BHP’s production hit by COVID in March quarter

BHP has joined rival Rio Tinto in citing COVID absenteeism for a 10 per cent drop in quarterly iron ore shipments from its key Pilbara operations (reports The West Australian).
21st April 2022

The mining giant produced 66.7 million tonnes in the three months to the end of March, down from 73.9mt in the previous quarter.

However, the figure was in line with production in the previous corresponding period and in line with year-to-date output of 211mt.

BHP also reiterated full-year guidance for the division of 278–288mt at costs of $US17.50-$US18.50 a tonne.

The miner cited temporary labour constraints relating to COVID-19, train driver shortages, planned track upgrade works and the planned maintenance on car dumper one and the Jimblebar train load for a dip in production in the March quarter.

But it said the full effects were offset by continued strong supply chain performance, including higher car dumper performance and favourable weather compared to the prior period.

The ongoing ramp up of South Flank to 80mtpa contributed to record production from its Mining Area C hub and record lump sales.

BHP warned production in the June quarter would continue to be impacted by COVID-19 related absenteeism as WA approached anticipated peak case numbers as well as planned car dumper maintenance.

Chief executive Mike Henry said BHP’s WA iron ore business continued to perform strongly as it navigated the State’s first major COVID-19 wave, and remained on track to achieve full-year volume and cost guidance.

“Market volatility and inflationary pressures have increased further as a result of the Russian invasion of Ukraine,” he said.

“We continue our work to mitigate cost pressures through a sharp focus on operational reliability and cost discipline.

“While we expect conditions to improve during the course of the 2023 calendar year, we anticipate the skills shortages and overall labour market tightness in Australia and Chile to continue in the period ahead.”

The company’s Nickel West division was also hit by COVID and related worker shortages with production down 13 per cent to 18,700t and year-to-date output also down 13 per cent to 58,000t.

The weaker output forced BHP to lower its nickel production guidance to 80,000-85,000t.

Full-year copper guidance was also lowered to between 1570kt and 1620kt, reflecting lowered production guidance for Escondida.

BHP said the proposed merger of its petroleum division with Woodside Petroleum was on track for June 1 subject to conditions precedent and the approval of Woodside shareholders at a meeting on May 19.

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