'Strong' half year result for mining giant BHP

STRONG results from the company's coal mines in Queensland and New South Wales have bolstered BHP's outlook for 2015, with half-year results showing a 21% jump in metallurgical coal exports last year.

The record coal volumes released to the stock exchange on Wednesday were supported by a 15% rise in iron ore production in Western Australia, thanks to expanding exports from the new Jimblebar mine.

Despite lower commodity prices, BHP chief executive Andrew Mackenzie said cost reductions, improved efficiency and productivity drove a "strong" half year result for the mining giant.

The East Coast coal assets and iron ore in the west underwrote a 9% rise in group production, less than Rio Tinto's 12% rise announced Tuesday, but a comparable result despite the iron ore price slump.

But the oil price slump has changed BHP's plans, with Mr Mackenzie reporting the company would cut back planned US oil investments and reduce the number of operating oil rigs, despite December quarter oil production up 10% on the same period in 2013.

"Our ongoing shale investment program will remain focused on our liquids-rich Black Hawk acreage," he said.

"However, we will keep this activity under review and make further changes if we believe deferring development will create more value than near-term production."

Mr Mackenzie said the results had not detracted from plans to split off the company's Australian and South African assets from the international operations under a de-merger with a new company, South32, to run Southern Hemisphere mines.

The de-merger is expected to be completed in the first half of the year.


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