BHP had solid ore sales from its mines in Western Australia in the three months to March 31 as wet weather and maintenance impacted output and exports.
BHP said it shipped 66 million tonnes of iron ore from its mines in WA’s Pilbara, slightly below market expectations.
Production fell 4% to 59.9 million tonnes for the quarter, leaving output up 4% for the first three quarters of the year at 188 million tonnes
Sales for the first nine months of 2020-21 totalled 210.1 million tonnes, up from 206.2 million tonnes in the same period of 2019-20.
But that has left BHP on track to achieve the top end of its full-year iron ore target range of 276-286 million tonnes, the company said in the update
“We are reliably executing our major projects, bringing on new supply in copper, petroleum and iron ore,” BHP CEO Mike Henry said.
“With our focus on keeping our people safe, costs down and productivity up, we are well positioned to finish the year strongly and continue delivering the essential products the world needs.”
Iron ore prices continued their surge on Tuesday and are now near all-time highs at $US189 a tonne for 62% Fe fines after Brazilian mining giant Vale this week said it had produced less ore than expected compared to the December quarter – 68 million tonnes vs 84.5 million tonnes.
But Vale’s shipments were 14% higher than the first quarter a year ago at more than 65 million tonnes.
Australia’s second-biggest miner, Rio Tinto, also said its iron ore output fell 2% in the quarter due to wet weather and labour shortages the company was facing in WA’s Pilbara.
Following the quarter’s performance, production guidance for 2020-21 remains unchanged for petroleum and iron ore. However, guidance for the company’s copper production has been increased to between 1.535 million tonnes to 1.660 million tonnes, reflecting the strong performance from the Escondida in Chile.
For metallurgical coal front, BHP has reduced its guidance to between 39 million tonnes and 41 million tonnes due to poor weather conditions. The lower expected coal volumes have also increased expected unit costs for Queensland Coal to $US74 and $US78 a tonne.
At the end of March, BHP had four major projects under development across petroleum, iron ore, and potash. These projects combined carry a combined budget of US$8.5 billion over the project’s life. All of the projects remain on track.
The $US3.06 billion South Flank iron ore project in the Pilbara is on track to begin production by the middle of the year while the company says it will make the final investment decision on the first stage of the Jansen potash project in Canada mid-year.
BHP shares fell 0.5% to $47.21.
