Cyclone Veronica to cut BHP output

BHP Group said today it expected its Pilbara iron ore production to be reduced by between 6 million tonnes and 8mt this year because of the impact of flooding on its rail network and Port Hedland operations.

In a statement, Australia’s biggest miner said Cyclone Veronica had caused flooding at the port and sections of the rail leading into the port.

As a result, the port is currently operating at reduced rates and is not expected to return to full production until the end of this month, and BHP said it would soon update its 2019 financial year production and unit cost guidance to reflect this.

BHP said initial inspections revealed no major damage to its operations.

The announcement comes a day after Rio Tinto said its full-year Pilbara iron ore shipments were expected to be at the lower end of its 338mt to 350mt guidance, after Tropical Cyclone Veronica damaged its Cape Lambert port.

In a statement, Rio said initial inspections uncovered damage its Cape Lambert A port facility, which led it to declare force majeure on some contracts.

Shares in BHP were down 0.08 per cent to trade at $39.02 each at 3.50pm AEDT.