BHP Group’s second-quarter iron ore production has fallen 9 per cent and the mining giant has flagged a $US600 million ($840 million) hit due to production disruptions at its copper and iron ore operations.

The world’s biggest miner said on Tuesday that unplanned production outages at Olympic Dam, Spence and WA Iron Ore were likely to negatively impact productivity. It flagged that it would revise guidance at its results on February 19.

The miner also raised its 2019 copper production forecast to between about 1.6 million tonne and 1.7mt, bolstered by the retention of Cerro Colorado copper mine in Chile, after a sale to private equity house EMR Capital fell through.

“Yes, iron ore output might have been a little softer but overall I’d say production was broadly in line,” said a fund manager in Melbourne who declined to be named.

“I’d think about the $600 million as more of an opportunity cost that we knew about from earlier in the quarter.”

BHP’s iron ore output fell to 66mt during the three months ending December 31, compared with 72mt a year ago, hurt by the forced train derailment in the Pilbara that caused a supply disruption.

The West Australian revealed on November 5 that a fully-laden 268-car iron ore train careered driverless for 50 minutes at an average speed of 110km/h before it was deliberately derailed about 120km south of Port Hedland in the early hours of the same morning.

Play Video The sacked train driver has put together a case to get his job back. The West Australian Video The sacked train driver has put together a case to get his job back.

Speculation swirled for weeks about how the incident could have occurred before BHP released a statement attributing the incident to a combination of mechanical failure and human error.

The Anglo-Australian miner maintained its full-year guidance of between 273mt and 283mt of iron ore from its WA operations.

In other metals, BHP’s copper output fell 3 per cent at 416,000 tonnes in the quarter, hurt by planned maintenance as well as outages.

BHP also flagged a $700 million first-half impact due to higher Australian and Chilean income tax payments than last year, and the settlement of an Australian transfer pricing dispute.

The WA Government said on Monday that it was in talks with the miner after an audit had found that BHP had underpaid royalties on iron ore shipments sold via its Singapore marketing hub stretching back over more than a decade.

Reuters