BHP expects hefty savings by mid-2013

THERE will be little reprieve from the threat of more cuts in the mining sector after BHP Billiton said it would continue trimming expenses even after earlier slashing pay dividends.

In its latest production report released Wednesday, BHP trumpeted that after closing two costly mines last year, it expected some hefty savings by mid-2013.

On top of that, it had now overcome crippling industrial action from a trio of unions, allowing more coal to be mined for export.

Aside from some scheduled maintenance in the past six months, BHP Billiton Mitsubishi Alliance's coal mines were now ramping up.

Unfortunately, it would not be enough to keep workers from the crosshairs of the world's most prolific coal exporter.

A spokesman said coal prices, a strong Australian dollar and "escalating costs" justified cuts "across its entire business".

"As part of that response, BMA will be continuing to review contractor arrangements."

BHP's Queensland coal production in the six months to December 2012 barely eclipsed its results when compared to its 2011 figures.

In total, it mined 13.97 million tonnes of coal in those six months, just 300,000 tonnes more than 2011.

This could be partly due to the mothballing of Norwich Park mine in April and the closure of Gregory open-cut later in the year.

 

Tough times, but BHP keeps going

IT MAY be a tough market for miners, but as the times stay tough, BHP Billiton has managed to keep going.

Although constantly warning of hurdles the multinational Goliath must faith, the firm has been quietly plodding away with its $5.2 billion in construction and expansion budget in Central Queensland.

The $800 million Daunia Mine is now 82% finished according to the latest development report from BHP.

Not bad considering it was described as being 68% finished at the end of September.

BHP are expecting it to be finished this year to then slowly build up to its 4.5 million tonnes of coal-mining capacity.

Its big brother - the $1.87 billion mine capable of supplying 5.5 million tonnes of coal a year - is a shade over half finished, with operation expected to begin in 2014.

The miner's two expansions, including a $450 million life line for Broadmeadow Mine and the $1.25 billion expansion of Hay Point Coal Terminal, are to be finished in 2013 and 2014 respectively.

Broadmeadow sits at 95% finished as Hay Point's is now 57% complete.


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