BHP (NYSE:BHP) missed estimates for Q4 iron ore production but said it expects to increase production of commodities in the year ahead after output in FY 2022 was slowed by wet weather and a tight labor market.
In its latest operations update, BHP (BHP) reported Q4 production of iron ore from Western Australia rose 8% Q/Q but fell slightly Y/Y to 71.7M metric tons from 72.8M tons in the year-earlier quarter, below a consensus estimate of 76M tons, while Q4 output of copper increased 25% and energy coal jumped 52% Q/Q.
The miner said it met FY 2022 production targets for its iron ore and energy coal units, as well as recently downgraded guidance for copper and metallurgical coal, but full-year nickel production was lower than revised expectations due to a smelter outage in Q4.
For FY 2023, BHP (BHP) forecast iron ore production of 278M-290M metric tons, with the midpoint coming in marginally higher than the 282.8M tons it produced this year.
BHP (BHP) also said it is working to bring forward first production from its Jansen potash project in Saskatchewab, and will assess the outlook for its metallurgical coal business after Australia’s Queensland state increased royalty rates.
“We expect the lag effect of inflationary pressures to continue through the 2023 financial year, along with labor market tightness and supply chain constraints,” CEO Mike Henry said.
Rival Australian miner Rio Tinto last week reported higher iron ore production while also warning of similar economic headwinds.