Aggreko expands renewable energy and battery storage at Gold Fields’ Granny Smith mine
The gold mine will have a total of 19MW of solar capacity and 9MW/4.5MWh of BESS capacity installed.
BHP Group Ltd., the world’s biggest miner, posted a full-year profit broadly in line with expectations, as revenue from iron ore and copper increased despite a deteriorating Chinese demand outlook.
“In the near term, we expect volatility in global commodity markets, with China experiencing an uneven recovery,” chief executive officer Mike Henry said in an earnings statement. Iron ore supply will outpace demand into next year as surplus steel floods the market, he said.
China’s slowing economy and languishing property market is damping demand for metals, especially steelmaking staple iron ore, which accounts for almost two-thirds of BHP’s revenue. The head of the country’s biggest steel producer warned this month the industry faced a situation worse than crises in 2008 and 2015, and a wave of surplus Chinese steel is expected to flood global markets.
BHP’s underlying attributable profit was $13.66 billion for the year through June, up 2% from the year earlier and just above analysts’ estimate of $13.49 billion. The company’s share price rose as much as 2.7% in Sydney following the earnings release.
Henry has signaled plans to focus BHP more closely on materials tied to the energy transition, particularly copper, but the company’s failed $49 billion bid to takeover Anglo American Plc this year dealt a blow to those ambitions. It will have another opportunity to bid for its rival in November, and Henry said on the earnings call on Tuesday that there still a lot of attractive growth opportunities for copper.
The red metal currently generates just under 30% of BHP’s sales. Output rose 9% over the year through June, and the company is forecast a further 4% expansion this year.
BHP’s overall revenue rose 3% on the back of higher sales volumes and relatively strong prices for iron ore and copper. That was partially offset by lower coal prices and a crash in nickel, caused by a flood of cheap Indonesian supply that spurred the miner’s decision to shutter its Nickel West business. Both iron and copper have weakened since the end of the reporting period, potentially signaling more challenging times ahead.
BHP will pay a final dividend of 74 cents per share, compared with 80 cents a year ago.
The Melbourne-based company is looking at a potential expansion of its Western Australia iron ore business to lift output to 330 million tons annually, compared with 260 million tons in the year just completed. Henry said that was contingent on market factors, and that China’s steel demand had plateaued.
“Some sectors of the Chinese economy that drive steel demand, such as shipbuilding and the auto industries, are actually performing quite healthily,” Henry said. “What we’re seeing play out in the market is really a fine balance between steel demand and iron ore supply,” adding “we see things having bounced off the downside cushion.”
The miner said it sees iron ore prices having real-time cost support at between $80 and $100 a ton.
BHP’s announcement continues a trend of the world’s largest miners remaining profitable despite China’s sluggish growth. Rio Tinto Group’s first-half profit was slightly higher than a year earlier, while Vale SA — the world’s No. 2 iron ore producer — posted second-quarter that were only just below analyst estimates.
(By Paul-Alain Hunt)
Comments