BHP has achieved production records at Western Australia Iron Ore (WAIO), Spence and two Queensland Coal mines.
BHP Chief Executive Officer, Andrew Mackenzie said BHP has stepped up to unlock low-cost latent capacity and achieve strong productivity gains across their tier one assets.
Improved productivity led to record annual production at Western Australia Iron Ore, Spence and two Queensland Coal mines while production guidance was achieved by Petroleum and Western Australia Iron Ore.
Copper production is expected to rebound strongly in the 2018 financial year with the commissioning of the Escondida Water Supply project and ramp-up of the Los Colorados Extension project during the September 2017 quarter to enable utilisation of Escondida’s three concentrators.
In Petroleum, the recently approved Mad Dog phase 2 project will extend low-risk oil volumes as supply tightens while in the near-term, Onshore US development activity is to increase with up to 10 rigs planned for the 2018 financial year.
“Our relentless focus on safety, productivity and capital discipline will support strong growth in shareholder value,” said Mr Mackenzie.
Major development projects
During the year, the Bass Strait Longford Gas Conditioning Plant was fully commissioned and is running at design capacity, enabling full production from the Turrum and Kipper fields. The BHP Board also approved the Mad Dog Phase 2 project in the deepwater Gulf of Mexico. The Escondida Water Supply project achieved mechanical completion in the December 2016 quarter and was transitioned to operations effective 1 July 2017, following completion of project commissioning in June 2017.
At the end of the 2017 financial year, BHP had three major projects under development in Petroleum and Potash, with a combined budget of US$5.1 billion over the life of the projects.
BHP expects to record exceptional items of US$546 million (US$740 million post-tax) in the second half of the 2017 financial year. These items relate to idle capacity and other strike-related costs incurred as a result of the Escondida industrial action in the March 2017 quarter and Chilean withholding tax on a one-off dividend paid while a concessional tax rate was available.