BHP turns in strong production performance across the board

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By Colin Hay - 
BHP ASX Western Australia iron ore WAIO production 2023

After a reporting period where it obtained strong performances across its vast mineral commodity portfolio, BHP (ASX: BHP) has hit a number of full year production guidances.

Led by annual production records at Western Australia Iron Ore (WAIO), Spence and Olympic Dam, BHP reached its forecast numbers for copper, iron ore, metallurgical coal and energy coal.

However, nickel finished in line with the lower end of its original guidance.

The star producers were WAIO with 285 million tonnes of iron ore, Spence with 240,000 tonnes of copper and Olympic Dam with 212,000 tonnes of refined copper.

On target across numerous projects

The company told shareholders it now expects to achieve full year unit cost guidances at Escondida, WAIO and the New South Wales Energy Coal (NSWEC) project.

BHP chief executive officer, Mike Henry, said the performance for the financial year was stained by the tragic deaths of two workers.

“These tragic events underscore the absolute importance of safety and we are resolute in our commitment to eliminating fatalities and serious injuries at BHP,” he said.

He also revealed that inflationary pressures have impacted the company’s business and the company has ramped up its focus on safety and productivity.

“Competitiveness will be ever more important as we enter the new financial year and at a time when there are new challenges and opportunities to resource development and global economic volatility.”

Strong fourth quarter

The mining giant was able to wrap up its financial year with a strong fourth quarter which saw increased annual production across the board and annual records at WAIO, Olympic Dam and Spence.

“WAIO shipped record volumes on the back of productivity in its supply chain, rail network and car dumpers, while South Flank completed its deployment of autonomous haul trucks in May and is on track to ramp up to full production in the next 12 months,” Mr Henry said.

BHP achieved Increased production at WAIO, despite unfavourable impacts from Tropical Cyclone Ilsa.

“Olympic Dam’s improved reliability and productivity delivered record annual output in copper, gold and silver, and the integration of OZ Minerals into our South Australian copper business is expected to lift production to between 310 and 340 kt in FY24,” Mr Henry said.

Overcame Escondida challenges

Mr Henry said the Escondida project overcame a number of operational challenges to deliver solid production and position the asset to increase output further in FY24.

“Our Queensland coal operations achieved strong underlying performance including the transition to autonomous fleets at Goonyella Riverside and Daunia, offsetting the impact of significant wet weather.”

The BHP boss noted that the company’s portfolio is targeted towards high quality steelmaking and growth options in future critical commodities.

“The Jansen potash project in Canada remains ahead of plan and studies for Stage 2 are progressing. Through the year, BHP made strategic investments and exploration progress in copper and nickel prospects globally, including Kabanga in Tanzania, Oak Dam in Australia, Filo Mining with the Filo del Sol project in Argentina and Chile, and Ocelot in the United States, as well as Serbia and Peru.”

For the 2023 financial year, unit costs at Escondida and WAIO are expected to be towards the upper end of guidance ranges, and unit costs at NSWEC are expected to be in line with the revised guidance range.

The latest reporting period also included the completion of the Oz Minerals acquisition, which has added strength to BHP’s portfolio in copper, nickel and uranium.