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BHP inches up as better than expected petroleum production outweighs drop in copper and iron

Published: 18:46 17 Jul 2019 AEST

Mining equipment
Production of metallurgical coal, energy coal and nickel also dropped year-on-year

Shares in blue-chip miner BHP Group PLC (LON:BHP) ticked up on Wednesday after better than expected petroleum production just about outweighed declines in its copper and iron ore output last year.

For the year ended 30 June, the FTSE 100 firm reported that petroleum output had risen 1% to 121mln barrels of oil equivalent (mmboe), mainly due to increased natural gas production and increased tax barrels in Trinidad and Tobago.

READ: BHP, AstraZeneca and Shell among world’s top divi payers as shareholders gear up for record year of returns

Copper production, meanwhile, fell 4% to 1,689 kilotonnes as a result of production outages at the Olympic Dam project in Australia as well as lower grades from the Escondida mine in Chile.

Iron ore production during the year was flat at 238mln tonnes despite record production at BHP’s Jimlebar mine as the benefits were offset by the impact on inventory from a fire at the Mount Whaleback mine in the previous year.

The declines continued across the group’s metallurgical coal, energy coal and nickel production, which fell 1%, 6% and 6% respectively over the course of the year.

However, the figures were better for the group’s performance in June, which saw month-on-month iron ore output rebound 12% to 63mln tonnes as its Western Australia Iron Ore project returned to full capacity following Tropical Cyclone Veronica in March.

Month-on-month petroleum output was up 3% while copper, metallurgical coal, energy coal and nickel were up 3%, 6%, 20%, 10% and 49% respectively.

Looking ahead, the company said it expected copper production for the 2020 financial year to be “slightly higher” that the year just ended, with chief executive Andrew Mackenzie saying a “strong underlying performance” during the year had put the company in a position to deliver “higher volumes” in 2020.

BHP added that all of its major projects were currently “tracking to plan”.

The positive outlook and higher petroleum output helped lift the shares by 0.4% to 2,037.5p in early deals.

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