Spence Operation Reports An Increase In Copper Production
AUSTRALIA - BHP Chief Executive Officer, Mike Henry, said, “The first quarter operational performance was highlighted by a 11% uplift in copper production from the previous year. After completing a typically busy quarter of planned maintenance particularly at our Australian assets, we are on track to achieve full year production and unit cost guidance. BMA in particular was impacted by planned maintenance, an extended longwall move and low opening inventory following drawdowns in the prior year.
Jansen Stage 1 in Canada is approximately one-third complete after a productive summer. In South Australia, we saw strong operational performance in the first full quarter of production for the new province, as we bring our copper assets together and progress further exploration drilling.
The FY24 production guidance remains unchanged. Copper production increased 11%, including record quarterly production at Spence. BMA production was lower due to maintenance, an extended longwall move and low inventory. We also executed major planned maintenance across our Australian business.
In September, BHP recognised the shipment of 3 Bt of highquality iron ore to China. Since its initial investment over 30 years ago to the end of FY23, WAIO has delivered 15% average annual returns and, over the past decade, has increased production by >50% and lowered costs by >30%. The Company saw strong underlying operational performance in the first full quarter of production from the newly-integrated Copper South Australia, while our Jansen Stage 1 project remains on budget and on track to deliver first production by the end of CY26 (32% complete). Total copper production increased by 11% to 457 kt. Guidance for FY24 remains unchanged at between 1,720 and 1,910 kt."
At the Escondida increased production was primarily due to higher concentrator feed grade of 0.85%, compared to 0.83% in the September 2022 quarter. Concentrator feed grade is expected to be between 0.85% and 0.90% during FY24. Guidance for FY24 remains unchanged at between 1,080 and 1,180 kt, with production expected to be weighted towards the second half of the year. Escondida successfully completed negotiations for a new collective agreement with the Union N°2 of Supervisors, effective for 36 months from 1 October 2023.
Production at Spence increased 19% to a quarterly record of 69 kt, largely as a result of improved concentrator performance and recoveries. The concentrator plant modifications, which commenced in August 2022, are now expected to be completed in FY24. Guidance for Spence remains unchanged at between 210 and 250 kt for FY24, subject to the remediation of the previously identified anomalies in the Spence Tailings Storage Facility.
Cerro Colorado production was 26% lower at 9 kt as it transitions towards closure by the end of December 2023. Production for H1 FY24 is now expected to be ~11 kt, up from a previous estimate of ~9 kt.
South Australia Copper production increased due to the additional 23 kt from Prominent Hill and Carrapateena. Integration of the Olympic Dam, Prominent Hill and Carrapateena assets has gone well, with strong operational performance and continued focus on safe and reliable production, in particular at Olympic Dam (record material mined since FY15) and Carrapateena (record development metres achieved in September). Planned maintenance was completed across the province. In addition, the Company upgraded a conveyor at Carrapateena, ahead of the planned commissioning of Crusher 2 in Q3 FY24. Olympic Dam also delivered record gold production (for the second time in three quarters) and gold sales in the quarter. Production guidance remains unchanged at between 310 and 340 kt for FY24. Exploration drilling continued beneath the Olympic Dam ore body with eight active drill rigs and at Oak Dam with 10 operating drill rigs.
The Antamina copper production decreased by 12% to 33 kt reflecting planned lower copper feed grades. Zinc production was 9% higher at 36 kt, reflecting higher grades. Copper guidance of 120 to 140 kt and zinc guidance of between 85 and 105 kt remains unchanged for FY24. Carajás produced 1.2 kt of copper and 0.8 troy koz of gold. Operations were suspended in August due to a geotechnical event, and are expected to recommence in Q2 FY24. Total iron ore production decreased by 3% to 63 Mt. Guidance for FY24 remains unchanged at between 254 and 264.5 Mt.
Production was lower due to tie-in activity for the Rail Technology Programme (RTP1), the ongoing ramp up and maintenance at the Central Pilbara hub (South Flank and Mining Area C), and the timing of track renewal maintenance. South Flank remains on track to ramp up to full production capacity of 80 Mtpa (100% basis) by the end of FY24. The planned tie-in of the Port Debottlenecking Project (PDP1) continues to progress and remains on track to be completed in CY24. Guidance for FY24 remains unchanged at between 250 and 260 Mt (282 and 294 Mt on a 100% basis).
The Company is building inventory at the mines while we complete planned maintenance and with South Flank continuing to ramp up, volumes are expected to be weighted to the second half. Production increased as a result of higher concentrator throughput. Guidance for FY24 remains unchanged at between 4 and 4.5 Mt Lower production was due to planned wash plant maintenance at Goonyella, mining in higher strip ratio areas, an extended longwall move at Broadmeadow, and a stoppage at Peak Downs. This was partially offset by strong underlying truck productivity and favourable weather conditions. BMA also opened the period with low inventory levels compared with an inventory drawdown in the prior year due to wet weather.
Guidance for FY24 remains unchanged at between 28 and 31 Mt (56 and 62 Mt on a 100% basis). Planned wash plant maintenance at Peak Downs and Caval Ridge and the ramp up of
Broadmeadow from the longwall move will continue into Q2. Once completed, we expect underlying operating performance to deliver increased production in the second half.
In February 2023, we announced our intention to pursue options to divest the Daunia and Blackwater mines together with our joint venture partner Mitsubishi Development Pty Ltd. BHP confirms that Whitehaven Coal has been selected as the preferred bidder in the divestment process.
Production increased due to favourable weather conditions and eased labour constraints, which enabled record annualised truck hours for the quarter. This was partially offset by planned wash plant maintenance completed in August. Guidance for FY24 remains unchanged at between 13 and 15 Mt. On 6 September 2023, the NSW Government announced a 2.6% point increase in coal royalties (from 8.2% to 10.8% for open cut mines), which will become effective from 1 July 2024, coinciding with the end of the legislated period for the domestic reservation policy. The Company has submitted a consent modification to mine beyond FY26 to closure in FY30, and will take into consideration the increase to NSW royalties in the plans for closure.
At Mt Keith mining production decreased marginally in line with higher stripping activity operations. Guidance remains unchanged at between 77 and 87 kt for FY24. The refinery shutdown planned for October 2023 will now largely be completed in February 2024, and as a result production is expected to be relatively flat across the remainder of the year.
For the quarter Copper Iron ore had strong underlying operational performance, including record quarterly production at Spence, was offset by planned maintenance across Copper South Australia and lower concentrator and stacking grades at Escondida.
Lower production at WAIO as a result of planned equipment maintenance and the ongoing ramp-up of the Central Pilbara hub, partially offset by favourable weather following Tropical Cyclone Ilsa in the prior quarter.
Metallurgical coal Energy coal for the quarter reported the low opening inventory position following drawdowns in Q4 FY23, along with planned wash plant maintenance at Blackwater and Goonyella, a higher strip ratio, a longer than planned longwall move at Broadmeadow and an unexpected stoppage at Peak Downs resulted in lower volumes at BMA. Lower volumes at NSWEC reflected planned wash plant maintenance, and a focus on additional stripping volumes which resulted in higher strip ratios.
The Company reported Nickel lower volumes in line with higher stripping activity at Mt Keith in the quarter.
BHP is a As a world-leading resources company. The Company is focused on the resources the world needs to grow and decarbonise. Copper for renewable energy. Nickel for electric vehicles. Potash for sustainable farming. Iron ore and metallurgical coal for the steel needed for global infrastructure and the energy transition.