PERTH (miningweekly.com) – Diversified miner BHP has reported a fall in production across the majority of its commodity portfolios, apart from petroleum, during the three months to September.
“BHP’s operations delivered reliably during the first quarter and we completed planned major maintenance activities across a number of our assets. We continue to skilfully navigate the ongoing challenges of Covid-19,” said CEO Mike Henry.
“We progressed the ramp-up of production of high quality iron-ore at South Flank and copper from the Spence growth option, and we delivered first nickel sulphate from our new plant at Kwinana.
“We sanctioned the Jansen Stage 1 potash project in Canada, and made a series of targeted investments in copper and nickel exploration in Australia and Canada. These are aligned with our efforts to increase our exposure to future facing commodities and to position the portfolio to continue to deliver attractive returns and long-term value to shareholders.”
Iron-ore production for the September quarter was down 3% on the June quarter, to 63.3-million tonnes, with the lower volumes reflecting planned major maintenance and the impacts of temporary rail labour shortages owing to Covid-related border restrictions.
Petroleum production for the September quarter was up 2% on the previous quarter, with higher volumes owing to increased production from the Ruby operation, and higher seasonal gas demand at Bass Strait, which was partially offset by lower production at the North West Shelf and natural field decline.
BHP in August struck a deal with oil and gas producer Woodside to combine their respective oil and gas portfolios through a stock merger.
The proposed merger would create the largest energy company listed on the ASX, with a global top 10 position in the liquefied natural gas industry by production, with the merged entity having delivered some 200-million barrels of oil equivalent in the 2021 financial year.
Full transaction documents are expected in November, BHP said on Tuesday.
Following receipt of all approvals, the merger is expected to be completed in the second quarter of the 2022 calendar year with an effective date of July 2021.
Meanwhile, copper production in the September quarter was down 7% on the June quarter, to 376 500 t, with lower volumes at Olympic Dam reported, owing to the start of planned smelter maintenance.
Metallurgical coal production volumes were down 25% on the June quarter, to 8.9-million tonnes, owing to planned maintenance, a planned longwall move at the Broadmeadow mine, and mining higher strip ratio areas.
Energy coal production was down 6% to 4.2-million tonnes, as lower volumes were reported from the New South Wales operations, owing to mining in higher strip ratio areas. This was partially offset by increased stripping enabled by the continued improvement in underlying truck productivity.
Meanwhile, planned maintenance also resulted in nickel production for the September quarter declining by 21% on the June quarter, to reach 17 800 t.
BHP has maintained production and cost guidance for the financial year, despite the fall in production.
Iron-ore production expectations have remained unchanged at between 249-million and 259-million tonnes, while petroleum production is expected to reach between 99-million and 106-million barrels of oil equivalent. Copper production has been targeted at between 1.59-million and 1.76-million tonnes, with nickel production targeted at between 85 000 t and 95 000 t.
Energy coal production for the full 2021 is expected to reach between 13-million and 15-million tonnes, with metallurgical coal production targeted for 70-million to 78-million tonnes.
At the end of the September 2021 quarter, BHP had four major projects under development, including the Mad Dog Phase 2 and Shenzi North petroleum developments, the Jensen potash mine shaft and the Jensen Stage 1 project. The four projects have a combined budget of $11.2-billion over the life of the projects.