BHP Group (NYSE: BHP), the global miner, beat first-quarter iron ore output estimates on Thursday, spurred by an easing of bottlenecks at its Western Australia operations amid efforts by China to revive its grappling property market and faltering economic growth.
Over the last year, the world’s largest listed miner has ramped up the South Flank mine to full production capacity and streamlined its port operations for its Western Australian iron ore business.
The ramp-up comes at a time when mining rivals including Vale (NYSE: VALE) and Rio Tinto (NYSE: RIO) are moving to expand their supplies. Vale plans to further lift its production, while Rio’s Simandou mine will begin production next year.
BHP Group (NYSE: BHP), which is diversifying into potash, said the $10.5 billion Jansen Stage 1 project was 58% complete.
The miner’s upbeat iron ore production update comes as China, the commodity’s largest purchaser, has been announcing a slew of stimulus measures to support its downbeat economic recovery.
BHP said iron ore output from Western Australia on a 100% basis was 71.6 million metric tons in the three months to September 30, beating a Visible Alpha consensus estimate of 70.7 Mt, according to a Macquarie note.
“Upcoming stimulus (from China) is likely to focus on relieving local debt, stabilizing the property market, and bolstering business confidence,” said CEO Mike Henry.
BHP Group (NYSE: BHP), which has been aiming to expand its copper operations, recorded a 4% rise in the metal’s output for the quarter, reflecting improved performance at its Escondida mine in Chile.
Analysts at Citi said Escondida output rose on higher grades and throughput at the Chilean mine.
Earlier this year, BHP made a $49 billion bid for British copper major Anglo-American, which did not materialize. But BHP joined hands with Lundin Mining to take over Filo Corp, gaining access to more copper assets.
Copper, used widely across the globe, is an ideal conductor of electricity and easily malleable, qualities that have made it widely popular for use in wiring, engines, construction equipment, electronics, and other devices.
BHP Group (NYSE: BHP) shares were up 2.17% at $57.96 in after-hours trade.
(Source: Reuters)
Maria Reed is a financial journalist with a passion for covering US equities. She joined the ABBO News team in June 2023. Maria holds an M.S. degree in International Economics and Finance from Otto-von-Guericke University in Magdeburg and is a CFA Level 2 candidate.
