BHP posts record iron output, and takes $650m hit from Samarco dam disaster

Sydney — BHP, the world’s largest miner, says it is on track to sell its US shale assets.

It also reported record levels of iron ore output and a $650m hit from the fatal Samarco dam collapse in Brazil.

The world’s largest miner is seeking to exit the onshore US shale oil and gas business, which it bought in 2011 for $20bn, amid price headwinds.

“Bids have been received and we aim to announce one or more transactions within the coming months, targeting completion of any transactions by the end of the 2018 calendar year,” the Anglo-Australian firm said its annual operational review.

BHP also boosted its iron ore production to record levels for the year to June 30, aided by improved productivity, as major consumer China lifts its demand for higher-quality metals.

Rival Rio Tinto, one of the world’s big four iron ore exporters, on Monday reported a surge in its Australian iron ore production and shipments in the three months to June 30.

BHP last month approved a new $2.9bn mine in resource-rich northwestern Australia to meet Chinese demand, while Rio is exploring the development of a multibillion-dollar project in the same region.

The mining giant said it expected to record a $650m charge from the 2015 Samarco mine failure in Brazil’s Minas Gerais region, which left 19 people dead, for the 2018 financial year.

BHP and Vale, the co-owners of Samarco, last month reached an agreement with Brazilian public authorities to settle a 20-billion real ($5.3bn) civil suit over the tragedy, which was one of the South American nation’s worst environmental disasters.

The companies also established a framework to progress a second 155-billion real claim brought by federal prosecutors in the next two years.

AFP