As the Australian nickel industry grapples with various challenges, BHP is exploring strategies to counter the impact of the significant decline in nickel prices.
BHP acknowledged the structural changes and cyclical lows in nickel pricing affecting the industry, stating that Nickel West is not immune to these challenges. The company is actively optimizing operations and assessing options to mitigate the effects of the sharp decline in nickel prices. In response to market conditions, an ongoing assessment of the carrying value of the group’s nickel assets is underway.
Despite the challenges in the nickel sector, BHP reported robust operational performances across a diverse range of commodities for the half-year ending December 31.
Copper proved to be a major success for the mining giant, with a seven percent increase in production during the half-year period. BHP CEO Mike Henry highlighted the solid first half, noting a five percent quarter-on-quarter increase in Western Australia Iron Ore production. The company also reported a record half in copper production at Spence, along with strong performance and additional tonnes in Copper South Australia.
BHP’s half-year energy coal production saw a significant 36 percent increase, with expectations that production for the 2023–24 financial year will be at the upper end of the guidance range. While NSW Energy Coal achieved its best first half in five years, BHP Mitsubishi Alliance (BMA) faced challenges in the six months due to planned maintenance and low starting inventories.
The FY24 guidance ranges across all assets remain unchanged, except for BMA, which has been adjusted to 23–25 million tonnes following a 17 percent decrease in half-year metallurgical coal production.
It’s important to note that the update excludes the Blackwater and Daunia mines, which BHP sold to Whitehaven Coal last year. The completion of this sale is anticipated on April 2.
