By David Winning
SYDNEY--BHP Group Ltd. reported stronger quarterly production of iron ore as it continued to capitalize on high prices for a commodity that is its main profit driver.
BHP /zigman2/quotes/208108397/composite BHP +2.08% /zigman2/quotes/201448516/delayed AU:BHP +0.06% /zigman2/quotes/203323256/delayed UK:BHP +3.18% said it produced 60 million metric tons of iron ore in the three months through December, up 4% on the same period a year earlier when it temporarily suspended all of its rail operations in Australia’s Pilbara region after a train ran loose for more than 50 miles before it was forcibly derailed.
The quarterly result means BHP, the world’s biggest miner by market value, produced 121 million tons of iron ore in its fiscal first half. Management stuck with annual guidance for between 242 million tons and 253 million tons from its Pilbara operations.
BHP’s Australian iron-ore shipments account for almost one-fifth of seaborne trade in the commodity. It is the world’s third-largest iron-ore exporter, behind Vale SA (VALE) and Rio Tinto PLC (RIO.LN).
BHP is in the midst of a leadership reshuffle that could have an impact on its growth strategy and which commodities and operations are favored for investment. Mike Henry became chief executive at the start of this month, replacing Andrew Mackenzie who will leave the company on March 31, three months sooner than was originally scheduled.
Under Mr. Mackenzie’s leadership, BHP sold assets ranging from U.S. shale gas deposits to South African coal mines and jettisoned a long-held pledge to increase its annual dividend. The result is a slimmed-down company, but one more reliant on swings in prices of just a handful of commodities such as iron ore and crude oil for profit growth.
“We delivered solid operational performances across the portfolio in the first half of the 2020 financial year, offsetting the expected impacts of planned maintenance and natural field decline,” Mr. Henry said. “Our six major development projects are progressing well, and we continue to advance our exploration programs in petroleum and copper.”
BHP said second-quarter output of petroleum products fell by 6% to 28 million barrels of oil equivalent. That reflected the impact of Tropical Storm Barry in the Gulf of Mexico and natural field decline across the company’s portfolio.
Quarterly copper output totaled 455,000 tons, driven by ongoing improvements in maintenance and operational performance at the Escondida mine in Chile.