|Mining giant BHP's fiscal 2018-19 (July-June) iron ore production hit its recently revised guidance, while metallurgical coal production was slightly below expectations, the company said Wednesday in an annual operations review.
The company's iron ore output from operations in Western Australia was 238 million mt for its share of the assets in the 12-month period, unchanged year on year, while total production was 270 million mt, down 2% over the same period.
The results met guidance of 235 million-239 million mt for BHP's share and 265 million-270 million mt on a 100% basis, which was revised down earlier in the year from 241 million-250 million mt and 273 million-283 million mt respectively in the wake of Tropical Cyclone Veronica.
BHP said it expects production to increase to 242 million-253 million mt for its share in the current 2019-20 fiscal year and to 273 million-286 million mt for total production.
It added it has a maintenance program planned for Port Hedland during the year aimed at improving productivity and aiding in increasing production towards 290 million mt/year on a 100% basis.
Total production in the April-June quarter was 71 million mt, down 1% on year and up 12% on quarter, which saw the run rate - excluding the impact of Veronica - hit the 290 million mt/year target. BHP's share during the quarter was 63 million mt, down 2% on year and up 12% on quarter.
The June quarter results beat the forecasts of both RBC Capital Markets and JP Morgan; RBC had tipped BHP's share at 62 million mt and JP Morgan total production at 68 million mt.
BHP also flagged that a major car dumper maintenance campaign in the current July-September quarter would impact production.
The company reported an average realized iron ore price of $77.74/wet mt FOB for January-June, up 37% on year and up 40% from the previous half-year.
MET COAL PRODUCTION BELOW TARGET
BHP's share of metallurgical coal production, which comes via its Australian Queensland Coal business, was marginally lower on year in fiscal 2018-19 and slightly below guidance, with a similar level expected for the current fiscal year.
BHP's share of metallurgical coal production for fiscal 2018-19 was 42 million mt and total production 75 million mt, both down 1% on year. It missed the guidance range of 43 million-46 million mt for its share and hit the low end of its total production guidance of 75 million-81 million mt. It set guidance for the current fiscal year at 41 million-45 million mt and 73 million-79 million mt respectively.
BHP said production was impacted hit by severe weather events in the March and June quarters and lower wash plant yields in the June quarter. Both the June quarter totals were down 1% on year and on quarter at 12 million mt for BHP's share and 21 million mt for the total.
It has major wash plant shutdowns planned for the current quarter, which will see fiscal 2019-20 production "significantly weighted" to the last three quarters, the company said. BHP said it achieved a hard coking coal price of $201.33/mt over January-June, down 2% on year and up 2% from the previous half; and a weaker coking coal price of $126.46/mt, down 12% on year and down 6% from the previous half.