchanged at approximately 29 – 30 million t in the 2018 financial year.

New South Wales thermal coal production increased by 6% as it benefitted from a lower strip ratio and additional bypass coal. Cerrejón production increased by 9% compared to the previous year, which was constrained by drought conditions.

BHP expects to record exceptional items of US$546 million (US$740 million post-tax) in the second half of the 2017 financial year. These items relate to idle capacity and other strike-related costs incurred as a result of the Escondida industrial action in the March 2017 quarter and Chilean withholding tax on a one-off dividend paid while a concessional tax rate was available.

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