BHP warns on market constraints as iron ore output misses estimates

The company on Tuesday said iron ore output from Western Australia was 71.7 million tonnes (Mt) in the three months to June 30, falling short of a consensus estimate of 76 Mt and 72.8 Mt it reported a year ago.

Metallurgical coal production in Queensland fell by round 9% in the quarter, partly hit by an increase in coal royalties by the state government.

BHP said labour shortages, supply-chain constraints and inflation would carry on into fiscal 2023.

Industry rival Rio Tinto last week also reported similar issues while reporting misses across the board in its second-quarter production update.

“Over the year ahead … the continuing conflict in the Ukraine, the unfolding energy crisis in Europe and policy tightening globally is expected to result in an overall slowing of global growth,” said BHP chief executive Mike Henry.

"BHP is assessing the impacts on BMA economic reserves and mine lives as a result of the increase in coal royalties by the Queensland government. The near tripling of top-end royalties has worsened what was already one of the world’s highest coal royalty regimes, threatening investment and jobs in the state.”