You might think that Australian mining has hit the wall owing to the consistent negative press the sector receives. It’s fair to say, however, that the mining and resource sector in Australia is undergoing a massive readjustment after years of ‘good times’.

“high commodity prices”

High commodity prices fuelled by developing nations like China, created a mining bubble that was almost certainly destined to deflate at some stage in the future.

At this point in time, the deflation has occurred and we are not in the grips of the beginning of a new era in mining. Global mining companies operating in Australia have made some tough decisions over the last 12 months in order to develop their mining operations into more efficient operating models.

Driving productivity

The focus for mining giants like BHP and Rio Tinto has been to invest billions of dollars in high-tech equipment and computer systems to drive productivity and reduce the reliance on traditional labour.

“all hands on deck – by any means possible”

This in itself has caused many issues for those people who were employed in an industry where high profits and even higher demand created an opportunity for an ‘all hands on deck – by any means possible’ approach by mining companies to get people to work on their mine sites.

“massive profits”

BHP Billiton was one of the biggest investors in technology and innovation. Their ability to introduce automated mining technologies into their mines, especially in Western Australia has see the company realise massive production gains as well as massive profits.

Cutting expenditure on exploration and new mine development

Another focus for the big mining companies like BHP Billiton has been to cut expenditure on exploration and new mine development – on a global scale and not just in Australia.� Tending to concentrate more on improving existing mines, BHP has realised cost savings by budgeting for $US15.2 billion on capital and exploratory expenditure.

Just this week BHP Billiton announced it has achieved a 1.9 per cent increase in revenue last financial year (2013 – 2014). According to official press releases, BHP have increased their revenue by 67.2 billion dollars. On the back of this increase, comes the expected financial windfall for the company and investors alike.

“BHP Billiton – surviving the downturn in commodity prices”

Investors in BHP Billiton have been given a fully franked dividend of 62 cents (US) per share which is 3 cents more that last year. With the reduction in CAPEX and exploration, BHP Billiton has achieved an $8.1 billion increase in cash-flow which has helped the company survive the downturn in commodity prices.

It’s also estimated that for every one dollar�of the drop in price of iron ore for instance, BHP Billiton loses $150 million profit.

As BHP Billiton push to reinvent themselves, with upcoming demerger plans forecast to further increase the profitability of the company, CEO Andrew MacKenzie is preparing for the next phase of development.

“increase the profitability of the company”

In a recent statement, the BHP CEO said: “Our operational performance continued to improve, enabling us to exceed production guidance for a number of our core commodities including iron ore, metallurgical coal and petroleum liquids”.

He also went on to say BHP Billiton have realised over $US6.6 billion of sustainable, annualised gains over the last two years which can be attributable to the productivity push.

BHP Billiton iron ore production increases

BHP Billiton has seen impressive increases in its iron ore production out of the WA Pilbara with some 225 million tonnes of production for the year and 37.6 million tonnes of coal from its Queensland coal mining operations like the $5 billion Daunia mine.

For 2015, BHP Billiton have set their sights on reaping even more product off the back of their technology investments in their Western Australian iron ore business. BHP have set themselves a target to produce around�290 million tonnes of iron ore by the end of financial� year 2015.

“remaining profitable”

One of the biggest concerns for Australian iron ore mining companies like BHP, Rio Tinto and Fortescue Metals Group is remaining profitable when the price of the raw commodity dips to record lows.

“iron ore currently sitting around $8o a tonne”

Heavy investment in automation and efficiency technologies allows BHP to keep capacity rates high despite the low iron ore prices, which has hit record lows and is currently sitting around the $8o a tonne mark.

BHP Billiton indicated their iron ore production costs are somewhere in the region of $US50 a tonne, making their 2015 productivity expansion targets less dependent on the drop in commodity prices.

About BHP iron ore mining operations

BHP Billiton Iron Ore is one of the world`s�leading iron ore producers with many mining operations in Australia. They market and sell lump and fine iron ore from Australia.

Iron ore mining is concentrated in the Pilbara region of north Western Australia. BHP Billiton mining operations consist of an integrated and technologically connected system of seven mining operations, with over 1,000km of rail network, stock yards and two separate port facilities in Port Hedland.

Western Australia Iron Ore

BHP Billiton employs about 13,000 people across its mining operations in the WA Pilbara. Remote mining operations are serviced by the town of Newman while port and rail facilities are concentrated at their Port Hedland location.

The huge BHP operated Mt Whaleback mine is the biggest single-pit open-cut iron ore mine in the world which is more than five kilometres long and almost 1.5 kilometres wide.� Adjacent smaller satellite mines are located outside the town of Newman.

The Yandi and Area C mines can be found about 100 kilometres north-west of Newman, with the BHP Billiton Yarrie mine being 200 kilometres east of Port Hedland.

Stay up to date with BHP Billiton mining projects in Australia

Get iMINCO Project News in your email inbox each week. The newsletter service is completely free – nothing to pay, no subscriptions, membership obligations or anything like that. All you need to do is pop your email address in to the registration form and you will start to receive iMINCO Project News in your inbox weekly.

If at some stage you want the emails to stop, no problem, you can simply click a link in the bottom of the email and the emails will cease . . . give it a try!