JOHANNESBURG - Diversified mining giant BHP, formerly known as BHP Billiton yesterday flagged that Australia’s bushfire smoke had slowed down coal production in the half-year ended December.
The group, which is the world’s biggest mining company by value, reported an 11percent decline in output at New South Wales Energy Coal to 7million tons as a result of the change in product strategy to focus on higher-quality products.
“Smoke from regional bushfires and dust have reduced air quality at our operations, which has impacted on December 2019 production,” the group said.
“We are monitoring the situation and if air quality continues to deteriorate then operations could be constrained further in the second half of the (financial) year,” BHP added.
The group left 2020 production guidance for New South Wales Energy Coal unchanged at between 15 and 17million tons.
The company, with its headquarters in Australia, said mining and processing operations at Samarco, the joint venture with Brazilian mining giant Vale, remained suspended after the failure of the Fundao tailings dam and Santarem water dam in November 2015.
The two dams in Mariana, which contained by-products of iron mining, collapsed killing 19 people. The mix of contaminated water and mud flowed to nearby rivers including the Rio Doce, an important river in the region.
BHP said approval of the corrective Operating Licence for Samarco’s operating activities at its Germano Complex was received in October and operation readiness for restart had commenced.
The group reported a 9percent decrease in petroleum production and crude oil production respectively. It said natural gas production also fell 8 percent while iron ore production increased 2percent.
Guidance was unchanged at between 242 and 253million tons.
BHP fell 1.65 percent to R342.82 on the JSE yesterday after the release of the half-year production report.