Investment Matters

Company News: BHP, Coronado and Paladin

BHP Group released its June quarter activity report.  Production levels broadly met its targets.  Iron ore production was in line with the company’s revised guidance, post-cyclone Veronica (238 Mt vs 235-239Mt target range).  Copper (1,689 kt vs 1,645-1,740kt target range) and petroleum volumes (121 MMBoe vs 113-118 MMboe target range) were above guidance, while both metallurgical (42 Mt vs 43-36 Mt range) and thermal coal volumes (27 Mt vs 28-29Mt range) were below guidance.  The company also flagged that unit costs will be on the upper end of its forecasts for 2H-19 and additional exceptional item charges related to its Samarco tailings dam.

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Coronado Global Resources also released its June quarter activity report this week.  ROM production (coal delivered from the mine, pre-processing) increased by 14.3% to 8.3Mt compared to the previous quarter, while saleable production increased by 6.9% to 5.4Mt.  The realised metallurgical coal price for the group was $137.8 per tonne, up 0.5% on the prior quarter, with metallurgical coal sales constituting 80% of total production.  The company has decided to curtail a portion of its thermal coal production from its Logan mine, revising its total production guidance down by 0.5Mt (to 21.1Mt-21.6Mt), although it has reaffirmed its operating profit guidance of $737-$807m for 2019.

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Paladin Energy ‘s quarterly activity report indicated that the pre-feasibility study (PFS) for a rapid restart at its Langer Heinrich Mine remains on track (for completion in September of 2019).  The PFS study for process optimization at the mine is expected to be completed by March 2020.