The BHP Group Ltd [ASX:BHP] released their quarterly activities report for the year ending 30 June 2021 today. BHP is a global miner producing commodities like iron ore, gold, and copper.
A boost from higher production and iron ore and copper prices
This quarter, BHP hit record production in Western Australia Iron Ore (WAIO). BHP saw an increase in iron ore production of 9% compared to the previous quarter this year, and a 2% increase year-on-year.
BHP said that the higher production came from Mining Area C, which included the first iron ore production at South Flank.
As BHP’s Chief Executive Officer Mike Henry said:
‘South Flank, the largest and one of the most technically-advanced iron ore mines in Australia, began production in May and will boost the overall quality of BHP’s iron ore product suite.’
This is as iron ore prices are at record highs due to strong demand from China, along with Brazilian iron ore producer Vale having production issues.
To give you an idea, BHP’s average realised iron ore prices per wet metric tonne (wmt) were 69% higher this year at US$130.56, compared to the average US$77.36/wmt it got last year. Average realised prices were also 106% higher this quarter compared to the same quarter last year.
Another stand out from the report was BHP’s Olympic Dam, which reached the highest annual copper production since BHP bought it in 2005, along with the highest gold production ever in its operating history.
BHP saw an increase in copper production of 3% compared to the previous quarter. Copper prices have also been on the rise recently, and that’s reflecting in prices. BHP saw a 52% increase in realised prices this year compared to last year, and an 82% increase this quarter compared to the same quarter last year.
BHP’s Chief Executive Officer Mike Henry had this to say:
‘BHP is in great shape. Our operations are performing well, we continue our track record of disciplined capital allocation, and our portfolio is positively leveraged to the megatrends of decarbonisation, electrification and population growth.’
BHP share price is down though
Even with the great results, the BHP share price today is down close to 2% at time of writing, trading at $49.51.
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