BHP’s iron ore production timing is on the money

So far Andrew MacKenzie’s plan is working, with production growing just as iron ore prices rise.

BHP boss Andrew MacKenzie calls it “counter cyclical” exploration spending but it is coming as prices continue to rise. Picture: AFP.

BHP’s record iron production was perfectly timed, with realised prices of $US55 a tonne in the latest half some 25 per cent above June half levels.

The company said realised prices in the latest half compared to $US44 a tonne in the June half.

BHP of course is predicting prices will fall with China demand but so far everything is working to plan for the company.

Shaw Stockbroking’s Peter O’Connor is tipping increased capital management from the company this year, with dividends up to 79.7 cents a share from 43.9 cents.

He is tipping a net profit of $US6.4 billion on sales of $US38.8bn.

As expected BHP ramped up petroleum exploration spending by some 17 per cent or $US120m, to $US820m.

Recent expansion with the Trion field in the Gulf of Mexico put the company in good shape to maintain the momentum.

BHP boss Andrew MacKenzie calls it “counter cyclical” exploration spending but it is coming as prices continue to rise.

Copper production as expected fell due in part to the shutdown of its Olympic Dam project in South Australia amid the statewide power failure in July.

In all the production report came in as expected and the company’s stock price was up slightly in lunchtime trade at $27.50 a share.