BHP holds iron ore, thermal coal forecasts despite Australian fires

James Marshall
January 22, 2020

Mr Hissey said RBC preferred BHP to Rio Tinto in the mining space and expected the former's balance sheet to remain strong.

"We delivered solid operational performance across the portfolio in the first half of the 2020 financial year, offsetting the expected impacts of planned maintenance and natural field decline".

Encouragingly, quarterly production at Olympic Dam in South Australia jumped 32% to 86,000t and BHP left full-year guidance unchanged at 180,000-205,000t. "Our six major development projects are progressing well, and we continue to advance our exploration programmes in petroleum and copper".

All were tracking to plan, according to Mr Henry.

For the 2020 financial year, BHP's production target for iron-ore has remained unchanged at between 242-million and 253-million tonnes.

"Production and cost guidance is unchanged, and we remain on track to deliver slightly higher production than a year ago".

"Production and cost guidance is unchanged, and we remain on track to deliver slightly higher production than a year ago".

The lower volumes during the quarter ended December resulted from the completion of a major auto dumper maintenance at the Pilbara operations during October previous year.

Metallurgical and energy coal production were up for the quarter, but declined over the half due to weak September quarters.

Production at the New South Wales Energy Coal unit declined 11% in the six months to December 31 compared to a year earlier, in part because of the fires and as the operation shifts strategy to extract a smaller volume of higher quality product. Output jumped 32%, that was partly offset by preliminary work on upgrading the refinery's crane, which is set to be physically replaced in the current March quarter.

Mining giant BHP Group said on Tuesday that poor air quality caused by smoke from Australia's bushfires is hurting coal production, as authorities said a reprieve from hazardous fire conditions would end within days.

"We are monitoring the situation and if air quality continues to deteriorate then operations could be constrained further in the second half of the year", the world's biggest miner said. Though this is down 1% on a quarterly basis - a fact attributable to the "completion of a major auto dumper maintenance program in October 2019" - production is up year-over-year.

The company's average coking and thermal coal prices all fell sharply in the half-year and quarter.

Looking at some of BHP's other key production results, on a quarter-over-quarter basis we see that Nickle production increased 37%, petroleum 4%, copper 6% and metallurgic coal and energy coal rose 17% and 8%, respectively.

Shares in BHP were down 20 cents, or 0.48 per cent, at $41.04 at 1248 AEDT.

Other reports by Click Lancashire

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