The BHP Group Ltd (ASX: BHP) share price will be on watch on Wednesday.
That's because the Big Australian has just released its first quarter update.
BHP share price on watch following Q1 update
For the three months ended 30 September, the mining giant reported the following production compared to the fourth quarter of FY 2023:
- Copper production down 4% to 457kt
- Iron ore production down 3% to 63.2Mt
- Met coal production down 34% to 5.6Mt
- Energy coal production down 24% to 3.6Mt
- Nickel production down 8% to 20.2kt
In respect to its copper production, a strong underlying operational performance, including record quarterly production at Spence, was offset by planned maintenance across Copper South Australia and lower concentrator and stacking grades at Escondida.
BHP commanded an average realised copper price of US$3.63 per pound during the quarter, which was down 4% from the second-half average in FY 2023.
For iron ore, lower production at WAIO, as a result of planned equipment maintenance and the ongoing ramp-up of the Central Pilbara hub, was partially offset by favourable weather following Tropical Cyclone Ilsa in the prior quarter.
BHP received an average iron ore price of US$98.04 per tonne during the three months, which was down 2% from the average during the preceding six months.
How does this compare to expectations?
Despite reporting declines across the board, BHP's production appears to have come in slightly ahead of expectations for some commodities.
The market was expecting copper production of 450Mt and nickel production of 19.6kt.
It was also expecting iron ore shipments of 71.6Mt on a 100% basis. And while that number was not revealed by BHP with this release, management has reaffirmed its iron ore guidance for FY 2024. So, it appears to be trending at least in line with expectations.
Management commentary
BHP's CEO, Mike Henry, appeared pleased with the quarter. He said:
First quarter operational performance was highlighted by a 11% uplift in copper production from the previous year. After completing a typically busy quarter of planned maintenance particularly at our Australian assets, we are on track to achieve full year production and unit cost guidance. BMA in particular was impacted by planned maintenance, an extended longwall move and low opening inventory following drawdowns in the prior year.
Jansen Stage 1 in Canada is approximately one-third complete after a productive summer. In South Australia, we saw strong operational performance in the first full quarter of production for the new province, as we bring our copper assets together and progress further exploration drilling.
Guidance reaffirmed
Possibly giving the BHP share price a boost today will be management's outlook commentary. It revealed that its FY 2024 production and unit cost guidance remains unchanged for all assets.
This includes copper production of 1,720kt to 1,910 kt and iron ore production of 254Mt to 264.5 Mt.
