Jan 20 (Reuters) – BHP Group has accepted lower prices for some iron ore during annual contract negotiations with China, it said on Tuesday, as it reported record first-half production of the key steelmaking ingredient.
The miner also flagged a 20% jump in costs for its Jansen potash project in Canada.
BHP said it was currently negotiating annual contract terms with state iron ore buyer China Mineral Resources Group (CMRG).
“During negotiations, we continue to optimise product placement distribution channels and take actions within our operations to preserve operational flexibility and productivity,” BHP said in a statement. “This has seen some impact to realised price.”
BHP separately said the total investment estimate for its Jansen stage 1 project will increase to $8.4 billion from a previously estimated range of $7 billion to $7.4 billion.
It said the cost increase reflected construction hours and quantities of materials that were not included in previous estimates.
The world’s largest listed miner said iron ore production from its Western Australia operations on a 100% basis was 146.6 million metric tons in the six months ended December 31, a 1% increase from the same period last year.
(Reporting by Rajasik Mukherjee in Bengaluru; Editing by Jamie Freed)
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