BHP’s Australian iron ore output for the three months ending December 30 was 68 million tonnes, compared with 66 million tonnes reported a year earlier, the mining giant said on Tuesday. Though output was down almosty 2 per cent on the September quarter figures.
UBS had earlier estimated quarterly iron ore production at 69.3 million tonnes.
Like its rival Rio Tinto, a surge in average realised prices over the year more than offset the production drop.
BHP reported receiving about $US78 per tonne for iron ore shipped from its WA operations excluding freight over the half year ending December 2019, a 41 per cent increase on the same period in 2018.
Last week Rio said it received about $US79 per tonne of iron ore shipped excluding freight.
“We delivered solid operational performances across the portfolio in the first half of the 2020 financial year, offsetting the expected impacts of planned maintenance and natural field decline,” said newly installed BHP chief executive, Mike Henry, who took over the reins in January from outgoing boss Andrew Mackenzie.
“Production and cost guidance is unchanged, and we remain on track to deliver slightly higher production than last year. Our six major development projects are progressing well, and we continue to advance our exploration programs in petroleum and copper.”
Group copper equivalent production was broadly unchanged in the December 2019 half year, BHP said, with volumes for the full year expected to be slightly higher than last year.
Total copper production increased 7 per cent mainly as a result of a boost in output to 602 kilotonnes at the group’s Escondida mine in Chile.
The Olympic Dam mine in South Australia, hit by troubles at its acid plant in the previous period, bounced back with a 32 per cent increase that was partly offset by preliminary work on upgrading the refinery’s crane, which is set to be physically replaced in the March quarter.
The miner added that all major projects under development were tracking to plan.
At the end of December, it had six major developments in petroleum, copper, iron ore and potash, with a combined budget of $US11.4 billion ($16.5 billion) over the life of the projects.
Output from the miner’s Queensland’s metallurgical coal division was down 2 per cent in the December half, although a stronger second half was expected to lift its overall performance.
BHP said it expects operating costs at Escondida to be below guidance, exploration expenses to rise by $US231 million and the group is accounting for a further US$793 million exceptional item charge for the Samarco dam failure.
Shares in BHP slipped 25¢ to $41 by mid afternoon trading.
Simon Johanson is a business journalist at The Age and The Sydney Morning Herald.