BHP Group has announced plans to reveal the fate of its Western Australian nickel operations by August, while also revising down its fiscal 2024 output projections for its Queensland coal operations due to significant wet weather impacts.
As the world’s largest listed miner, BHP is currently reviewing the future of its Western Australian nickel operations, with a focus on conserving cash amid challenging market conditions. The decline in nickel prices, attributed to increased supply from Indonesia, has raised concerns about the viability of nickel production in high-cost regions like Australia. BHP initiated the review of its nickel business at its half-year results in February, and CEO Mike Henry stated, “In Western Australia, we expect to announce a decision on the future of our nickel business in the coming months, where efforts to optimize operations and preserve value are underway.”
BHP now anticipates producing between 21.5 million tons (Mt) and 22.5 Mt of metallurgical coal in fiscal 2024 from its assets in the Bowen Basin in Queensland, a reduction from the previous estimate of 23 Mt to 25 Mt. This adjustment reflects the impact of two tropical cyclones and operational challenges.
Despite the challenges in the metallurgical coal sector, BHP reported a rise in third-quarter iron ore output, driven by the continued ramp-up of its South Flank mine and improved operational efficiencies in Pilbara, which helped offset the impact of wet weather. The South Flank mine is on track to achieve full production capacity of 80 million tonnes per annum by the end of fiscal 2024.
BHP’s iron ore production from mines it operates in Western Australia reached 68.1 million tonnes during the three months ended March 31, marking a 3% increase compared to the previous year.