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BHP: metallurgical coal production down, thermal coal up

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World Coal,

BHP’s metallurgical coal production for the December 2017 half year decreased by 4% to 20 million t. The company’s guidance for the 2018 financial year has been reduced to between 41 – 43 million t and reflects lower volumes now expected at Broadmeadow and Blackwater.

According to the company production at Queensland Coal for the December 2017 half year was lower due to the impacts of ongoing challenging roof conditions at Broadmeadow and geotechnical issues brought on by wet weather at Blackwater. This was partially offset by record production at South Walker Creek, Saraji, Caval Ridge and Daunia, underpinned by improved truck and shovel performance, utilisation of latent dragline capacity at Caval Ridge and increased wash-plant feed rates.

The Caval Ridge Southern Circuit project is progressing according to plan, with production expected to ramp-up early in the 2019 financial year.

Thermal coal production for the December 2017 half year increased by 4% to 14 million t. BHP’s guidance for the 2018 financial year remains unchanged at 29 – 30 million t.

New South Wales thermal coal production increased by 10% as a result of improved stripping performance, higher truck utilisation and additional bypass coal. This was partially offset by a 6% decline in Cerrejón production, which was impacted by wet weather conditions during the September 2017 quarter.

Commenting on the company’s full performance across all commodities, BHP Chief Executive Officer, Andrew Mackenzie, said: “A strong operating performance in the first half allowed us to capture the benefit of higher prices. The successful Los Colorados Extension project ramp-up contributed to a 17% increase in copper output and production records were achieved at a number of Western Australia Iron Ore and Queensland Coal mines. We have revised down our metallurgical coal production forecast for the full year as a result of geotechnical issues at both Broadmeadow and Blackwater. The momentum we’ve built across the wider portfolio during the second quarter will flow through to an expected stronger second half operating performance. Together with incremental production from latent capacity projects in iron ore and copper, we expect volume growth of 6% for the full year.”

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