BHP share price charges higher following Q3 update

How did the Big Australian perform during the last quarter?

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The BHP Group Ltd (ASX: BHP) share price is on the move on Thursday.

In morning trade, the mining giant's shares are up 2% to $45.38.

Why is the BHP share price rising?

Investors have been buying the miner's shares this morning following a strong rise in the iron ore and the release of its quarterly update.

In respect to the latter, BHP had a relatively positive three months, reporting quarter on quarter production growth across a number of commodities.

Arguably the biggest highlight was its 7% increase in copper production to 465.9kt. Management advised that this was driven by record production at Spence, strong operational performance at Copper South Australia (and the contribution from Prominent Hill and Carrapateena), and improved performance and grade at Escondida. Production guidance for FY 2024 remains unchanged at between 310kt and 340 kt. BHP's average realised copper price increased 5% to US$3.72 per pound.

Also increasing quarter on quarter was its coal production. Metallurgical coal increased by 6% to 6Mt and energy coal lifted by 8% to 4.1Mt. However, despite this, the company has downgraded its met coal guidance for FY 2024 to 21.5Mt to 22.5Mt. It has also lifted its unit cost guidance. This is due to "significant wet weather."

The Big Australian's iron ore production fell 7% during the three months to 61.5Mt. This reflects softer quarter on quarter production due partly to heavy rainfall. The good news, though, is that its iron ore production guidance for FY 2024 remains unchanged at between 254Mt and 264.5Mt. BHP reported a 3% increase in its average realised price to US$104.53 per wet metric tonne for the quarter. Iron ore shipments came in at 69.8Mt.

How does this compare to expectations?

The result appears to have been a bit of a mixed bag.

The consensus estimate was for iron ore shipments of 70.2Mt, copper production of 459kt, and metallurgical coal production of 6.8Mt.

While the company beat on its copper production, it missed on met coal production and slightly on iron ore shipments.

Nevertheless, thanks to the rising iron ore price overnight, the BHP share price is shrugging this off.

Management commentary

BHP's CEO, Mike Henry, appeared to be pleased with the quarter. He said:

We remain on track to meet copper, iron ore and energy coal production for the year. Copper volumes have increased by 10 per cent reflecting strong performance and additional tonnes from Copper South Australia, record year-to-date performance from Spence, and improved grades and production at Escondida.

Western Australia Iron Ore, the lowest cost iron ore producer globally, delivered another consistent period of production despite heavy rainfall. We continue to invest in improvements to our rail and port operations, which are essential for growth in the medium term to 305 million tonnes per annum and beyond.

Henry also provided investors with a progress report on the miner's major potash project in Canada and spoke briefly on its nickel plans. He advised:

In Canada, the Jansen Stage 1 project remains ahead of its initial schedule and is now 44 per cent complete. In Western Australia, we expect to announce a decision on the future of our nickel business in the coming months, where efforts to optimise operations and preserve value are underway.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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