BHP has hit an iron ore production record in the 2018 financial year, improving its output by 3 per cent.
The Western Australia Iron Ore (WAIO) business in the Pilbara increased production to 238.4Mt through productivity gains and stability across the supply chain, including both rail and port, leading to record production at the Jimblebar and Mining Area C operations.
In the June quarter, BHP produced 63.6Mt, a 10 per cent rise on the previous three months. The company is targeting another production increase in the 2019 financial year, with guidance set at between 241–250Mt.
BHP will launch a program of works in the September quarter to optimise maintenance schedules across its supply chain and improve port reliability and performance. It expects this program will impact production and unit costs.
The iron ore production record was complemented by BHP’s approval of a $US2.9 billion ($3.9 billion) investment in the South Flank project in June. South Flank has been flagged as a replacement for the Yandi mine and is expected to deliver first ore in 2021.
Iron ore was one of five commodities produced by BHP which met or exceeded guidance during the fiscal year, with the metallurgical coal, energy coal, copper and petroleum businesses also performing well.
BHP’s metallurgical coal production was 7 per cent higher to a record 43Mt. In Queensland, the record output was supported by stripping performance, increased truck hours and higher wash-plant utilisation from low-cost de-bottling activities. Record production was achieved at the Peak Downs, Saraji, Caval Ridge, South Walker Creek and Poitrel operations.
The company’s copper production increased by 32 per cent to 1.7Mt, reflecting a full year of output from the Escondida mine in Chile after interruptions due to industrial action in the 2017 financial year.
BHP chief executive officer Andrew Mackenzie said the company delivered a strong finish to the 2018 financial year.
“We further simplified the portfolio with the announced divestment of Cerro Colorado in Chile and Gregory Crinum in Australia and our investment in South Flank supports our ability to supply low cost, high quality products into Asia,” Mackenzie, in the company’s 2018 operational review, said.
“Good prices and our culture of continuous improvement give us positive momentum into the 2019 financial year.”
BHP added it was progressing well with its planned exit from the US onshore petroleum sector, saying it expected to announce one or more transactions for its assets in the coming months.
The company has received bids for these assets and is targeting completion of any transactions by the end of 2018.