BHP Group: Iron Ore Production Up 2%; Sales Up 3% in CY18

BHP Group - world's third largest iron ore producer has recently announced CY18 results. The miner achieved production at 274 MnT for CY18 from Western Australia iron ore operations on 100% basis. The production increased 2% on yearly basis as against 268 MnT in CY17.

The H2 CY18 production recorded at 134.8 MnT, down against H1 CY18 at 139.2 MnT. The drop is attributed to maintenance pause in Sep'18 and derailment in Nov'18. The derailment led to suspension of mines for five days and production impact of around 4 MnT.

BHP Group's FY'19 production guidance remains intact at 273-283 MnT on 100% basis.

The South Flank project is expected to replace production from 80 MnT p.a. Yandi mines.

The total iron ore production on 100% basis from Pilbara, Australia for quarter ending Dec'18 witnessed at 65.5 MnT, down 5% Q-o-Q as against Q3 CY'18 at 69.3 MnT. On yearly basis, the miner recorded fall of 9% in Q4 CY'18, as against Q4 CY'17 at 71.6 MnT.

Average realised prices in Q4 CY18 was USD 55.62/WMT, FoB against USD 56.5/MT, FoB a year ago. The majority of iron ore shipments were linked to the index price for the month of shipment, with price differentials predominantly a reflection of product quality and market fundamentals.

BHP Group's iron ore sales increased in CY'18

BHP Group's total iron ore sales from Pilbara on 100% basis recorded at 274.4 MnT for CY'18, up 3% as against 267.7 MnT in CY'17. For Q4 CY'18 sales recorded at 65.8 MnT, decline of 5% Q-o-Q as against 69.4 MnT in last quarter. The sales for Q4 CY'18 depicted 7% decline on yearly basis as compared to Q4 CY'17 sales at 70.7 MnT.

Mining and processing operations at Samarco remain suspended following the failure of the Fundao tailings dam and Santarem water dam on 5 November 2015 and a short-term facility of up to USD 77 million to be made available to Samarco until 30 June 2019.