BHP Billiton Metallurgical Coal production Is a Solid Beat
BHP Billiton: A Solid 3Q2015 and Upgraded Iron Ore Guidance (Part 5 of 5)
Met coal sees record production
BHP Billiton (BHP) metallurgical coal production for the nine months ended March 31 was higher by 14% YoY (year-over-year), up to a record 38 million tons.
At the Queensland Coal operation, a successful ramp-up of the Caval Ridge Mine and sustained development in truck and wash-plant use led to record production and sales. Meanwhile, production was lower quarter-over-quarter due to a longwall move at the Gregory Crinum complex, and wet weather.
The Illawara Coal mining operation achieved record production of 6.5 million tons for the nine-month period. Maintenance efficiencies supported higher equipment-use rates.
Energy coal
Energy coal production for the nine-month period ending March 2015 was 56 million tons, which is 2% higher YoY.
Energy Coal South Africa production in the nine months ended March 2015 also increased by 15%. This increase was due to improved equipment use and optimized mine planning. But it was partially offset by lower production at the Cerrejon Coal Mine as a result of drought conditions, and lower customer demand for BHP’s Navajo Mine coal product.
Guidance upgraded
BHP has upgraded its metallurgical coal production guidance for fiscal 2015 to 49 million tons, which is 4% higher than its previous guidance. Guidance for energy coal production remains unchanged at 73 million tons for fiscal 2015.
Peabody Energy (BTU) will release its first quarter results on April 23, and Cloud Peak (CLD) and Alpha Natural Resources (ANR) will report earnings on April 30. Peabody and Cloud Peak respectively form 3.2% and 2.8% of the SPDR S&P Metals and Mining ETF (XME). The outlook for metallurgical coal is quite weak due to excess Chinese and Australian production and weak Chinese steel production.
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