BHP reports reduced coal production following Australian bushfires

Matthew Farmer 21 January 2020 (Last Updated January 22nd, 2020 17:00)

BHP’s operational review for the second half of 2019 reflects the negative impact of the Australian bushfires on coal production.

BHP reports reduced coal production following Australian bushfires
Energy coal output dropped due to bad air quality during the Australian wildfires. Photo courtesy of BHP.

Australia-headquartered mining and drilling company BHP has posted its operational review for the second half of 2019, reflecting the negative impact of the Australian bushfires on coal production.

Energy coal production from the second half of 2019 was down by 11% compared with the same period in 2018. Mines in Australia and Colombia changed focus to produce higher-quality products, reducing their production quantity.

In December, dust and smoke from Australian bushfires reduced air quality, further reducing production. BHP said in its report: “We are monitoring the situation and if air quality continues to deteriorate then operations could be constrained further in the second half of the year.”

Copper production in Q4 increased by 9% compared to a year before with 455 kilotons produced.

The company is focussing its mineral exploration efforts on finding copper in Chile, Ecuador, Peru, South Australia, Canada, and the south-western USA.

It also expects the third phase of a South Australian mine to come online in Q2 2020.

Iron ore production remained consistent. In October, a Brazilian iron ore mine received a licence needed to resume operation after it was flooded in 2015.

The company paid $44m to enable work at the mine to resume and will be fully operational again when safety requirements are met.

BHP said in the review: “As at the date of this Operational Review… we are not in a position to provide an update on the ongoing potential financial impacts on BHP Brasil of the Samarco dam failure.”

Zinc production in the latter half of 2019 decreased by 22% compared to 2018 as head grades in a Peruvian mine decreased as expected.

Nickel refineries and smelters in Australia underwent maintenance, meaning nickel production in Q4 2019 was down by 37% compared to Q3.

The company’s only oil exploration well drilled during the last quarter, off the coast of Trinidad and Tobago, was found to be dry.

BHP’s CEO Mike Henry said: “We delivered solid operational performances across the portfolio in the first half of the 2020 financial year, offsetting the expected impacts of planned maintenance and natural field decline.

“Production and cost guidance is unchanged, and we remain on track to deliver slightly higher production than last year. Our six major development projects are progressing well, and we continue to advance our exploration programs in petroleum and copper.”