BHP's iron ore production and sales volumes declined simultaneously in Q1 2025

Australian mining company BHP has released its operational report for Q1 2025 (Q3 of the 2025 Australian fiscal year), which indicates the following:
Production:BHP's iron ore production in Q1 2025 was 67.844 million mt, down 7.2% MoM and 0.4% YoY. The main reasons for the decline include the short-term impact of tropical cyclones "Zelia" and "Sean," the phased adverse effects of the railway technology project (RTP1) connection operations, and ongoing production cuts due to the depletion of Yandi resources.

Despite these challenges, BHP has maintained its production targets by optimizing production efficiency and structural growth momentum. For example, the Central Pilbara Hub completed capacity ramp-up at the South Flank mine, coupled with optimized handling after the completion of the port debottlenecking project, resulting in a 13% YoY improvement in supply chain efficiency, which became a key driver of production growth. Among them, Mining Area C and Jimblebar mine stood out, with production increasing by 11.8% and 3.4% YoY, respectively, fully reflecting the effectiveness of new capacity releases and operational optimizations. However, the main Newman mine area experienced a 20.2% YoY decline in production due to weather disruptions and a decline in ore quality.

Meanwhile, BHP's production resumptions at its Samarco joint venture in Brazil have exceeded expectations since the restart of the second beneficiation plant in December last year. In Q1, iron ore pellet production increased by 11.1% MoM and 39.3% YoY. Based on current progress, Samarco is expected to achieve its annual production capacity target of 16 million mt of pellets ahead of schedule by the end of June this year. BHP has maintained its annual production guidance for Samarco at 5-5.5 million mt (on a 50% equity basis) in its latest quarterly report, but expects actual production to be closer to the upper end of the range.

Shipments:BHP's iron ore sales in Q1 2025 were 66.765 million mt, showing a dual decline: down 8% MoM and 4.3% YoY. Among them, fines sales were 40.412 million mt, down approximately 8.2% MoM, and lump sales were 18.822 million mt, down approximately 7.4% MoM.

In addition, as of the end of Q1 2025, BHP's production for the 2025 fiscal year was 213 million mt, up 1.1% YoY. BHP's WAIO fiscal year production guidance target remains unchanged at 282-294 million mt (on a 100% basis).

Financials: In Q1, FMG's C1 cash cost was $17.53/wmt (based on Pilbara hematite), down 4% MoM and 7% YoY.
Furthermore,the shipment target guidance for the 2025 fiscal year is 190-200 million mt, with a C1 cost target of $18.5-19.75/wmt (based on Pilbara hematite).