Pilbara iron ore record for BHP

BHP’s Western Australian Iron Ore division has achieved a full-year production record, with output again set to rise this financial year.
Pilbara iron ore record for BHP Pilbara iron ore record for BHP Pilbara iron ore record for BHP Pilbara iron ore record for BHP Pilbara iron ore record for BHP

Kristie Batten

WAIO production increased by 4% to 231 million tonnes attributable to BHP, or 268Mt on a 100% basis, reaching guidance and setting a new record.

The company said the result reflected productivity improvements across the supply chain, as well as additional production from Jimblebar.

BHP produced 60.1Mt (attributable) in the June quarter, with output running at a record annualised rate of 80Mt per annum in the month of June following the completion of the rail renewal and maintenance program in May.

The average realised price received for the year was US$58 per wet metric tonne, up 32% over the previous financial year.

WAIO production this financial year is expected to increase to 239-243Mt on an attributable basis, or 275-280Mt on a 100% basis.

BHP also achieved annual production records at the Spence copper mine in Chile, and two Queensland copper mines, while it achieved guidance in petroleum.

Copper production of 1.32Mt was 16% lower due to the strike at Escondida and unplanned maintenance at Olympic Dam.

BHP expects copper production for FY18 to be 1.65-1.79Mt.

Nickel West full-year output rose by 5% to 85,100t due to debottlenecking.

A 6% drop in metallurgical coal production to 40Mt reflected the impacts of Cyclone Debbie, while energy coal production rose by 7% to 29Mt.

BHP said it expected to achieve full-year cost guidance at WAIO and petroleum, but not for copper or coal.

Group production on a copper equivalent basis is expected to rise by 7% this financial year.

“Our people have stepped up to unlock low-cost latent capacity and achieve strong productivity gains across our tier one assets,” BHP CEO Andrew Mackenzie said.

“Our relentless focus on safety, productivity and capital discipline will support strong growth in shareholder value.”

BHP flagged exceptional items of $546 million ($740 million post-tax) in its financial accounts next month, due to idle capacity and other strike-related costs for Escondida, and Chilean withholding tax on a one-off dividend paid while a concessional tax rate was available.

Mineral exploration expenditure for the 2017 financial year was $163 million, of which $139 million was expensed.

Shares in BHP were down by 1.7% to A$24.66 this morning.