(MENAFN- AFP) Mining giant BHP Billiton on Wednesday said total iron ore production for the nine months to March jumped to a new high as prices remained near a decade-low, but deferred a project to boost output of the commodity to save costs.
In an operational review for the nine-month period, the world's biggest miner said it expected iron ore output for the 2015 financial year to increase by two percent to 230 million tonnes from its previous guidance.
The deferred project, which involved plans to reduce bottlenecks at a Western Australia port, was postponed as the output from existing infrastructure continued to exceed expectations, the miner said.
"In iron ore, our focus remains on producing at the lowest possible cost with Western Australia iron ore unit costs now below US$20 per tonne as we continue to improve productivity," BHP chief executive Andrew Mackenzie said.
Mackenzie said BHP acted quickly to boost its production as Chinese demand for the metal soared over the past decade, with the increased output helping the firm despite recent sharp falls in the ore price.
"Despite the subsequent increase in supply-side competition, these low-cost expansions continue to deliver attractive margins and returns through the cycle," he said.
The iron ore price has tumbled by 60 percent over the past year and hit a decade-low of US$47.08 in early April. It was buying just above US$51 early Wednesday.
Some of the world's biggest iron ore miners, including BHP, were last week placed on "credit watch negative" by ratings agency Standard & Poor's amid the diving price.
S&P Wednesday lowered the credit rating of Australia's Fortescue Metals, the world's fourth-largest iron ore miner, from BB+ to BB and gave it a negative outlook. It also lowered its debt ratings.
Fat Prophets resources analyst David Lennox told AFP BHP's result was "pretty sound", adding: "There was nothing in there that was surprising.
"Obviously their iron ore division still roars ahead. Petroleum was a little bit sluggish at only one percent growth, but the rest of the business was probably as we would have expected."
Iron ore output soared by 17 percent in the nine months to March compared to the previous period while petroleum production rose six percent.
Metallurgical coal output jumped by 14 percent and copper production edged higher by one percent. Aluminium and nickel output fell by 15 percent and nine percent respectively.
The Anglo-Australian firm said its plans to demerge parts of its business, including aluminium, manganese, silver and selected coal and nickel operations, into a company called South32 was on track later this year.
Lennox said BHP's plans to defer the "debottlenecking project" was a reflection of the weak iron ore price.
"They've acknowledged that 'yes, prices are pretty tough in that industry, so we might as well leave what we've got in the ground a little bit longer and see if we can't get any improvement'," he said.
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