SYDNEY, AAP – Global miner BHP has posted record iron ore production for the financial year despite a dip in fourth quarter iron ore output.
Iron ore production for the June quarter totalled 73.3 million tonnes, down four per cent from a year ago, as bad weather, labour shortages and COVID-19 related restrictions affected operations.
The company still managed to lift full year production to 284.1 million tonnes.
“We achieved production records at our Western Australia Iron Ore operations and the Goonyella Riverside metallurgical coal mine in Queensland,” chief executive Mike Henry said.
The strong performance comes at a time iron ore prices have surged due to rising demand from Chinese steel mills and stagnant supply due to mine and port disruptions at key supplier Brazil.
Spot iron ore prices currently trade around US$220 a tonne. Iron ore accounts for roughly two thirds of BHP’s earnings.
BHP said it secured iron ore prices of US$158.17 for the June half year, a 52 per cent jump from those in the first half of the financial year.
It expects iron ore output between 278 Million tonnes and 288 Mt in the current financial year.
However, annual production fell at many of its other divisions.
Annual copper production was down 5 per cent due to the pandemic related logistical challenges in Chile, where BHP expects conditions to remain difficult.
It also posted a 6 per cent decline in petroleum production, while metallurgical coal output fell by 1 per cent and energy coal production was down 17 per cent for the year.
The company has flagged an increase in operating costs by up to US$425 million due to mine closure provisions. It will also write-off up to US$500 million at its Yandi iron ore mine and Bass Strait petroleum operations.
By 1200 AEST, BHP shares were trading 1.7 per cent lower at $49.67 each in a weak Australian market.