【Ferro-alloys.com】:Diversified miner BHP has reported increased production across its portfolio of commodities during the June quarter, but has also taken a swipe at the Queensland government over the introduction of new coal royalties, saying it would impact future investment decisions.

“BHP produced a strong fourth quarter to cap off a year of significant progress. Our performance for the year has been underpinned by safe, reliable operations and firm demand for our commodities. We completed another year fatality free and we are unwavering in our effort to improve safety, and this includes addressing sexual assault and harassment, racism and bullying,” said CEO Mike Henry.

“We delivered record full-year sales volumes at our iron-ore business in Western Australia as a result of reliable operational performance and the South Flank project which continued to ramp up.

“In copper, Escondida in Chile had record material mined and near-record concentrator throughput, while Olympic Dam in South Australia performed strongly in the fourth quarter after planned smelter maintenance,” said Henry.

BHP on Tuesday reported that iron-ore production in the June quarter was up by 8% on the March quarter to 64.2-million tonnes, with the higher volumes reflecting record production from the Mining Area C hub, and the continued ramp-up of the South Flank operation, as well as improved supply chain performance.

For the full year, iron-ore production was in line with the previous period at 253.2-million tonnes, and BHP has now set a production target of between 249-million and 260-million tonnes for 2023.

Meanwhile, copper production for the June quarter was up by 25% on the March quarter, to 461 800 t, resulting from higher volumes at the Escondida operation, in Chile, owing to increased grade and concentrator throughput, as well as at Spence, owing to the improved leaching performance.

Production at the Olympic Dam operation, in South Australia, also increased following major smelter maintenance campaigns which impacted the previous period.

For the full year, BHP produced 1.57-million tonnes of copper, which was down 4% on the 2021 financial year.

For the 2023 financial year, BHP has set a copper production target of between 1.6-million and 1.8-million tonnes.

Meanwhile, metallurgical coal production in the June quarter was up by 3%, to 8.1-million tonnes, while energy coal production was up by 52%, to 3.9-million tonnes. BHP told shareholders that significant wet weather impacts across most BMA operations and labour constraints, including Covid-19-related absenteeism, which impacted stripping and mine productivity, more than offset record production at the Broadmeadow mine.

“Queensland metallurgical coal delivered strong underlying performance for the quarter in the face of significant wet weather. BHP is assessing the impacts on BMA economic reserves and mine lives as a result of the increase in coal royalties by the Queensland government. The near tripling of top-end royalties has worsened what was already one of the world’s highest coal royalty regimes, threatening investment and jobs in the state,” Henry said on Tuesday.

The Queensland government recently lifted a decade-long royalty freeze. For coal prices trading above A$175/t, a royalty rate of 20% would apply, while coal trading at prices above A$225/t would be subject to a 30% royalty. A 40% royalty would be placed on coal tonnages trading above A$300/t.

BHP told shareholders that at spot metallurgical coal prices, the effective pre-tax royalty rate has increased by approximately seven percentage points to 19%. The company said that this further cost pressure would discourage investment, operational growth, job creation and local business spending across the state.

BHP also noted that the new tax damages Queensland’s reputation as a stable place to invest, and would make it harder for the state to compete against other global jurisdictions in attracting major new investments that would deliver longer-term value to communities and the state economy.

Meanwhile, nickel production in the June quarter was up 1%, to 18 800 t, but down 14% in the full year to 76 800 t.

The Nickel West production in the full year decreased owing to the significant impacts of Covid-19-related labour absenteeism and workforce shortages, and unplanned downtime at the oxygen plant leading to a 15-day smelter outage in the June 2022 quarter. Production for the 2023 financial year is expected to be between 80 000 t and 90 000 t, weighted to the second half of the year owing to planned smelter maintenance in the first half.

In terms of its potash development in Canada, Henry told shareholders that the $5.7-billion Jansen project was tracking to plan, and that BHP was working to bring first production forward to 2026.

“Also during the year, we merged our petroleum business with Woodside, completed the sales of BMC and Cerrejón, and decided to retain New South Wales Energy Coal until the cessation of mining in 2030 subject to relevant approvals. We also unified our corporate structure, and added to our global options in copper and nickel,” he added.

“Broader market volatility continues and we expect the lag effect of inflationary pressures to continue through the 2023 financial year, along with labour market tightness and supply chain constraints.

“Over the year ahead, China is expected to contribute positively to growth as stimulus policies take effect, however, the continuing conflict in the Ukraine, the unfolding energy crisis in Europe and policy tightening globally is expected to result in an overall slowing of global growth. Our strong focus on safety, operational reliability, cost control and social value will help us navigate these challenges and continue to deliver for all of our stakeholders.”

• [Editor:Alakay]