BHP 1st Half Iron-Ore Output Higher, Flags Up to $1.25 Billion Impairment Charge
By Rhiannon Hoyle
SYDNEY--BHP Group Ltd. said it produced more iron ore but less
coal, copper and petroleum in the first half of its fiscal year, as
it flagged an impairment charge of between $1.15 billion and $1.25
billion against an Australian coal unit.
BHP, the world's largest mining company by value, also raised
its projection for annual iron-ore output following the restart of
its Samarco joint venture operations with Vale SA in Brazil, which
had been suspended for five years following a deadly waste-dam
The miner reported iron-ore production of 128.4 million metric
tons for the six months through December, up 6% on the same period
a year earlier.
The miner said it now expects to produce between 245 million and
255 million tons of iron ore in the year through June, up from an
earlier forecast of between 244 million and 253 million tons.
BHP's increased output in the first half was tied to record
production at its Jimblebar operation in its Western Australia
mining hub, which more than offset weather-related disruptions.
Its first-half production of metallurgical coal, used in steel,
totaled 19.2 million tons, down 5% on a year ago. BHP cited plant
maintenance work and said it expects stronger volumes in its second
"We continue to monitor for any potential impacts on volumes
from restrictions on coal imports into China," BHP said.
BHP downgraded its full-year output projection for energy coal,
to 21 million-23 million from 22 million-24 million tons, because
of a strike at the Cerrejón mine in Colombia. First-half energy
coal output was down 30% year-on-year, at 8.2 million tons.
BHP said the post-tax impairment charge of $1.15 billion-$1.25
billion would be recorded as an exceptional item in relation to New
South Wales Energy Coal and associated deferred tax assets.
"This reflects current market conditions for Australian thermal
coal, the strengthening Australian dollar, changes to the mine plan
and updated assessment of the likelihood of recovering tax losses,"
Its copper mines produced less because of pandemic-related
restrictions at operations in South America, as well as some
maintenance, BHP said. Copper output for the half was 841,300 tons,
down 5% on a year ago.
Still, BHP said it recorded strong throughput at Escondida, the
world's biggest copper mine, and that its Spence copper-mine
expansion project reached first production in December.
Petroleum output was meantime down 12% year-on-year at 50.5
million barrels of oil equivalent because of natural field decline
and weather disruptions in the Gulf of Mexico.
Write to Rhiannon Hoyle at email@example.com
(END) Dow Jones Newswires
January 19, 2021 17:04 ET (22:04 GMT)
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