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BHP (ASX:BHP) share price in focus on FY24 third quarter update

The BHP Group Ltd (ASX: BHP) share price is under the spotlight after revealing its FY24 third-quarter update.

FY24 third quarter update

The mining business reported its quarterly numbers for the three months to 31 March 2024.

It produced 465.9kt of copper, which was a 7% rise quarter on quarter and a 15% rise year on year. This increase was largely thanks to a solid performance by Escondida.

BHP produced 61.5mt of iron ore, which was down 7% quarter on quarter and up 3% year on year. The company was pleased with its iron production amid heavy rainfall. This is the key segment for supporting the BHP share price.

The miner reported it produced 6mt of metallurgical coal, which was up 6% quarter on quarter and down 13% year on year.

Energy coal production was 4.1mt, representing an increase of 8% quarter on quarter and 5% year on year.

The nickel production was 18.8kt, down a disappointing 4% quarter on quarter and down 4% year on year.

Asset sale

BHP noted it had divested the BHP Mitsubishi Alliance (BMA) metallurgical coal mines Blackwater and Daunia mines to Whitehaven Coal Ltd (ASX: WHC) for a total cash amount of up to US$4.1 billion (on a 100% basis).

BMA now has a “more focused operational footprint and a greater portion of higher quality metallurgical coal, which is expected to achieve higher relative margins in a decarbonising world.”

Final thoughts on the BHP share price

BHP is the lowest-cost iron ore producer globally. It’s investing in improvements to its rail and port operations, which are “essential for growth” in the medium-term to 305 million tonnes per annum and beyond.

The company said it remains on track to meet copper, iron ore and energy coal production for the year.

BHP is a high-performing miner and it has been a good investment for dividends for most of the past decade. The outlook for copper seems promising with the world focused on decarbonising.

The more that BHP diversifies away from relying on iron, the better, in my view. I wouldn’t call it a great buy at the current price, but I think there could be an opportunistic time to buy in a decline in the next couple of years. I don’t know when it’ll happen, but the iron ore miners do seem to regularly go through significant volatility.

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