The year ending June 30 saw BHP (ASX:BHP) hit new highs in iron ore and copper, ending 2023-24 with record levels of output for both metals.
BHP’s production and sales report for June came just a week after it revealed the expected decision to close its entire WA Nickel business amid a stagnant market.
It was the best result in copper in 15 years, thanks to the $US9.6 billion takeover of Oz Minerals in 2022-23, which added more than 200,000 tonnes of metal annually to its output, with the promise of more.
Escondida in Chile had a significant year, producing over 1.8 million tonnes of copper in 2023-24, solidifying BHP as the largest global producer of the metal.
WA iron ore also performed well, with a new mine adding extra tonnes and resolving problems at Port Hedland.
BHP reported a 2% rise in iron ore production from its Pilbara operations to 287 million tonnes.
This increase came from the South Flank project reaching its annual production target of 80 million tonnes, and from improved shipping capacity at Port Hedland, enhancing logistical efficiencies.
BHP expects only a marginal rise in full-year production from its WA Iron Ore business this year, between 255 and 265.5 million tonnes, with the 100% basis forecast unchanged at 282 to 294 million tonnes (including shareholders in various mines).
Copper production soared 9% to 1.87 million tonnes, led by operations in South Australia, benefitting from the additional tonnes following the $9.6 billion takeover of OZ Minerals in May 2023.
The upper end of guidance for this financial year would take production to just over 2 million tonnes, weighted towards the second half of the year.
With the sale of two central Queensland coking coal mines (Daunia and Blackwater to Whitehaven Coal), coking coal production and sales from BMA (the JV with Mitsubishi) will decline this financial year, but BHP plans to increase output back to the presale range of 43 to 45 million tonnes.
Output for the year ending June was 44.7 million tonnes, with Blackwater and Daunia producing 5 million tonnes of coking coal.
CEO Mike Henry stated that the miner ended the year with a strong fourth quarter, achieving several production records and meeting production and unit cost guidance for all commodities.
“WA Iron Ore continued its strong performance, delivering a second consecutive year of record production on the back of ongoing incremental improvements along its supply chain as we progress toward our medium-term goal of increasing production to greater than 305mtpa,” Mr. Henry said.
“We achieved a strong performance across our copper business globally, underpinned by the highest production in four years at Escondida and another year of record production from Spence in Chile.
“The successful integration at Copper South Australia has delivered additional production tonnes and exceeded the annualised synergies planned at the time of the OZL acquisition.”
Ironically, BHP’s WA nickel assets increased full-year production to 81,600 tonnes, up 2%.
However, these assets are now starting to be placed on care and maintenance due to a flood of cheap, low-quality supply from Indonesian/Chinese mines, which has kept a lid on world prices and met Chinese demand.