The world’s number one mining company BHP (NYSE:BHP) reported solid September quarter production across its business units on Tuesday and made no changes to its production and cost guidance for its current financial year to end-June 2018.
The Melbourne-based giant said improved mine productivity and record output at its Jimblebar operations in Western Australia
partially offset the impact of planned maintenance and lower opening stockpile levels following the fire at its Mt Whaleback screening plant in June 2017.
Production at its iron ore unit fell 3% year-on-year to 56m tonnes for the three months to end-September. Compared to the previous quarter output declined 8%
BHP expects iron ore production for its current financial year to end June 2018 to rise 3–5% to between 239–243m tonnes on an attributable basis and to 275–280m tonnes in total.
Coking coal production was static at 11m tonnes for the quarter with record production at the Saraji mine and increased productivity across its Queensland mines offset by lower production at Broadmeadow. For its 2018 financial year BHP expects to produce 44–46m tonnes of met coal, an increase of 10–15% year on year.
The company’s output of coal used in power generation declined by 2% to 7m tonnes mainly as the result of bad weather at its Cerrejón operations.
In August, BHP approved the expansion of its Spence copper mine for a capital outlay of $2.5 billion to increase production by 185,000 tonnes per year and extend the life of the mine by more than 50 years
Copper production for the September quarter jumped 14% to 404,000 tonnes boosted by increased volumes at Escondida and the start-up of the Los Colorados Extension project and higher average copper grades and throughput. Los Colorados will ramp up to full capacity during Q4 2017.
BHP expects full year copper output for 2018 to recover by 25–35% overall as Escondida expansion plans push production at the mine to between 1.13m–1.23m tonnes. Strike action that lasted 44 days at Escondida saw output at the giant mine down by more than a fifth during the company’s previous financial year.
In August, BHP approved the expansion of its Spence copper mine for a capital outlay of $2.5 billion which will increase production by 185,000 tonnes per year and extend the life of the mine by more than 50 years.
BHP’s expects zinc output to reach in the region of 100,000 tonnes in its current financial year. Nickel production gained 20% year on year during the quarter and is expected remain unchanged for the full year at 85,100 tonnes.
BHP said exploration spending for the quarter totalled $43 million with greenfield exploration focused copper targets within Chile, Peru, Canada, South Australia and the southwest US.
Production from BHP’s oil and gas business, which after pressure from activist shareholders the company plans to sell, declined 8% to 50m barrels oil equivalent during the quarter due to natural field decline and the impact of Hurricane Harvey.
ADRs of BHP trading in New York did not react after hours on Tuesday. BHP stock is worth $107 billion after rising 18.6% since the start of the year.