BHP Output Mostly Down; Flags Productivity Hit, Copper Guidance Lift
22 January 2019 - 9:34AM
Dow Jones News
By Rhiannon Hoyle
SYDNEY--BHP Group Ltd. (BHP.AU) recorded weaker quarterly
production of commodities including iron ore and petroleum and
forecast a first-half productivity hit totaling US$600 million
because of disruptions to operations that included a train
derailment in a remote part of Australia.
The company also raised its full-year forecast for copper
production after it called off the sale of its Cerro Colorado
copper mine in Chile.
BHP, the world's biggest miner by market value, on Tuesday said
it produced 58 million metric tons of iron ore in the three months
through December, down 6% on the same period a year earlier.
In November, BHP was forced to derail a runaway train consisting
of four locomotives and 268 loaded wagons that ran loose for more
than 50 miles without a driver. The train rolled away after its
operator disembarked to inspect one of the wagons and didn't secure
a brake.
BHP temporarily suspended all of its rail operations in the
Pilbara to investigate the incident and recover the rogue
train.
The derailment helped to prop up iron-ore prices, which have
been trading above analyst expectations as China continues to
produce massive amounts of steel. China's steel-product output rose
8.5% last year.
BHP's Australian iron-ore shipments account for almost one-fifth
of seaborne trade in the commodity. It is the world's third-largest
iron-ore exporter, behind Vale SA (VALE) and Rio Tinto PLC
(RIO.LN).
BHP said its productivity drive, aimed at working its mines and
infrastructure network harder, had also been set back in the half
by a plant outage at its Olympic Dam copper mine in Australia and a
plant fire at its Spence mine in Chile.
BHP meantime raised its full-year copper production forecast to
between 1.645 million tons and 1.740 million tons to reflect the
retention of Cerro Colorado. It reported a 2% rise in
second-quarter copper output, to 416,000 tons.
The company also recorded a sharp fall in quarterly petroleum
production tied to lower gas sales. It said second-quarter output
of petroleum products fell by 8% to 30 million barrels of oil
equivalent.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
January 21, 2019 17:19 ET (22:19 GMT)
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