Introduction
BHP’s September quarter witnessed copper taking the limelight due to the culmination of the A$9.6 billion OZ Minerals acquisition. This boost overshadowed other commodities that saw little change during BHP's extensive maintenance activities across its Australian sites.
A Remarkable Quarter for Copper
Concluding the OZ deal on May 2, BHP recorded an 11% increase in copper production, reaching 457,000t for the September quarter. This was a jump from 410,000t on a year-to-year basis. While Escondida and Pampa Norte operations in South America took the lead, South Australian mines, in conjunction with the traditional Olympic Dam operation, contributed a substantial 44% increase in metal - a net increment of 23,000t. This surge was propelled by a record development at Carrapateena and peak production levels at Olympic Dam since FY 2015.
Future Prospects for Carrapateena and Olympic Dam
With the anticipated inauguration of the second crusher by March 2024, Carrapateena's output is set to grow. Additionally, Olympic Dam showcased impressive gold production figures, setting records for the second time in the last three quarters. Ongoing exploration drilling beneath the Olympic Dam ore body adds promise, with eight rigs at the site and another 10 at Oak Dam.
Iron Ore: A Steady Contender
Iron ore production decreased marginally by 3%, settling at 63Mt. The average price achieved also saw a minor 2% dip to US$98.04/t, primarily driven by BHP’s efficient mines in Western Australia. The decreased production is attributed to rail system upgrades, track maintenance, and ongoing operations at the Central Pilbara hub. Despite these challenges, the South Flank project remains on track to attain its full production capability by the end of FY24.
NickelWest Production: A Momentary Dip
Experiencing a 2% decrease in production (20,200t), NickelWest faced challenges due to intensified stripping activity at Mt Keith. However, a refinery halt planned for this month has been rescheduled to February 2024, forecasting a consistent nickel production for the upcoming months.
Coal: A Game of Ups and Downs
BHP's coal operations saw varied results. While metallurgical coal production descended by 16% to 5.6Mt, thermal coal production witnessed a 38% leap to 3.6Mt. Metallurgical coal faced obstacles like maintenance activities, stoppages at Peak Downs, and other factors. However, these setbacks were somewhat balanced by increased truck productivity and favorable weather in Queensland. On the flip side, energy coal profited from the latter two advantages.
Outlook for BHP
Having invested significantly in maintenance across Australia, BHP is confident in meeting its annual production and cost guidance. Over the past year, BHP shares fluctuated between $36.93 and $50.21, with the latest trading value being $45.57, positioning the company's market cap at $231 billion.
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