BHP Misses Annual Coal Production Guidance

BHP, formerly known as BHP Billiton, the Anglo-Australian multinational mining company has reported slightly lower coal production than its set guidance for the year ended of 30 Jun’19, predominantly as a result of lower than expected was plant yields and adverse weather impacts.

BHP’s metallurgical coal production remained flat on the year recorded at 42.4 MnT during FY19 (running from Jul’18 to Jun’19) against 42.64 MnT in FY18 (Jul’17-Jun’18). Annual production guidance for metallurgical coal was set at between 43-46 MnT for FY19.

BHP’s metallurgical coal operation comprises the BHP Mitsubishi Alliance (BMA) and BHP Mitsui Coal (BMC) assets in the Bowen Basin in Central Queensland, Australia.

The company had reported record annual production at BMC due to improved wash plant performance. On the other hand, despite record stripping, BMA’s production decreased slightly due to unfavorable weather impacts.

BHP has lowered its annual metallurgical coal production guidance to 41-45 MnT for FY20 (Jul’19-Jun’20), while indicating an adverse performance on account of planned shutdown at Goonyella, Peak Downs and Caval Ridge during Sep’19 quarter.

Thermal Coal Production:

BHP’s energy coal production, commonly known as thermal coal, decreased 6% Y-o-Y to 27.487 MnT in FY19 period (Jul’18-Jun’19), thereby missing its annual production guidance of 28-29 MnT.

The company stated that production from New South Wales (Australia) fell by 2% as record stripping performance was offset by higher strip ratios and lower wash plant yields. While, output from Cerrejón, Colombia decreased by 13% accounted to the adverse condition and its impact on mine sequencing.

Going forward the company has said that it would lower its thermal coal production for next year and wash it instead to focus on higher quality products.

BHP’s thermal coal production guidance was assessed at 24-26 MnT for FY20 (Jul’19-Jun’20 period).

Source: BHP
Quantity in MnT
Financial Year runs from July to June