Mining Profits...Investing In Industrial Metals

BHP Billiton Ltd./Plc., the world's biggest miner, said on Tuesday its copper production in the three months ended September fell 19 percent from a year ago, in large part due to a month-long strike at its Escondida mine in Chile.

Copper is a key component underpinning forecasts for a sharp rise in the Sydney and London-listed company's fiscal 2007 profit.

The company also said it continues to face shortages of equipment and workers, in common with other miners as they increase production to meet strong global demand.

"While the majority of BHP Billiton's projects remain broadly on schedule and budget, tight labour markets and shortages of equipment and supplies continue across the industry," the company said.

"These issues are particularly acute in Western Australia and the Gulf of Mexico and continue to impact costs and schedules."

BHP Billiton, which sees strong demand for metals for the remainder of the year, is forecast to post a full-year net profit exceeding last year's $10.45 billion.

BHP said copper output fell to 249,900 tonnes in the three months to Sept. 30 from 308,900 tonnes a year ago, impacted largely by the strike at Escondida, in which BHP has a 57.5 percent stake.

The strike over wages, which ran for most of August, also played a role in a decline in copper production at BHP's close rival and 30 percent Escondida stakeholder, Rio Tinto Ltd./Plc. .

London Metal Exchange copper sold for between $7,150 and $8,100 a tonne during the company's last quarter. In May it fetched as much as $8,800 a tonne, double its January price.

BHP also reported output of 44,500 tonnes of nickel , up 1 percent on the same period last year.

The increase comes amid record high nickel prices above $32,000 a tonne due to little or no surplus supplies of the metal, which is needed to give stainless steel its shine.

Aluminium production was up 1 percent to 337,000 tonnes, a record high, while output of alumina, which is needed to make aluminium, rose 5 percent to 1.078 million tonnes.

Iron ore production, where BHP Billiton holds the No.3 position behind Brazil's CVRD and Rio Tinto, was 5 percent higher at 25 million tonnes.

Iron ore has emerged as a key component of BHP Billiton's asset mix, given strong demand across Asia and China's emergence as a top global steelmaker.

Oil and condensate production in the quarter fell 2 percent to 15.216 million barrels.

BHP Billiton stock, which fell 11 percent in the last quarter, closed at A$27.8 on Monday.