BHP iron ore up, but weather hits coking coal

The world's biggest miner BHP Billiton on Wednesday said it boosted iron ore production in the first three months of the year despite adverse weather, but coking coal output fell. Iron ore production jumped seven percent to 33.2 million tonnes, in contrast to coking coal which slumped 18 percent to 6.7 million metric tonnes in the three months to March -- the third quarter of BHP's financial year. BHP said wet conditions in the northeastern Bowen Basin, where it produces most of its steelmaking coal, would likely continue to impact production for the rest of the year. "At Queensland Coal (Australia), resultant in-pit water accumulation has severely restricted overburden removal and broader mining activities," the company said, of a product in strong demand from China. "Force majeure remains in place for the majority of our Bowen Basin products with production, sales and unit costs likely to be impacted, to some extent, for the remainder of the 2011 calendar year." Rival Rio Tinto last week said force majeure -- a legal clause that releases companies from supply agreements -- had been lifted at three of its four Queensland operations. Rio reported a three percent drop in quarterly iron ore production from a year earlier and said steelmaking coal was 12 percent lower due to the wild weather. Australia is the world's largest exporter of iron ore, and the Bowen Basin accounts for almost 40 percent of global coking coal production. While BHP's production of iron ore, its biggest single commodity, jumped seven percent from a year earlier, it eased one percent on the previous quarter. Total petroleum products in the March quarter declined four percent from the prior quarter to 35.79 million barrels of oil equivalent, as permit delays in the Gulf of Mexico and cyclones in Western Australia hit operations. Among base metals, production in copper, lead and aluminium fell from the prior quarter while zinc production gained. Compared with a year earlier, copper production grew, aluminium was flat, while lead and zinc declined.