BHP 2Q Output Mostly Higher, Cautions on Costs
January 18 2023 - 5:32PM
Dow Jones News
By Rhiannon Hoyle
BHP Group Ltd. on Thursday reported a sharp increase in
second-quarter production of steelmaking coal and copper, as well
as a small lift in iron-ore output.
The world's largest miner by market value said it continued to
grapple with cost pressures, however, raising full-year cost
expectations for its coal-mining operations
BHP said it produced 7.0 million metric tons of metallurgical
coal in the three months through December, up 10% on a year ago,
and 424,300 tons of copper, up 16%.
Second-quarter iron-ore output totaled 66.9 million tons, up 1%
on year. However, production of energy coal and nickel was
weaker.
"WA [Western Australia] Iron Ore delivered record production for
the half year through strong supply chain performance, supported by
the ongoing ramp-up at South Flank," said Chief Executive Mike
Henry. "Copper production at Escondida rose despite road blockades
in Chile in the December quarter and the Spence Growth Option
continued to ramp up, while Olympic Dam's ongoing smelter
performance saw near-record material processing and record gold
production," he added.
While coal-mining operations continued to face headwinds from
heavy rainfall, metallurgical-coal output benefited from an
improvement in truck productivity, particularly following the
rollout of more autonomous trucks, and reduced labor
constraints.
Still, BHP said unit cost guidance for its metallurgical and
thermal coal operations had increased, largely because of
significant wet weather and inflationary pressures.
The company sounded an optimistic tone on the outlook for
Chinese commodity demand.
"BHP believes China will be a stabilizing force when it comes to
commodity demand in the 2023 calendar year, with OECD nations
experiencing economic headwinds," Mr. Henry said. The miner expects
China to surpass one billion tons of steel production for a fifth
consecutive year, he said.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
January 18, 2023 17:17 ET (22:17 GMT)
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