BHP has reports that production guidance for the 2019 financial year remains unchanged for petroleum, copper, metallurgical coal and energy coal. Iron ore production guidance, however, has decreased to between 265 and 270 Mt (100 per cent basis), reflecting impacts of Tropical Cyclone Veronica.

Image courtesy of ©BHP

BHP Chief Executive Officer, Andrew Mackenzie, said the company had a strong operational performance during the March 2019 quarter, despite weather impacts across Australia and Chile.

“We approved Atlantis Phase 3 and now have five major projects under development. Those projects, our work on transformation, technology and culture, and our successful petroleum and copper exploration and appraisal programs will grow value and returns for years to come,” said Mr Mackenzie.

BHP’s total copper production decreased by three per cent to 1,245kt. Guidance for the 2019 financial year remains unchanged at between 1,645 and 1,740 t.

Escondida copper production decreased by six per cent to 848kt as expected lower copper grades were partly offset by record concentrator throughput. Production guidance remains unchanged at between 1,120 and 1,180kt for the 2019 financial year, with volumes expected to be towards the lower end of the range.

Pampa Norte copper production decreased by 11 per cent to 172kt and reflects planned maintenance and a production outage at Spence following a fire at the electro-winning plant in September 2018, and the impact of heavy rainfall in northern Chile in February 2019 at both Spence and Cerro Colorado. This was partially offset by record ore milled at both operations after implementing maintenance improvement initiatives. Production guidance at Spence and Cerro Colorado remains unchanged for the 2019 financial year, at between 160 and 175kt and 60 and 70kt respectively.

Olympic Dam copper production increased by 22 per cent to 115kt as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018. Following completion of the acid plant remediation works, surface operations ramped up between October 2018 and February 2019. Production guidance remains unchanged at between 170 and 180kt for the 2019 financial year, with volumes expected to be towards the lower end of the guidance range.

Antamina copper production increased by five per cent to 110kt due to higher head grades. Production guidance for the 2019 financial year remains unchanged at approximately 135kt for copper and approximately 85kt for zinc.

Despite a few setbacks, BHP has reported a relatively unchanged total iron ore production, measuring at 175 Mt (198 Mt on a 100 per cent basis).

Production guidance for the 2019 financial year, however, has been reduced to between 235 and 239 Mt, or 265 and 270 Mt on a 100 per cent basis, reflecting a 6 to 8 Mt impact from Tropical Cyclone Veronica. As a result, full year unit costs are now expected to be below US$15 per tonne, an increase from previous guidance of less than US$14 per tonne, due to the lower volumes, direct costs of remediation, increased demurrage, rehandle to manage stockyards and opportune maintenance at the mines during port downtime. In addition, private royalties are also expected to be higher as a function of higher iron ore prices.

At WAIO, volumes reflected record production at Jimblebar and the impact from the Mt Whaleback fire in the prior period. This was offset by the impacts of planned maintenance in the September 2018 quarter, a train derailment on 5 November 2018 and Tropical Cyclone Veronica in March 2019. While our facilities did not sustain major damage as a result of the cyclone, the port ramp up was slowed by localised flooding, processing wet material and equipment assessments.

Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.

BHP’s metallurgical coal production was broadly flat at 31Mt (54Mt on a 100 per cent basis). Guidance for the 2019 financial year remains unchanged at between 43 and 46Mt (75 and 81Mt on a 100 per cent basis).

At Queensland Coal, increased yields at South Walker Creek and higher wash-plant throughput at Poitrel following the purchase of the Red Mountain processing facility supported record production at BMC. Despite record stripping, BMA’s production decreased slightly due to the scheduled longwall move at Broadmeadow in the December 2018 quarter and unfavourable weather impacts in the March 2019 quarter.

On 27 March 2019, BMA completed the sale of the Gregory Crinum Mine to Sojitz Corporation.

Like metallurgical coal, energy coal production was also reported to be broadly flat at 20Mt. Guidance for the 2019 financial year remains unchanged at approximately 28 to 29Mt.

New South Wales Energy Coal production increased five per cent supported by record stripping performance. Production guidance remains unchanged at between 18 and 19Mt for the 2019 financial year. However, following optimisation of the mine plan through the construction of Multiple Elevated Roadways (MERs) which will reduce future cycle times, the focus on higher quality products and challenges with labour hire attraction and retention, unit costs for New South Wales Energy Coal are now expected to be approximately US$51 per tonne, an increase from previous guidance of between US$43 and US$48 per tonne. Ongoing labour hire challenges are being addressed, including through the initial deployment of BHP Operations Services in the June 2019 quarter.

Cerrejón production decreased by eight per cent due to adverse weather and its impacts on mine sequencing. Production guidance remains unchanged at approximately 10Mt for the 2019 financial year.

Nickel West production decreased by 13 per cent to 59kt as operations were suspended following a fire at the Kalgoorlie smelter in September 2018. The smelter returned to operation on 1 October 2018, with final repairs and ramp up completed in the March 2019 quarter. Production guidance for the 2019 financial year remains unchanged and is expected to be broadly in line with the 2018 financial year.

Source:  www.bhp.com