BHP Group, the world's largest mining company, has released its first-quarter production results. While there was an increase in copper and energy coal output compared to the same period last year, iron ore, steelmaking coal, and nickel production experienced a decline. Here are some key details from the company's quarterly operations report.
BMA Joint Venture
Production at the BHP Mitsubishi Alliance (BMA) joint venture was lower due to several factors. Planned maintenance work at the Goonyella wash plant, mining in areas with higher strip ratios, an extended longwall move at Broadmeadow, and a temporary stoppage at Peak Downs all contributed to the decrease. However, this decline was partially offset by strong truck productivity and favorable weather conditions. BMA also began the quarter with lower inventory levels compared to the previous year's inventory drawdown caused by wet weather.
The guidance for the full fiscal year of 2024 remains unchanged, with an estimated production range of 28 to 31 million metric tons (56 to 62 million tons on a 100% basis). Wash plant maintenance at Peak Downs and Caval Ridge, along with the ramp-up of Broadmeadow following the longwall move, will continue into the second quarter. Once these activities are completed, BMA anticipates an increase in production during the second half of the year.
Escondida Copper Mine
The Escondida copper mine saw increased production primarily due to a higher concentrator feed grade of 0.85% compared to 0.83% in the September 2022 quarter. BHP Group expects the concentrator feed grade to range between 0.85% and 0.90% throughout fiscal year 2024. The guidance for the year remains unchanged, with estimated production ranging from 1.08 to 1.18 million tons. Production is expected to be weighted towards the second half of the year.
Copper South Australia Business
The production has witnessed an increase, primarily due to the additional contribution of 23,000 tons from the Prominent Hill and Carrapateena assets. The integration of the Olympic Dam, Prominent Hill, and Carrapateena assets has been successful, leading to strong operational performance and a consistent focus on safe and reliable production. Notably, Olympic Dam has achieved a record material mined since FY15, while Carrapateena has achieved record development meters in September.
The planned maintenance activities have been successfully conducted across the province. Furthermore, a conveyor upgrade at Carrapateena has been completed in preparation for the planned commissioning of Crusher 2 in Q3 FY24. Olympic Dam has also achieved record gold production for the second time in three quarters, along with notable gold sales in the quarter.
Western Australia Iron Ore Operations
The production at the Western Australia Iron Ore operations experienced a decline due to tie-in activity for the Rail Technology Programme (RTP1). Additionally, ongoing ramp-up and maintenance at the Central Pilbara hub (South Flank and Mining Area C), combined with timing issues related to track renewal maintenance, further contributed to the decrease in production.
South Flank is progressing as planned and is expected to reach its full production capacity of 80 million tons per annum (100% basis) by the end of FY24. The implementation of the Port Debottlenecking Project (PDP1) is also advancing according to schedule and is set to be completed in CY24. As we continue planned maintenance activities and with South Flank's ongoing ramp-up, volumes are anticipated to be weighted towards the second half, while we build inventory at the mines.