BHP Metallurgical Coal Operations Disrupted by Australia Covid-19 Surge -- Update
By Rhiannon Hoyle
BHP Group Ltd. said a surge in Covid-19 cases in Australia is
causing a shortage of workers at its coal pits that will likely
constrain how much steelmaking coal the world's No. 1 miner can
produce in its fiscal year.
BHP, which in eastern Australia runs the world's biggest
metallurgical coal export operations in joint venture with
Mitsubishi Corp., on Wednesday reported an 8% fall in first-half
production of the commodity, to 17.7 million metric tons. That
prompted the miner to downgrade its full-year production forecast
to 38 million-41 million tons, from a prior 39 million-44 million
Australia is experiencing its worst surge in Covid-19 infections
of the pandemic to date. In Queensland state, where BHP mines
metallurgical coal, cases have climbed quickly after controls on
the state border were relaxed.
"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," BHP said.
La Niña weather patterns have also had a big impact on its
Queensland coal mines in recent months, with rainfall having
doubled, BHP said.
BHP said first-half group copper-equivalent
production--excluding the petroleum division it is combining with
Australia's Woodside Petroleum Ltd.--was down by 4% versus a year
In addition to weaker-than-expected metallurgical coal output,
BHP's copper production was also sharply lower.
The miner reported first-half copper output of 742,000 tons,
down 12% on a year earlier. BHP now expects full-year copper
volumes at the low end of the company's 1.59 million-1.76 million
ton projection, it said.
BHP's Chilean copper mines have also been heavily disrupted
during the pandemic, although the miner said the impact had
lessened in recent months amid rising vaccination rates and what
BHP said were successful control measures at its mine sites.
The company softened its expectations for full-year copper
output in big part because of a worker death at a desalination
plant, which had disrupted BHP's operations, it said.
BHP meantime reported a 1% lift in first-half iron-ore output to
129.4 million tons. BHP is the world's third-largest producer of
the steel ingredient.
"Cost control remained strong across the business, in the face
of a more inflationary environment," too, Chief Executive Mike
Write to Rhiannon Hoyle at firstname.lastname@example.org
(END) Dow Jones Newswires
January 18, 2022 17:57 ET (22:57 GMT)
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