Diversified resource firm BHP has said its joint venture in Australia now has a more focused operational footprint, as it decides on the future of its nickel business in Western Australia after a nine-month period to March in which iron ore production sagged.
Earlier this month, BHP and its JV partner in BMA restructured the Australian coal venture through divestment of BHP Mitsubishi Alliance’s (BMA) Blackwater and Daunia mines to Whitehaven Coal.
The JV earned $4.1 billion (R78.4bn) from the disposal.
“We successfully completed the sale of the Blackwater and Daunia mines on April 2 for a total of up to $4.1bn,” said BHP CEO, Mike Henry.
“At our BMA metallurgical coal operations in Queensland, significant wet weather including the impact of two tropical cyclones and operational challenges impacted production and unit costs, and we have revised guidance for the year.”
Production from the BMA joint venture was 16% lower at 17.4 million tonnes over the nine-month period to end March on a 50% accounting basis.
BHP said production from the Australian JV had been impacted by “increased planned maintenance, an extended longwall move at Broadmeadow, as well as increased stripping” to improve supply chain stability.
The company has embarked on a project to restore depleted inventory positions arising from extended weather impacts and labour constraints over the past few years.
Energy coal production was, however, 23% higher at 11.6m tonnes over the period as improved weather conditions enabled an uplift in truck productivity.
BHP began domestic sales under the government Coal Market Price Emergency directions for coal mines notice in the quarter to March.
The groups copper production for the period under review increased by 10% to 1.3m tonnes, prompting the company to maintain its full-year guidance at between 1.7m and 1.9m tonnes.
The Escodida mine copper output was 7% stronger at 816 000 tonnes, primarily due to a higher concentrator feed grade of 0.85% .
Mining had progressed into areas of high grade ore as planned following the implementation of measures to manage geotechnical events.
The company is now expecting concentrator feed grade for the 2024 financial year which is expected to be between 0.85% and 0.90%, with 0.92% grade achieved in the third quarter.
“We remain on track to meet copper, iron ore and energy coal production for the year,” Henry said.
“Copper volumes have increased by 10% reflecting strong performance and additional tonnes from Copper South Australia, record year-to-date performance from Spence, and improved grades and production at Escondida.”
Total iron ore production by BHP over the three quarters to March however sagged by 1% to 190m tonnes, although the company’s guidance for the full year remains unchanged at 254m tonnes and 264.5m tonnes.
Iron ore production for the period dipped due to heavy rainfall throughout the third quarter, as well as owing to the continued tie-in activity for the Rail Technology Programme (RTP1) and the impacts of the ongoing ramp up of the Central Pilbara hub.
“Western Australia Iron Ore, the lowest cost iron ore producer globally, delivered another consistent period of production despite heavy rainfall,” Henry said.
“We continue to invest in improvements to our rail and port operations, which are essential for growth in the medium term to 305 million tonnes per annum and beyond.”
In Canada, Henry said BHP’s Jansen Stage 1 project remained ahead of its initial schedule and was now 44% complete.
The company is due to announce a decision on the future of its nickel business in Western Australia in the coming months, with “efforts to optimise operations and preserve value” already under way.
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