BHP Reports Higher Copper Output in July-December, Driven by Strong Escondida Production

BHP

Escondida’s Growth Offsets Declines in Other Operations

BHP, one of the world’s largest mining companies, reported a 10% increase in copper production for July-December 2024, reaching 987,000 tonnes. This growth was primarily driven by higher output from the Escondida mine in Chile, which hit a 10-year high. The strong Escondida performance offset declining production from Pampa Norte, South Australia, and the Antamina mine in Peru.

The company maintained its 2024-25 copper production guidance at 1.85 million-2.05 million tonnes, reinforcing its position as a key player in the global copper market.

Regional Copper Production Performance

Production at Escondida surged 22% year-on-year to 644,000 tonnes, benefiting from higher-grade ore feed and improved recovery rates. Output guidance for 2024-25 remains at 1.18 million-1.3 million tonnes, highlighting continued operational stability.

Conversely, Pampa Norte’s copper production declined by 9% to 126,000 tonnes, mainly due to the temporary care and maintenance of the Cerro Colorado mine. Meanwhile, Spence mine output fell slightly by 1%, but its production guidance remains between 240,000-270,000 tonnes.

In South Australia, copper production dropped by 6% to 145,000 tonnes due to a power outage in October caused by a severe lightning storm. However, operations rebounded, producing 30,000 tonnes in December. Consequently, BHP lowered its South Australian 2024-25 guidance from 310,000-340,000 tonnes to 300,000-325,000 tonnes.

The Antamina mine in Peru saw a 7% drop in production, totaling 67,000 tonnes, due to planned lower throughput and declining ore grades. Despite this, output guidance remains unchanged at 115,000-135,000 tonnes.

Copper Prices and Nickel Market Challenges

BHP’s average realised copper price increased by 9% to $3.99/lb, closely following the London Metal Exchange (LME) price surge of 12% to an average of $9,331/t for July-December.

Meanwhile, nickel prices fell, impacting BHP’s earnings. The company’s average realised nickel price dropped 12% to $16,386/t, aligning with the LME’s 14% drop in class 1 nickel prices to $16,401/t.

Nickel production plummeted 31% to 28,000 tonnes, as BHP suspended operations at its Western Australian nickel division in October. Given the uncertain market conditions, no production guidance has been issued for nickel in 2024-25.

Cost Guidance Updates and Future Outlook

BHP maintained its unit cost guidance at $1.30-$1.60/lb at Escondida and $2-$2.30/lb at Spence. However, due to increased costs in South Australia, the company revised its cost guidance there to the upper half of $1.30-$1.80/lb.

Despite operational challenges in South Australia and Pampa Norte, strong copper prices and Escondida’s production boost have positioned BHP for a resilient 2024-25 fiscal year. With global copper demand rising, the company remains a key player in supplying critical metals for the energy transition.