BHP expects major economic impact of coronavirus still to come

The Jimblebar mine. Image: BHP

BHP has tipped that major economies such as the United States, Europe and India will remain dramatically impacted by coronavirus in the June quarter.

This is despite China showing early indications of economic recovery.

The majority of heavy industrial activity restarted in China at the end of March, easing the impact on Australian commodity exports.

Despite the impact of coronavirus, BHP has kept its copper production unchanged and in line with last year and record production achieved at Western Australia Iron Ore (WAIO) and Caval Ridge coal mine.

Record iron ore production at WAIO was reflective of BHP mining 60,030 tonnes at the Jimblebar mine, amid weather interruptions from Tropical Cyclone Damien during early February.

At Caval Ridge, BHP Mitsubishi Alliance (BMA) produced 1.03 million tonnes of coal during March, contributing to the company’s total production of 13.7 million for March.

For copper, BHP experienced a 7 per cent increase since the December 2019 quarter, producing a total of 425,000 tonnes across its worldwide operations.

This included 38,000 tonnes at the Olympic Dam mine in South Australia, despite unplanned downtime at the smelter.

BHP has maintained strong performances across its Australian operations by implementing strict measures against the coronavirus.

The mining giant has confirmed that only a small number of its 72,000 strong workforce have tested positive for the virus, all of whom are recovering well.

BHP chief executive officer Mike Henry said the company continued to work closely with relevant authorities and medical experts to conduct strict travel and hygiene measures.

“The commitment of people across BHP and our financial strength has enabled us to continue to safely operate and supply our customers with the critical resources they require and to continue to provide jobs and economic activity both locally and around the world,” Henry said.

“Our business continuity plans have been effective and our operations have continued to perform well, thanks to the effort of our employees, contractors and suppliers.

“While demand in China has strengthened in recent weeks, we expect other major economies to contract sharply in the June 2020 quarter.

“The situation remains fluid however, with our strong financial position and low-cost operations, our business is resilient, with capacity to generate solid cash flow through this period and emerge well placed as the global economy recovers.”

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