Investing.com-- Anglo-Australian miner BHP Group Ltd (ASX:BHP) logged a small decline in iron ore production during the September quarter due to maintenance activity in its rail networks and some mining areas.
The miner also said that Whitehaven Coal Ltd (ASX:WHC) had been selected as the preferred bidder for the sale of its Daunia and Blackwater coal mines, which it owns together with Japan’s Mitsubishi Development. BHP did not specify a deal value, while separately, Whitehaven entered a trading halt pending details on the sale.
West Australian iron ore production, on a 100% basis, fell 4% from the prior quarter to 69.4 million tonnes (mt). BHP said that while production was weaker due to planned maintenance activity, this was somewhat offset by favorable weather conditions.
BHP maintained its production guidance for fiscal 2024 at a range of 282 mt to 294 mt.
While the miner has steadily ramped up production, logging record-high iron ore output in fiscal 2023, it is grappling with somewhat sluggish demand in China, its biggest market.
The miner logged its weakest annual profit in three years for fiscal 2023, even as it logged record-high iron ore production for the year.
The steel-making material is a key resource for China’s property sector, which has been struggling with a nearly three year-long cash crunch. This trend has also weighed on iron ore prices, denting BHP’s margins.
Peer Rio Tinto Ltd (ASX:RIO), which is the world’s largest iron ore producer, clocked stronger shipments in the third quarter on some recovery in Chinese demand.
BHP’s total copper production fell 4% from the prior quarter to 457,000 tonnes, while its annual production guidance was unchanged at 1.7 mt to 1.9 mt.
Metallurgical coal production sank 34%, while energy coal production fell 24% in the three months to September. Annual coal production guidance was also left unchanged.
BHP has been steadily attempting to pivot away from coal production, citing environmental concerns. Its sale to Whitehaven comes as another step towards the pivot, after the firm sold out of the South Walker Creek and Poitrel coal mines in 2022.