BHP’s fourth quarter iron ore, coal production slowed by labor constraints

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World Miner BHP Group (NYSE: BHP ASX: BHP) saw its iron ore and coal production decline in the fourth quarter of fiscal 2022 from a year earlier due to Covid-related labor constraints.

“BHP produced a strong fourth quarter to cap off a year of significant progress. Our performance for the year was underpinned by safe and reliable operations and strong demand for our products,” BHP Chief Executive Mike Henry said in a press release.

Iron ore production from BHP’s operations in Western Australia was 71.7 million tonnes in the fourth quarter, down from 72.8 million a year ago. For the full year, iron ore production totaled 282.8 million tonnes, meeting its guidance for fiscal 2022. The company also raised its guidance for the following year to 278-290 million. tons.

Metallurgical coal production saw a larger decline quarter-over-quarter at 9% to 16.4 million tonnes, leading to a full-year decline of 9% to 58.3 million tonnes. Thermal coal, too, fell 13% and 4% for the quarter (3.9 million tonnes) and the year (13.7 million tonnes) respectively. In addition to weather impacts and a labor shortage, BHP’s coal production has been partially impacted by an increase in coal royalties by the Queensland Government. The decline in coal production also followed the company’s sale of its 80% stake in the BHP Mitsui coal joint venture, its main coal production avenue in Queensland.

Still, the company met its coal production targets for 2022 and expects to produce 58-64 million tonnes of metallurgical coal and 13-15 million tonnes of thermal coal in the next fiscal year.

“Queensland Metallurgical Coal delivered strong underlying performance for the quarter despite significant wet weather,” Henry added. BHP is currently assessing the impacts on economic reserves and mine life of the BHP-Mitsubishi alliance following the increase in coal royalties.

“The near tripling of high-end royalties has worsened what was already one of the highest coal royalty regimes in the world, threatening investments and jobs in the state,” he explained. .

In other commodities, copper and nickel production were lower for the year, at 1.6 billion tonnes and 76.8 million tonnes respectively. Full-year copper production, despite a 15% improvement in the fourth quarter with record material extraction and near-record concentrator throughput at the Escondida mine in Chile, was still down 4% in during the 2022 financial year.

A detailed report of BHP’s fourth quarter and full year 2022 operating results is available at www.bhp.com.

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