BHP’s ramp-up of operations at Olympic Dam following a maintenance program has been slower than expected, forcing the miner to lower its copper production guidance at the South Australian mine.
Olympic Dam copper output dropped 18 per cent to 94,700t in the first nine months of the 2018 financial year compared to a year earlier due to planned smelter maintenance in the December half year.
With operations not ramping up at the expected rate since, BHP has lowered its 2018 copper guidance at Olympic Dam to 135,000t from the previous 150,000t target.
The company does, however, expect Olympic Dam operations will return to normal during the June quarter.
Development into Olympic Dam’s higher-grade Southern Mine Area is continuing, meanwhile, with record underground development metres achieved in the March quarter, BHP added in an operational update today.
The miner was able to offset the performance at Olympic Dam with a 64 per cent year-on-year increase in copper production at Escondida in Chile. The nine-month output of 897,000t was supported by the start-up of the Los Colorados extension project last September.
BHP chief executive officer Andrew Mackenzie said the Los Colorados extension project, as well as higher utilisation rates at Pampa Norte in Chile, underpinned strong performance in copper.
“This more than offset the slower than expected ramp-up of Olympic Dam during the quarter following planned smelter maintenance,” Mackenzie said.
The company’s overall copper output for the nine months reached 1.29Mt, a 37 per cent year-on-year increase. Its guidance for the financial year is between 1.7–1.785Mt.
At its iron ore operations, BHP recorded a 2 per cent increase in production to a record 175Mt. However, BHP has reduced its iron ore production guidance for the 2018 financial year to between 236–238Mt because of car dumper reliability issues as it pushed towards record production levels.
In the Pilbara, Western Australia, BHP delivered record output at the Jimblebar and Mining Area C operations, and improved its rail reliability.
“Incremental improvements across out operations from debottlenecking and increased throughout delivered record production in iron ore,” Mackenzie said.
BHP is also continuing to advance its planned exit from the Onshore US shale industry. It is expecting to receive bids for its assets by June and potentially announce deals in the first half of the 2019 financial year.
The company’s petroleum output was 8 per cent lower in the nine months to end-March. In coal, BHP’s metallurgical coal output fell 2 per cent, while thermal coal production was 4 per cent lower.