As the Australian nickel industry facing multiple headwinds, BHP is weighing up options to “mitigate the impacts of the sharp fall in nickel prices”.
“The nickel industry is undergoing a number of structural changes and is at a cyclical low in realised pricing. Nickel West is not immune to these challenges,” the company said.
“Operations are being actively optimised, and options are being evaluated to mitigate the impacts of the sharp fall in nickel prices. Given the market conditions, a carrying value assessment of the group’s nickel assets is ongoing.”
Despite the nickel woes, BHP has reported strong operational performances across a range of commodities for the half year ending December 31.
Copper continues to prove a major winner for the mining giant, reporting a seven per cent increase in the half-year.
“Operationally, BHP has had a solid first half,” BHP chief executive officer Mike Henry said.
“Western Australia Iron Ore production was up five per cent quarter-on quarter, while first half copper production rose seven per cent reflecting a record half at Spence and ongoing strong performance and additional tonnes at Copper South Australia.
“We (have) successfully integrated our Copper SA business and significant exploration drilling beneath Olympic Dam has identified attractive copper mineralisation above (a) one per cent grade along a 2km strike, with areas above two per cent.”
BHP’s half-year energy coal production increased by 36 per cent, with its 2023–24 financial year (FY24) production expected to be in the upper end of the guidance range.
“NSW Energy Coal had its best first half in five years, while BMA (BHP Mitsubishi Alliance) had a tough six months following significant planned maintenance and low starting inventories,” Henry said.
BHP’s FY24 guidance ranges across all assets remain unchanged, except for BMA which has been lowered to 23–25 million tonnes following a 17 per cent decrease in half-year metallurgical coal production.
The update excludes the Blackwater and Daunia mines BHP sold to Whitehaven Coal last year. This sale is expected to be completed on April 2.