BHP iron ore output hits new record but copper production tanks

The world's number one mining company BHP  (NYSE:BHP) reported record full-year production at its Western Australia iron ore division on Tuesday.

The Melbourne-based giant said thanks to the continued ramp up of additional capacity at its Jimblebar operations in Western Australia production at its iron ore unit rose 4% year-on-year to 231m tonnes for the 12 months to end-June.

BHP expects iron ore production for its current financial year to end June 2018 to rise 3–5% to between 239–243m tonnes on an attributable basis and to 275–280m tonnes in total.

Coking coal production declined 6% to 40m tonnes for the year  with two of the company's four Queensland mines  achieving record production which helped to offset the impact of cyclone Debbie in March. For its 2018 financial year BHP expects to produce 44–46m tonnes of met coal, an increase of 10–15%.

Exploration spending totalled $163 million and focused mainly on greenfield copper targets within Chile, Peru, Canada, South Australia and the southwest US

Copper production for 2016/2017 fell 16% to 1.326m tonnes due to a power outage at its Australian Olympic Dam operations in September-October last year and strike action that lasted 44 days at Escondida earlier this year which saw output at the giant mine down by more than a fifth to 772kt.

BHP expects full year copper output for 2018 to recover by 25–35% overall as Escondida expansion plans push  production at the mine to between 1.13m–1.23m tonnes.

Copper production at the world's largest copper mine will be boosted by the commissioning of a new water project  and ramp-up of the Los Colorados Extension project during the September 2017 quarter to enable utilization of Escondida’s three concentrators.

BHP's production of zinc jumped by 58% during the past 12 months to 87.5kt and the company expects zinc output to reach in the region of 100kt in its current financial year. Nickel production gained 5% to 85.1kt and is expected remain unchanged this year.

BHP said exploration spending for the 2017 financial year totalled $163 million and focused mainly on greenfield copper targets within Chile, Peru, Canada, South Australia and the southwest US. BHP was also awarded five exploration concessions in Ecuador in June 2017.

Production from BHP's oil and gas business which has come under pressure from activist shareholders keen on a spin-off of the division declined 13% to 208m barrels oil equivalent.

ADRs of BHP trading in New York were down 0.6% after hours on Tuesday following a similar decline during regular trading. BHP stock is worth a shade under $100 billion after rising 29% over the past year.