BHP signals production cuts as prices fluctuate
SYDNEY - Agence France -Presse
This company photo shows BHP’s large processing plant near the Olympic Dam, Australia.Global mining giant BHP Billiton yesterday warned that it could scale back production at unprofitable operations as commodity prices softened due to economic uncertainty. But BHP chief Marius Kloppers said the firm’s flagship iron ore business was in good health despite weakening Chinese demand and insisted it would take a “fairly big event” to knock expansion plans worth Aus$27 billion ($29 billion) off course.
“I think a more immediate problem is that... given some of those price movements that you have seen, not all of our operations are making profit to the same extent at the moment,” Kloppers told ABC television.
“We are probably likely to say ‘look this is not making profit, let’s curtail production’.”
BHP posted a 5.5 percent fall in first half profits last week to US$9.4 billion, largely due to volatility in commodity prices. Kloppers said iron ore had “clearly moderated a little bit.”