BHP iron ore output rises despite weaker prices

Mining giant BHP Group on Wednesday reported a rise in first-quarter iron ore output, driven by better performance from Western Australian operations and despite lower prices.

The company produced 72.1 million tonnes of iron ore in its first quarter, up 2% and left annual production and cost guidance unchanged.

Iron prices have fallen over the quarter in response to continued lockdowns in major Chinese cities as part of its “zero-covid” policy.

However, BHP said it had lower Covid-19 impacts and strong supply chain performance over the September quarter from its Western Australia projects.

The pandemic has caused labour shortages in the mining industry due to border closures and illness from the virus.

Worker shortages also hit BHP’s coal projects in New South Wales, which were already hit by severe flooding. Production in the eastern Australian state fell 38%.

“We expect global macro-economic uncertainty in the short term to continue to affect supply chains, energy costs, labour markets and equipment and materials availability” said chief executive Mike Henry.

BHP also said it was looking at bringing forward first production from its Jansen potash project in Canada with a first production target of 2026.

Reporting by Frank Prenesti for Sharecast.com