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BHP costs on target as iron ore output peaks

BHP expects to achieve its cost guidance for the 2021 financial year at the Western Australia Iron Ore and Queensland Coal operations after breaking production records.

The company’s 2021 cost guidance for WAIO is $US13-14 ($17.75-$19.11) per tonne and $US74-78 per tonne at Queensland Coal.

With iron ore prices reaching their highest position in history, BHP produced a record 252 million tonnes at WAIO in the 2021 financial year.

This marked a 1 per cent increase from the previous year, while total iron ore production for the company increased to 253.5 million tonnes.

BHP reached first production on budget and ahead of schedule at four of its major development projects across the company during the fiscal year, including the South Flank iron ore project in Western Australia.

Ahead of BHP’s financial results release in August, chief executive officer Mike Henry said the company was in a good position .

“Our operations are performing well, we continue our track record of disciplined capital allocation, and our portfolio is positively leveraged to the megatrends of decarbonisation, electrification and population growth,” he said.

Higher volumes of metallurgical coal at Queensland Coal allowed the company to reach record production at the Goonyella mine, with 9448 tonnes in the 2021 financial year.

However, metallurgical coal production was reduced by 1 per cent to 41 million tonnes in the 2021 financial year, but remained within BHP’s guidance range.

“BHP safely delivered another year of excellent operational performance and its second consecutive financial year with zero fatalities at our operated assets,” Henry said.

BHP also produced its highest annual copper production at the Olympic Dam mine in South Australia.

The mine produced 205,300 tonnes of copper in the 2021 financial year as demand for the base metal surges in response to electric vehicle manufacturing and requirements for clean energy technologies.

BHP’s production result at Olympic Dam was its best since acquiring the site in 2005.

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