“We continue to expect cumulative production growth of 16% over the two years to the end of 2015,” BHP chief executive Andrew Mackenzie said.
“Group capital and exploration expenditure remains on track to decline by 25% in the 2014 financial year, before declining again next year.
“By maintaining strict financial discipline and a focus on our four pillars of iron ore, copper, coal and petroleum, we continue to believe that an average rate of return of greater than 20% is achievable for our major development options.”
Iron ore was a standout for the mining giant, with production for the nine-month period increasing 21% year on year to a record 147 million tonnes, including a 23% increase in output from Western Australia.
WA iron ore achieved a record 163Mt over the period, underpinned by the ramp-up of the Jimblebar operation and improvement in equipment and labour productivity.
These improvements are expected to allow the company to transition the last of its contractor-run sites, Orebody 18, to an owner-operated model in early financial year 2015.
The ramp-up at Jimblebar to 35Mt per annum is expected to be completed by the end of FY15.
A longer-term option to expand to 55Mtpa and supply chain debottlenecking, meanwhile, is expected to underpin further growth in capacity to about 260-270Mtpa.
Guidance for iron ore production and sales for FY14 was lifted to 217Mt.
Other commodities marking improvements for the nine-month period notably included copper, which increased production 2% year on year to 1.2Mt and metallurgical coal, which tracked a 21% increase in output to 33Mt with record production at all Queensland operations.
Other metals making operational strides for the period included manganese alloys (up 9% to 465,000t), alumina (3% to 898,000t) and alumina, which improved production 7% year on year to 3.8Mt, with record performances from the Worsley refinery in WA and the Alumar operation in Brazil.
Nickel remained relatively stable for the company over the period, with production down only 1% year on year to 112.3Mt despite maintenance work at the Cerro Matoso (Colombia) and Kwinana (WA) refineries as well as a seismic event causing a stoppage of operations at the Perseverance underground in WA.
The Rocky’s Reward open cut near Leinster will provide temporary alternative ore supply for the nickel business, allowing forecast saleable production to remain broadly unchanged for FY14.
The operational review follows on two years of portfolio simplification, including divestment of petroleum, copper, coal, mineral sands, uranium and diamond assets across Australia, the US, Canada, South Africa and the UK.
The company said earlier this month that is expected to continue to actively study the next phase of simplification, including structural options.
