In an operational update for the year to end June, the miner also announced that Olympic Dam achieved the highest annual copper production since the acquisition by BHP in 2005 and the highest gold production ever for the operation.
“We set several production records and brought on four major projects safely, on schedule and on budget,” said chief executive Mike Henry.
South Flank, the largest iron ore mine in Australia, began production in May as did the Ruby project in Trinidad and Tobago. Atlantis Phase 3 in the Gulf of Mexico and the Spence expansion in Chile also began production in the first half of the year.
“BHP is in great shape,” he added. “Our operations are performing well, we continue our track record of disciplined capital allocation, and our portfolio is positively leveraged to the megatrends of decarbonisation, electrification and population growth.”
However, the company’s financial results on August 17 may be overshadowed by its update on the ongoing potential financial impacts of the Samarco dam failure.
BHP and Vale SA (NYSE:VALE) may be forced to pay about US$19.06bn for the damage caused by a burst tailings dam in 2015, Reuters reported yesterday, citing the governor of the Brazilian state where the disaster occurred. The estimate is almost four times higher than an initial deal struck with the mining companies in 2016.
Today’s operational update showed that petroleum production for the 2021 financial year dipped 6% from the previous year to 103 million barrels of oil equivalent (MMboe), but was slightly above guidance. BHP expects to produce between 99 and 106 MMboe in the 2022 financial year.
BHP also met its output guidance for copper, iron ore, metallurgical coal and nickel and its revised guidance for energy coal.
Production of energy coal, also known as thermal coal, fell 17% from the previous year to 19 million tonnes (Mt). Production is expected to decrease to between 13 and 15 Mt in the 2022 financial year, reflecting the sale of its 33% interest in the Cerrejon mine in Colombia.
Total copper production fell 5% to 1.64 Mt and is expected to be between 1.59Mt and 1.76Mt for the 2022 financial year. Olympic Dam, which produced 205,300 tonnes over the year, is guided to produce only 140,000 to 170,000 tonnes in the 2022 financial year.