Aug 22 (Reuters) - BHP Group Ltd (BHP) : DEMAND FOR COMMODITIES...

Aug 22 (Reuters) - BHP Group Ltd (BHP) :

• DEMAND FOR COMMODITIES IN DEVELOPED WORLD HAS SLOWED SUBSTANTIALLY DUE TO IMPACT OF ANTI-INFLATIONARY POLICIES
• IN THE NEAR TERM, WHILE THE OUTLOOK FOR THE DEVELOPED WORLD IS UNCERTAIN
• WHILE ENERGY CRISIS HAS FADED, LAG EFFECT OF HIGHER INTEREST RATES WILL SUPPRESS ECONOMIC GROWTH IN DEVELOPED WORLD IN FY24
• BHP’S EXTERNAL OPERATING ENVIRONMENT IN FY23 WAS VOLATILE
• MARCH QUARTER SAW A BETTER-THAN-EXPECTED RECOVERY IN A RANGE OF SECTORS IMPORTANT TO COMMODITY DEMAND, RAISING HOPES OF A STRONG YEAR OVERALL
• EXPECT CHINA AND INDIA TO REMAIN RELATIVE SOURCES OF STABILITY FOR COMMODITY DEMAND IN NEAR TERM
• BHP GROUP LTD- COPPER-INTENSIVE SECTORS LIKE AUTOMOBILES, POWER MACHINERY, CONSUMER DURABLES AND ELECTRICITY GRID HAVE SEEN SOLID GROWTH
• CONTINUED LABOUR MARKET TIGHTNESS WILL CONTINUE TO IMPACT OUR COST BASE THROUGHOUT FY24
• EXPECT LAG EFFECT OF INFLATION PEAKS IN FY23 AND CONTINUED LABOUR MARKET TIGHTNESS WILL CONTINUE TO IMPACT COST BASE THROUGHOUT FY24
• EXPECT CAPITAL AND EXPLORATION EXPENDITURE TO BE FOR FY24 AND FY25, US$10 BN PER ANNUM, INCLUDING US$0.4 BN OF EXPLORATION IN FY24
• THE LABOUR MARKET REMAINS A CORE INFLATIONARY CONCERN
• IN NEAR TERM, WE EXPECT DEMAND FOR COPPER TO BE MET BY A COMBINATION OF RISING PRIMARY AND SCRAP SUPPLY
• OVERALL, THE COST OF MINING PRODUCTION IS NOW ESTIMATED TO BE HIGHER THAN IT WAS PRIOR TO THE PANDEMIC
• IN MEDIUM AND LONGER TERM, TRADITIONAL COPPER DEMAND IS EXPECTED TO REMAIN SOLID WHILE DECARBONISATION MEGA-TREND IS EXPECTED TO BOLSTER DEMAND
• IN PERU, ANTAMINA HAS APPLIED FOR ENVIRONMENTAL APPROVAL FOR A LIFE EXTENSION UNTIL 2036, FROM 2028
• ESCONDIDA PRODUCTION IS EXPECTED TO INCREASE IN FY24 TO BETWEEN 1,080 AND 1,180 KT
• NET DEBT INCREASED BY US$10.8 BN IN THE YEAR
• IN THE MEDIUM TERM, CHINA’S DEMAND FOR IRON ORE IS EXPECTED TO BE LOWER THAN IT IS TODAY
• PRODUCTION AT SPENCE IS NOW EXPECTED TO AVERAGE 250 KTPA OVER THE NEXT FIVE YEARS.
• FORECAST ESCONDIDA PRODUCTION BETWEEN 1.2 AND 1.3 MT PER YEAR IN FY25 AND FY26
• EXPLORING OPTIONS TO EXTEND THE LIFE OF CERRO COLORADO,
• IN THE IRON ORE MARKET, CONDITIONS WERE BETTER IN THE SECOND HALF OF FY23 THAN IN FIRST HALF
• PRE-COMMITMENT SPEND IN FY24 FOR JANSEN STAGE 2 IS EXPECTED TO BE US$125 M
• AT END OF FY23 JANSEN STAGE 1, WAS 26% COMPLETE AND ON TRACK TO ACHIEVE FIRST PRODUCTION BY THE END OF CY26
• STUDYING GROWTH OF THE WAIO BUSINESS TO 330 MTPA AND WE EXPECT TO COMPLETE THESE STUDIES IN CY25
• FOR ESCONDIDA, COSTS ASSOCIATED WITH STUDIES, CAPTURED AS OPERATING COSTS, TO INCREASE TO US$140 M PER YEAR IN BOTH FY24 AND FY25
• AT WAIO, WE ARE FOCUSED ON INCREASING ANNUAL PRODUCTION TO GREATER THAN 305 MT OVER THE MEDIUM TERM
• SAMARCO IS EXPECTED TO CONTINUE TO MAKE STRONG PROGRESS ON REMEDIATION ACTIVITY
• EXPECT CAPEX TO INCREASE TO US$1.0 BN IN FY24 FOR JANSEN STAGE 1
• JANSEN STAGE 2 IS EXPECTED TO DELIVER 4 MTPA OF POTASH PRODUCTION AT A LOWER CAPITAL INTENSITY THAN STAGE 1
• OVER NEXT 18 MONTHS, ESCONDIDA TO FINISH STRATEGIC STUDIES INTO OPTIONS TO OFFSET IMPACT IN DECLINE OF CONCENTRATOR FEED GRADE SEEN FROM FY27
• HAVE ACCELERATED THE FEASIBILITY STUDY FOR JANSEN STAGE 2, AND THIS REMAINS ON TRACK FOR COMPLETION DURING FY24