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BHP has reported a three per cent drop in metallurgical coal production in the nine months to March 31, with its largest Queensland mine still clawing back from a wet start to 2020.

Production at Queensland mines in which it holds an interest was down to 52 million tonnes and the volume for the full year is now expected to be at the lower end of the guidance range (73-79Mt).

The company said rainfall during January and February 2020 was significantly higher than historical averages – by a factor of almost two at Peak Downs and almost three at Blackwater.

“Blackwater, our largest mine, was the most severely impacted, with five site evacuations following the flooding of pits and haul roads during January and February 2020,” the company reported.

“Mining operations at Blackwater are expected to be stabilised in the June 2020 quarter and to return to full capacity during the September 2020 quarter as inventory levels are rebuilt.”

Potential impacts from COVID-19 in the June 2020 quarter, including weak demand as a result of customer disruptions, were also listed as a possible downside risk to full year guidance.

New South Wales Energy Coal production decreased by 13 per cent in the nine months to March 31 compared to the same period last year.

On the global front, the company expects to see many major economies contract heavily in the June 2020 quarter in the wake of COVID-19.

“While demand in China has strengthened in recent weeks, we expect other major economies, including the US, Europe and India, to contract sharply in the June 2020 quarter,” chief executive officer Mike Henry said.

“The situation remains fluid, however, with our strong financial
position and low-cost operations, our business is resilient, with capacity to generate solid cash flow through this period and emerge well placed as the global economy recovers.”