Copper tumbles but iron ore holds steady for BHP

BHP says copper output slumped as its key mines in Chile were affected by weather and lower-quality ore.

But the Big Australian has kept its full-year guidance for the key energy transition metal unchanged.

Copper production slumped 19 per cent from a year earlier in the three months through September, the company said in a quarterly report on Tuesday.

The drop reflected “planned grade declines and scheduled maintenance, alongside temporary disruptions from severe weather in Chile,” it said.

Major miners are struggling with falling grades at old mines, while finding new deposits of copper is becoming harder. This coincides with a bull run in prices of the red metal off the back of intense growth from artificial intelligence and the ongoing rollout of renewables and electrification.

“Global markets remain volatile, with geopolitical tensions, trade uncertainty and elevated energy and freight costs continuing to create headwinds across the industry,” BHP chief executive Brandon Craig said. It was a “maintenance-intensive” period, he added.

“At the same time, demand for commodities remains resilient, supported by continued industrialisation and urbanisation in China and India, alongside unprecedented investment in data centres and enabling infrastructure globally, which is reinforcing the long-term outlook for copper.

“That demand plays to the strength of our portfolio, which touches almost every part of how the world builds, powers and feeds itself.”

BHP mined 400,700 tonnes of copper in the quarter, while output of its other key commodity iron ore was steady at 66.5 million tonnes.

Despite the lower output, BHP rode the record price high for copper during the quarter, achieving $US7.01 a pound, up 7 per cent from the previous quarter.

But prices for iron ore slipped 9 per cent to $US76.27/t.

Guidance remained unchanged for copper — the key metal for electrification — while full-year forecasts for steelmaking ingredient iron ore were also unchanged at 260mt to 272mt.

The world’s biggest miner is spending heavily just to maintain production from its flagship Chilean copper mines, while also seeking to tap new resources elsewhere in South America. Last week, it averted a strike at its flagship Escondida operation.

“We continued to strengthen one of the world’s largest copper portfolios, from funding the Escondida new concentrator in Chile to growing our resource base and long-term production potential at Copper South Australia, while also expanding our copper growth pipeline across the Americas,” Mr Craig said.

BHP is also aiming to boost iron ore production in the Pilbara, where Mr Craig hopes to reach 305mt of yearly production in the near term, even after last week making 300 workers redundant across the operations.

Elsewhere, the company continues development of its Jansen potash project in Canada after cost and time overruns, and remains on track to deliver first ore of the key fertilizer mineral next year.

Bloomberg