Monday 28th May, 2018

Iron ore dumper issues costing BHP

Laing O'Rourke works across a number of Australian sectors including rail. It worked on BHP's RGP5 Railway in the Pilbara, pictured here. Photo: Laing O'Rourke
BHP's WA iron ore president will leave the business. Photo: Laing O'Rourke

Issues with car dumpers have forced BHP to cut into its FY18 iron ore guidance, with the miner saying it is looking into ways to fix the issues it is having with the giant machines.

BHP on April 19 downgraded its full-year iron ore production guidance from 275-280 million tonnes, to 272-274 million tonnes.

The miner said ongoing issues with the car dumper machines used to unload iron ore from rail wagons at Port Hedland had caused the output drop.

“A program of work is underway to improve car dumper availability and performance,” the miner said.

The announcement knocked some of the gloss off BHP’s iron ore business, which the miner said was otherwise performing strongly.

“Total iron ore production for the nine months ended March 2018 increased by 2% to a record 175 million tonnes, or 203 million tonnes on a 100% basis,” the miner said. “Increased production was supported by record production at Jimblebar and Mining Area C, and improved rail reliability.”

Elsewhere in its third-quarter report, BHP said increased volumes at the Escondida project helped drive a 37% year-on-year increase in copper production through the first nine months, to 1.29 million tonnes.

“BHP remains on track to achieve 6% volume growth for the 2018 financial year [across all operations],” chief executive Andrew Mackenzie said.

“Strong performance in copper was underpinned by the Los Colorados Extension project at Escondida and higher utilisation rates at Papa Norte. This more than offset the slower than expected ramp-up of Olympic Dam during the quarter following planned smelter maintenance.

“Incremental improvements across our operations from debottlenecking and increased throughput delivered record production in iron ore.”