Red metal steals the show for BHP as iron ore cools

Copper has emerged as BHP’s hero commodity for the first half of the year, lifting production by 10 per cent while iron ore tonnes stayed relatively subdued amid weaker demand.

BHP’s share of output from its lifeblood iron ore operations for the half year to December clocked in at 130.9 million tonnes, up 1 per cent on the same time last year. Quarterly production of 66.2mt was up 2 per cent on the prior quarter.

In a broadly solid performance update, the mining giant held its full-year iron ore guidance of between 250mt and 260mt and expects output to land in the upper end of that band.

It comes as iron ore markets shift to a post-China steel boom era, with the country’s rapid industrialisation generally believed to have past its peak and its property market in oversupply.

BHP’s average realised price for a tonne of iron ore was $US81.11 per wet metric tonne ($129.34), down 22 per cent on this time last year.

Still, the period marked a record six month shipping performance for BHP, which has undertaken substantial efforts over recent years to debottleneck port infrastructure and free up more tonnes for export.

“WAIO shipped record half-year tonnes through the port, enabled by supply chain improvements following the completion of major debottlenecking at the port,” chief executive Mike Henry said on Tuesday.

Record volumes were also churned out of South Flank as the new mine hit full capacity, and at Mining Area C.

Meanwhile, output at BHP’s flagship copper operation Escondida in Chile surged 22 per cent on the second half of 2024’s numbers to 644,000 tonnes.

That helped boost overall production for the period to a 10-year production record of 987kt, with the miner targeting between 1.18mt and 1.3mt for the full year.

Copper has been a new focus area for the Big Australian, which unsuccessfully tried to buy Anglo American in April last year. The miner then in July moved for a $US2b acquisition to buy half of the Josemaria copper project in Argentina and Chile.

On home soil, BHP’s copper operations in South Australia fell 6 per cent due to a two-week power outage following a “significant storm” at the start of the second quarter.

Output for the full year has been trimmed to between 300kt and 325kt as a result.

the doors to BHP’s Nickel West operations in WA officially closed in December following a decision to shut the operation in July amid depressed prices.

Jobs were found for 800 workers out of the 3000 left in limbo, and it’s been reported some had been offered redundancies before the closure.

“Our WA Nickel operations were safely transitioned into a period of temporary suspension, with many employees moving into roles to support this phase or within other parts of BHP,” Mr Henry said.

The majority have moved to roles in Australia. The miner affirmed it would review the operation’s viability in 2027.

Overall Mr Henry said BHP was “well positioned to continue strong momentum into the second half”.

“BHP delivered safe and reliable performance in the first half. Our flagship copper, iron ore and steelmaking coal assets delivered particularly strong production in the period,” he said.

“BHP is in good shape and we have a clear pathway for growth.”

Shares in the miner closed up 0.92 per cent on Tuesday to $40.61.