BHP lifts forecast as disaster mine resumes
BHP has slashed its debt while increasing iron ore production with the restart of its Samarco operations in Brazil, five years after the tailings dam disaster.
The mining giant reported on Wednesday it had achieved record production at its all-important iron ore mines in Western Australia during the first half of 2020-21.
It also increased its full-year output guidance for the steelmaking commodity to between 245 and 255 million tonnes as a result of resuming production at its Samarco joint venture with Vale last month.
The dam collapse in November 2015 was Brazil's worst environmental catastrophe, unleashing a flood of sludge that killed 19 people and displaced hundreds.
It also triggered various legal actions against BHP.
Announcing the restart on Christmas Eve, BHP said about $US2.1bn had been spent on remediation and compensation programs, and about $US620 million had been paid in indemnities and emergency financial aid to some 325,000 people by November 2020.
RBC Capital Markets was mildly disappointed by the first half iron ore production result, saying it "came in lighter than our expectations" but noting the full-year guidance increase.
BHP reported copper equivalent production was broadly flat in the half year, with strong underlying operational performance offsetting the impacts of planned maintenance, natural field and copper grade decline and adverse weather.
The company achieved record average concentrator throughput at its epic Escondida mine in Chile - the world's biggest copper operation.
BHP realised better prices for both commodities, up 39 per cent for copper compared with the half-year ending June 30 and up 35 per cent for iron ore amid strong demand from China.
Prices for LNG and coal were lower, however.
BHP also said it expected in its first half financial results to cut the value of its NSW thermal coal assets - which it seeks to sell - by up to $US1.25bn ($A1.62bn) amid China's ban on Australian coal imports.
The miner said it reduced gross debt by more than $US4bn ($A5.2bn) during the period and reaffirmed it expected to make a final investment decision on the stalled Jensen potash project in Canada in the middle of this calendar year.
Originally published as BHP lifts forecast as disaster mine resumes