Future of Nickel West division to come in time for BHP FY results
The nickel price has recovered, but it still may not save 3000 jobs as BHP sets a date to decide the future of its struggling WA division.
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BHP says it will make a call on its WA nickel operations by August, as the company continues to weigh whether it will put its struggling Nickel West division into care and maintenance.
BHP slashed $US3.5bn from the value of Nickel West in its half-year accounts, warning that it was considering closing its nickel operations in the face of the tumbling price and the onslaught of cheap nickel from Indonesia.
The division employs about 3000 people in WA.
The company said in its March quarter review on Thursday that it expected to make a decision on the long-term future of the division by the time it delivers its full-year results in August.
After hitting a low of $US15,620 a tonne in March, the price of the commodity has staged something of a comeback, last trading on the London Metal Exchange at $US17,625.
Nickel West produced 59,000 tonnes of nickel in the March quarter, up slightly on the same period last year, realising an average price of $US16,581 a tonne for the quarter.
Shipments from BHP’s WA iron ore division lifted almost 5 per cent compared to the March 2023 quarter to 69.8 million tonnes, with mine production also up for the period. BHP said heavy weather in the Pilbara left the company slightly below its production figures for the first nine months of the year, at 210.3 million tonnes, down from 212.6 million tonnes at the end of March 2023.
The March result leaves BHP needing a strong close to the year to meet its 282 to 294 million tonne annual production guidance, though the company said on Thursday it still expected to hit its guidance range.
BHP boss Mike Henry said the company was on track to meet copper, iron ore and energy coal guidance for the year, with copper volumes up 10 per cent.
South Australia’s Olympic Dam mine produced its strongest performance in a decade, the company said.
And BHP said it is looking to accelerate work on its promising Oak Dam deposit, with the company seeking approval to build an exploration decline to allow cheaper and faster drilling of the deposit. BHP said it expects to publish a first resource estimate for Oak Dam later this year.
Wild weather in Queensland, including the impact of two cyclones, meant BHP was unlikely to meet its 46 to 50 million tonne output guidance from its BMA operations, Mr Henry said, with the company now forecasting output of 43 to 45 million tonnes.
The drop in output from BMA’s mines will also add to its average unit costs, with BHP lifting guidance to $US119 to $US125 a tonne, up from previous estimates of $US110 to $US116.
But strong coking coal prices for the quarter will ensure the division still delivers for BHP, with the company selling its premium product for an average $US293.94 a tonne, and lower grades for $US208.91 a tonne in the period.
BHP shares closed up 65c, or 1.5 per cent, on Thursday at $45.09.
Originally published as Future of Nickel West division to come in time for BHP FY results
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