BHP sees medium-term uptick in iron ore, met coal production

Sydney — Mining giant BHP expects an increase in iron ore and metallurgical coal production over the medium term, while copper production is forecast to be in a steady range, the company said Tuesday.

After reporting total iron ore production from its assets of 270 million mt in fiscal 2018-19 (July-June), BHP is expecting 273-286 million mt in the current 2019-20 fiscal year, and then 290 million mt/year over the course of five years, it said.

"Global steel production has maintained healthy growth in the second half of the 2019 financial year, continuing the upswing from the trough towards the end of the 2015 calendar year," BHP said.

"However, the growth profile has become unbalanced recently, with robust expansion in China and the US offsetting weakness in Europe and Japan," it added.

The miner expects relatively steady metallurgical coal production in the current fiscal year before seeing a lift for the medium-term five-year period.

Its share of volumes from its Queensland coal business is expected to be 41-45 million mt in the current fiscal year. It is then expected to rise to 49-54 million mt/year for the medium term. The fiscal 2019-20 volumes could be impacted by planned wash plant shutdowns in the current July-September period at Goonyella, Peak Downs and Caval Ridge, it said.

The Chilean copper operation is expected to see production of 1.16-1.23 million mt for the current fiscal year, and then 1.2 million mt/year over the medium term, the company said.

"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 meet this growing demand at low cost. Scrap supply and aluminum substitution are constraints on the upside," it said.

-- Nathan Richardson, newsdesk@spglobal.com

-- Edited by Shashwat Pradhan, shashwat.pradhan@spglobal.com