Column: Electric dreams turn into a nightmare for battery metals
A sector that was once racing to build new supply has been closing mines and deferring projects as low prices bite into the cost curve.
BHP Group Ltd on Wednesday upgraded its full-year iron ore production outlook on sustained China demand and restart of Samarco operations.
The company resumed production at its Samarco plant with joint venture partner Vale SA in December, five years after a dam disaster led to suspension of activities at the site and multiple legal cases.
BHP said it expects to produce 245 million tonnes to 255 million tonnes of iron ore in fiscal 2021, up from its previous forecast of 244 million tonnes to 253 million tonnes.
Like its peers, BHP has gained from China’s steady appetite for the steel-making commodity and said its Western Australia iron ore output rose 3.5% to 70.4 Mt for the quarter ended Dec. 31. UBS had estimated the output at 70.7 Mt.
Earlier this week, peer Rio Tinto logged a jump in iron ore shipments and said industrial activity in China had returned to pre-pandemic levels.
Iron ore last month breached the 1,000 yuan ($154.04) per tonne level for the first time on supply concerns and as commodity-intensive stimulus measures in China fuelled demand, sending BHP and Rio’s share prices to record highs.
However, BHP warned of an impairment charge of between $1.15 billion and $1.25 billion in its half-yearly results for fiscal 2021, related to its assets at New South Wales Energy Coal, which includes Mt Arthur coal mine.
(By Anushka Trivedi; Editing by Vinay Dwivedi)
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