BHP says it is on target for 7 per cent volume growth BHP Billiton says it is on track to hit production records in copper and iron ore this financial year, leaving guidance unchanged at the giant Escondida mine it operates in Chile, despite minority partner Rio Tinto yesterday flagging reduced production.
In its first-quarter report on Wednesday, BHP mostly met market expectations in its main product groups of iron ore, petroleum, copper and coal and left 2017-18 production guidance unchanged.
“Our performance in the first quarter keeps us on track to deliver 7 per cent volume growth in the 2018 financial year,” BHP managing director Andrew Mackenzie said.
BHP said September-quarter West Australian iron ore production slipped 3 per cent from a year earlier to 64 million tonnes (including minority partners’ shares), because of maintenance and a June fire at its Mt Whaleback screening plant.
The production was in line with UBS expectations of 64 million tonnes, but down on RBS expectations of 69 million tonnes.
BHP left unchanged its fullyear production guidance of 275 million to 280 million tonnes.
First-quarter copper production rose 14 per cent to 404,000 tonnes, in line with expectations, as the Los Colorados expansion project at Escondida started up. Full-year copper guidance was left unchanged at be- tween 1.655 million tonnes and 1.79 million tonnes, including unchanged guidance of 1.13 to 1.23 million tonnes from Escondida.
But Rio cut calendar-year copper guidance by 55,000 tonnes because of delays to the ramp up of Los Colorados and a change in mine plane at its Kennecott mine.
This may indicate BHP, whose guidance is based around the June financial year, plans to make up any lost Escondida production in the December quarter in the two following quarters.
Overall petroleum production fell 8 per cent on year to 50 million barrels of oil equivalent, with US onshore volumes down 16 per cent to 17 million barrels, due in part to what the company said was natu- ral field decline as well as the impact of Hurricane Harvey in the Gulf of Mexico. For the shale operation, the decline was partially offset by additional wells in the Black Hawk, Permian and Haynesville basins, it said. The miner said work was underway to exit its US onshore oil-and-gas assets.
The production numbers come a day ahead of BHP’s annual meeting of shareholders in London, the first that will be led by Ken MacKenzie since he succeeded Jac Nasser as chairman last month.
Mr MacKenzie, who had been a director at BHP for about a year and previously led packaging company Amcor, took control of the board under the shadow of activist investor Elliott Manage- ment’s calls for sweeping changes, including an exit from US shale activities and a collapsing of its dual UK-Australia listed structure around a primary listing in Sydney. After months of campaigning by the New York hedge fund, BHP in August said it had determined its US onshore oil-and-gas acreage would in time be sold.
In August, BHP recorded a net profit of $US5.89 billion in the 12 months through June, a sharp improvement from a year-earlier loss of $US6.39bn when it absorbed an impairment hit on its onshore US oil-and-gas business and a charge for the fatal 2015 dam failure at the Samarco iron-ore site in Brazil.
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