BHP Writes Down Australian Thermal Coal Mine $1.6 Billion

BHP continues to write down its fossil fuel assets cutting up to $1.6 billion from the value of its Mt Arthur thermal coal mine in the Hunter Valley. BHP sold its U.S. shale assets to Britain’s oil major BP for $10.5 billion in 2018 selling off “non-core and we are actively pursuing options to exit these assets for value”.

BHP Mt Arthur Coal

BHP is Australia’s largest miner at it’s shareholders meeting it will writedown its Mt Arthur coal mine in the Hunter Valley in New South Wales between $US1.15 billion (AUD 1.49 billion) and $US1.25 billion (AUD 1.62 billion). BHP Chief executive Mike Henry has been trying to divest the Mt Arthur mine and the miner’s stake in Colombia’s Cerrejon coal mine as BHP repositions for a lower-carbon future.

Australia’s thermal coal producers have been under pressure this year with the Covid global lockdown and China’s trade war with Australia. The price of BHP’s coal has fallen to 25 per cent to $US44 a tonne. The escalation of China’s bans on Australian coal imports has been weighing on the market. Though this has left China vulnerable with a record cold weather. However thermal coal is the world’s most carbon-intensive energy source, and the political shift against it concerns investors.

Iron Ore

BHP’s exports of iron ore, by far its most valuable commodity, hit a new half-year record, the miner said on Wednesday, as China’s demand for the steel-making ingredient soared and BHP’s Jimblebar mine in the Pilbara performed strongly. BHP produced a record 144 million tonnes of iron ore from Western Australia mines over the December half and is guiding for between 276 million tonnes and 286 million tonnes in the financial year to June 30. However BHP’s quarterly output of 70.4 million of WA iron ore was lower than analysts expectations of 70.6 million tonnes from UBS & RBC Capital Markets had forecast 72 million tonnes. “BHP delivered strong safety and operational performance in the first half of the 2021 financial year, including record production at Western Australia iron ore,” Mr Henry said.

Australia’s iron ore mega trio BHP, Rio Tinto and Fortescue share prices have recently hit all-time highs. Australia’s biggest export is iron ore, and the price of iron ore has surged as record-breaking steel output in China, with it;s massive post-COVID stimulus programs and disruptions affecting rival suppliers in Brazil such as Vale. Iron ore cargoes on Tuesday were trading around $US170 per tonne.


BHP on Wednesday retained its 2021 financial year output target for WA iron ore but raised its overall iron ore target amid the gradual resumption of its jointly owned Samarco iron ore operation in Brazil (50 per cent owned by BHP). BHP and its partner Vale halted Samarco operations in 2015 after a dam collapse killed 19 people, poured mine waste into the local river and destroyed nearby villages. Samarco is expected to produce between 1 million tonnes and 2 million tonnes of iron ore in the financial year.

BHP said it was committed to supporting the Renova Foundation in its work to progress remediation and compensation programs to restore the environment and re-establish communities affected by the Samarco tragedy.


BHP reported better-than-expected output from its Escondida copper mine in Chile, with an 8 per cent lift in the company’s quarterly copper production. BHP’s Olympic Dam mine in South Australia also reported strong copper volumes, placing it on course to hit a target of between 180,000 and 200,000 tonnes for the full year.

via BHP

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