Staff shortages take a toll as Covid hits BHP

BHP has flagged a billiondollar hit to its February halfyear financial accounts from impairments and fresh payments over the Samarco tailings disaster despite bumper iron ore shipments.

The warning comes as it shrugged off the impact of skilled labour shortages in Western Australia and Queensland.

The mining giant released its December quarter production report on Wednesday, saying it shipped 73.2 million tonnes of iron ore from its Pilbara mines in the December period, up from 70.8 million tonnes in the same period in 2020, and exported 144 million tonnes in the first half of the financial year.

The lift in the export rate came as BHP ramped up output from its new South Flank mine, saying the near-record export rates came despite the impacts of the WA labour shortages and major maintenance campaigns at its rail operations.

But, while BHP left its financial export forecast unchanged at 278 to 288 million tonnes, the company joined Rio Tinto in warning that the planned reopening of the WA state borders on February 5 may “introduce some shortterm disruption to the operating environment”.

BHP also downgraded production expectations in its coal division. It now expected to ship 68-72 million tonnes of metallurgical coal for the financial year, down from an earlier forecast of 70-78 million tonnes.

The group said skilled labour shortages were also affecting its Queensland coal operations.

“Following the recent easing of Queensland’s border restrictions, Covid-19 related absenteeism has increased and remains a risk for the remainder of the year,” BHP said.

The mining giant missed out on some of the benefits of the soaring thermal coal price in the December quarter as shipments from Mt Arthur slumped 30 per cent on the impact of bad weather in NSW, to 3 million tonnes.

BHP’S global assets, however, put in a solid performance despite the ongoing impact of the pandemic.

Copper output for the half fell 12 per cent to 742,000 tonnes, largely on lower production at Olympic Dam and Escondida, and heavy rain in

Queensland impacted metallurgical coal shipments, which fell 8 per cent compared to the first half of the previous year to 17.7 million tonnes.

It also signalled a new round of impairments and asset writedowns in its February accounts as it restructures its global business.

The company will take a $US400M to $US450M impairment as it writes off deferred tax assets in the US that it won’t be able to claim after the sale of its petroleum division to Woodside petroleum later this year.

BHP shares closed down 0.3 per cent at $46.56.