Are our miners getting washed away?

Rain Warning

Key Points

  BHP reported first-quarter copper production numbers below consensus of 430.4kt.   WHC ROM production for the quarter came in at 4.0Mt, a 22% decrease on the previous comparable quarter.   BPT reported quarter production down 8% to 5.2MMboe.  
BHP Group (BHP), Whitehaven Coal (WHC), and Beach Energy (BPT) reported production numbers this morning, and all had one thing in common. BHP reported first-quarter copper production numbers of 410.1kt, below consensus of 430.4kt, while met coal production fell 38% due to extreme weather conditions on the east coast.  

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  WHC reported some impressive numbers in its first quarter production report, with record coal prices and strong production from Narrabri, generating $1.55bn of cash, but on a sour note, weather affected open-cut operations and volumes. ROM production for the quarter came in at 4.0Mt, a 37% decrease on the previous quarter, and a 22% decrease on the previous comparable quarter. MD and CEO Paul Flynn commented on the matter, saying: “With La Niña forecast to be a feature through the Spring season, we have been working constructively with councils and developing measures to minimise the impacts of weather delays and flood-related road closures as much as possible.WHC Chart  
BPT reported quarter production down 8% to 5.2MMboe, stating, “Flooding in the Cooper Basin caused shut-in of some wells and delay of well connections”. BPT Chart
See the connection yet? This wet weather we’re experiencing is not just annoying for your beach plans on the weekend, it is having a significant impact on production numbers for some of our miners. The La Niña weather pattern is expected to persist for a while longer, bringing with it more wet weather, and potentially further impacts on production. Despite this, companies have been reluctant to downgrade guidance, yesterday, we saw RIO lower its guidance to the bottom end of its prior range, but BHP reaffirmed its full-year guidance. WHC also maintained its guidance but accompanied it with the comment, “Notwithstanding La Niña impacts and labour constraints, we remain on track”.   MT Logo Founded in 1998, Marcus Today Stock Market Newsletter is a business that has built a community of like-minded investors who want to survive and thrive in the stock market. We achieve that through a combination of daily stock market education, ideas and activities.  

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