BHP’s Olympic Dam copper output up, but below forecast on outages
BHP’s FY19 production was mixed across commodities, but the global miner is expecting better results this financial year.
BHP produced more copper in the past financial year at its Olympic Dam operations in South Australia, but the results fell short of its expectations due to unplanned outages.
Copper production at Olympic Dam increased by 17 per cent to 160,000 tonnes to the end of June 30, the mining giant said in its full year update to investors. This was lower than its production guidance of between 170,000 and 180,000 tonnes for the 2019 financial year.
An unplanned acid plant outage in August 2018 and two minor production outages in May 2019 relating to the smelter and to the refinery crane impacted on production. However, underground operations were continuing to perform well, with copper production expected to increase to between 180,000 and 205,000 tonnes in the 2020 financial year. While the guidance reflects improved operational performance, it also takes into account planned maintenance related to the $130 million replacement of the refinery crane in the March 2020 quarter. The lower numbers at Olympic Dam also dented the overall strong performance by BHP’s three copper operations in Chile. Total group copper production came in at 1.69 million tonnes to the end of June, four per cent lower than FY18.
The group has progressed the second phase of exploration at Oak Dam, with 10 further drill holes. Results are currently being evaluated and interpreted.
BHP also reported a rare fall in full-year iron ore exports following a major train accident and wild weather but flagged they are on track to hit a new record in the year ahead. It produced 270 million tonnes of the key steel making ingredient in the year to June, down from 275 million tonnes in 2017-18. It followed the miner’s Pilbara operations in WA being interrupted by a runaway train derailment in November and Cyclone Veronica in March.
The fall in annual production was the first in at least 15 years. But BHP has forecast production to rise to 273 million to 286 million tonnes this financial year, which will be a new record for the group.
Overall annual production, including across its petroleum and metallurgical coal operations, was broadly in line with the strong results in FY18.
“We finished the 2019 financial year with an 11 per cent increase in quarterly production, driven by strong operational performances across our portfolio, including annual production records at a number of our petroleum, copper, iron ore and metallurgical coal operations,” chief executive Andrew Mackenzie, pictured, said.
“Our exploration program delivered encouraging results, with seven out of nine petroleum wells successful and further evaluation of the Oak Dam copper prospect underway. Strong underlying performance puts us in a position to deliver higher volumes in the 2020 financial year,” he said.