BHP trims Australian iron ore production guidance on car dumper issues

BHP trims Australian iron ore production guidance on car dumper issues

BHP trims Australian iron ore production guidance on car dumper issues

Mining giant BHP has cut its fiscal 2017-2018 (July-June) iron ore production guidance due to unplanned maintenance and issues with car dumper availability, the company said Thursday.

In the January-March quarter, the miner produced 57.69 million mt of iron ore, up 8% year on year but down 6% from the previous quarter, it said in its quarterly operational review. RBC Capital Markets said in a research note that it had expecting BHP to produce 61 million mt of iron ore in the quarter.

“Volumes decreased by 6% from the December 2017 quarter reflecting impacts from Cyclone Joyce and unplanned car dumper maintenance, despite improved rail reliability and an increase in peak performance in the number of rakes per day,” BHP said.

“With the system constraint now at the port, a program of work is underway to improve car dumper availability and performance,” it said.

The car dumper reliability issues, which follow the company hit record levels of production, caused it to trim its iron ore production guidance to between 236 million mt and 238 million mt (or between 272 million mt and 274 million mt on a 100% basis). It previously expected to produce 239 million-243 million mt of iron ore.

BHP produces iron ore from its Western Australia integrated system of four processing hubs and five mines connected by more than 1,000 km of rail infrastructure to the port facilities in the Pilbara region.

“Increased production [in Western Australia] was supported by record production at Jimblebar and Mining Area C, and improved rail reliability. This was partially offset by the impact of lower opening stockpile levels following the Mt Whaleback fire in June 2017, planned maintenance and port debottlenecking activities in the first half of the financial year,” it said.

In February, the company received regulatory approval to increase capacity at its Port Hedland operations to 290 million mt (100% basis). It said Thursday that it expected to reach this run rate by the end of fiscal 2018-2019.

Meanwhile, mining and processing operations at its Brazilian Samarco operation remain suspended following the failure of the Fundao tailings dam and Santarem water dam in November 2015.

Source: Platts

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