BHP trumps rivals with robust iron ore production
BHP Group (BHP) has reported a robust increase in production across the board, navigating the challenging headwinds of Chinese lockdowns and reduced demand with more ease than its rivals.
The miner has reported rising output for iron ore and copper over the past quarter, despite China sticking firmly to its zero Covid policy and concerns of a global recession.
In the three months to the end of September, iron ore production rose three per cent year-on-year to 65.1, tonnes.
Meanwhile, copper output has soared nine per cent year-on-year to 410,000 tonnes.
BHP has also left its annual output guidance unchanged.
It expects iron ore production between 249-260m tonnes and copper production between 1.6-1.8m tonnes.
Nickel production rose while BHP said it wants potash project Jansen in Canada to be in production in 2026.
“We expect global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability” said chief executive Mike Henry.
The higher production rates comes despite an 18 per cent fall in spot prices of iron ore over the September quarter, hampering economic activity and slashing demand for iron ore.
The decline in prices caused rival Rio Tinto to lower its annual iron ore shipments forecast after quarterly iron ore deliveries fell.
By contrast, BHP revealed it had a lower impact from Covid-19 with strong supply chain performance over the September quarter from its Western Australia projects.
Nevertheless, mining firms operating in Australia did suffer shortages of skilled labour in recent months, from both border closures and worker absenteeism due to COVID-19.
The worker shortage slowed performance at its coal projects in New South Wales, which were already hit by floods.
New South Wales energy coal production fell 38 production in the September quarter.
Despite the challenges, BHP revealed it was working on bringing forward first production from its potash project in Canada.
It is targeting first production in 2026.