Melbourne, Australia — MININGREVIEW.COM — 25 April 2008 – BHP Billiton – the world’s largest diversified mining and resource company – showed a 22% increase in iron ore production to a new record level during the third quarter of its current financial year, bolstering its hostile US$170 billion (R1.3 billion) bid for the Rio Tinto Group.
A production report issued here reveals that iron ore output rose to28 Mt in the three months ended March 31, from 23 Mt a year earlier. London-based Rio last week reported a 16% gain.
Bloomberg News reports that chief executive officer Marius Kloppers could use the advance to undermine Rio CEO Tom Albanese’s case that his iron ore strategy is better that BHP’s. Albanese says his expansion plans are worth more to investors than the US$3.7 billion (R29 billion) in savings and extra revenue that BHP says a takeover will create.
Bloomberg quotes Hugh Dive – who helps manage US$5.3 billion (R40 billion at Investors Mutual Ltd. in Sydney – as saying: “Marius is keen to show they can deliver faster so he is cracking the whip pretty hard, and this report is a sign they can do that.”
BHP’s output of coking coal fell 25 percent because of flooding at mines in Australia’s Queensland state. Production, which has resumed, will be crimped as the mines are brought back up to operational capacity, BHP said in its production report. The rain may cut output by as much as 4.6 million tons this year, it added.
Copper cathode output from the Olympic Dam mine in South Australia has fallen 33 % from a year ago; and nickel production declined 6% because of a strike at the Cerro Matoso mine in Colombia and rain at the Yabulu refinery in Australia. Lead, zinc and silver output increased in the third quarter, the report added.