Record-breaking year for BHP iron ore and copper

BHP (ASX: BHP) released its FY24 operational review, showing record iron ore production and its highest copper production in over 15 years.

BHP chief executive Mike Henry says BHP had a strong finish to the year.

“We finished the year with a strong fourth quarter, achieving several production records and we are meeting current production and unit cost guidance for all commodities,” he said.

BHP looks to continue this year’s record production and decarbonisation efforts to drive results in FY25.

Record production

BHP achieved FY24 production guidance for all commodities with metallurgical coal achieving the upper end of is revised guidance.

The company had record production at WA iron ore operations (WAIO), Spence and Carrapateena and the highest production in four years at Escondida.

BHP’s total copper production increased 9% since FY23. Despite a halt in its $75b takeover of AngloAmerican, BHP expects copper production to increase by a further 4% in FY25.

Mr Henry says they are meeting current production and unit cost guidance for all commodities.

“WAIO continued its strong performance, delivering a second consecutive year of record production on the back of ongoing incremental improvements along its supply chain as we progress toward our medium-term goal of increasing production to greater than 305mtpa,” he said.

“We achieved a strong performance across our copper business globally, underpinned by the highest production in four years at Escondida and another year of record production from Spence in Chile.

“Successful integration at Copper South Australia has delivered additional production tonnes and exceeded the annualised synergies planned at the time of the OZ Minerals (ASX: OZL) (OZL) acquisition.

“We successfully completed the sale of the Blackwater and Daunia metallurgical coal operations on April 2, 2024.

“After a challenging year at BHP Mitsubishi Alliance (BMA), we have plans in place to increase production to between 43 and 45mtpa (100%) in the next five years.”

Strong prices in key commodities

BHP reported average realised prices for copper and iron ore were higher in FY24, while metallurgical coal prices remained relatively stable and nickel and energy coal prices were lower.

BHP expects FY24 unit cost guidance to be met at Escondida, WAIO and Spence, and revised unit cost guidance to be met at BMA.

BHP will continue to adjust in FY25, following the announced closure of all WA nickel operations driven by decreasing nickel prices. WA nickel operations are expected to cease from October 2024.

Progress on Scope 1, 2 and 3 emissions

As outlined in their update on decarbonisation progress, BHP will continue to trial battery electric haul trucks in the Pilbara and investigate a pilot electric smelting furnace.

BHP expects to remain a primary contributor of resources needed for the energy transition in FY25.

“We continued to execute against our strategy, progressing growth options in the commodities the world needs to meet the demands of the energy transition and population growth,” said Mr Henry.

“This includes our Jansen potash mine in Canada, where construction of Stage 1 is now more than 50% complete and Stage 2 is underway.

“We will see first production in 2026 and will be a major global producer of potash by the end of the decade.”