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BHP nears decision on WA nickel, adjusts coal guidance

BHP will announce a decision on its WA nickel operations in the coming months

BHP will announce a decision on its WA nickel operations in the coming months

18th April 2024

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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Diversified mining company BHP is nearing a decision regarding its nickel operations in Western Australia. The company, which has been conducting a review of these assets since February, is expected to unveil its long-term strategy by August, CEO Mike Henry said on Thursday.

The ongoing review encompasses a range of considerations aimed at optimising and enhancing efficiency. This includes evaluating maintenance schedules, scrutinising capital plans and curtailing contractor spend and equipment hire.

Moreover, BHP is exploring the possible transition of Nickel West into a period of care and maintenance, alongside assessing the phasing and capital expenditure for the development of the Musgrave project.

“We expect to announce a decision on the future of our nickel business in the coming months,” Henry stated.

Despite encountering adverse weather conditions, BHP managed to increase nickel production by 1% in the first nine months of the year, reaching 59 000 t. Full-year output is anticipated to fall in the lower half of the guidance range, which spans between 77 000 t and 87 000 t.

Adverse weather also impacted BHP’s coal and iron-ore operations, leading to adjustments in its full-year guidance for its metallurgical coal operations in Queensland.

At BMA, production was affected by a fatality-related safety stop in January, increased maintenance and impacts of wet weather, including two tropical cyclones in the region. The operation’s output fell by 13% in the third quarter to 12.1-million tonnes. In the year-to-date period, output was down 16% to 34.7-million tonnes.

Asa result, full-year guidance for metallurgical coal operations has been revised from between 46 000 t and 50 000 t, to between 43 000 t and 45 000 t.

Heavy rainfall also persisted at the Western Australia Iron Ore (WAIO) operations, resulting in a 6% decline in third-quarter output to 68.1-million tonnes and a 1% dip in nine-month output to 210.2-million tonnes.

Despite these challenges, BHP maintained its WAIO guidance at 282-million to 294-million tonnes.

“WAIO, the lowest-cost iron-ore producer globally, delivered another consistent period of production, despite heavy rainfall. We continue to invest in improvements to our rail and port operations, which are essential for growth in the medium term to 305-million tonnes per annum and beyond,” said Henry.

Furthermore, BHP remains on track to meet its copper guidance for the year, with copper volumes increasing by 10%, owing to strong performances from Copper South Australia and Spence and improved grades and production at Escondida.

Edited by Creamer Media Reporter

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