BHP says production of iron ore up by 4% to 188 metric tonnes
BHP (LON:BHP) gave an update on production at its Western Australia iron ore business, which it said had reached record levels in the first nine months.
The mining giant said it was expecting to finish the year strongly as a result.
The FTSE 100 company said its annual production guidance for iron ore and petroleum was unchanged, while it reduced guidance for metallurgical coal and energy coal, on account of wet weather conditions.
Production of iron ore increased by 4% to 188 metric tonnes for the three quarters up to the end of March while BHP anticipates its yearly production to be between 245 and 255 metric tonnes.
Production of petroleum is down by 8% to 75.8 megatonnes.
BHP has cut its guidance for metallurgical coal to between 70 and 73 metric tonnes from 71 and 77 tonnes, while for energy coal the guidance is down from 21-23 metric tonnes to 18-20 metric tonnes.
Jamie Maddock, equity research analyst at Quilter Cheviot, added that copper output is up which could beneficial to investors:
“Moreover, and after a stronger than expected quarter for copper output, which represents the bulk of the outstanding earnings, full year copper production guidance has been nudged higher with the longer-term targets restated. Copper is becoming increasingly crucial to development of ‘green economies’ around the world and as such BHP is well positioned to take advantage of the demand. Indeed, we have already seen this year the price of copper surge on increased demand, and we expect this to be sustained as the economic reopening takes shape.”
“Overall, the operations remain still very much on track with only minor cost revisions and we wouldn’t expect significant changes to earnings estimates.”
BHP chief executive Mike Henry commented further on the company’s updates from its mines across the world:
“BHP’s strong safety and operational performance continued during the quarter, with record year-to-date production at Western Australia Iron Ore, the Goonyella Riverside metallurgical coal mine in Queensland and concentrator throughput at Escondida in Chile,” Henry said.
“We are reliably executing our major projects, bringing on new supply in copper, petroleum and iron ore. The Spence Growth Option and Samarco are ramping up and West Barracouta, in Petroleum, started production this month. First production from Petroleum’s Ruby project is expected in the coming weeks and South Flank, with its higher grade and lump proportion, is on track to begin production in the middle of the year.”
“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.”
