BHP Billiton is to increase its coal volumes to the 2018 financial year (FY) by 5 million t – or 8% - according to a recent presentation by its President Operations Minerals Australia, Mike Henry, as the company exploits its low-cost assets.
“Even in today’s difficult environment, all of our operations remain cash positive,” said Henry. The company has delivered over US$3 billion of productivity gains since 2012 and is targeting another US$600 million by the end of FY2017.
The company also remained positive on the continued need for both its metallurgical and thermal coal. “The developing world needs steel; steel needs coking coal,” said Henry. “We have the strongest resource position in the seaborne market.”
Meanwhile, despite greater uncertainty in the outlook for thermal coal, the company was “confident that base demand in emerging economies will remain resilient for decades to come,” Henry added. “Our higher-quality coals position us well in an increasingly carbon-constrained world.”
On the back of this positive outlook, the company will increase its coal production in both Queensland and New South Wales.
In Queensland, where the company’s metallurgical coal assets are located, the company is aiming to increase production from 42.5 million t in FY2016 to 46 million t in FY2018. Meanwhile, thermal coal production in New South Wales will jump from 17 million t in FY2016 to 21 million t in FY2018.
The company’s focus on a portfolio of low-cost, high-quality assets has seen it sell or spin off coal assets in the US, South Africa, Australia and, most recently, Indonesia, leaving it with it with only its metallurgical coal assets in Queensland and thermal coal assets in New South Wales and Colombia.
Yet the company may now be interested in adding to its coal business with it reportedly interested in Anglo American’s Queensland metallurgical coal assets – which are close to its assets in the Bowen Basin – and Anglo’s stake in the Cerrejon mine in Colombia.
Edited by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/21062016/bhp-to-take-advantage-of-low-cost-position-2016-998/