BHP shares rise as Q2 copper output beats estimates
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More news: BHP shares lifted on the ASX after the mining heavyweight reported a mixed second-quarter result, boosted by better-than-expected copper production during the period.
BHP shares were up 1.4% to $40.82 by 11:05am AEDT, having slipped more than 10% over the last 12 months.
RBC Capital Markets analyst Kaan Peker said the result marked a "good operational performance" during the quarter, despite key assets being impacted by wet weather, power outage and strikes.
However, realised copper and iron ore pricing fell behind average estimates, he said, which will likely weigh on consensus earnings forecasts.
BHP reaffirms guidance despite cuts to Copper SA guidance after power outage
The news: Mining giant BHP reaffirmed its full-year production guidance at most of its assets, but cut guidance at its copper operations in South Australia after a two-week weather-related power outage during the second quarter.
The numbers: BHP reported a 10% increase in copper production during the first half of the year, boosted by a 22% rise at its Escondida mine in Chile. Output totalled 987,000 tonnes across all copper operations, from 894,000 tonnes in the previous corresponding period. The average realised price rose 9% to USD3.99 ($6.36) per pound.
The miner said Esconda's 10-year production record helped offset the impact of a weather-related power outage at Copper SA, which saw production slump 6%. Full-year production guidance for Copper SA has been revised down from between 310,000 and 340,000 tonnes, to between 300,000 and 325,000 tonnes.
Elsewhere, iron ore production lifted 1% year over year to 131 million tonnes, though the average realised price per wet metric tonne fell 22% to USD81.11.
Coal production lowered 21% to 8.9 million tonnes, with the average realised price of USD206.37 per tonne sinking 23%.
The context: BHP said that with the exception of Copper SA, the miner is on track to deliver production in the upper half of the FY25 guidance at its Western Australia Iron Ore (WAIO), BHP Mitsubishi Alliance (BMA), New South Wales Energy Coal (NSWEC) assets, as well as at its Samarco operations.
The miner noted that its formation of Vicuña Corp with Canadian miner Lundin Mining earlier this month will help it advance the Filo del Sol and Josemaria projects in Argentina, which it considers to be "one of the most significant global copper discoveries in decades".
The sources: ASX announcement, RBC Capital Markets research
