Broadmeadow a bug bear for BHP

CHALLENGING roof conditions at BHP’s Broadmeadow longwall mine are expected to continue through the March 2018 quarter, pushing up unit production costs for the company’s Queensland coal division.
Broadmeadow a bug bear for BHP Broadmeadow a bug bear for BHP Broadmeadow a bug bear for BHP Broadmeadow a bug bear for BHP Broadmeadow a bug bear for BHP

BHP's Broadmeadow longwall mine in Queensland.

Lou Caruana

Unit costs for 2017-18 are now expected to be US$66 per tonne, an increase from previous guidance of $59/t, the company said in its half yearly report.

Unit costs for the second half of the 2018 financial year are expected to be $63/t when as the Broadmeadow production problems continue to weigh on productivity.

The company said geotechnical issues triggered by wet weather also impacted its Blackwater mine. 

Controllable cash costs increased by $191 million and included $134 million for unfavourable fixed cost dilution from reduced volumes at Broadmeadow and Blackwater, and compensatory increased production from BHP Billiton Mitsubishi Alliance’s other higher cost pits.

Half yearly coal revenues for the company came in at $4 billion for the six months to December 2017, which was up on the $3.9 billion for the previous corresponding period, however, earnings before interest tax depreciation and amortisation dipped from $2 billion to $1.7 billion.

Metallurgical coal production for the half year decreased 4% to 20 million tonnes.

NSW Energy Coal  unit costs increased 4% to $48/t in the December 2017 half year due to the impact of a stronger Australian dollar. 

Unit cost guidance for the 2018 financial year remains unchanged at $46/t.

“In the medium term, we expect to lower our unit costs further to approximately US$40 per tonne,” the company said.

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