BHP raises production target for iron ore

Global mining giant BHP Billiton upgraded its iron ore production target while petroleum output hit a quarterly record, as it ramps up output to capture more of a slower-growing market for raw materials.

Iron ore benefited from multibillion-dollar expansion work under way in Australia that will lift fiscal 2014 output to 212 million tonnes, up from a previous target of 207 million, BHP said in its fiscal first-quarter production report.

In petroleum, liquids output rose 16 per cent, helped by a shift in focus at its US shale holdings to focus more on oil production as US gas prices sag.

BHP has warned that mining companies face slowing demand growth for raw materials from China and elsewhere, requiring greater emphasis on economies of scale to keep costs down.

The world’s biggest mining company has already cut planned spending for 2013/14 by 25 per cent to US$16 billion, and has earmarked a further decline for the following year.

“The large, top-tier mining companies have learned lessons from the recent downturn,” said Peter Esho, an analyst with Invast Financial Services in Sydney.