BHP is telling investors a mixed production quarter has not derailed its copper ambitions, even as it quietly draws a line under a fraught dispute with its biggest iron ore buyer.
The miner says full-year copper production should land in the upper half of its guidance range, despite a 7% year-on-year slide in third-quarter copper volumes.
It has wrapped up protracted iron ore sales contract talks with China Mineral Resources Group, ending months of tension and reported product boycotts.
Copper production for the quarter fell to 476,800 tonnes, which is 7% lower than a year earlier and 3% below the prior quarter.
Iron ore was a relative bright spot, rising 2% year on year to 62.8 million tonnes, although that was still 10% down on the previous quarter.
Steelmaking coal volumes declined 3% year on year to 3.8 million tonnes and dropped 11% against the December quarter.
Energy coal climbed 12% year on year to 4 million tonnes, but that business also saw a 12% quarter-on-quarter fall.
Operationally, the weaker copper numbers trace back to Chile, where BHP is grappling with ore complexity, grade variation and declining grades at its Pampa Norte operations.
Those issues affect both the concentrator and cathode plant, forcing the miner to trim Pampa Norte’s full-year guidance from 230-250 thousand tonnes down to 210-220 thousand tonnes.
Escondida in Chile is also delivering lower copper production due to a planned reduction in concentrator feed grades, even as material mined and concentrator throughput hit record levels.
BHP is holding Escondida’s annual guidance steady and still expects output to end up in the upper half of its range.
