BHP Shares Hits Record Iron Ore Production in WA (ASX:BHP)

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.

With interest rates at record lows, check out these five exchange traded funds (ETFs) that Editor Greg Canavan thinks could benefit from the zero-interest rate market environment.

You can find them here.

Best,

 Selva Freigedo

PS: The Rum Rebellion is a fantastic place to start your investment journey. We talk about the big trends driving the Australian Economy. Learn all about it here.


Selva Freigedo is a research analyst for The Rum Rebellion.

Born in Argentina, her passion for economic analysis started at a young age. Her father was an economist for the Argentinean governments and the family used to discuss politics and economics at the dinner table.

Argentina is a country with an unusual economic history. Growing up there gave Selva first-hand experience on different economic phenomena such as hyperinflation, devaluation and debt default.

Selva has also lived in Brazil, Spain and the USA.

Back in 2000 she was living in the US as the dot com bubble popped…
And in 2008 she was in Spain as the property market exploded and then collapsed…

She has seen first-hand what happens when bubbles burst.

Selva joined Fat Tail Investment Research’s team in 2016, as an analyst. She now writes from her vantage point in Australia, where she settled in 2015.


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