PERTH (miningweekly.com) – Diversified major BHP has reported a mixed bag of results for the nine months ending March and has adjusted the production outlook for a number of its commodities.

“Our Western Australian iron-ore business achieved record production, and total copper output for the group was up for the nine months, while metallurgical coal volumes were down slightly due to significant wet weather,” said CEO Mike Henry on Friday.

“Overall copper production for the year remains on track, however we’ve reduced production guidance at Escondida and also at Nickel West. We continue to focus on safety, productivity and costs as we navigate ongoing challenges and inflationary impacts.”

In the year-to-date, BHP’s share of iron-ore production reached a record 191.7-million tonnes, with the March quarter contributing 59.8-million tonnes, with the Western Australian iron-ore assets delivering a total of 212.6-million tonnes in the nine months under review, and 66.2-million tonnes in the March quarter.

BHP has maintained its iron-ore production guidance at between 249-million to 260-million tonnes in the full year.

The company reported that the production ramp up at South Flank remains on track to reach full capacity of 80-million tonnes a year by the end of the 2024 financial year.

Meanwhile, BHP’s share of Samarco production increased by 7% cent to 3.3-million tonnes during the nine-months to March, reflecting strong concentrator performance. Production for the 2023 financial year is expected to be at the top of the guidance range of between 3-million and 4-million tonnes.

Copper production in the nine months to March increased by 12% on the previous corresponding period, to 1.24-million tonnes, with the 405 900 t of copper produced in the March quarter.

BHP told shareholders on Friday that the Escondida operation, in Chile, had reported a 7% increase in production to 762 000 t, primarily due to higher concentrator feed grade of 0.79 per cent, compared to 0.74% in the nine months to March 2022. The positive impact of higher grade was partially offset by the impact of road blockades across Chile in the December quarter, which reduced availability of some key mine supplies.

Production guidance at Escondida has been lowered to between 1.05-million and 1.080-million tonnes for the full year, from between 1.08-million and 1.18-million tonnes as BHp managed geotechnical risks at the mine, which has led to a resequencing of the mine plan resulting in lower volumes of mine ore and increased processing of lower grade stockpiles.

Pampa Norte copper production increased by eight per cent to 220 000 t as a result of higher concentrator throughput at the Spence Growth Option (SGO). Full year production is expected to be towards the upper end of the guidance range of between 240 000 t and 290 000 t.

At Olympic Dam, copper production reached 156 000 t, an increase of 88% on the previous nine months, primarily as a result of the major smelter maintenance campaign across the December 2021 and March 2022 quarters. Continued strong concentrator and smelter performance has delivered record concentrate smelted for the nine month period. The March 2023 quarter was also a record gold production quarter, contributing to a record nine months for both gold and silver production following the implementation of debottlenecking initiatives in the prior year. Copper production at Olympic Dam is expected to be towards the upper end of the guidance range for the 2023 financial year at between 195 000 t and 215 000 t.

Antamina copper production decreased by eight per cent to 102 000 t reflecting expected lower copper feed grades, partially offset by higher throughput. Zinc production was 10% lower at 86 000 t reflecting expected lower zinc feed grades, partially offset by higher throughput. Production guidance remains unchanged for the 2023 financial year, with copper production of between 120 000 t and 140 000 t, and zinc production of between 115 000 t and 135 000 t.

Meanwhile, BHP on Friday reported that its share of metallurgical coal production for the nine months under review had declined by 2% to 20.5-million tonnes, with the March quarter contributing 6.9-million tonnes to production, down 13% on the previous corresponding period.

The decline in production resulted from significant wet weather conditions, and this was partly offset by continued improvement in underlying truck productivity, in particular at Goonyella and Daunia following the completion of their autonomous fleet transitions, as well as reduced Covid-19 related labour constraints. In the nine months to March 2023, BMA has experienced the highest level of rainfall in the past ten years, which has impacted production.

Full year metallurgical coal production is expected to be at the bottom of the guidance range of between 29-million and 32-million tonnes, with further wet weather in the June 2023 quarter posing a risk to this outcome.

Energy coal production in the nine-months to March reached 9.4-million tonnes, and in the three months to March reached 3.9-million tonnes. The year-to-date production was down 4% on the previous corresponding period, while the quarterly results were up by 53% on the previous corresponding quarter.

BHP told shareholders that the New South Wales Energy Coal (NSWEC) production decreased by four per cent to 9-million tonnes reflecting the impacts of the wet weather experienced in the December 2022 half, and the increased proportion of washed coal. This was partially offset by improved stability in labour, particularly reduced absenteeism which impacted stripping performance and mine productivity in the prior period.

Production guidance for the 2023 financial year remains unchanged at between 13-million and 15-million tonnes.

Nickel West production was in line with the prior period at 58 000 t, with the ramp up of the refinery following planned maintenance in the December 2022 quarter offset by the increased proportion of concentrate and matte products.

In March, Nickel West advised one of its third party product providers, Mincor Resources, that it will no longer accept off-specification product containing high levels of arsenic due to the issues with processing this ore. Further, a heavy rain event was experienced at the Mt Keith operations in early April 2023 impacting mine progression. As a result, production guidance for the 2023 financial year has been revised to between 75 000 t and 85 000 t from the previous estimate of between 80 000 t and 90 000 t.

“Last week, Oz Minerals shareholders voted overwhelmingly in favour of BHP’s offer. We are now focused on the safe integration of the two businesses and we look forward to building an internationally competitive copper business in South Australia and incorporating West Musgrave into our nickel options in Western Australia. We are pursuing growth options in copper and nickel globally, we aim to have up to 10 drill rigs on the ground at Oak Dam in South Australia in the next few months and have seen promising results from a potential new copper prospect in Arizona. In Canada, we signed C$260-million in new contracts with Indigenous suppliers in March, and construction of the Jansen potash project is on track,” Henry said on Friday.

“Recent engagements with customers in China and India have reaffirmed our positive outlook for commodity demand, with China’s economic rebound and solid momentum in India’s steelmaking growth helping to offset the impact of slowing growth in the US, Japan and Europe.”