World’s top miner BHP Billiton finally sees signs of recovery in mining

World’s top miner BHP Billiton finally sees signs of recovery in mining

Cecilia Jamasmie

Oct 19 2016


For the first time in about five year the world’s No. 1 mining company BHP Billiton (ASX, NYSE:BHP) (LON:BLT) has said it was finally seeing clear signs of a commodity market turnaround.

Announcing the results of an operational review ended Sep. 30, chief executive officer Andrew Mackenzie said there were “early signs of markets rebalancing.”

“Fundamentals suggest both oil and gas markets will improve over the next 12 to 18 months. Iron ore and metallurgical coal prices have been stronger than expected, although we continue to expect supply to grow more quickly than demand in the near term,” he said, while flagging that BHP’s own production was mostly lower in recent months than around the same time a year ago.

The miner, which is the world’s third-largest iron ore producer behind Brazil’s Vale SA (NYSE:VALE) and Australia’s Rio Tinto (ASX, LON:RIO) also said it was on track to meet its fiscal 2017 production guidance for iron ore of 265 to 275 million tonnes, compared with 257 million tonnes last year. The positive outlook was not dented by the firm’s 1% on-year decline in total output to 67 million tonnes in the quarter to September.

Spot iron ore hit $58.37 a tonne on Wednesday according to The Metal Bulletin, the highest price in over a month, while coking coal prices have more than doubled this year to around $230 a tonne.

BHP recently singled out oil and gas as one of the main areas in which it has the capability to ramp up drilling quickly, while in line with prices. The Melbourne-based firm decided in May not to wait for commodity prices to recover and resumed expansion plans. It has said is actively looking for possible acquisitions, particularly of copper and oil assets, but no major deals have been made so far.

The miner is not the first major player to flag green shoots in the mining industry. Caterpillar (NYSE:CAT), the world’s largest heavy machinery maker, said last month it had had more discussions about potential sales in recent months than in the last two or three years combined.




About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on October 19, 2016, in economic impact, political, potash, uranium and nuclear. Bookmark the permalink. Leave a comment.

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