BHP lowers copper guidance

BHP has maintained full-year guidance for iron ore, petroleum and coal, but lowered the full-year outlook for copper.
BHP lowers copper guidance BHP lowers copper guidance BHP lowers copper guidance BHP lowers copper guidance BHP lowers copper guidance

Spence in Chile

Staff reporter

Copper production rose by 1% year-on-year to 409,000 tonnes due to higher volumes at Escondida, which was offset by the impact of planned maintenance and a fire at Spence, as well as an acid plant outage at Olympic Dam.

As a result, copper guidance for the 2019 financial year was lowered by 3% to 1.62-1.7 million tonnes reflecting lower volumes expected at Spence and Olympic Dam.

Iron ore output was the highlight in an otherwise flat quarter, with production rising by 10% year-on-year, but down 3% quarter-on-quarter, to 61Mt, or 69Mt on a 100% basis.

Jimblebar posted a record quarter of production, supported by improved reliability across rail and port.

FY19 guidance remains unchanged at between 241-250Mt, or 273-283Mt on a 100% basis.

The company said the US$3.06 billion South Flank mine was 15% complete and on schedule and budget.

Production at Nickel West dropped by 8% to 21,000t due to a fire at the Kalgoorlie smelter last month.

The smelter is expected to ramp back up to full capacity within weeks, with planned maintenance at Kwinana brought forward to align with the outage.

Metallurgical coal production dropped by 2% to 10Mt, while energy coal output was down by 1% to 7Mt.

Petroleum production was down by 1% to 33 million barrels.

"We delivered a 2% increase in copper equivalent production despite maintenance at a number of our operations," BHP CEO Andrew Mackenzie said.

"We are on track to meet guidance for the 2019 financial year across our commodities, except copper where we have reduced production guidance slightly following outages at Olympic Dam in Australia and Spence in Chile."

Mackenzie said he expected the sale of the company's US onshore assets to finalise by the end of this month, after which the cash would be returned to shareholders.

BHP spent $40 million on exploration during the quarter, of which $30 million was expensed.

Greenfields exploration is primarily focused on copper in Chile, Ecuador, Peru, Canada, South Australia and south-west US.

Shares in BHP closed 1.7% higher yesterday at A$33.90.