Commodities, News, Production

BHP drives iron ore to near-record production

BHP

BHP rode the WAIO train to near-record production in the second half of 2021 despite being overcome by COVID-induced labour constraints.

Western Australia Iron Ore (WAIO) produced approximately 127 million tonnes (144 million tonnes on 100 per cent basis) from July to December 2021, while BHP’s overall iron ore production was 129,401 million tonnes (mt) for the December half of 2021 – a 1 per cent increase from the same timeframe in 2020.

The major miner’s labour capacity was impacted by COVID-19 border restrictions, while planned maintenance on the train load out at Jimblebar and car dumper one at Port Hedland also affected the company.

The ramp up of BHP’s South Flank iron ore mine remains on track. Producing iron ore at a peak rate of 45 million tonnes per annum (Mtpa) in the second half of 2021, BHP is aiming to elevate South Flank to 80 Mtpa within three years.

BHP produced approximately 742,000 tonnes of copper in the half year, a 12 per cent decrease from the December half of 2020. The company is trending towards the lower-end of its copper guidance for the 2022 financial year (FY22).

Production from BHP’s Olympic Dam copper operation in South Australia dropped by 56 per cent to approximately 44,000 tonnes amid major smelter maintenance. Maintenance was completed in January 2022 and Olympic Dam will ramp up to full capacity by April this year.

BHP’s metallurgical coal operations were impacted by significant La Niña weather events and COVID-19 labour shortages in the December quarter.

As a result, the company produced 17.67 mt of met coal for the half year (31 mt on a 100 per cent basis), an 8 per cent decline from the same timeframe in 2020.

BHP’s FY22 met coal guidance has decreased from between 39 and 44 mt (70 and 78 mt on a 100 per cent basis) to between 38 and 41 mt (68 and 72 mt on a 100 per cent basis).

BHP chief executive officer Mike Henry is pleased by the company’s direction, with its cost control efforts a particular positive.

“Cost control remained strong across the business, in the face of a more inflationary environment,” he said.

“Unit cost guidance remains intact bar a change to metallurgical coal which is a function of the lowering production guidance as a result of significant wet weather and in anticipation of Omicron headwinds in the early part of the second half of the financial year.”

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