BHP’s solid first half dimmed by metallurgical coal stumble
Diversified mining group BHP has had a “solid” operational first half, CEO Mike Henry said on Thursday, reporting higher six-month copper and energy coal production, but lower iron-ore and metallurgical coal output.
The major boosted its interim copper production by 7%, reflecting a record half at the Spence mine, in Chile, and ongoing strong performance and additional tonnes at Copper South Australia.
Copper output increased to 894 400 t in the six months, with second-quarter output contributing 437 400 t. The group’s guidance for the full year remains unchanged at 1.72-million to 1.91-million tonnes.
Iron-ore production from BHP’s Western Australian operations reduced by 3% to 142.1-million tonnes (on a 100% basis).
The lower production was attributed to the continued tie-in activity for the Rail Technology Programme and the impacts of the ongoing ramp-up of the Central Pilbara hub (South Flank and Mining Area C).
BHP kept its group Western Australia iron-ore guidance unchanged at 250-million to 260-million tonnes.
Samarco, in Brazil, produced 2.5-million tonnes in the half-year and is on track to produce between 4-million and 4.5-million tonnes in the full year.
At NSW Energy Coal, in Australia, BHP had its “best first half in five years”, Henry reported, with full-year production now forecast to be in the upper end of the guidance range of 13-million to 15-million tonnes.
Compared with the first half of 2023, energy coal production surged by 36% to 7.5-million tonnes.
While energy coal had a strong performance, the group’s metallurgical coal performance stumbled, leading to BHP reducing its guidance for the key steelmaking ingredient.
BHP Mitsubishi Alliance (BMA), which this week reported a fatality in Queensland, produced 22.6-million tonnes in the first six months of the financial year; a 17% year-on-year reduction.
“BMA had a tough six months, following significant planned maintenance and low starting inventories,” explained Henry.
For the full year, BHP is now expecting 46-million to 50-million tonnes, rather than the previously guided 56-million to 62-million tonnes. The guidance excludes Blackwater and Daunia from the date of completion of the investment, which is expected to occur on April 2.
Interim production at Nickel West, in Australia, increased by 4% year-on-year to 40 000 t. BHP is “evaluating options” to mitigate the impacts of the sharp fall in nickel prices.
Meanwhile, BHP is progressing its growth agenda with the ongoing construction of the Jansen mine, in Canada, and the recently sanctioned Jansen Stage 2, which will double its planned potash capacity.
The Jansen Stage 1 project is currently 38% complete and will produce its first product by the end of the 2026 calendar year. Jansen Stage 2 was approved in October and is targeting first production in 2029.
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