Australian mining giant BHP has reported a significant boost in its copper production, reaching 987 000 tons for the half-year period ending December 2023 as mining companies rush to meet a projected boom in demand.
This marks a 10% increase compared to the same period last year, with the company optimistic about surpassing 1.8 million tons by the end of the 2025 financial year.
However, the rise in output was not without its hurdles, as adverse weather conditions posed challenges for the company’s operations in Southern Australia.
Copper prices for the half year period under review also went up by 9% to $3.99 R74) per pound.
BHP CEO Mike Henry said the company’s “flagship copper, iron ore and steelmaking coal assets delivered particularly strong production in the period” with higher volumes from Escondida in Chile “more than offsetting the impact of a weather-related power outage” at Copper South Australia
Commodity analyst, Giovanni Staunovo said: “BHP boosted copper production as miners race to meet growing demand Strong performance in metal used for key technologies contrasts with weak growth in traditional iron ore operation.”
BHP’s iron ore production only marginally increased during the half year to December, rising by 1% to 131 million tons, with production guidance for the full year to June 2025 remaining unchanged at between 255 million tons and 265.5 million tons.
However, prices realised by the company for iron ore dipped by 22% during the period to $81.11 per wet metric tonne.
Greg Davies, head of wealth for Cratos Capital, wrote on X that challenges for BHP included “weather-related power outages” that impacted its Copper South Australia while “nickel production was down 31%” as West Australia operations suspended.
“Costs elevated in some segments,” he said.
BHP’s steel making coal volumes for the half-year fell 21% to 17.9 million tons, with average prices realised also plunging 23% to $206.37 per ton.
The company’s production of energy coal was “broadly in line despite a higher proportion of washed coal” after relapsing 1% to 7.4 million tons.
“Inventory was drawn down to offset the impacts of reduced truck availability and unfavourable weather conditions,” said BHP.
While prices clawed back by 1% to $124.42 per ton, BHP was now expecting “an outcome from the New South Wales Government in regarding the modification to extend the mining consent” to 30 June 2030.
In terms of nickel production, output from the company’s West Australian Nickel operation decreased significantly by 31% to 28 000 tons, although this was to be expected.
BHP has transitioned the Nickel West supply chain and West Musgrave project into temporary suspension. Nickel production for the period benefited from the drawdown of inventory aimed at realising additional value.
“We expect costs to be elevated in HY25, as a result of operational and ramp down activities combined with the drawdown of inventory as the operations transitioned to temporary suspension,” said the company.
It has had to redeploy over 800 employees, with the majority moving to roles across the Australian operations.
BHP will likely review the decision to temporarily suspend Western Australia Nickel by February 2027.
“We are well positioned to continue strong momentum into the second half with a number of assets now expected to deliver production in the upper half of their respective ranges, while maintaining tight cost control,” added Henry.
BUSINESS REPORT