BHP Downgrades Fiscal Year Escondida, Nickel Production Guidance -- Update
April 20 2023 - 8:41PM
Dow Jones News
By Rhiannon Hoyle
BHP Group Ltd. said it will produce less copper than expected at
the Escondida mine in northern Chile this fiscal year, but stuck
with its annual group copper-production estimate, citing the strong
performance of other operations in Chile and Australia.
The world's largest miner by market value cut its annual
estimate for nickel production, in part due to heavy rainfall.
BHP on Friday downgraded its production guidance for the
Escondida copper operation in the year through June to between 1.05
million and 1.08 million metric tons, from 1.08 million to 1.18
million tons previously. Geotechnical challenges in a high-grade
part of the pit have prompted changes to the mine plan, resulting
in less mined ore and the processing of more low-grade stockpiles,
it said.
Still, group copper production totaled 405,900 tons in BHP's
third fiscal quarter, up 10% year-on-year.
"Given the strong performance at the other copper assets,
full-year total copper production guidance remains unchanged" at
1.635 million to 1.825 million tons, the company said. The global
mining giant said it expects annual production at its Olympic Dam
and Pampa Norte operations to be toward the upper end of its
estimates.
For its nickel business, BHP cut its annual production forecast
to between 75,000 and 85,000 tons, from 80,000 to 90,000 tons
previously.
The company's Australian nickel operations were affected by
heavy rainfall in early April, it said. In March, BHP also told one
of its nickel suppliers, Mincor Resources NL, that it would no
longer accept a product that contained high levels of arsenic.
BHP kept fiscal-year production guidance for its iron ore,
energy coal and metallurgical coal businesses unchanged, although
said output from the BHP Mitsubishi Alliance, the world's major
steelmaking coal exporter, is expected to be at the bottom of the
miner's guided range following heavy rainfall.
BHP, also one of the world's top iron-ore exporters, reported
record production from its Australian iron-ore mines for the first
nine months of its fiscal year.
Third-quarter iron-ore output was flat on a year ago at 59.8
million tons. The company said there was no significant damage or
reported injuries at the iron-ore mining operations in Australia's
remote northwest as a result of the recent Tropical Cyclone
Ilsa.
BHP Chief Executive Mike Henry took an optimistic tone on global
commodity demand.
"Recent engagements with customers in China and India have
reaffirmed our positive outlook for commodity demand, with China's
economic rebound and solid momentum in India's steelmaking growth
helping to offset the impact of slowing growth in the U.S., Japan
and Europe," he said.
BHP has been seeking to increase its exposure to commodities
such as copper that it expects to be vital to a global energy
transition. Earlier this month, shareholders of OZ Minerals Ltd., a
copper-and-gold producer, blessed a takeover plan by BHP that is
expected to be finalized on May 2.
"We are now focused on the safe integration of the two
businesses and we look forward to building an internationally
competitive copper business in South Australia and incorporating
West Musgrave into our nickel options in Western Australia," Mr.
Henry said.
BHP also said it has identified a new copper-porphyry
mineralized system in Arizona, and that it has been granted
environmental approval for a new phase of exploration drilling at
its Oak Dam site in South Australia.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
April 20, 2023 20:26 ET (00:26 GMT)
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