BHP reports solid FY19

17th July 2019

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – Diversified giant BHP has exceeded its full-year production guidance for petroleum, while hitting its revised targets for both iron-ore and copper output in the year ended June.

CEO Andrew Mackenzie told shareholders on Wednesday that BHP finished the 2019 financial year with an 11% increase in quarterly production, driven by strong operational performances across its portfolio, including yearly production records at a number of BHP’s petroleum, copper, iron-ore and metallurgical coal operations.

“Our overall production was broadly in line with last year, overcoming the impacts of weather, grade and natural field decline, and unplanned outages in the first half.

“Our exploration plan delivered encouraging results, with seven out of nine petroleum wells successful and further evaluation of the Oak Dam copper prospect under way.”

BHP on Wednesday reported that petroleum output in the full year reached 121-million barrels of oil equivalent (MMboe), a 1% increase on the 2018 financial year, with fourth-quarter production reported at 30 MMboe.

Petroleum volumes are expected to decrease to between 110 MMboe and 116 MMboe in the 2020 financial year as a result of planned maintenance at Atlantis and natural field decline across the portfolio.

Meanwhile, iron-ore production for the full year was stagnant at 238-million tonnes, with 63-million tonnes produced in the three months to June.

BHP has lifted its 2020 iron-ore production guidance to between 242-million and 253-million, as maintenance programmes at Port Hedland pay dividends. The maintenance programme is designed to improve productivity and provide a stable base for our tightly coupled supply chain as we sustainably increase production towards 290-million tonnes a year.

Meanwhile, copper production in the full year was down 4% on 2018 figures, to 1.68-million tonnes, with 444 000 t delivered in the fourth quarter. The output from the Escondida operation decreased by 6% on declining copper grades, but this was partially offset by record average concentrator throughput, while production from Olympic Dam decreased by 17% due to adverse weather conditions in the March quarter.

A production outage at the Spence operation, following a fire at the electrowinning plant in September of last year, also affected copper production.

For the 2020 financial year, BHP is targeting a copper production of between 1.7-million and 1.8-million tonnes.

Meanwhile, metallurgical coal production for the full year was also down by 1% on the previous financial year, to 42.4-million tonnes, while energy coal production was down 6% on the same period to 27.4-million tonnes.

BHP told shareholders that with major plant shutdowns planned at the Goonyella, Peak Downs and Caval Ridge operations in the September quarter of this year, metallurgical coal volumes for the 2020 financial year would be significantly weighted towards the subsequent three quarters of the year, with production expected to reach between 41-million and 45-million tonnes in 2020.

For energy coal, the 2020 financial year guidance has been set at between 24-million and 26-million tonnes, as the combination of monocline and a changed product mix to focus on higher quality products at the New South Wales energy coal operations, take a toll.

Meanwhile, nickel production from the Nickel West operation also declined by 6% in the full year, to 87 400 t, with BHP producing 28 700 t in the fourth quarter of the 2019 financial year.

Edited by Creamer Media Reporter

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