BHP has said strong operational performances across its portfolio meant it finished FY 2019 with an 11% increase in quarterly production.
“Our overall production was broadly in line with last year, overcoming the impacts of weather, grade and natural field decline, and unplanned outages in the first half,” CEO Andrew Mackenzie stated in the miner’s operational review for the year ended 30 June 2019.
“Our exploration program delivered encouraging results, with seven out of nine petroleum wells successful and further evaluation of the Oak Dam copper prospect underway.
“Strong underlying performance puts us in a position to deliver higher volumes in the 2020 financial year. BHP’s suite of attractive options, together with our culture and transformation programs, will grow returns and create long-term financial and social value.”
The company highlighted that it exceeded full-year production guidance for petroleum and met revised guidance for copper and iron ore. Metallurgical coal and energy coal production were marginally below guidance predominantly as a result of lower than expected wash plant yields and adverse weather impacts during the June 2019 quarter.
Group copper equivalent production increased by 11% in the June 2019 quarter, reflecting a strong operational performance across the portfolio, particularly at Western Australia Iron Ore and Queensland Coal, which achieved annualised run rates above 290 Mt (excluding the impact of Tropical Cyclone Veronica) and 48 Mt respectively during the quarter.
Group copper equivalent production for the 2019 financial year declined by 2%, with annual production records at two petroleum and four minerals operations offset by grade and natural field decline, weather-related interruptions and several unplanned outages.
BHP said it expects to achieve full-year unit cost guidance at Petroleum, Escondida and Western Australia Iron Ore. Queensland Coal and New South Wales Energy Coal unit costs are expected to be marginally above guidance (based on 2019 financial year guidance exchange rates of A$/US$ 0.75 and US$/CLP 663).
Group copper equivalent production for the 2020 financial year is expected to be slightly higher than the 2019 financial year despite a ~7% decline in petroleum volumes largely due to natural field decline.
In Petroleum, the Bélé-1, Tuk-1 and Hi-Hat-1 exploration wells in Trinidad and Tobago all encountered hydrocarbons during the quarter. Over the full year, seven out of nine wells drilled were successful.
Underlying improvements in productivity were largely offset by the impact of unplanned production outages of US$835M during the first half, in addition to grade decline in copper and higher unit costs in coal. BHP added that a negative movement of approximately US$1B is now expected to be recorded for the 2019 financial year.