BHP sets out growth target after solid first half

Diversified mining giant BHP Billiton expects to deliver a compound annual growth rate of 10 per cent in copper equivalent terms over the next two years, the group said on Wednesday.

Diversified mining giant BHP Billiton expects to deliver a compound annual growth rate of 10 per cent in copper equivalent terms over the next two years, the group said on Wednesday.

The firm said that this was due to the release of latent capacity at a number of its highest margin businesses and strong growth across our broader portfolio.

In its production report for the first six months of its fiscal year, the company said that iron ore production and sales reached a record high for the 12th consecutive half year.

Iron ore output rose to 81.96m tonnes in the half year to December 31st 2012, up 2% year-on-year "as the business continued to benefit from the company's decade long investment in supply chain capacity". The company reiterated its guidance of producing 183m tonnes of iron ore for the full year, up 5%.

Full-year petroleum production guidance also remains unchanged at 240m barrels of oil equivalent, after the company produced 121m barrels of oil equivalent in the first half, up 11% year-on-year.

Alumina production grew 17% to a record 2.4m tonnes in the first half, while aluminium and nickel output fell 10% and 2%, respectively. BHP warned that a strong Australian dollar and a weak pricing environment "continued to place pressure on the group's Australian alumina and nickel operations".

As for the base metals, copper (+14%), zinc (+1%) and uranium oxide concentrate (+8%) all registered growth in production year-on-year, while lead (-20%) and silver (-12%) slipped. Elsewhere, manganese ore (+11%) and energy coal (+7%) production increase, while metallurgical coal output was flat.

BHP's diamonds business, which it has agreed to sell to Harry Winston Diamond Mines for $500m, continued to struggle, with output down 35% on the year before. The company said that the disposal of this division is expected in the first half of 2013.

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