BHP: Iron-Ore Mines May Face Covid-19 Disruption When Western Australia Eases Border Rules -- Commodity Comment

   By Rhiannon Hoyle

BHP Group Ltd. Wednesday reported a fall in first-half production of metallurgical coal, copper and nickel, but said output of iron ore and energy coal was higher. Here are some remarks from its second-quarter operational report.

On iron ore output:

"WAIO [Western Australia Iron Ore] finished the half year at near record production levels... despite impacts of temporary labor constraints relating to Covid-19 border restrictions and the planned major maintenance on car dumper one and the Jimblebar train load out. This reflects continued strong supply chain performance including higher car dumper performance and improved rail cycle times. The proposed easing of Western Australia's border restrictions on 5 February 2022 may introduce some short-term disruption to the operating environment as the Covid-19 pandemic evolves in the state."

On copper output:

"Uncertainty around impacts from Covid-19 remains as the pandemic evolves, despite an improved operating environment for our Chilean assets in the December 2021 half year due to high Covid-19 vaccination rates and continued use of successful control measures at our operating sites. Escondida copper production decreased... due to concentrator feed grade decline despite a record performance for material mined. Pampa Norte copper production increased... reflecting the continued ramp up of the Spence Growth Option (SGO), partially offset by the impact of planned lower ore stacking grade. Olympic Dam copper production decreased... as a result of the major smelter maintenance campaign in the period. The maintenance campaign was completed in January 2022 and ramp up to full capacity is now expected by April 2022 (previously March 2022), due to Covid-19 impacts on the availability of workforce."

On metallurgical coal output:

"Queensland Coal production decreased due to significant wet weather, with double the amount of rainfall, coupled with Covid-19 related labor constraints impacting stripping and mine productivity across most operations. A longwall move was successfully executed at Broadmeadow and the Caval Ridge wash plant maintenance was also completed on time during the December 2021 quarter. Following the recent easing of Queensland's border restrictions, Covid-19 related absenteeism has increased and remains a risk for the remainder of the year."

On nickel output:

"Guidance for the 2022 financial year remains unchanged... with volumes weighted towards the second half of the financial year. The first batch of nickel sulphate crystals were produced in the September 2021 quarter and customer certification continues. First saleable production was achieved in the December 2021 quarter."

Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com

(END) Dow Jones Newswires

January 18, 2022 18:18 ET (23:18 GMT)

BHP Billiton (ASX:BHPCD)
Historical Stock Chart
From Oct 2024 to Nov 2024