BHP is spending more than $US16 billion to pump up production in the Pilbara.
BHP is spending more than $US16 billion to pump up production in the Pilbara. DEAN LEWINS

A doubly good day for BHP

MARKET leader BHP Billiton was in for a good day either way today, thanks to the overnight surge on Wall Street.

But this morning's September quarterly report makes that doubly so. The market will like the fact that the group's Pilbara iron ore shipments rose to a record annualised rate of 173 million tonnes.

The expectation was for a run rate of about 165 million tonnes and it is iron ore where the seriously big profits are being made, even if in recent weeks the iron ore price has begun to cool from its record levels.

BHP is spending more than $US16 billion to pump up production in the Pilbara to 240 million tonnes-a-year from 155 million tonnes by 2016 at a capital cost of more than $US16 billion, about half of which has already been spent. So the fact that production is rising on a quarterly basis is no surprise.

Still, there is nothing more the market likes to see than above-expectation performances, which is what this quarterly has delivered in iron ore.

Read more at Brisbanetimes.com.au

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