BHP's Operational Review for the year ended 30 June 2024 reveals a strong performance across its diverse portfolio of assets. The company achieved record production in several key areas, demonstrating its resilience and operational excellence in the face of global challenges. Western Australia Iron Ore (WAIO) continued its impressive streak, delivering a second consecutive year of record production. This achievement was attributed to ongoing incremental improvements along the supply chain, as BHP progresses towards its medium-term goal of increasing production to more than 305 million metric tons per annum.
The copper business also showed remarkable results, with Escondida in Chile achieving its highest production in four years. Spence, another Chilean copper asset, maintained its record-breaking performance for the second year running. The successful integration of Copper South Australia, following the acquisition of OZL, has not only contributed additional production tonnes but also exceeded the anticipated annualized synergies.
In a strategic move, BHP completed the sale of its Blackwater and Daunia metallurgical coal operations on 2 April 2024. While the BMA, BHP Mitsubishi Alliance, faced challenges during the year, the company has implemented plans to increase production to between 43 and 45 million metric tons per annum (100% basis) over the next five years. This demonstrates BHP's commitment to optimizing its portfolio and focusing on high-performing assets.
The company continues to make progress on its growth options in commodities crucial for the energy transition and population growth. A notable example is the Jansen potash mine in Canada, where construction of Stage 1 has surpassed the 50% completion mark, and Stage 2 is already underway. BHP anticipates first production from Jansen in 2026, positioning itself to become a major global producer of potash by the end of the decade.
However, BHP also faces challenges in certain sectors. On 11 July, the company announced the temporary suspension of its Western Australia Nickel operations, scheduled for October 2024. This decision was prompted by an oversupply in the global nickel market and persistently low nickel prices. The move underscores BHP's agility in responding to market conditions and its commitment to maintaining profitability across its operations.
BHP's Chief Executive Officer, Mike Henry, expressed satisfaction with the company's performance, stating that they have met current production and unit cost guidance for all commodities. He emphasized the strong fourth quarter, which saw several production records being achieved. Henry also highlighted the company's strategic execution, particularly in progressing growth options in commodities essential for the energy transition and meeting the demands of population growth.
The Operational Review demonstrates BHP's ability to navigate complex market conditions while maintaining operational excellence. The company's focus on continuous improvement, strategic portfolio management, and investment in future-focused commodities positions it well for long-term success in the global resources sector.
As of the latest trading session, BHP Group Limited (BHP) is trading at $60.45 on the New York Stock Exchange (NYSE), showing a change of +1.23%.
Based on technical analysis, the stock is currently in an uptrend, having broken above key resistance levels. The 50-day moving average is acting as support, while the MACD indicator shows bullish momentum. Fibonacci retracement levels suggest potential resistance at $62.80. Bollinger Bands indicate decreased volatility, with the price trading near the upper band, suggesting continued upward momentum. Overall, the technical outlook for BHP remains positive in the short to medium term.
