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BHP publishes its operational review

Published by , Assistant Editor
Global Mining Review,


BHP CEO, Andrew Mackenzie, said: “During the March 2019 quarter, we had a strong operational performance despite weather impacts across Australia and Chile. We approved Atlantis Phase 3 and now have five major projects under development. Those projects, our work on transformation, technology and culture, and our successful petroleum and copper exploration and appraisal programmes will grow value and returns for years to come.”

Copper

Total copper production decreased by 3% to 1.245 million t. Guidance for the 2019 financial year remains unchanged at between 1.645 million and 1.74 million t. Escondida copper production decreased by 6% to 848 000 t as expected lower copper grades were partly offset by record concentrator throughput. Production guidance remains unchanged at between 1.12 million and 1.18 million t for the 2019 financial year, with volumes expected to be towards the lower end of the range. Pampa Norte copper production decreased by 11% to 172 000 t and reflects planned maintenance and a production outage at Spence following a fire at the electro-winning plant in September 2018, and the impact of heavy rainfall in northern Chile in February 2019 at both Spence and Cerro Colorado.

This was partially offset by record ore milled at both operations after implementing maintenance improvement initiatives. Production guidance at Spence and Cerro Colorado remains unchanged for the 2019 financial year, at between 160 -175 000 t and 60 - 70 000 t respectively. Olympic Dam copper production increased by 22% to 115 000 t as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018. Following completion of the acid plant remediation works, surface operations ramped up between October 2018 and February 2019. Production guidance remains unchanged at between 170 - 180 000 t for the 2019 financial year, with volumes expected to be towards the lower end of the guidance range. Antamina copper production increased by five per cent to 110 000 t due to higher head grades. Production guidance for the 2019 financial year remains unchanged at approximately 135 000 t for copper and approximately 85 000 t for zinc.

Iron ore

Total iron ore production was broadly unchanged at 175 million t (198 million t on a 100% basis). Production guidance for the 2019 financial year has been reduced to between 235 - 239 million t, or 265 - 270 millon t on a 100% basis, reflecting a 6 - 8 million t impact from Tropical Cyclone Veronica. As a result, full year unit costs are now expected to be below US$15/t, an increase from previous guidance of less than US$14/t, due to the lower volumes, direct costs of remediation, increased demurrage, rehandle to manage stockyards and opportune maintenance at the mines during port downtime. In addition, private royalties are also expected to be higher as a function of higher iron ore prices. At WAIO, volumes reflected record production at Jimblebar and the impact from the Mt Whaleback fire in the prior period. This was offset by the impacts of planned maintenance in the September 2018 quarter, a train derailment on 5 November 2018 and Tropical Cyclone Veronica in March 2019.

While BHP’s facilities did not sustain major damage as a result of the cyclone, the port ramp up was slowed by localised flooding, processing wet material and equipment assessments. Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.

Metallurgical coal

Metallurgical coal production was broadly flat at 31 million t (54 million t on a 100% basis). Guidance for the 2019 financial year remains unchanged at between 43 - 46 million t (75 and 81 million t on a 100% basis). At Queensland Coal, increased yields at South Walker Creek and higher wash-plant throughput at Poitrel following the purchase of the Red Mountain processing facility supported record production at BMC. Despite record stripping, BMA’s production decreased slightly due to the scheduled longwall move at Broadmeadow in the December 2018 quarter and unfavourable weather impacts in the March 2019 quarter. On 27 March 2019, BMA completed the sale of the Gregory Crinum mine to Sojitz Corp.

Energy coal

Energy coal production was broadly flat at 20 million t. Guidance for the 2019 financial year remains unchanged at approximately 28 - 29 million t. New South Wales Energy Coal production increased 5% supported by record stripping performance. Production guidance remains unchanged at between 18 - 19 million t for the 2019 financial year. However, following optimisation of the mine plan through the construction of Multiple Elevated Roadways (MERs) which will reduce future cycle times, the focus on higher quality products and challenges with labour hire attraction and retention, unit costs for New South Wales energy coal are now expected to be approximately US$51/t, an increase from previous guidance of between US$43 and US$48/t. Ongoing labour hire challenges are being addressed, including through the initial deployment of BHP Operations Services in the June 2019 quarter. Cerrejón production decreased by 8% due to adverse weather and its impacts on mine sequencing. Production guidance remains unchanged at approximately 10 million t for the 2019 financial year.

Read the article online at: https://www.globalminingreview.com/exploration-development/17042019/bhp-publishes-its-operational-review/

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Australian mining news