BHP Billiton Ltd./Plc (BLT.L) said on Tuesday it was pushing for record output levels for many of its minerals this year, after reporting a surge in output in the third quarter to meet rising global demand.
"It's no surprise that BHP and others are running hard," said Martin Petch, an analyst with Commonwealth Securities in Sydney. "Demand for things like nickel, copper, iron ore and other metals going forward for a least the next year or so is looking very strong," Petch said.
BHP, which has earmarked $17.5 billon for 29 new projects, said copper output leapt 22 percent to 357,600 tonnes in the March quarter, helped by added production from the giant Escondida and Spence mine projects in Chile, where new capacity has been installed.
Sweeping industrial modernisation and urban growth in China has led the boom, especially in raw steel making materials such as iron ore, metallurgical coal and nickel.
BHP and rivals have been producing as much as possible to meet the demand, but additional supplies have done little to soften prices for metals, many of which are at record or near-record levels.
Copper is up in price by nearly a third or $2,000 a tonne so far this year. Stocks of copper in London Metal Exchange warehouses are down more than 20 percent since early February and currently stand at 168,150 tonnes, covering less than four days of global consumption.
In China alone, refined copper imports in March hit their highest level ever, with total imports exceeding 200,000 tonnes for the first time, data from China's customs bureau figures showed Monday.
Rio Tinto Ltd./Plc (RIO.L), second in size to BHP and a partner in Escondida, said last week its quarterly copper yield rose 19 percent.
BHP's base metals division, chiefly copper, accounted for almost a third of last year's overall earnings before interest and tax of $15.3 billion. That figure could rise to $16.38 billion in fiscal 2007, according to ABN Amro.
NICKEL OUTPUT UP
BHP's nickel production from mines in Colombia and Australia rose 14 percent to 45,800 tonnes, though the additional supply has failed to quell global supply concerns that have yanked the stainless steel alloy to record-high prices nearing $50,000 a tonne.
Inventories of nickel held in LME warehouses -- historically the last stop for metals buyers -- have dwindled to little more than 4,000 tonnes, one-seventh the 52-week peak.
Other nickel producers, including Brazil's CVRD , Sherritt International Corp. , Xstrata Plc. (XTA.L) and Jubilee Mines N.L., also are racing to maximise operations.
BHP for its part is spending $2.2 billion to dig a new mine and build processing facilities to churn out an additional 50,000 tonnes a year in Ravensthorpe, Australia, starting in about a year.
Aluminium production crept 1 percent higher to 331,000 tonnes, while oil and condensate production in the quarter slipped 2 percent to 10.67 million barrels.
Iron ore production increased 8 percent to 22.88 million tonnes despite interruptions to mining in Australia caused by cyclones.
Metallurgical coal production was up 7 percent in the third quarter, the company said.
Lead output dropped 8 percent to 62,974 tonnes in the last quarter.
Alumina output rose 1 percent while manganese ore was up 18 percent and manganese alloy rose 14 percent, the company said.
BHP's Australia-listed stock, which gained around 17 percent in the third quarter, was 0.5 percent higher at
A$30.15.
Rio Tinto was flat at A$83.95 in a mildly weaker broader market.
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