BHP working to get SA thermal coal to NSW standards

BHP Billiton will seek to turn around the operational performance of its thermal coal mines in South Africa in an attempt to make them as efficient as its New South Wales operations, according to investment newsletter Fat Prophets.
BHP working to get SA thermal coal to NSW standards BHP working to get SA thermal coal to NSW standards BHP working to get SA thermal coal to NSW standards BHP working to get SA thermal coal to NSW standards BHP working to get SA thermal coal to NSW standards

An aerial view of the Mt Arthur Coal operation

Lou Caruana

The company’s thermal coal business in the Hunter Valley is now setting benchmarks across the industry and breaking records.

Half-yearly production of thermal coal fell 9.7% in South Africa compared to the corresponding half for 2013, to 14.2 million tonnes.

“South African production was negatively impacted by a raft of operational issues and weather events,” Fat Prophets said.

“The company is addressing operational issues where these issues are under its control. Partially offsetting the performance of South Africa was production in New South Wales which reported a record half of 9.9Mt.

“The result represents a 6.9% rise in production on the corresponding half for 2013. Unlike South Africa, operational efficiencies across the company’s NSW mines drove the better result.”

The South African situation has not swayed the company from its 2014 production guidance for energy coal, which remains unchanged at 73Mt.

“Given the half-year result, our expectation is for the company to achieve guidance for the full year. For 2013, the company produced 72.9 million tonnes of energy coal,” Fat Prophets said.

Metallurgical coal production for the half rose compared to the corresponding 2013 half by 21.9% half on half, to a record 21.7Mt.

The company’s key BHP Billiton Mitsubishi Alliance mines in Queensland reported higher production numbers for the half.

Production from the Queensland mines showed a significant improvement on the first half 2013 result rising 33.7%, to 14.2Mt.

“Minimum weather events and operational efficiencies were behind the Queensland result,” Fat Prophets said.

“In releasing its operational review for the first half of 2014, production outcomes continue to show BHP Billiton’s operations are weathering the backwash of the broader global economic turmoil of recent years.

“For the half, key business groups delivered record production numbers, while overall 2014 production guidance ranges have been maintained.”

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