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TOP NEWS: BHP To Cut 2021 Budget And Expects Europe, US Demand Hit

Tue, 21st Apr 2020 05:55

(Alliance News) - BHP Group PLC on Tuesday reported a rise quarterly iron ore and copper output despite the Covid-19 disruption, but the miner said it will cut its capital and exploration expenditure for the next financial year.

In the nine months ended March 31, iron production was 3% higher in the year to date at 181 million tonnes, rising 7% annually in the third quarter alone. BHP reported "record" production at Western Australia Iron Ore.

Quarterly copper production edged 1% higher annually to 425,000 tonnes, helping year-to-date production rise 5% to 1.3 million tonnes.

BHP said that its timeline at the Spence copper mine in Chile is under review, with first production now expected in the 2021 financial year, following delays due to social distancing measures being imposed.

Elsewhere, metallurgical coal output was 3% lower year-on-year in the nine month period, falling 7% annually in the third quarter alone. Energy coal production slumped 14% in the year to date and 13% in the third quarter.

There were double-digit falls in petroleum production too, dropping by 10% in the year to date and 13% annually in the third quarter.

Nickel output was mixed, climbing 9% year-on-year in the third quarter but down 4% during the nine months.

BHP Chief Executive Officer Mike Henry said, "We have operated safely for the quarter and have achieved another strong operational performance.

"We have delivered strong performance across the portfolio despite the impacts of planned maintenance, natural field decline and wet weather in Australia. Western Australia Iron Ore achieved record year-to-date production, while Escondida production also increased supported by record concentrator throughput. While demand in China has strengthened in recent weeks, we expect other major economies, including the US, Europe and India, to contract sharply in the June 2020 quarter."

For the full-year, iron production guidance is unchanged, copper is under review and nickel has been lowered. At the Queensland Coal mine, part of BHP metallurgical coal operations, output is now expected to be at the lower end of its range. Petroleum output is also tipped at the lower end of the guidance range.

"We have flexibility in our capital and exploration expenditure. We are reviewing our guidance for the 2021 financial year and it will be lower than the current guidance of around USD8 billion. We will provide updated guidance with our full year results," BHP added.

BHP shares were 2.2% lower in Sydney at AUD30.14, about USD18.99, each in late trade.

By Eric Cunha; ericcunha@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.

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