|
|
BHPBill exploration update for June 0 quarter
As highlighted in last quarter`s report, global demand for raw materials remains strong and the consequent increased project construction activity across the industry continues to drive tight labour markets and increasing input costs, with a weak US dollar adding further cost pressure. These pressures are particularly acute in Australia. In this environment, BHPBill remains committed to working with its suppliers, contractors and other stakeholders to mitigate the effect of these cost pressures where possible. However, some BHPBill projects are expected to run over original board approved budgets and cost reviews are being conducted at some projects. Despite these challenging conditions, all of the group`s projects are tracking in line or ahead of schedule. Two projects were commissioned during the quarter, Dendrobium (Australia) and Panda Underground (Canada), bringing to eight the total commissioned during the 2005 financial year.
Petroleum Development
In February 2005, BHPBill approved a revised budget of USD1.1bill for the development of the Atlantis South oil and gas reserves. The Atlantis South development will have a gross nameplate daily capacity of 200 000 barrels of oil and 180 million cubic feet of natural gas. The project remains on schedule for first production in the third quarter of 2006.
In June 2005, BHPBill announced the approval of an expansion to the liquefied natural gas (LNG) processing facilities at the North West Shelf Project in Western Australia. The project includes the construction of a fifth liquefaction processing train with a gross capacity of 4.2 million tonnes per annum, additional processing facilities and associated infrastructure. At its completion, the expansion will increase the gross production capacity of the North West Shelf Project to 15.9 million tonnes of LNG per annum. BHPBill`s share of development costs, based on the operator`s estimate, is approximately USD250m. First production is expected by late 2008.
In June 2005, BHPBill announced the approval of the Neptune oil and gas development in the Gulf of Mexico. The project includes the construction, installation, and operation of a stand-alone platform and associated subsea system with seven wells. The facility will have a gross nameplate daily capacity of 50 000 barrels of oil and 50 million cubic feet of gas per day. Detailed design is underway and major equipment and fabrication contracts have been placed. Development costs are estimated at USD850m (BHPBill share USD300m) with first production expected by the end of 2007.
Aluminium
The Worsley Alumina DCP were approved in May 2004 with a budget of USD192m (USD165m BHPBill share). The projects will increase alumina capacity by 250 000 tonnes per annum (215 000 tonnes per annum BHPBill share) to a capacity of 3.5 million tonnes per annum (3.01 million tonnes per annum BHPBill share). Overall the projects are greater than 48% complete. Engineering and procurement activities are substantially complete and construction activities are progressing, with all major contractors now mobilised and working on site. Commissioning of the DCP is scheduled for the first quarter of 2006.
Base Metals
The development of the Escondida Norte pit, located approximately 5 kilometres north of the existing Escondida mining operations, was approved in June 2003. Overall project progress is on schedule to meet first ore delivery to the crusher in the fourth quarter of 2005. Development costs are estimated at USD400m (BHPBill share USD230m).
The Escondida Sulphide Leach project was approved in April 2004. The project will produce 180 000 tonnes (103 500 tonnes BHPBill share) of copper cathode per annum Development costs are estimated at USD870m (USD500m BHPBill share) and production is scheduled to begin during the second half of 2006.
The Spence Project, approved in October 2004, will be a new open cut mine with associated plant facilities capable of producing 200 000 tonnes per annum of copper cathode Development costs are estimated at USD990m and production is scheduled to begin during the last quarter of 2006.
Carbon Steel Materials
The Rapid Growth Project 2 (RGP2) was approved in October 2004. Engineering activities are substantially complete, tendering and procurement processes are well advanced and site activities are proceeding to schedule. The project will increase installed capacity at Western Australian Iron Ore to 118 million tonnes per annum by the second half of 2006. Development costs are estimated at USD575m (BHPBill share USD489 million).
Diamonds and Speciality Products
The Panda Underground Project, approved in May 2004, is a 2 600 tonnes per day sub-level retreat mine that will deliver approximately 4.6 million tonnes of ore and 4.7 million carats of high value Panda diamonds to the EKATI process plant over a 6 year production life. The production ramp up phase is underway and tracking well, with full production expected in early 2006. Development costs are estimated at USD182m (BHPBill`s share USD146m). As the project`s production ramp up has successfully commenced, it will no longer be included in this report.
Stainless Steel Materials
The Ravensthorpe Nickel Project was approved in March 2004. Engineering and procurement activities are proceeding to schedule. On site, bulk earthworks are effectively complete as are approximately 50% of concrete works. Construction contracts are underway, with four steel erection contractors mobilised and operational at site. Given the current Australian construction market, a review of project costs is underway. The first shipment of MHP is expected by the second quarter of 2007.
Yabulu Extension Project, Australia
The Yabulu Extension Project was approved in March 2004. The metal refining section of the QNI Yabulu refinery near Townsville in Queensland is being expanded to process up to 220 000 tonnes of MHP. This additional processing capacity will increase refinery production to 76 000 tonnes of nickel and 3 500 tonnes of cobalt. Engineering and procurement activities are proceeding to schedule. Site construction contracts are progressing well and detailed tie-in planning is advancing. Given the current Australian construction market, a review of project costs is underway. First nickel metal production is expected from the expanded Yabulu refinery by late 2007.
The Minerals Exploration group of BHPBill continued to pursue global exploration opportunities for key commodities of interest utilising both in- house capabilities and the Junior Alliance Programme. Exploration drilling continued on diamond targets in Canada, Namibia and Angola; and on porphyry copper targets in Chile and Peru. Exploration for iron ore, coal and bauxite was undertaken in a number of regions including Australia, Brazil and West Africa. The integration of the ex-WMC nickel portfolio will see a significant increase in BHPBill exploration activities in Western Australia, where a major exploration office will be located.
During the quarter, BHPBill spent USD56m on minerals exploration, of which USD55m was expensed (USD149m gross and USD147m expensed year to date), and USD137m on petroleum exploration, of which USD70m was expensed (USD380m gross and USD202m expensed year to date).
|
|
Click here for original article
|
| |
BHPBill production report -- quarter end June 05
BHPBill took control of WMC on 3 June 2005 achieving a 76.25% interest in WMC`s shares. This was increased to 93.27% on 17 June 2005 and subsequently BHPBill moved to compulsorily acquire the remaining WMC shares. This process is continuing. BHPBill is reporting 100% production from Olympic Dam, Nickel West and Queensland Fertiliser Operations for the month of June 2005.
Total Petroleum Products
Total production for the June 2005 financial year was 119.0 million barrels of oil equivalent, 3% lower than the June 2004 financial year. June 2005 quarter production was 33.1 million barrels of oil equivalent, 9% higher than the June 2004 quarter and 16% higher than the March 2005 quarter.
Oil and Condensate
Production for the June 2005 quarter was 13.9 million barrels, 5% higher than the 13.3 million barrels produced in the June 2004 quarter. This primarily reflects new production from ROD, Angostura and Mad Dog, and successful infill drilling at North West Shelf (Australia). This was partially offset by natural field decline at Typhoon/Boris (USA), Bass Strait (Australia), Liverpool Bay (UK) and Griffin (Australia), and the divestment of Laminaria (Australia) in January 2005.
Natural Gas
Production for the June 2005 quarter was a record 98.8 billion cubic feet, 16% higher than the 85.1 billion cubic feet produced in the June 2004 quarter. This reflects the commissioning of Minerva (Australia) in January 2005 and higher production from North West Shelf LNG following the commissioning of the 4th LNG Train in September 2004. This was partially offset by lower demand for Bass Strait gas and natural field decline at Bruce (UK) and Typhoon/Boris. Production for the June 2005 quarter was 20% higher than the 82.4 billion cubic feet produced in the March 2005 quarter reflecting seasonal conditions driving higher demand for Bass Strait gas, the ramp up of production from Minerva and lower downtime at Liverpool Bay and North West Shelf LNG. This was partially offset by seasonal conditions driving reduced demand for Zamzama (Pakistan) gas.
Alumina
Production for the June 2005 financial year of 4.2 million tonnes was in line with the June 2004 financial year. Production was 3% lower than the March 2005 quarter due to processing of stockpiled hydrate at Worsley (Australia) in the prior quarter. Production was also impacted by commissioning difficulties at the Suriname refinery expansion.
Aluminium
Production for the June 2005 financial year was a record 1.33 million tonnes, 6% higher than the previous year. This primarily reflects the first full year of production from the Mozal 2 (Mozambique) and Hillside 3 (South Africa) expansions, which reached full commissioning in August 2003 and December 2003 respectively. Production for the June 2005 quarter of 321 000 tonnes was 4% lower than the June 2004 quarter and 3% lower than the March 2005 quarter, reflecting lower production at Bayside (South Africa) following a potline outage in April 2005.
Copper
Production for the June 2005 financial year was 1.03 million tonnes, 8% higher than the June 2004 financial year. The increase was partly offset by the sale of the group`s interest in Highland Valley Copper (Canada) in January 2004. Production for the June 2005 quarter was 269 800 tonnes, in line with the June 2004 quarter. Increased production following the acquisition of Olympic Dam was offset by the temporary suspension of production at both Cerro Colorado (Chile) due to an earthquake, and Tintaya following regional unrest. Production was 8% higher than the March 2005 quarter reflecting increased production from Escondida as a result of higher head grades and mill throughput, and the inclusion of Olympic Dam production. This was partially offset by the temporarily suspended production at Cerro Colorado and Tintaya.
Silver
Production for the June 2005 financial year was a record 50.0 million ounces, 15% than the June 2004 financial year. This mainly reflects increased mill throughput at Cannington (Australia) resulting from a debottlenecking program. Production for the June 2005 quarter was 11.9 million ounces, 7% higher than the June 2004 quarter reflecting increased mill throughput at Cannington. Production was 15% lower than the March 2005 quarter mainly as a result of lower head grades and reduced mill throughput at Cannington.
Lead
Production for the June 2005 financial year was a record 281 970 tonnes, 13% higher than the June 2004 financial year. This mainly reflects increased mill throughput at Cannington resulting from a debottlenecking program. Production for the June 2005 quarter was 64 652 tonnes, in line with the June 2004 quarter. Production was 20% lower than the March 2005 quarter mainly as a result of lower head grades and reduced mill throughput at Cannington.
Uranium Oxide
Production of 415 tonnes of uranium oxide concentrate for the June 2005 quarter reflects the inclusion of one month of production from Olympic Dam.
Iron Ore
Production for the June 2005 financial year was a record 96.7 million tonnes, 15% higher than the June 2004 financial year. This primarily reflects increased production following the completion of several expansion projects at Western Australia Iron Ore underpinned by continuing strong customer demand. Production for the June 2005 quarter was 25.3 million tonnes, 23% higher than the June 2004 quarter and 5% higher than the March 2005 quarter. The increase reflects the successful ramp up of production following the completion of the Accelerated Expansion Project and Rapid Growth Project 1 in June 2004 and December 2004 respectively. Western Australia Iron Ore production for the quarter was 27.3 million tonnes (100% basis) which represents an annualised rate of 109.2 million tonnes per annum (100% basis).
Metallurgical Coal
Production for the June 2005 financial year was a record 37.3 million tonnes, 5% higher than the June 2004 financial year. This is mainly due to increased production at Queensland Coal (Australia) reflecting continuing growth initiatives, and higher production at Illawarra Coal (Australia) resulting from improved operating performance and the commissioning of Dendrobium in April 2005. Production for the June 2005 quarter was 9.6 million tonnes, 3% higher than the June 2004 quarter. This primarily reflects the commissioning of Dendrobium in April 2005. Production was 8% higher than the March 2005 quarter reflecting increased production at Queensland Coal. Higher production at Illawarra Coal following the commissioning of Dendrobium was offset by a longwall changeout at West Cliff and scheduled maintenance at the West Cliff coal preparation plant.
Manganese ore
Production for the June 2005 financial year was a record 5.5 million tonnes, 10% higher than the June 2004 financial year. Production from latent capacity was increased to meet strong customer demand in all markets, particularly China, Japan and Europe. Production for the June 2005 quarter was a record 1.4 million tonnes, 6% higher than the June 2004 quarter reflecting strong customer demand. Production was 9% higher than the March 2005 quarter reflecting scheduled maintenance shutdowns at the South African operations and seasonal conditions impacting production at Gemco (Australia) in the prior quarter.
Manganese alloys
Production for the June 2005 financial year was a record 755 000 tonnes, 6% higher than the June 2004 financial year. This primarily reflects improved operating performance at Metalloys (South Africa) and increased production at Temco (Australia) in response to strong customer demand. Production for the June 2005 quarter was 156 000 tonnes, 23% lower than the June 2004 quarter and 21% lower than the March 2005 quarter. This primarily reflects scheduled maintenance at Metalloys and changes to product mix at Temco.
Diamonds
Production of 3.6 million carats at Ekati (Canada) was 34% lower than the June 2004 financial year. This decrease primarily reflects the processing of lower grade ore after mining of a high grade zone in the Koala pipe was completed in the June 2004 quarter. Production for the June 2005 quarter was 957 000 carats, 21% lower than the June 2004 quarter reflecting the processing of lower grade ore. While diamond grades were low in the June quarter, they were higher than in the March 2005 quarter, causing carat production to increase by 19% over the prior quarter.
Fertilizer
Production of 73 902 tonnes of fertiliser for the June 2005 quarter reflects the inclusion of one month of production from Queensland Fertiliser Operations.
Energy Coal
Production for the June 2005 financial year was 87.4 million tonnes, 4% higher than the June 2004 financial year. This primarily reflects the continued ramp up of production at Mt Arthur Coal (Australia) and increased production from New Mexico Coal (USA) following improved dragline availability at Navajo Coal (USA). Production for the June 2005 quarter was 22.7 million tonnes, 6% higher than the June 2004 quarter, primarily reflecting inventory building in preparation for a dragline outage at Navajo Coal, and lower production in the June 2004 quarter at San Juan Coal (USA) following a longwall move. Production was 13% higher than the March 2005 quarter reflecting higher production at Ingwe (South Africa) in response to increased domestic demand, a longwall move at San Juan Coal in the March 2005 quarter and the ramp up of production at Mt Arthur Coal.
Nickel
Production for the June 2005 financial year was a record 91 900 tonnes, 12% higher than the June 2004 financial year. This primarily reflects the inclusion of production for June 2005 from Nickel West and the benefits of processing enhancements arising from operating excellence initiatives at Cerro Matoso (Colombia). Production for the June 2005 quarter was a record 31 ,800 tonnes, 60% higher than the June 2004 quarter and 53% higher than the March 2005 quarter. This is mainly due to the inclusion of one month of production from Nickel West. Increased production also reflects record quarterly production at both Yabulu (Australia) and Cerro Matoso arising from the conversion of work in process inventories to finished goods at Yabulu following scheduled maintenance in the March 2005 quarter and improved operating efficiencies at Cerro Matoso.
Ferrochrome
Production for the June 2005 financial year was 954 000 tonnes, 7% lower than the June 2004 financial year. This primarily reflects the sale of Samancor Chrome (South Africa), effective 1 June 2005. Production for the June 2005 quarter was 178 000 tonnes, 33% lower than the June 2004 quarter and 26% lower than the March 2005 quarter reflecting the sale of Samancor Chrome.
|
|
Click here for original article
|
| |
| |
|
| Closing price data source: JSE Ltd. All other statistics calculated by ProfileData. |
| |
|
|
