The rain proves a pain for miner Billiton

BHP Billiton, the world’s biggest mining house, warned persistent rains in Australia were delaying a recovery in its coal operations after a devastating March quarter cut production by nearly a fifth.

BHP Billiton is the latest miner to caution investors to brace for a dramatic fall in Australian coal exports this year, as the full impact of floods at the start of the year in Australia’s eastern Queensland state becomes clearer.

The company’s iron ore mines in Western Australia, which were also hit by torrential rains between January and March, recorded a modest 7 per cent year-on-year rise in March quarter output, setting the division on course for a record year, BHP Billiton said.

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Iron ore is BHP Billiton’s top revenue earner, followed by coal.

The company has already earmarked nearly $10bn of a planned $80bn capital-spending spree over the next five years to expand iron ore and coal mining.

Analysts believe this demonstrates the challenges the industry is having satisfying rising demand for industrial raw materials as industrialisation in China spreads to India and other Asian countries.

BHP Billiton’s production of steel-making coal is mostly centred on the Bowen Basin, which bore the brunt of the flooding.