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BHP Billiton’s staging a comeback in copper volumes

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Copper production

BHP Billiton’s (BHP) total copper production decreased by 2% in the December 2014 half-year to 813 kilotons, but production for the quarter ended December 2014 increased by 9% quarter-over-quarter (or QoQ). BHP posted a strong recovery after a weak September quarter.

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Escondida

Escondida copper production decreased by 2% in the same period to 553 kilotons. Strong operating performance, including a 14% increase in truck utilization, resulted in record material mined for the period. This was offset by the impact of water restrictions during the December 2014 quarter along with two days of industrial action and a power outage throughout Northern Chile during the September 2014 quarter. 

Pampa Norte

Pampa Norte copper production increased by 22% in the December 2014 half-year to 125 kilotons as Spence benefited from higher grades and recoveries. Production at Pampa Norte for the 2015 financial year is expected to remain broadly unchanged from the prior year as higher grades and recoveries at Spence continue to offset declining grades and recoveries at Cerro Colorado.

Olympic Dam copper production increased by 4% in the half year to 82 kilotons. Production in the 2015 financial year is expected to remain broadly unchanged from the prior year, with planned smelter maintenance scheduled for the June 2015 quarter.

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Antamina copper production declined by 37% in the half-year to 53 kilotons. Lower grades more than offset record mill throughput. Average copper grades at Antamina for the remainder of the 2015 financial year are expected to remain at a similar level to the December 2014 half-year, consistent with the mine plan.

Outlook

Guidance for fiscal 2015 remains unchanged at 1.8 million tons.

Copper prices too have touched multi-year lows in 2014, but they’re likely to find support, as mine production is falling short of expectations and supply growth expectations are lowering for 2015.

Freeport-McMoRan (FCX) reported slightly weaker copper volumes for the December 2014 quarter in the results released on January 27. Southern Copper (SCCO) is expected to report in early February. Rio Tinto (RIO) reported a slight miss in copper volumes due to lower grades. FCX forms 3.34% of the SPDR Metals and Mining ETF (XME), which invests in diversified metals and mining companies.

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