BHP upbeat despite slowing demand

BHP Billiton Ltd says it remains confident that the industrialisation of developing economies will continue to drive demand for its products but says volatility and uncertainty will continue in the short-term. The world's largest mining company said it had delivered a "solid performance" during the first quarter of the financial year amid a challenging supply environment. BHP Billiton said "macroeconomic indicators show that Chinese growth has softened during the quarter, albeit from very high levels", with volatility and uncertainty to continue in the short-term. Iron ore output during the three months to September 30 rose 15 per cent to 29.82 million tonnes on the previous corresponding quarter as the company expanded projects in Western Australia. Petroleum output increased by 15 per cent to 34.8 million barrels of oil equivalent (MMBOE) due to newly commissioned projects, despite the impact of two hurricanes in the Gulf of Mexico. Copper output was flat at 308,900 tonnes, with lower production at the Escondida mine in Chile offsetting an improved performance at Olympic Dam in South Australia. BHP Billiton says copper output at Escondida is estimated to be about ten per cent lower in fiscal 2009. Nickel output dropped by 31 per cent to 26,800 tonnes following a major furnace rebuild at the Kalgoorlie Nickel Smelter in WA and maintenance at the Yabulu refinery in Queensland. Production of metallurgical coal, used in steelmaking, dropped by four per cent to 9.21 million tonnes as the company recovers from flooding at the start of the year. Aluminium output declined eight per cent during the first quarter to 309,000 tonnes due to continuing power supply issues in South Africa, which has resulted in the partial shutdown of the Bayside smelter. Uranium production from Olympic Dam climbed 19 per cent to 1,110 tonnes due to improved recoveries and a record amount of mined material. Manganese ore output was 27 per cent higher at 1,830 tonnes after improved performance at GEMCO off the Northern Territory coast and Hotazel in South Africa. BHP Billiton said increased availability of rail and port capacity in South Africa also helped to increase manganese ore production. The company spent $US166 million ($A235.56 million) on mineral exploration during the first quarter and $US148 million ($A210.02 million) on petroleum exploration. ---smh.com.au