Coal news and updates

Australian mining giant BHP reported Thursday that its metallurgical coal and iron ore production fell in the first quarter of the 2019-2020 (July-June) fiscal year, but has maintained its guidance ranges for the 12-month period.

BHP's share of metallurgical coal production from its Queensland Coal business was 9.36 million mt over July-September, which is down 10% year on year and 21% lower than the April-June quarter. It is the weakest quarterly production the company has seen of the product since April-June 2017, according to data from the miner.

"At Queensland Coal, production was impacted by the planned major wash plant shutdowns at Goonyella, Peak Downs and Caval Ridge. This was partially offset by increased feed rates at the Peak Downs wash plant following a change in mine sequencing," BHP said.

In research notes Thursday, RBC Capital Markets said BHP's Q1 production was below their forecast of 11 million mt, while J.P. Morgan said it was slightly better than their expectation of 9.1 million mt.

Queensland Coal comprises the BHP Mitsubishi Alliance and BHP Mitsui Coal assets. BMA, Australia's largest supplier of seaborne metallurgical coal, is 50:50 owned by BHP and Mitsubishi Development. BMC is 80% owned by BHP and Mitsui has the remaining 20%.

Queensland Coal's total production -- including the other company's shares -- was 16.26 million mt in the September quarter, having fallen 10% year on year and 22% quarter on quarter, the results showed.

BHP is expecting its share of production in 2019-2020 to total 41 million-45 million mt, while the guidance for total production is 73 million-79 million mt.

BHP'S IRON ORE PRODUCTION SLIPS 1% YEAR ON YEAR

BHP's share of production from its Western Australia Iron Ore business in the September quarter was 61 million mt, which is down 1% year on year and 3% lower than the June quarter.

RBC said it had forecast 62 million mt for the period.

"At WAIO, lower volumes reflected significant planned maintenance at Port Hedland, including a major car dumper maintenance program, to further improve port reliability and provide a stable base for our tightly coupled supply chain," the company said.

"Major planned car dumper maintenance was completed on October 16, 2019, while the port maintenance program continues through the 2020 financial year," it added.

There are four main WAIO joint ventures, namely Mt Newman, Yandi, Mt Goldsworthy and Jimblebar. BHP's interest in each of the joint ventures is 85%, with Mitsui and ITOCHU owning the remaining 15%.

WAIO's production including all interests was 69 million mt, which is level year on year and down 3% from the June quarter, BHP said.

The total production was just below J.P. Morgan's 71 million mt forecast.

BHP is expecting its share of production at WAIO to be 242 million-253 million mt and the business' total production to be 273 million mt-286 million mt. 

 

Source : https://www.spglobal.com