Total metallurgical coal production was 12% down year-on-year to 8.89 million tonnes, with a 5% fall from the September quarter.

Metallurgical coal production was affected by planned longwall moves at subsidiary Illawarra Coal which hosts the Appin/Appin West, West Cliff and Dendrobium longwall mines.

The longwall moves will continue to affect output in the March quarter with Appin scheduled to start panel 703 in November.

Planned maintenance impacted the performance from BHP’s met coal operations in Queensland with all BMA and BHP Mitsui Coal mines producing less coal year-on-year in the December quarter.

However, the major miner made record coking coal shipments totalling 11.66Mt to meet overseas demand in the second half of 2009, despite the lower production figures.

December quarter thermal coal output from BHP’s portfolio of mines was 3% lower year-on-year to 15.46Mt and 14% below the previous quarter.

BHP attributed the falling output to planned and unplanned interruptions across various operations.

Production from the miner’s one-third share of the gigantic Cerrejon open cut mine in Colombia was limited by lack of demand while output from its South African mines faced unplanned maintenance and was hit by weather interruptions.

BHP’s thermal coal operations in the Hunter Valley dropped production 3.5% year-on-year to 2.89Mt during the recent quarter.

Project development

As part of the Newcastle Coal Infrastructure Group consortium constructing Newcastle’s third coal loading terminal, BHP said the project was 88% complete.

The expansion of the Mount Arthur mine in the Hunter Valley to increase thermal coal output by 3.5Mtpa is 40% complete with construction of the coal handling and preparation plant underway.

Over to South Africa, BHP said the Klipspruit project was essentially complete and had delivered its first coal.

The mine aims to produce 1.8Mt per annum of export thermal coal and 2.1Mtpa of domestic thermal coal.

The Douglas-Middelburg Optimisation project is 84% complete and on track for mid-2010 completion to sustain the operation’s 10Mtpa of export thermal coal output.

Outlook

While BHP noted Chinese demand and restocking elsewhere underpinned strong price recovery in commodities, the major miner remains cautious.

“Going forward the speed of recovery in the developed economies remains uncertain, particularly considering the eventual withdrawal of government stimulus,” BHP said.

“In China the impact of measures to control loan growth will add another future variable.

“Consequently we expect some degree of volatility in the short-term outlook for our commodities.”