BHP has finished off 2019 with a notable increase in copper production after the Olympic Dam mine in South Australia put an operational issue behind it.
The company’s total copper production jumped 7 per cent to 885,000 tonnes on the corresponding period a year earlier.
BHP reported higher copper volumes at Olympic Dam during the half year period as a result of acid plant outage in the previous period.
The company anticipates its group copper production for the full year to be slightly higher than last year amid global trade uncertainty, and a steady growth in copper demand despite volatile prices.
“Despite near term uncertainty – due to the coronavirus outbreak, trade policy and geopolitics – we remain convinced about the positive underlying fundamentals of our commodities,” BHP chief executive Mike Henry said.
“In the face of market uncertainty and slowing rates in growth and commodity demand, a greater proportion of value growth will come from an unrelenting focus on being great at what we do.
“We must create more options in future-facing commodities to help us continue grow value. These options will come from both within our existing footprint as well as through securing more resources through exploration and early stage entry.”
BHP expects to complete its third phase of drilling program at the Oak Dam project in South Australia in the June quarter.
This builds on previous drilling phases which confirmed high-grade mineralised intercepts of copper, with associated gold, uranium and silver.
BHP is also on track to achieve production guidance for the 2020 financial year at Western Australia Iron Ore (WAIO) and Queensland Coal despite weather impacts this year.
The company experienced a 2 per cent increase in WAIO production to 137 million tonnes during the December half year on the prior corresponding period.
Unit costs at WAIO decreased by 10 per cent to $US13.03 ($$19.41) per tonne due to higher volumes, favourable currency exchange movements and the planned inventory build at mines during the major car dumper maintenance campaign.
BHP also plans to achieve a supply chain capacity of 290 million tonnes a year at WAIO over the medium term.
At the South Flank project in Western Australia, BHP has reached 58 per cent completion.
There was, however, no growth in output at Queensland Coal, with production remaining at 36 million tonnes as per the December 2018 half year period.
“With our strong portfolio and performance momentum, we’re set up much better than most,” Henry said.
“Today we already have a positively differentiated strategy in terms of where to play: with fewer commodities and great assets in safer jurisdictions.”
BHP paid around $R2 billion ($688.4 million) to the people affected by the Fundão dam failure up until December last year.
Following Samarco’s receipt of corrective operating licence in October last year, works related to the construction of a filtration plant are under way.
BHP stated restart could occur when the filtration system was complete and Samarco had met all safety requirements, subject to final approval by shareholders.
The company lost $US6 million during the December half year due to the Samarco dam failure.
“BHP is in good shape. We have passionate and committed people hungry to perform,” Henry said.
“I intend for BHP to be unquestionably the industry’s best operator: safer, lower cost, more reliable and more productive with our portfolio and capabilities fit for the future. This will drive value and returns.”