Miner sees record iron production

Demand from China and other growing countries has not abated

Mining giant BHP Billiton has said that its iron ore production rose by a record amount in the third quarter.

Production of the key steel-making ingredient rose by 11% in the June-to-September quarter to 30.1m tonnes.

But BHP confirmed the world's fourth-biggest copper mine, Olympic Dam, would be operating at only 25% capacity for six months because of a damaged shaft.

That has helped push up copper prices to a one-year high of $6,570 a tonne, and will also hit uranium supplies.

The dam, in Australia, has the world's biggest-known deposit of uranium. It was disrupted when a runaway skip hit a a shaft on 6 October.

It will not be back to full capacity until the first quarter of next year, the world's largest miner said.

Chinese demand

Analysts were also disappointed that BHP also reported an 8% fall in copper output over the quarter.

BHP shares fell almost 1% in Sydney.

"I have a forecast surplus of over 200,000 tonnes," said David Moore, commodities strategist at Commonwealth Bank of Australia. "Obviously this will tighten things up and other cumulative disruption elsewhere might start to take their toll."

The Anglo-Australian firm forecast that copper production at Escondida in Chile, the world's largest copper mine, would increase by 5% to 10% for the financial year.

The firm employs more than 40,000 people across 25 countries. It has more than 100 operations across commodities including coal, iron ore, platinum, uranium , silver and diamonds.

The company has benefited in recent years from a China-driven resources boom.

"China's re-stock of commodities is essentially complete and there is now evidence of higher than normal stockpiles across the supply chain," BHP said.

"We continue to look for Chinese imports to more closely reflect real demand over the remainder of 2009 calendar year."