BHP operational review highlights

BHP Group (ASX: $BHP) has reported a strong operational performance for the year ended 30 June 2024, achieving record iron ore production and the highest copper production in over 15 years. The Western Australia Iron Ore (WAIO) segment continued its robust performance, delivering a second consecutive year of record production, while the copper business globally exhibited a strong performance, with record production from Spence in Chile and the highest production in four years at Escondida. The company also successfully completed the sale of the Blackwater and Daunia metallurgical coal operations on 2 April 2024 and has plans in place to increase production at BMA in the next five years.

Executive commentary on operational performance and strategic progress

We finished the year with a strong fourth quarter, achieving several production records and meeting current production and unit cost guidance for all commodities. WAIO continued its strong performance, delivering a second consecutive year of record production on the back of ongoing incremental improvements along its supply chain as we progress toward our medium-term goal of increasing production to greater than 305 Mtpa. We achieved a strong performance across our copper business globally, underpinned by the highest production in four years at Escondida and another year of record production from Spence in Chile. Successful integration at Copper South Australia has delivered additional production tonnes, and exceeded the annualised synergies planned at the time of the OZL acquisition. We continued to execute against our strategy, progressing growth options in the commodities the world needs to meet the demands of the energy transition and population growth. This includes our Jansen potash mine in Canada, where construction of Stage 1 is now more than 50% complete and Stage 2 is underway. We will see first production in 2026 and will be a major global producer of potash by the end of the decade. On 11 July we announced the temporary suspension of our Western Australia Nickel operations from October 2024 as a result of an oversupply in the global nickel market and protracted low nickel prices.

Operational excellence, strategic progress, and financial performance

BHP Group has achieved record production at WAIO and Spence, with FY24 production guidance achieved for all commodities. The company has made significant progress in executing its strategy, completing the divestment of Blackwater and Daunia, and commencing construction of Jansen Stage 2. BHP also reported strong prices in key commodities, with average realised prices for copper and iron ore higher in FY24. The company has made progress on decarbonisation, holding an investor roundtable to provide an update on its decarbonisation progress, including collaborations to trial battery electric haul trucks in the Pilbara and investigate a pilot electric smelting furnace (ESF). Looking ahead, BHP aims to increase total copper production by 4% in FY25 and expects to be a major global producer of potash by the end of the decade. The company also anticipates an increase in iron ore production for FY25 and is progressing plans to cease mining at the NSW Energy Coal asset in FY30.