PERTH (miningweekly.com) – Macroeconomic and industry research house Fitch Solutions believes that global miner BHP will benefit from its diversified portfolio of large, long-life and low-cost assets as it continues to outperform its peers in terms of liquidity.
Fitch on Wednesday said that BHP’s strong performance in the 2018 financial year was testament to this, highlighted by the fact that the miner managed to reduce its debt substantially during the fiscal period.
“We believe BHP's tight rein on capital and relentless focus on brownfield assets is a boon to the miner's growth prospects. The company will spend on greenfield exploration of copper and petroleum, but expenditure on this will decrease. This will aid in debt reduction, which has already started playing out with the substantial decline in debt from $16.3-billion in 2017 to $10.9-billion in 2018,” Fitch said in a note to investors.
The research house added that going forward, BHP aims to continue maximising cash flow, reducing debt, and maintaining a tight rein on capital spend.
Furthermore, BHP's further focus on investing in technology to enhance productivity and capital efficiency is also expected to benefit the company in the long term.
In June last year, BHP confirmed the development of the South Flank iron-ore deposit, which will be the miner’s first mega opencut mine that fully embeds cutting edge technology, which will run a fleet of autonomous drills that will be operated from the Perth mining centre and a fleet of 40 autonomous trucks that will have human drivers during the first three years before robots are progressively switched on.
BHP’s autonomous drills at Yandi and Mining Area C have increased productivity and reduced wear and tear maintenance costs. Its fleet of self-driving trucks at Jimblebar has reduced potential safety incidents involving vehicles, increased truck utilisation and reduced haulage costs by about 20%.
Meanwhile, BHP's precision mining project is exploring opportunities to maximise copper output and extend the life of the Escondida mine, in Chile, by using sensor technologies on bulk mining equipment to quickly and accurately analyse copper grades.