BHP 2Q Output Mostly Higher, Cautions on Costs

By Rhiannon Hoyle

BHP Group Ltd. on Thursday reported a sharp increase in second-quarter production of steelmaking coal and copper, as well as a small lift in iron-ore output.

The world's largest miner by market value said it continued to grapple with cost pressures, however, raising full-year cost expectations for its coal-mining operations

BHP said it produced 7.0 million metric tons of metallurgical coal in the three months through December, up 10% on a year ago, and 424,300 tons of copper, up 16%.

Second-quarter iron-ore output totaled 66.9 million tons, up 1% on year. However, production of energy coal and nickel was weaker.

"WA [Western Australia] Iron Ore delivered record production for the half year through strong supply chain performance, supported by the ongoing ramp-up at South Flank," said Chief Executive Mike Henry. "Copper production at Escondida rose despite road blockades in Chile in the December quarter and the Spence Growth Option continued to ramp up, while Olympic Dam's ongoing smelter performance saw near-record material processing and record gold production," he added.

While coal-mining operations continued to face headwinds from heavy rainfall, metallurgical-coal output benefited from an improvement in truck productivity, particularly following the rollout of more autonomous trucks, and reduced labor constraints.

Still, BHP said unit cost guidance for its metallurgical and thermal coal operations had increased, largely because of significant wet weather and inflationary pressures.

The company sounded an optimistic tone on the outlook for Chinese commodity demand.

"BHP believes China will be a stabilizing force when it comes to commodity demand in the 2023 calendar year, with OECD nations experiencing economic headwinds," Mr. Henry said. The miner expects China to surpass one billion tons of steel production for a fifth consecutive year, he said.

Write to Rhiannon Hoyle at [e-mail]

(END) Dow Jones Newswires

January 18, 2023 17:17 ET (22:17 GMT)

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