BHP has maintained its annual production targets for each of its sectors despite pressures created by labor shortages, the Anglo-Australian mining group said in its quarterly operational review on Tuesday.
The company said pandemic-induced labor shortages hit its iron ore operations in Western Australia, just days after rival Rio Tinto cut its annual production forecast for the same reasons .
BHP said iron ore production in Western Australia fell 6% to 62 million tonnes from the previous quarter, causing its quarterly production of the steel ingredient to drop 4% year-on-year.
He said the drop was mainly the result of scheduled maintenance during the quarter, but added that “temporary rail labor shortages related to border restrictions linked to Covid-19 have also had a minor impact” .
Production and unit cost forecasts for all sectors remained unchanged, however, with chief executive Mike Henry saying the company had performed “reliably” during the quarter and “deftly” overcame the challenges of Covid-19.
Henry gave a more optimistic note than Rio, which noted an “operationally difficult quarter” amid a “tight” labor market in Western Australia in an update on Friday.
Production fell quarter over quarter in five of the six BHP products, with sharp declines in nickel and metallurgical coal production, which were down 20% and 9% respectively from the previous quarter, in due to planned maintenance work.
The company also noted a quarterly drop of 9% in copper production, in part due to maintenance delays at its Olympic Dam site in South Australia due to virus restrictions.