BHP reports record iron ore production from flagship WA mines as price surges to 10-year highs

Iron ore mines in Western Australia are the gift that keeps on giving for BHP, which has achieved record nine-month production.

BHP has reported record iron ore production from its all-important mines in Western Australia’s Pilbara region as prices surge to 10-year highs.

The resources giant produced 187 million tonnes of the steelmaking commodity at its WA mines in the nine months to March 31, up 3 per cent, reflecting record output at its Jimblebar operation and strong performance across the supply chain.

Full-year volumes are expected to be in the upper half of BHP’s guidance range of between 244 and 253 million tonnes as a result, with commissioning at its new South Flank project, which is replacing depleted production at its Yandi mine, slated to start in the June quarter.

South Flank is a $US3.6bn ($A4.6bn) project. Picture: Supplied

“South Flank, with its higher grade and lump proportion, is on track to begin production in the middle of the year,” chief executive Mike Henry said.

It comes as iron ore prices surge to levels not seen since 2011, driven by last year’s stimulus in China boosting property and infrastructure construction.

“The strength in the iron ore price currently shows no sign of abating,” Bell Potter said in a recent research note.

BHP also achieved record average concentrator throughput at its epic Escondida copper mine in Chile, which was better than the company anticipated.

Mike Henry at the site of the South Flank project in 2018. Picture: Colin Murty/The Australian

The miner has upped its full-year copper guidance accordingly, but RBC Capital Markets analyst Tyler Broda said BHP had previously provided a weak forecast for the division.

Mr Broda said he was expecting the record iron ore and copper results but noted poor performance in the company’s coal division, mainly due to wet weather at its Queensland and NSW operations.

He said BHP’s next phase of growth, beyond its Jansen potash project in Canada, needed to emerge.

“The management team continues to drive efficiencies, but as with all competitors, we expect this will become tougher into a more inflationary environment,” he said.

Originally published as BHP reports record iron ore production from flagship WA mines as price surges to 10-year highs