BHP (BHP LN) 2,035p, £112.5bn – Annual Production report • BHP reports that with a strong performance during the final quarter, production for the year ending 30th June 2019 met its revised guidance for copper and iron ore while it exceeded the guidance for petroleum and was marginally below the expectation for metallurgical and thermal coal. • Commenting on the performance, Chief Executive, Andrew Mackenzie, said that “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”. • Copper production for the year was 4% lower at 1.69mt with production at Escondida declining by 6% “as an expected 12 per cent decline in copper grade was partially offset by record average concentrator throughput of 344ktpd”. Production at Olympic Dam, however, rose by 17% to 160kt “as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018, and two minor production outages in May 2019 relating to the smelter and to the refinery crane. Underground operations continue to perform well, with record development kilometres achieved”. • At the Antamina mine, production also increased by 6% to 147kt. The US$2.46bn concentrator expansion at Spence, which is planned to increase output by approximately 185,000tpa is reported to be 60% complete and on schedule for initial production in FY2021. • The company’s FY 2020 production guidance envisages a 1% to 8% increase in Group copper production to the range 1.705-1.820mt. • Iron Ore production “was broadly unchanged at 238 Mt (270 Mt on a 100 per cent basis). Production of between 242 and 253 Mt (273 and 286 Mt on a 100 per cent basis) is expected in the 2020 financial year as we undertake a significant maintenance program at Port Hedland.” • In Brazil, “Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.” • The company explains that “record production at Jimblebar“ offset “inventory impacts from the Mt Whaleback fire in the prior period” to deliver broadly unchanged output for its Western Australian Iron Ore operations. Production guidance for FY 2020 is for between 242-253mt (273-286mt on a 100% basis). • “Metallurgical coal production was broadly flat at 42 Mt (75 Mt on a 100 per cent basis). Production is expected to be between 41 and 45 Mt (73 and 79 Mt on a 100 per cent basis) in the 2020 financial year. … … Energy coal production for the 2019 financial year decreased six per cent to 27 Mt. Production is expected to decrease to between 24 and 26 Mt in the 2020 financial year.” • Energy coal output at Cerrejon in Colombia “decreased by 13 per cent due to adverse weather and its impacts on mine sequencing.” • “Nickel West production decreased by six per cent to 87 kt as operations were suspended following a fire at the Kalgoorlie smelter in September 2018. The smelter returned to operation on 1 October 2018, with final repairs and ramp up completed in the March 2019 quarter.” Production in the 2020 FY is “expected to be broadly unchanged”. • BHP reports mineral exploration expenditure for the year of US$188m (US$128m expensed) with “Greenfield minerals exploration … predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States.” Conclusion: After a difficult first half BHP’s production finished strongly in the final quarter of FY19 to leave output broadly in line with last year’s performance and the most recent guidance.
Mining company BHP Group has issued an operational review warning that it expects “a negative movement in productivity” of approximately $1bn for the 2019 financial year. It says first-half underlying productivity improvements were largely offset by unplanned outages costing $835m. Second-half productivity, meanwhile, was impacted by lower volumes, wet weather and increased contractor stripping costs at its Queensland Coal operations, contractor costs at New South Wales Energy Coal and mine plan changes in its Nickel West business. A surge in iron ore prices offset a fall in fourth-quarter iron ore output from 72 million to 71 million tonnes.
BHP Group Plc (BHP.L) Announced, in its operational review for the year ended 30 June 2019, that the company exceeded full year production guidance for petroleum and met revised guidance for copper and iron ore. Group copper equivalent production increased by 11.0% 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.
BHP Group Plc (BHP.L) Announced that the company hosting an investor and analyst briefing on its strategy. The purpose of the briefing is to provide further information on the company’s strategic framework and the strategic themes considered to test portfolio resilience.
BHP (BHP LN) 1,848p, £101.3bn – Q3 operations update highlights the impact of Cyclone Veronica and focus on copper exploration • BHP reports a lowering of its production guidance its Western Australian iron ore operations for the year to 30th June to 235-239mt “reflecting a 6 to 8 Mt impact from Tropical Cyclone Veronica”. Cost guidance has been increased to “below US$15 per tonne an increase from previous guidance of less than US$14 per tonne,” • With iron ore production of 56.12 mt during the quarter and year to date output of 175.34mt achieving the approximately 60mt of production during the final quarter to meet the lower end of the revised guidance looks realistic. It is particularly encouraging that “volumes reflected record production at Jimblebar” where year to date output of 44.3mt compares with 15.3mt in the nine months ending 31st March 2018. • The company reports that “our facilities did not sustain major damage as a result of the cyclone, the port ramp up was slowed by localised flooding, processing wet material and equipment assessments” implying that the return to more normal operations should not face major obstacles. • Production guidance for the Group’s other major commodities remains unchanged with copper output expected in the range 1.645mt-1.740mt, metallurgical coal in the range 43-46mt and thermal coal between 28-29mt. Petroleum guidance is also maintained in the range 113-118 MMboe. • BHP’s copper output of 420,000t (Q3 – 2018 during the quarter (1.245mt YTD vs 1.290mt 2018 YTD) reflects lower output at the Escondida and Pampa Norte operations which suffered a planned grade decline and the “impact of heavy rainfall in northern Chile in February 2019 at both Spence and Cerro Colorado” respectively, partially offset by a 22% increase in output from Olympic Dam where production rose to 115kt as production built up following a “major smelter maintenance campaign in the prior period”. • Copper output also increased at Antamina “by five per cent to 110 kt due to higher head grades”. • “Metallurgical coal production was broadly flat at 31 Mt (54 Mt on a 100 per cent basis).” The sale of the Gregory Crinum Mine to Sojitz was completed in late March. Energy coal output was also broadly unchanged at 20mt year to date. Improved performance in the New South Wales operations were offset by lower output from Cerrejon where weather impacted on mine sequencing. • BHP’s exploration expenditure amounts to US$122m so far this financial year. Greenfield exploration “is predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States.” • Among the projects highlighted by the company are the “identification in November 2018 of a potential iron oxide, copper and gold (IOCG) mineralised system at Oak Dam, 65 kilometres to the south east of Olympic Dam, BHP has commenced a further drilling program to define the extent of mineralisation.” • BHP also points to its agreement with Luminex “for an earn-in and joint venture agreement on Luminex's Tarqui 1 and 2 mining concessions in Ecuador. Negotiations to complete a binding agreement will be undertaken over the next two months.” Additional copper exploration exposure comes through its 5% interest in “Midland Exploration Inc., which has copper exploration tenements in Canada.” Conclusion: The effects of the cyclone in W Australia are reflected in the loss of around 6-8mt of production and lower iron ore production guidance. The group’s other operations are operating consistently within the previously announce guidance targets. The exploration focus on copper is clear with a focus on the Americas and Australia.
Mining company BHP Group has announced in an operational review that iron ore production for 2019 will be lower than last year, due to the impact of Cyclone Veronica on Australian ports last month. The group expects to experience a fall from 273–283 million tonnes to 265–273 million tonnes.
BHP Group Plc (BHP.L) Announced, in its operational review for the nine months ended 31 March 2019, that its production guidance for the 2019 financial year remains unchanged for petroleum, copper, metallurgical coal and energy coal. Iron ore production guidance decreased to between 265 and 270 Mt (100% basis), reflecting impacts of Tropical Cyclone Veronica. Further, in Petroleum, the Atlantis Phase 3 project in the US Gulf of Mexico was approved and the Bélé-1 exploration well in Trinidad and Tobago encountered hydrocarbons (drilling still in progress) during the quarter. Meanwhile, at the end of March 2019, the company had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of $11.1 billion over the life of the projects.
BHP Group has become the latest mining group to disclose the estimated effects on production of tropical cyclone Veronica. The group says its port and rail operations in Port Hedland, Western Australia, are now ramping-up after being suspended due to the cyclone. Initial inspections show no major damage to operations but the port is operating at reduced rates and is not expected to return to full capacity until later this month. BHP estimates that the incident will result in reduced iron ore production of between 6m - 8m tonnes and says its 2019 production and unit cost guidance are under review.
BHP Group Plc (BHP.L) Announced that BHP Port and Rail Operations in Port Hedland, Western Australia, are ramping-up after being suspended due to Tropical Cyclone Veronica. While initial inspections show no major damage to our operations, isolated flooding both on site and sections of the rail leading into the port has limited train movements. Consequently, the port is currently operating at reduced rates and not expected to return to full capacity until later this month. Final production impacts and revised production and unit cost guidance will be disclosed once they are finalised. Preliminary estimate of the impact of Tropical Cyclone Veronica is a reduction in production of approximately 6 to 8 million tonnes (100% basis), and as a result, its 2019 financial year production and unit cost guidance are currently under review
BHP Group Plc (BHP.L) Announced the appointment of Ian Cockerill and Susan Kilsby to the Board as independent NonExecutive Directors, with effect from 1 April 2019. After these changes are effective, the Board will comprise 11 Directors - 10 Non-executive Directors and one Executive Director.
BHP Group Plc (BHP.L) Announced that its Chief Executive Officer, Andrew Mackenzie, revealed changes to the company's Executive Leadership Team to reflect its simplified portfolio and transformation agenda. Accordingly, Geraldine Slattery would lead its Petroleum business as President Operations Petroleum and Vandita Pant would assume the position of Chief Commercial Officer from 1 July 2019. Further, Jonathan Price, currently Transformation Director, would assume the role of Chief Transformation Officer effective 1 March 2019 and join the Executive Leadership Team. Lastly, Laura Tyler would re-join the Executive Leadership Team from 1 March 2019 as Chief Geoscientist. However, she would continue in her current role as Asset President Olympic Dam based in Adelaide reporting to Mike Henry. They will join Peter Beaven, Geoff Healy, Mike Henry, Diane Jurgens, Danny Malchuk and Athalie Williams on the Executive Leadership Team.
Returns to shareholders of BHP (BHP) rose in the six months to December, as the mining giant’s interim dividend climbed to 55 cents a share, and the pay-out ratio passed 75 per cent. However, the return on capital employed declined in the period from 17 to 15 per cent, owing to production outages and higher taxes, meaning these results came in slightly below analyst forecasts. Investors will be hoping that a return to full production in the second half, together with a triumvirate of price rises in the iron ore, copper and oil divisions, could spell a recovery.
BHP Billiton (BHP LN) 1,780p, �97.6bn - H1 results BHP reports an 8% decline in underlying attributable profit for the six months ending 31st December 2018 to US$3.7bn (2017 – US$4.1bn). Underlying EBITDA of US$10.5bn fell by 3% (2017 – US$10.8bn). The company has declared an interim dividend of 55 US cents per share which includes “an additional amount of 18 US cents per share or US$0.9 billion”. Despite a 22% increase in capital and exploration expenditure to US$3.5bn (2017 – US$2.9bn), the company reports a 36% decline in 31st December 2018 net debt to US$9.9bn (December 2017 – US$15.4bn and 30th June 2018 level of US$10.9bn) and expects net debt “to remain at the lower end of the target range”. The company points to the receipt of “proceeds received from the sale of Onshore US, partially offset by the completion of a US$5.2 billion off ?market buy ?back” as a factor in the lower net debt levels. The company reports that “Productivity(i) guidance is now expected to be broadly flat for the 2019 financial year largely reflecting the unplanned production outages at Olympic Dam, Western Australia Iron Ore, Spence and Nickel West.” Commenting on the outlook for the global economy, the company expects “China's economic growth to slow modestly in the 2019 calendar year. The negative impact of weaker exports will be partially offset by easier monetary and fiscal policy”. It also notes that “The US performed strongly in the 2018 calendar year but near ?term prospects are less certain. The expansionary impact of tax cuts will progressively fade and trade policies remain unpredictable. In Europe and Japan, we believe business confidence and manufacturing momentum peaked in the 2018 calendar year. In India, growth prospects are solid”. In its principal commodities, the company expresses confidence in the outlook for copper: “we believe underlying fundamentals remain sound. Copper demand should grow steadily. Grade decline, rising input costs, water constraints and a scarcity of high ?quality future development opportunities continue to constrain the industry's ability to cheaply meet this growing demand and provide support for our positive outlook.”
Mining group BHP Billiton saw interim underlying attributable profits dip 8% to $3.7bn in the last six months of 2018 as commodity prices declined. The results were also hit by supply disruptions in the company’s iron ore and copper operations. Chief executive Andrew Mackenzie expects a strong second half to partially offset the impact from the outages, with unit costs across the business forecast to improve.
BHP Group Plc (BHP.L) Announced, in its interim results for the six months ended 31 December 2018, that revenues rose to $20.7 billion from $20.5 billion recorded in the same period a year ago. Profit after tax widened to $4.4 billion from $2.4 billion. The company's diluted earnings per ordinary share jumped to 70.8c from 37.9c reported in the same period last year. The Board has determined to pay an interim dividend of 55 cents per share ($2.8 billion).
BHP Group Plc (BHP.L) Announced, in its conventional petroleum update, that the Board has approved $696.00 million in funding to develop the Atlantis Phase 3 project in the US Gulf of Mexico. This follows sanction by BP, as the operator, of the Atlantis Phase 3 project, announced in January 2019. Moreover, the Board has also approved $256.00 million in funding to drill an additional appraisal well (3DEL) and perform further studies in the Trion field in Mexico, to further delineate the scale and characterisation of the resource.
BHP Billiton (BLT LN) 1,583p, �86.7bn - H1 Production in line with guidance • BHP reports that first half year production during the six months to 31st December was in line with production guidance and that, with a minor upward adjustment in the case of copper, guidance for the full year remains intact. • Costs for the full year are also expected to meet guidance. Although up to December they were running at higher levels as a result of a combination of planned maintenance and unforeseen production disruption"stronger anticipated volumes in the second half of the year" are expected to bring them back on course during the second half of the year. • Guidance for copper output has been increased slightly from the range 1620-1705kt to1645-1740kt reflecting the retention of the Cerro Colorado mine in Chile after "BHP and EMR Capital agreed to terminate their agreement for the sale and purchase of Cerro Colorado after it became clear that the financing conditions of the transaction would not be satisfied by the end of the 2018 calendar year." • Elsewhere the copper operations at Spence have recovered from the fire during September and Olympic Dam has resumed normal operations following the planned maintenance at the smelter and the unplanned acid spill during August. • Iron ore production "production increased by two per cent to 119 Mt (135 Mt on a 100 per cent basis). Guidance for the 2019 financial year remains unchanged at between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per cent basis." Production was impacted by the planned maintenance schedule and by the widely reported rail disruption following the train derailment in November, offset by record output from Jimblebar and the recovery of Mt Whaleback following a fire during the previous period. • Iron ore production guidance for the full year remains at 241-250mt for the full financial year and iron ore operations at Samarco remain suspended. • BHP spent US$81m on exploration during the six-month period "predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States." • BHP highlights its investment in the Ecuador focussed, Solgold*, saying "Consistent with our exploration focus on copper, in September 2018, BHP acquired an initial 6.1 per cent interest in SolGold Plc (SolGold), the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador. On 15 October 2018, BHP entered into an agreement to acquire an additional 100 million shares in SolGold, for an investment of US$59 million, with our total interest now approximately 11.2 per cent." • Conclusion: BHP is on track to meet its annual production guidance targets. Exploration focus is on copper and the company highlights its investment in Ecuador focussed Solgold. * SP Angel acts as broker to Solgold
BHP Group Plc (BHP.L) Announced, in its operational review for the half year ended 31 December 2018, that production guidance for the 2019 financial year remains unchanged for petroleum, iron ore, metallurgical coal and energy coal. Total copper production guidance increased to between 1,645 and 1,740 kt and reflects the retention of Cerro Colorado. Group copper equivalent production was broadly unchanged in the December 2018 half year, with volumes for the full year also expected to be in line with last year. Full year unit costs for all major assets are expected to be in line with guidance, predominantly reflecting stronger anticipated volumes in the second half of the year. All major projects under development are tracking to plan. Productivity for the December 2018 half year has been impacted by unplanned production outages at Olympic Dam, Spence and Western Australia Iron Ore, with a total negative impact of approximately US$600 million.
Flush with the proceeds of its sale to BP, BHP Group (BHP) – formerly listed as BHP Billiton (BLT) – has completed a $5.2bn off-market share buy-back, at a 14 per cent discount to the Australian-listed shares’ market price. The mining group has also declared a special dividend of $1.02 per share to all investor on the register as of 11 January, equivalent to another $5.2bn in shareholder returns.
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