We've got news for you.

Register on BusinessLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

Melbourne — BHP group on Tuesday reported full-year iron ore production near the top end of its forecast range, thanks to record output at two mines in Western Australia.

However, the world’s largest listed miner posted a 4% decline in fourth-quarter output, compared with last year, and lower annual production across four of its six divisions.

BHP notched record output at its Jimblebar mine and Mining Area C in the Pilbara region, as robust Chinese demand and supply issues in Brazil propelled iron ore prices.

The high commodity prices are expected to help BHP post bumper full-year profits in August, alongside rivals Rio Tinto and Fortescue Metals.

“Financially they are going to report very well,” said analyst David Lennox of Fat Prophets in Sydney. “We are pleased that they will deliver higher iron ore production into a higher iron ore price and higher nickel into a higher nickel price.”

BHP secured iron ore prices of $158.17 (R2,306) for the June half, double those received for the last financial year.

“Operationally, it’s just satisfactory from our point of view given production of more than half its offerings are on the negative side,” Lennox said.

The global miner produced 284.1-million tonnes of the steelmaking material in Western Australia on a 100% basis in fiscal 2021, and expects output in 2022 between 278-million tonnes and 288-million tonnes. Fourth-quarter output was 72.8-million tonnes, down from 76-million tonnes.

Across other divisions, BHP reported an 11% increase in nickel production for the year.

Production from other divisions fell, including a 5% drop in annual copper production given Covid-19 related logistical challenges in Chile, where BHP expects conditions to remain challenging. It logged a 6% decline in petroleum production, metallurgical coal output fell by 1% and energy coal production fell by 17% for the year.

BHP flagged an increase in operating costs of up to $425m due to mine closure provisions and a write-off of up to $500m due to shorter resource lives at its Yandi iron ore mine and Bass Strait petroleum operations.



Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.