BHP hit by cost of own iron

BHP Billiton is breaking production records but is still being squeezed by the rising price of one of its own products, iron ore.

A sharp kick in the price of steel a year ago appears to have almost singlehandedly caused a rise of 27 per cent, or $80 million, in the cost of the Stybarrow oil development off Exmouth on the West Australian coast.


The project, which is yet to begin production, is jointly owned by BHP Billiton and Woodside.

When it was approved in November 2005, BHP Billiton said its half share would cost “approximately $US300 million.”

This has grown to $US380 million ($429.5 million).

The entire oil industry is believed to be suffering from the same problem, since all offshore developments require steel in big quantities.

The Australian