The BHP Billiton Mitsubishi Alliance is ramping up for further production increases in the second half of this year, though gains in the December quarter were largely offset by planned wash plant outages at South Walker Creek and Goonyella and the closure of high-cost capacity at the Gregory mine.

The Gregory open cut mine ceased production on October 10, 2012.

“At the end of the December 2012 quarter, Queensland Coal production was approaching full supply chain capacity,” the company said.

“The associated increase in productivity, broader economies of scale and the closure of high-cost capacity is expected to deliver a substantial reduction in unit costs in the second half of the 2013 financial year.”

BHP produced a total of 8.8 million tonnes for the December quarter – 5% higher than the previous corresponding period.

At Illawarra Coal in New South Wales, a longwall move at Dendrobium mine started at the end of the December quarter, which affected productivity for the quarter.

Illawarra Coal achieved record sales during the December 2012 half-year.

The company‘s energy coal division continues to perform well, recording a 7% increase in production in the half year when compared with the prior corresponding period.

The company produced 18.2Mt of energy coal for the December quarter, an 8% increase on the previous corresponding quarter.

The good performance was underpinned by record production at NSW Energy Coal, which continued to benefit from the ramp-up of the RX1 project.

However, dragline outages at Navajo Coal and an unplanned shutdown at San Juan Coal in the US contributed to a 7% decline in volumes from the September 2012 quarter.

“The New South Wales Energy Coal and BECSA (South Africa) product mix continued to evolve with an increase in the overall proportion of high ash coal sold to key growth markets during the December 2012 half year,” the company said.