BHP hits high but fears Chilean output fall

Global mining giant BHP Billiton has produced another stellar quarterly production report, with a new record in iron-ore output and big gains in oil and gas as new projects pick up speed. The only jarring note came with a warning about the firm's giant Escondida mine in Chile, which produces almost 10% of the world's copper. Production rose 4% but BHP said the mine's total output would drop by between 10% and 15% in the 2009 financial year, a more severe decline than initially thought, because of lower ore grades. Iron-ore output rose to 29.7m tonnes in the three months ended 30 June from 25.7m tons a year earlier. It is heading for a full-year increase of 23% to 137m tonnes. Crude oil and condensates output increased 54%, thanks to the start-up of fields in the Gulf of Mexico and Australia. Production jumped to 17.6m barrels in the three months to 30 June, with a 20% gain in total oil and gas output. Copper output was up 14% but production of coal used in steelmaking dropped 18% because of bad weather at key Queensland sites. The figures come a week after takeover target Rio Tinto turned in similarly buoyant numbers. Rio, which has received an all-share hostile offer from BHP worth about $140bn (£70.1bn), saw its own output of iron ore rise 13% and mined copper production climb 15%. BHP says it sees no slackening in demand from China. Merrill Lynch says the "super-cycleî may last another 15 years. Shares in BHP jumped in early trading before settling back to be flat at 1618p. They have seen a sharp selloff since peaking at 2196p early in the summer, amid concerns about the state of global economic growth. Source: thisismoney