BHP’s Coal Production Falls 13% Y-o-Y in Sep’19 Quarter

BHP, the Anglo-Australian multinational mining company, has reported a decline of 13% in total coal production attained during Jul-Sep’19.

BHP’s coal production stood 15.005 MnT in Sep’19 quarter compared with 16.998 MnT noted in the year-ago quarter. The company highlighted that lower volumes reflected significant planned wash plant maintenance activities that were carried out in the period, besides, higher strip ratios envisaged in order to procure higher quality products had also impacted coal output.

Metallurgical coal production was down 11% Y-o-Y to 9.358 MnT in Jul-Sep’19 compared with 10.358 MnT in Jul-Sep’18.

At BMA coal asset in Queensland, production was impacted by the planned major wash plant shutdowns at Goonyella, Peak Downs and Caval Ridge. However, output was partially offset by increased feed rates at the Peak Downs wash plant following a change in mine sequencing.

Output at BMA was recorded at 6.905 MnT in Sep’19 quarter, down 12% Y-o-Y from 7.744 MnT noted in the year-ago period. Remaining volume of 2.453 MnT was procured from BHP’s Mitsui Coal (BMC) assets.

BHP’s thermal coal production (or Energy coal as ascertained in its report) decreased by 18% on the year to 5.647 MnT in Sep’19 quarter.

Share of thermal coal produced from its Australian coal asset was down 11% as a result of the change in product strategy to focus on higher grade coal. While production from mines located in Colombia, had noted a decline of 29% due to impact of adverse weather.

Source: BHP
Quantity in MnT

Despite the hefty decline recorded in the first quarter, BHP has made it clear that it will not alter its production guidance for FY20. The company’s production guidance for metallurgical coal has been ascertained at 41-45 MnT, while for thermal coal it was fixed at 24-26 MnT.