BHP Billiton to temporarily shut some coal mines

FTSE 100-listed mining company BHP Billiton has taken action to reduce its outgoing expenditure with the temporary closure of high cost metallurgical coal mines and 0.8bn dollars in annualised cash cost savings achieved for the coal business in the first half of 2013.

FTSE 100-listed mining company BHP Billiton has taken action to reduce its outgoing expenditure with the temporary closure of high cost metallurgical coal mines and 0.8bn dollars in annualised cash cost savings achieved for the coal business in the first half of 2013.

In a presentation delivered to analysts in Australia, on Wednesday, the group said that it had a substantial opportunity to deliver further cost savings to maximise utilisation to drive unit costs lower, optimise contractor usage and rates, reduce supplier costs and general overheads, reduce business development and exploration expenditure.

It added that the implementation of its productivity agenda would drive margins and returns higher.

Capital expenditure is expected to peak in the fiscal year 2013 and the group said it would substantially reduce development expenditure with no new major projects planned.

The group said that China is now a significant importer of metallurgical coal and that long-term seaborne metallurgical coal demand would transition towards the emerging markets.

Strong financial performance over the last five years reflected the underlying quality of the group's metallurgical coal assets with $11.9bn of underlying earnings before interest and tax (EBIT) representing 10% of total BHP Billiton underlying EBIT, the group added.

BHP Billiton's share price was up 0.21% to 1,942.50p at 12:22 on Wednesday.

MF

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