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(Alliance News) - BHP Group Ltd on Thursday reported a mixed production performance for the first half of its financial year and warned of trouble at its nickel and metallurgical coal operations.
In an operational review, the Melbourne-based miner said copper production rose 7.2% to 894,000 tonnes for the six months that ended December 31 from 834,000 tonnes a year earlier.
For the second quarter to December 31, copper output was up 3% to 437,400 tonnes, compared to the same quarter of financial year 2023. This got a boost from high volumes at the Prominent Hill and Carrapateena mines in Australia.
But production was 4% lower from 457,000 tonnes in the first quarter of the current year.
BHP kept its full-year copper production guidance at between 1.72 million tonnes and 1.91 million tonnes. In financial 2023, output was 1.7 million tonnes.
Iron ore production for the first half fell 2.3% to 129 million tonnes from 132 million tonnes. Iron ore output in the second quarter also declined on an annual basis, by 2% to 65.8 million tonnes, but rose 4% from 63.0 million tonnes in the first quarter.
For financial 2024, iron ore production guidance remains unchanged at between 254 million tonnes and 264.5 million tonnes, compared to 257.0 million tonnes in financial 2023.
Metallurgical coal production at BHP Mitsubishi Alliance, or BMA, slumped 17% to 11.3 million tonnes in the first half from 13.6 million tonnes a year before. Output for the second quarter alone dropped 18% from a year before to 5.7 million tonnes. However, production rose 2% from 5.6 million tonnes in the first quarter.
BMA is BHP's joint venture with Mitsubishi Development Pty Ltd.
BHP cut sharply its BMA production guidance for financial 2024 to between 23 million and 25 million tonnes from 46 million tonnes and 50 million tonnes forecast previously. In financial 2023, production was 29.0 million tonnes.
This comes after worker from BEP Engineering & Maintenance, a contracting partner to BMA, was killed in a vehicle incident at Saraji mine on Monday.
The mining group said investigations are underway, and it is working with the authorities. Operations at Saraji were suspended and are expected to progressively restart over the coming days.
Turning to energy coal, production at NSW Energy Coal in New South Wales in the first six months surged 36% to 7.5 million tonnes from 5.5 million tonnes a year before.
For the second quarter alone, energy coal output grew 35% to 3.9 million tonnes on an annual basis, and was up 7% from 3.6 million tonnes in the first quarter.
BHP attributed the increase in energy coal production to strong operating performance, as eased labour constraints and improved weather conditions enabled an uplift in truck productivity.
Full-year production guidance is expected to be at the upper end of the range of between 13 million and 15 million tonnes, against 14.2 million tonnes in financial 2023.
Producton at Nickel West in Australia rose 4% to 40,000 tonnes in the first half from 38,000 tonnes a year before, as a result of improved performance, and a shorter shutdown period at the Kalgoorlie Smelter offsetting downtime at the Kwinana Refinery.
Nickel output in the second quarter was up 11% annually to 19,600 tonnes. But production declined 3% from 20,000 tonnes in the first quarter.
BHP said it was evaluating options to mitigate hit from "sharp fall" in nickel prices, with the industry undergoing a number of structural changes and was at a cyclical low in realised pricing.
The annual nickel production forecast remains unchanged at between 77,000 tonnes and 87,000 tonnes, compared to 80,000 tonnes in financial 2023.
BHP said the ongoing construction of the Jansen mine in Canada was progressing. In October last year, the company decided to go ahead with the second phase of a potash mine in Canada in which it is investing more than USD15 billion in total.
In Australia, shares in BHP ended 1.8% lower to AUD45.73 on Thursday.
By Artwell Dlamini, Alliance News reporter
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