BHP driven by solid results in metallurgical coal and iron ore
BHP has started the new financial year with a strong first quarter of safety and production performance. Group production rose two per cent from a year ago driven by solid results in metallurgical coal and iron ore, our major growth projects made good progress, and the company secured more options in copper, nickel and oil.
While its copper operations in South America continue to be impacted by COVID-19 preventative measures, BHP achieved strong concentrator throughput at Escondida and expect first production from the Spence Growth Option before the end of March 2021.
In Australia, Olympic Dam delivered its best quarterly production in the past five years and the copper producer is on track for first production from South Flank in the middle of the 2021 calendar year.
“In petroleum, we have entered an agreement to increase our interest in the tier one Shenzi asset while delivering first production from Atlantis Phase 3 ahead of schedule and within budget. In copper, we secured an option agreement in the Northern Territory in Australia and saw further promising exploration results from Oak Dam. We bolstered our nickel options with an exploration alliance in Canada and completion of the Honeymoon Well acquisition,” said BHP Chief Executive Officer, Mike Henry.
“With a period of uncertainty to navigate, our efforts to be safer, more reliable and lower cost are as important as ever. We are alive to the challenges ahead but we look forward with confidence in our people and our strategy.”
At the end of the September 2020 quarter, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$10.9 billion over the life of the projects.
PRODUCTION PERFORMANCE AND GUIDANCE
Total copper production decreased by four per cent to 413 kt. Guidance for the 2021 financial year remains unchanged at between 1,480 and 1,645 kt.
Total iron ore production increased by eight per cent to 66 Mt (74 Mt on a 100 per cent basis). Guidance for the 2021 financial year remains unchanged at between 244 and 253 Mt (276 and 286 Mt on a 100 per cent basis).
Metallurgical coal production increased four per cent to 10 Mt (17 Mt on a 100 per cent basis). Guidance for the 2021 financial year remains unchanged at between 40 and 44 Mt (71 and 77 Mt on a 100 per cent basis), although BHP is monitoring for any potential impacts from restrictions on coal imports into China.
Energy coal production decreased by 17 per cent to 5 Mt. Guidance for the 2021 financial year is under review due to the ongoing strike at Cerrejon.
