BHP Group (ASX:BHP) falls short in production due to staff shortages

• BHP Group (BHP) falls short of iron ore production targets for the March quarter due to labour shortages in train drivers
• The mining giant produced 66.7 million tonnes of iron ore in the first three months of 2022, down from 73.9 million tonnes in the previous quarter
• Due to the labour shortage, BHP is expecting its June quarter will also be impacted but is confident it’s production guidance for FY22 will remain unchanged for iron ore and coal
• However, BHP has lowered its full-year nickel production guidance by 10 per cent
• BHP was down 2.28 per cent and trading at $51.11 per share

BHP Group (BHP) has fallen short of its iron ore production estimates for the March quarter due to labour shortages.

The mining giant produced 66.7 million tonnes in the first three months of 2022, which is down from the 73.9 million tonnes recorded in the previous quarter.

Total iron ore sales from its Western Australian operations were 67.1 million tonnes.

According to the company, there is a shortage of train drivers in WA as a result of the COVID-19 pandemic.

Due to the labour shortage, BHP is expecting its June quarter will also be impacted. However, if it can match the export tally it set in the June quarter of 2021, the iron ore division will reach its target.

Meanwhile, BHP has lowered its full-year nickel production guidance by 10 per cent.

The company also saw a number of staff challenges in Chile, due to COVID-19 quarantine regulations and public road blockades, which prompted it to lower its full-year copper production by about eight per cent.

Production guidance for the 2022 financial year remains unchanged for iron ore, metallurgical coal and energy coal.

“BHP delivered safe and reliable production in the third quarter. Our WA iron ore business continues to perform strongly as we navigate the state’s first major COVID-19 wave, and we remain on track to achieve full year volume and cost guidance, CEO Mike Henry said.

“Amid record high prices, our Queensland metallurgical coal business delivered strong underlying performance and benefited from better weather in the quarter.

“Market volatility and inflationary pressures have increased further as a result of the Russian invasion of Ukraine. We continue our work to mitigate cost pressures through a sharp focus on operational reliability and cost discipline. While we expect conditions to improve during the course of the 2023 calendar year, we anticipate the skills shortages and overall labour market tightness in Australia and Chile to continue in the period ahead.”

Yesterday, Rio Tinto also saw a drop in its iron ore shipments in the first three months of this year.

BHP was down 2.28 per cent and trading at $51.11 per share at 12:52 pm AEST.