BHP's mines in S.Afr. producing huge tonnages. Will dampen Mn...

BHP's mines in S.Afr. producing huge tonnages. Will dampen Mn price IMO.

By: Martin Creamer
Published on 22nd October 2008
Updated 1 hour 3 minutes ago
Record production at South Africa’s Hotazel manganese operation in the Northern Cape as well as increased South African rail and port capacity helped BHP Billiton to increase its manganese production in the latest quarter in spite of using 10% less power, the company said on Tuesday.

“The South African operations achieved a fourth consecutive quarterly record,” the world’s largest diversified miner said in its production report for the quarter ended September 30.

BHP Billiton produced 27% more manganese this September quarter than in the September quarter of 2007.

The combined output from Hotazel in South Africa and Gemco in Australia was 1 830 000 t of manganese. Maintenance and tie-in activities for its expansion project impacted on Gemco production.

Manganese alloy production was up 10% at 203 000 t, higher than both comparative quarters despite the impact of the mandatory 10% reduction in power consumption and load shedding in South Africa.

BHP Billiton manganese president Peter Beaven was masterminding low risk, fast payback and high rates of return on a R750-million capital expansion of Hotazel and had also brought in large diesel generator sets to boost power supply.

BHP Billiton was also expanding its cogeneration facility in Meyerton, where Metalloys beneficiated manganese ore into manganese alloy.

More challenging, however, was management of reduced energy to the company’s electrolytic manganese processing plant at MMC in Nelspruit, Mpumalanga.

He had also liaised intensely with Transnet for required access to additional rail and port capacity in South Africa.

The Samancor manganese resource had increased to 473- million tons, the company due mainly to the inclusion of the upper body at Wessels mine and the top cut at Mamatwan mine, along with the signing of the agreement with black economic empowerment partner Ntsimbintle.

The company said in its latest quarterly report that macroeconomic indicators showed that Chinese growth had softened during the quarter, albeit from “very high” levels.

“We expect volatility and uncertainty to continue in the short term. Notwithstanding this short term uncertainty, we remain confident that the ongoing industrialisation and urbanisation of China and other developing economies will continue to drive strong longer term demand for our products,” the company said.

BHP Billiton’s strong cash flow and balance sheet had allowed the company to re-invest it its growth projects throughout the cycle