Business Finance News BHP plans to ramp up SA production
BHP has announced plans to potentially double its South Australian production, which has hit a new record amid a nearly 40 per cent decrease in profits.
Isabella KellyAug 27, 2024, updated Aug 27, 2024
BHP has released its 2024 financial year results, announcing plans to increase SA production. Photo: BHP.
BHP’s South Australian production achieved record levels in the 2024 financial year, following its $9.6 billion acquisition of Oz Minerals in 2023.
The acquisition led to the formation of Copper South Australia, which combines BHP’s Olympic Dam and Oak Dam exploration project with the acquired Carrapateena and Prominent Hill assets.
BHP CEO Mike Henry said this integration had delivered “greater-than-expected synergies”, as Copper SA recorded $990.6 million in underlying profit for the financial year.
BHP today announced a strategy for production at Copper SA to be doubled by mid-2030.
The first phase, which will be decided upon in the first half of FY27, involves an upgrade to a two-stage smelter, enabling capacity growth to more than 500,000 tones in the early 2030s. BHP said this upgrade would enable it to unlock approximately $2.2 billion of total synergies from its OZL acquisition.
The second phase includes a further expansion of BHP’s smelting and refining capacity, aligning capacity with potential growth at its Oak Dam and Olympic Dam assets.
The company estimated the site holds 1.34 billion tonnes of potential resources, making the scale of a potential mine larger than its Carrapateena resource.
BHP remains in the exploration phase of this potential development with further resource development and mining studies still to be carried out.
BHP has applied for approvals to allow it to begin execution activities on underground access declines for both Oak Dam and Olympic Dam.
Other continued exploration includes the company’s Wira shaft mine expansion at Prominent Hil, which is now approximately 40 per cent complete.
Olympic Dam reported record mine and smelter performance in FY24, with a record cathode production outcome of 216kt. Ore mined reached record levels at 10.8 Mt, with record concentrate smelted at 508.9 kt. Record gold bullion production was also recorded, at 207 ktoz.
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“BHP, and mining, have a clear and undeniable role to provide the metals and minerals the world needs for more sustainable development,” said BHP chair Ken MacKenzie.
“A growing and increasingly urbanised population seeking a higher standard of living will require vast amounts of metals and minerals.”
Overall, BHP recorded a 39 per cent decrease in profit in FY24, reporting $11.7 billion compared to $19 billion in FY23.
The company reported a slight increase in underlying revenue to $82.2 billion, with Copper South Australia contributing $6 billion.
A $8.6 billion exceptional loss contributed to the company’s net profit decrease.
A $4 billion impairment of its Western Australia Nickel assets and a $5.6 billion charge relating to BHP’s Brazil Samarco dam asset contributed to the decrease in profits amid high production levels.
The company announced a temporary suspension of its Western Australia Nickel asset in July 2024, which CEO Mike Henry said “reflected significant global oversupply of nickel, which we expect will continue until the end of the decade”.
BHP reported $72.5 billion of net assets as at June 30 2024, and $13.5 billion of net debt.
At the time of writing, BHP’s share price is up 1.84 per cent to $41.60.
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