BHP posts strong output for copper, iron ore, energy coal

(Alliance News) - BHP Group Ltd on Thursday shared strong copper production figures in its nine-month operational review, but cut guidance for metallurgical coal output following weather challenges.

For the third quarter ended March 31, the Melbourne, Australia-based resource miner said copper production rose 15% year-on-year to 465,900 tonnes, bringing the year-to-date 10% ahead of the same period of financial 2023.

The increase was driven by "record" production at the Spence operations in Pampa Norte, Chile, strong operational performance at Copper South Australia, and improved performance and grade at Escondida in Chile's Atacama Desert, BHP said.

Iron ore increased 3% annually to 61.5 million tonnes, though the year-to-date was 1% behind the prior year. Energy coal was up 5% at 4.1 million tonnes, and 23% ahead of the prior year for the nine-month period.

However, metallurgical coal production from BHP Mitsubishi Alliance or BMA - its coal joint venture with Mitsubishi Development in Queensland - dropped 13% annually to 6.0 million tonnes in the third quarter, with nine-month production lagging the prior year by 16%.

"At our BMA metallurgical coal operations in Queensland, significant wet weather including the impact of two tropical cyclones and operational challenges impacted production and unit costs," explained Chief Executive Officer Mike Henry.

Output was also hit after operations were halted for several days following a fatality at Saraji in January.

Consequently, the company said it was cutting guidance once again for BMA. It now expects annual metallurgical coal production to be in a range between 21.5 to 22.5 million tonnes for the full year. This compares with prior guidance of 23 to 25 million tonnes, which had been cut from 28 to 31 million previously. In financial 2023, it produced 29.0 million tonnes.

BHP also noted it completed the divestment of BMA's Blackwater and Daunia mines to White Haven Coal in early April, which is worth up to USD4.1 billion.

Meanwhile, nickel from Nickel West in Australia slipped 4% to 18,800 tonnes in the third quarter, but was 1% ahead in the year-to-date.

In January, BHP had said it was evaluating options for its nickel operations amid a "sharp fall" in nickel prices. This stemmed from structural changes in the industry, with realised nickel prices seeing a cyclical low.

On Thursday, BHP's CEO Henry said the firm expects to announce a decision on the future of its Nickel unit in the coming months.

Other than the cut for BMA, annual production guidance ranges remained unchanged, though copper production in Pampa Norte, iron ore from Samarco, and energy coal are expected to be at the upper end of their respective ranges. Nickel production is expected to be in the lower half of guidance.

Shares in BHP were up 2.1% at AUD45.39 each in Sydney on Thursday afternoon.

By Elizabeth Winter, Alliance News senior correspondent

Comments and questions to [e-mail]

Copyright 2024 Alliance News Ltd. All Rights Reserved.