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BHP Billiton coal production falls in 2H15

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World Coal,

BHP Billiton have announced a fall in metallurgical coal production in 4Q15 on the back of convergence issues at its Broadmeadow mine and the completion of longwall mining at its Crinum mine in Queensland, Australia. This offset record production at the Blackwater, Duania, Caval Ridge and South Walker Creek mines.

The company mined 10.5 million t of metallurgical coal in the quarter, 6% down on the same period in 2014. Production in the six months to December 2015 totalled almost 21 million t – a 3% drop on 2014. Production guidance for the year to June 2016 remains unchanged at 40 million t.

On the thermal coal side, BHP mined 9.5 million t in 4Q15 – again a fall of 6% on the same period in 2014. Half-year production was 19.4 million t.

“Lower production for the December 2015 half year reflected the continued draught conditions at Cerrejon and the impact of heavy rainfall at New South Wales Energy Coal,” the company said in its production report. Production guidance for the full year to June 2016 remains at 40 million t.

BHP also said that the sale of its San Juan thermal coal asset in New Mexico, US, had received regulatory agreement and was expected to close in 1Q16. San Juan mined 1.2 million t of coal in 4Q15 – down from 1.5 million t in 4Q14 on lower demand for its product.

“Commodity prices fall substantially in the first half of the 2016 financial year putting pressure on the whole resources sector,” said BHP CEO, Andrew Mackenzie. “We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of the business.”

The company reported falls in production across all of its major products – with the notable exception of iron ore, which was up 4% at 118 million t in 2H15. Petroleum production fell 5% and copper fell 6%.

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