Record iron ore output helps BHP smash its annual production target

Image: Screenshot from BHP’s TV campaign.

  • BHP says it has met or exceeded full year production guidance for petroleum, copper, iron ore and energy coal.
  • Total iron ore production for the 2018 financial year increased by 3% to a record 238 million tonnes.
  • The company says it expects to have an exception $US440 million charge, related to the Samrco fatal mine disaster, in the June 2018 half year.

BHP, boosted by record iron ore output Western Australia, has smashed its guidance for the 2018 financial year with an 8% jump in production.

The world’s biggest miner says it has met or exceeded full year production guidance for petroleum, copper, iron ore and energy coal.

The company had a surge in iron ore output in the final three months of the year. June quarter iron ore production was up 10% to 64 million tonnes.

Total iron ore production for the 2018 financial year increased by 3% to a record 238 million tonnes. BHP is forecasting West Australian iron ore production of between 273 and 283 million tonnes in the 2019 financial year.

In early trade, BHP surged more than 3% to $33.59.

“We have delivered a strong finish to the 2018 financial year with an 8% increase in annual production and record output at Western Australia Iron Ore, Queensland Coal and at our Spence copper mine in Chile,” says BHP Chief Executive Officer Andrew Mackenzie.

“We further simplified the portfolio with the announced divestment of Cerro Colorado in Chile and Gregory Crinum in Australia and our investment in South Flank supports our ability to supply low cost, high quality products into Asia.”

The production numbers in detail:

Source: BHP

BHP expects to recognise an income statement charge in the second half of the 2018 financial year of $US440 million related to the fatal Samarco dam disaster in Brazil.

“This charge largely reflects updated assumptions relating to the continuation of the fishing ban, the number of eligible claimants, and the timeline and technical scope for resettlement of the communities,” says BHP in a quarterly report.

BHP last month signed . A total value on the settlement wasn’t announced but it will mean a fund being created for clean-up costs, remediation and for compensation.

A dam holding mining waste ruptured on November 5, 2015, sending a wall of mud downstream, leaving 19 dead and hundreds homeless in what has been described as Brazil’s worst environmental disaster.

BHP’s numbers come a day after Rio Tinto’s quarterly report.

Rio Tinto now expects its full year shipments of iron ore from the Pilbara in Western Australia to be at the , 330 to 340 million tonnes.

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