Lower realised prices for its metallurgical coal took US$1.4 billion off of BHP Billiton’s coal earnings in the twelve months to June 2014. Reporting its results for the 2013/14 Australian financial year, the company said prices for hard coking coal dropped by 20% and for weak coking coal by 14%, while thermal coal prices dropped 14%. This more than offset gains made by productivity-led volume and cost efficiencies and a stronger US dollar.
Underlying EBIT for the coal business dropped by US$209 million to US$386 million, accounting for less than 2% of the company’s total underlying EBIT of US$22.9 billion. Overall, the world’s largest miner achieved an increase in profit of 10% compared to the previous year to US$13.4 billion.
Capital expenditure on coal projects was also down from US$3.6 billion to US$2.3 billion. The company completed the Caval Ridge project with ramp up to 5.5 million tpa of metallurgical coal production expected by the end of the next financial year. The Appin Area 9 and Hay Point Stage Three Expansion projects remain on schedule and on budget.
Written by Jonathan Rowland
Read the article online at: https://www.worldcoal.com/coal/20082014/world-coal-lower-prices-cost-bhp-billiton-coal1232/