BHP’s Metallurgical coal production decreases by six per cent

AUSTRALIA – According to the Operational Review for the Half Year Ended 31 December 2020, metallurgical coal production decreased by five per cent to 19 Mt (34 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) with a stronger second half performance projected in line with company’s plans.

Volumes are expected to be at the lower half of the guidance range following significant wet weather impacts during the December 2020 quarter. BHP continues to monitor for any potential impacts on volumes from restrictions on coal imports into China.

At Queensland Coal, volumes were lower as a result of planned wash plant maintenance at Saraji and Caval Ridge and significant wet weather impacts from La Nina across most operations. South Walker Creek production decreased largely due to higher strip ratios and lower yields. Poitrel was also impacted by lower yields during the period.

Energy coal production decreased by 30 per cent to 8 Mt. Following a strike at Cerrejon, guidance for the 2021 financial year has been reduced to between 21 and 23 Mt from between 22 and 24 Mt.

NSWEC production decreased by seven per cent to 6.9 Mt. This decrease reflects significant weather impacts and higher strip ratios, as well as lower volumes due to an increased proportion of washed coal in response to reduced port capacity, following damage to a shiploader at the Newcastle port in November 2020, and widening price quality differentials. Guidance for the 2021 financial year remains unchanged at between 15 and 17 Mt.

Cerrejon production decreased by 68 per cent to 1.4 Mt due to a 91-day strike that started on 31 August 2020. During the period, Cerrejon successfully completed negotiations with Sintracarbon and signed a new Collective Labor Agreement, effective from 1 July 2020 to 31 December 2023.

Operations restarted in the first week of December 2020 and are continuing to ramp up. The impact of the strike was 1.5 Mt. Guidance for the 2021 financial year has been reduced to approximately 6 Mt from 7 Mt.

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