BHP sets record for metallurgical coal output

UK-Australian mining firm BHP increased metallurgical coal production to a record 42.6mn t in the July 2017-June 2018 fiscal year and is expected to set a new record next year in the 43mn-46mn t range. Thermal coal output was mostly unchanged.

The company achieved record output at its Peak Downs, Saraji, Caval Ridge, South Walker Creek and Poitrel mines in Australia's Queensland state in the 2017-18 fiscal year, BHP said in its annual operation review.

Although further gains are expected next year, volume growth will be weighted towards the second half of the year as an extensive maintenance programme will be carried out in the first half.

Met coal output in the April-June quarter rose by 16pc to 12mn t from March-May. BHP attributed the increase to the resolution of geological issues at its Blackwater and Broadmeadow mines, as well as the improved performance of its Caval Ridge and Poitrel wash plants.

BHP's second-quarter met coal output increased by 48pc from the same period last year, but that was from a low base after flooding of railways following Cyclone Debbie caused the company to declare force majeure during the April-June 2017 quarter.

The surplus of premium mid-volatile coking coal and relative shortage of premium low-volatile cargoes in the current spot market — where BHP is a major supplier — was partly reflected in the company's production report.

Output from the Goonyella mine, a premium mid-vol supplier, increased to the highest level of the year at 2.64mn t in the April-June quarter from 2.31mn t in March-May, while output from premium low-vol supplying mines Peak Downs and Saraji fell by 3-4pc over the same period to 1.66mn t and 1.2mn t respectively.

Production at mid-vol semi-soft mine Blackwater increased to 1.85mn t in the second quarter from the lowest level of the year at 1.38mn t in the first quarter as geotechnical issues were corrected.

Thermal coal production at BHP's assets in Australia and Colombia were little changed, edging lower to 29.16mn t in the 2017-18 fiscal year from 29.29mn t previously. A 2pc increase at BHP's thermal operations in New South Wales on the back of higher stripping performance was offset by a 3pc decline at the company's Cerrejon facility in Colombia because of weather impacts.