BHP posts solid production numbers for 2018 financial year

BHP released its operational review for the year ended 30 June on Wednesday, reporting that it met or exceeded full-year production guidance for petroleum, copper, iron ore and energy coal, as well as its revised guidance for metallurgical coal.

The FTSE 100 major miner said its group copper equivalent production increased by 8% in the 2018 financial year, with annual production records at Western Australia Iron Ore, Queensland Coal and Spence.

It said it expected to achieve full year unit cost guidance at its major assets, based on 2018 financial year guidance exchange rates of AUD/USD 0.75 and USD/CLP 663.

Group copper equivalent production for the 2019 financial year was expected to be broadly in line with the 2018 financial year.

The company said the exit process for onshore US was progressing to plan, with bids received and the board aiming to announce “one or more” transactions in coming months.

It was targeting completion of any transactions by the end of the 2018 calendar year.

In petroleum, the Victoria-1 exploration well in Trinidad and Tobago encountered gas and the

Samurai-2 well in the US Gulf of Mexico encountered hydrocarbons in multiple horizons, BHP noted.

The South Flank sustaining iron ore project was also approved during the June quarter.

On the production front, BHP said petroleum production fell 8% year-on-year for 2018, but made some improvements in the June quarter.

Copper output rose 32% in the year, thanks to higher volumes at Escondida, while Iron ore was up 3% to a record annualised production rate of 289 Mtpa.

Metallurgical coal production was 7% higher for the year, while energy coal output was flat.

“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,” said 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.

“Good prices and our culture of continuous improvement give us positive momentum into the 2019 financial year.”