Iron ore output by BHP (ASX:BHP) softens

Company News

by Lauren Evans

Mining giant BHP (ASX:BHP) reported a softer iron ore output while reassuring investors that the merger with Woodside Petroleum (ASX:WPL) is going ahead. The news was underpinned by the financial year 2022 guidance remaining unchanged.

Iron ore output fell 3 per cent quarter on quarter and 4 per cent year on year at 63.3 million tons due planned major maintenance including car dumper one and the impacts of temporary rail labour shortages which have improved during September 2021.

Oil production grew 2 per cent quarter on quarter and 3 per cent year on year to 27.5 millions of barrels of oil equivalent due to an increased production from Ruby and higher seasonal gas demand at Bass Strait, partially offset by lower production at North West Shelf and natural field decline.

Copper production fell 7 per cent quarter on quarter and 9 per cent year on year to 376.5 kilo tons. This was driven by lower volumes at Olympic Dam due to the commencement of the planned smelter maintenance campaign. This activity was delayed by approximately one month due to the border restrictions from Covid-19.

Metallurgical coal and energy coal production was down 25 per cent and 6 per cent respectively, quarter on quarter. Metallurgical coal output was down partly due to planned maintenance at BHP Mitsubishi Alliance. Energy coal output fell due to lower volumes at NSW Energy Coal due to mining in higher strip ratio areas.

Nickel production fell 21 per cent quarter on quarter to 17.8 kilo tons due to planned maintenance across the supply chain.

Looking ahead, the financial year 2022 guidance remains unchanged which includes iron ore production of 249 to 259 millions tons, copper production of 1,590 to 1,760 kilo tons, and petroleum production of 99 to 106 millions of barrels of oil equivalent. Also, the company have flagged that an update around the merger with Woodside is pencilled for November this year.

Shares in BHP (ASX:BHP) are trading 1.5 per cent lower $38.60. 

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