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Strong WA performance boosts BHP production

The Australian Federal Court has approved BHP’s $9.6 billion takeover of OZ Minerals in the final step toward completing the acquisition.

BHP has defied the odds by recording a rise in its quarterly iron ore output, aided by better performance from its Western Australian assets and a continued ramp-up at its South Flank project.

The higher production comes despite an 18 per cent fall in spot prices of iron ore over the September period as China repeatedly locked down several major cities as part of its zero-COVID policy, hitting economic activity and demand for iron ore.

Rio Tinto recently tempered its annual iron ore shipments forecast, after quarterly iron ore deliveries fell.

However, BHP said it had lower COVID impacts and strong supply chain performance over the September quarter from its Western Australia projects, despite the shortages of skilled labour from border closures and pandemic-forced worker absenteeism.

The miner produced 72.1 million tonnes of iron ore in its first quarter, a 2 per cent rise. The firm left its annual production and cost guidance unchanged.

Metallurgical coal production reached 6.7mt, which was down 1 per cent on the previous corresponding period, on the back of lower volumes resulting from significant wet weather conditions, the mining of higher strip ratio areas, a planned longwall move at the Broadmeadow operation, and a planned washplant maintenance at the Blackwater, Goonyella and Saraji operations in Queensland.

BHP chief executive officer Mike Henry said the company had started the new financial year strongly, achieving safe and reliable operating performance.

“The first quarter included significant planned major maintenance in Western Australia Iron Ore (WAIO), BHP Mitsubishi Alliance (Queensland), and Olympic Dam (South Australia),” he said.

“Copper production was up nine per cent on the same quarter last year, with strong concentrator throughput at Escondida, Chile, and record quarterly anode production at Olympic Dam. WAIO continued to perform strongly, with production up by 3 per cent relative to the same period last year, and we managed through substantial rainfall and labour constraints in our coal assets with production only down marginally year on year.”

Over the quarter, BHP also took further action to reduce GHG emissions from its operations and support decarbonisation of suppliers and customers. It struck a new agreement to supply the WAIO port facilities with renewable electricity – which is expected to halve GHG emissions from the electricity used – signed an MoU with India’s Tata Steel to collaborate on lower GHG emission steelmaking, and announced a partnership with Pan Pacific Copper to reduce GHG emissions from maritime transportation.

“We expect global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability,” Henry said.

“BHP remains well positioned, with a portfolio and balance sheet to withstand external challenges and a strategy positioned to benefit from the global mega-trends of decarbonisation and electrification.”

Editor of industrial titles and mastheads with Prime Creative Media. Publications include Rail Express and Australian Mining (web content).
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