Chilean old mine grades decline combined with adverse weather! BHP's Q3 copper production "plunges" but full-year guidance remains unchanged

According to Golden Ten Data, mining giant BHP (BHP.US) announced that, although copper production at its main mine in Chile has dropped sharply due to weather conditions and declining ore grades, the company is maintaining its full-year copper production guidance.

In its quarterly report on Tuesday, the company stated that in the three months ending September, copper production plunged 19% year-on-year. It explained that the decrease reflected “planned ore grade declines and scheduled maintenance, as well as temporary production interruptions caused by severe weather in Chile.”

Major mining companies are facing a growing challenge of declining ore grades at aging mines. At the same time, discovering new copper deposits is increasingly difficult. This situation comes as copper prices are in a bull market, with the rapid development of artificial intelligence (AI) and ongoing advances in renewable energy and electrification driving strong demand growth.

BHP CEO Brandon Craig said, “The global market remains turbulent; geopolitical tensions, trade uncertainty, and persistently high energy and transportation costs continue to be headwinds for the entire industry.” He added that this is a “maintenance-intensive” period.

According to BHP’s quarterly report, the company mined 400,700 tonnes of copper in the season, while output of another core commodity—iron ore—remained stable at 66.5 million tonnes. The company maintained its guidance for copper production. At the same time, it kept its annual forecast for iron ore output for steelmaking unchanged at 260 million to 272 million tonnes.

The world’s largest mining companies are investing heavily just to maintain production at their flagship Chilean copper mines, while also seeking to develop new resources elsewhere in South America. Last week, BHP successfully averted a strike at its flagship Escondida mine. BHP also plans to increase iron ore production in Western Australia. Despite cutting 300 jobs in related operations, Brandon Craig still hopes the company will soon reach its target of producing 305 million tonnes of iron ore annually.

In other operations, BHP continues to advance its Jansen potash project in Canada. Although the project has experienced cost overruns and delays, the company is proceeding as planned and expects to produce the first batch of this crucial fertilizer mineral next year.