BHP Ltd has cut its copper production target for this year due to problems at its Escondida mine in Chile, with its nickel target also lowered.
The Aussie-listed mining titan kept guidance unchanged for iron ore, metallurgical coal and thermal coal, though it cautioned it expects labour shortages in Chile and Australia to remain an issue before potentially easing in 2023.
Iron ore production fell 10% to 189.1Mt in the three months to March 2022 due to Covid issues and train driver shortages flagged earlier in the week by Rio Tinto, its partner in the Pilbara region of Western Australia.
Nickel output over the quarter also dropped 13% though there was a 20% rise in metallurgical coal production due to better productivity and less rainfall than the previous quarter. Prices of coal currently are at all-time highs.
Mike Henry, BHP's chief executive, said the disruptions at Escondida included Covid, staffing and public road blockages in the Antofagasta region.
The Jansen potash project in Canada remains on track with good progress on the shafts, he added.
BHP was criticised for going ahead with the development by some investors, but prices of fertiliser have rocketed since the onset of the Ukraine war.
Henry added the war was leading to rising costs across the business.
“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.”