BHP has outlined plans to increase the automation of its iron ore operations after reporting a small lift in production to record levels and a dip in shipments.
BHP has outlined plans to increase the automation of its iron ore operations after reporting a small lift in production to record levels and a dip in shipments.
Its WA iron ore operations achieved production of 146.4 million tonnes in the half year to December 2022, up 1.4 per cent from the prior corresponding half.
However, shipments were lower at 142.9mt, a decline of 0.7 per cent.
The mining giant attributed the record production to continued strong supply chain performance, including improved car dumper utilisation, and lower COVID-19 related impacts.
The half-year figures included record monthly production in December, helped by good weather and reduced labour constraints.
The mining giant is also benefiting from the ramp-up of its South Flank mine, which is expected to hit full production capacity of 80 Mtpa by June 2024.
The lower shipments reflect the impact of a port debottlenecking project and associated changes to stockpiling.
Production guidance for the year to June 2023 is unchanged at between 278 Mt and 290 Mt.
WA iron ore asset president Brandon Craig said an important factor in the group’s performance was its remote operations centre in Perth, which has been running for 10 years.
Mr Craig said BHP expected its iron ore operations to be fully autonomous by the middle of this decade.
“Our plans are clearly to push all the (mining) hubs to be automated,” Mr Craig said.
“By the mid part of this decade, we will be pretty close to transitioning to having fully autonomous load and haul operations across all of our operations.”
Its Jimblebar hub is already fully automated while its Newman, Area C and South Flank operations are following suit.
Mr Craig said an exception was its Yandi hub as BHP was still evaluating broader development strategies for that area.
He also confirmed BHP has no plans to follow its competitor Rio Tinto by automating its rail operations.
“We don’t have plans to automate rail at this stage, we are focusing more on our rail technology project, which is the replacement of our track controls and track signals.”
BHP has 510 staff at the IROC, up from about 300 when it commenced a decade ago.
That is out of 11,000 people across its WA iron ore operations.
A well as driverless trucks, BHP has automated drilling rigs and is automating its crushing and screening plants and ship loaders.
“It’s a really big part of how we have lifted the productivity of the iron ore business,” Mr Craig said.
To illustrate the benefits, he said the Installed infrastructure in WA iron ore has a design capacity of 240 Mtpa yet BHP is pursuing production of 290 Mtpa.
“The difference is driven by the productivity benefits that this type of centre delivers.”
The benefits included improved safety as well as more consistent, dependable operations and increased accuracy from automated drilling.
Mr Craig acknowledged there were doubters about remote operations when the centre opened.
“Back in 2012, there was some scepticism about whether it was feasible to run physical operations when you are 1,000 kilometres away.”
Over the past decade, the size and scope of responsibility for the remote operations centre has continued to grow.
He said it helped with full integration of the group’s mine, rail and port operations.
“You can see every single moving part of the business in one place, which was just impossible pre the operations centre.”
Commenting on the group’s overall operations, chief executive Mike Henry said cost inflation remained an issue.
“As foreshadowed, we are seeing the impact of inflation across our global supply chains and continue to focus on productivity and controllable costs,” Mr Henry said.
Full year unit cost guidance1 for WA iron ore and Escondida are unchanged but are expected to track towards the upper end of full year guidance.
Unit cost guidance for its coal operations in Queensland and NSW has been increased, reflecting production impacts from significant wet weather and inflationary pressures.
Mr Henry said he believes China will be a stabilising force when it comes to commodity demand in the 2023 calendar year, as OECD nations experience economic headwinds.
“China’s pro-growth policies, including in the property sector, and an easing of COVID-19 restrictions are expected to support progressive improvement from the difficult economic conditions of the first half,” he said.
“China is expected to achieve its fifth straight year of over 1 billion tonnes of steel production.”
