17th Jul 2019 06:45
(Alliance News) - BHP Group PLC on Wednesday reported a mixed performance in production for its recently ended financial year, with a drop in copper and iron ore, but a slight rise in petroleum output.
For the year to the end of June, copper production dropped by 4% to 1.7 million tonnes, due to production outages at Olympic Dam in Australia and a lower grade from the Escondida mine in Chile despite a strong performance from BHP's other operations in that country.
For the next financial year ending June 2020, BHP is guiding for copper production of between 1.7 million to 1.8 million tonnes.
Iron ore production for the year was slightly lower at 238.0 million tonnes, compared to 238.4 million the prior year, as record production from the Jimlebar mine in Australia was offset by inventory impacts from the Mount Whaleback mine fire the prior year.
For the 2020 financial year, BHP expects iron ore production to be between 242 million tonnes and 253 million tonnes.
Metallurgical coal output declined 1% year-on-year to 42.4 million tonnes, and energy coal production by 6% to 27.5 million tonnes.
The group is guiding metallurgical coal production for the current year to be between 41 million tonnes to 45 million tonnes, as major wash plant shutdowns are planned in several operations for the quarter to the end of September.
For energy coal production is guided to decrease even further to between 24 million tonnes and 26 million tonnes.
Lastly, total petroleum production increased in the recent financial year by 1% to 121 million barrels, mainly through a rise in natural gas output, reflecting increased tax barrels at Trinidad and Tobago.
However, petroleum for the current financial year is expected to decline in the range of 110 million barrels to 116 million barrels, due to planned maintenance at the Atlantis oil field in Mexico and natural field decline across BHP's portfolio.
BHP said for the 2019 financial year it expects to book an exceptional charge of USD260 million, due to legislative changes in Brazil, prompting the accelerated decommissioning of Samarco's upstream tailings dams, the costs of which Samarco does not have the cash flows to fund.
BHP last month established a Tailings Taskforce to ensure the continued improvement and assurance for its operated tailings storage facilities.
The move comes after over 200 people died in January because a mining dam owned by Vale SA collapsed near the city of Brumadinho, Brazil.
BHP and Brazillian miner Vale are joint venture partners, holding a 50% stake each in Samarco Mineracao SA.
In 2015, another dam administered by BHP, Vale and Samarco collapsed in the city of Mariana in Minas Gerais state, resulting in 19 deaths and forcing hundreds from their homes.
"Our overall production was broadly in line with last year, overcoming the impacts of weather, grade and natural field decline, and unplanned outages in the first half. Our exploration program delivered encouraging results, with seven out of nine petroleum wells successful and further evaluation of the Oak Dam copper prospect underway. Strong underlying performance puts us in a position to deliver higher volumes in the 2020 financial year," said Chief Executive Officer Andrew Mackenzie.
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