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BHP Group Limited 2021 AGM Speeches
BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91
11 November 2021
To: Australian Securities Exchange cc: New York Stock Exchange
London Stock Exchange JSE Limited
BHP GROUP LIMITED ANNUAL GENERAL MEETING SPEECHES
Please find attached addresses to shareholders to be delivered by the Chair and the Chief
Executive Officer at BHP Group Limited’s Annual General Meeting today.
In accordance with the Dual Listed Company structure of the Group, all of the items of business to
be conducted at BHP Group Limited’s Annual General Meeting will be treated as joint electorate
actions with BHP Group Plc. The poll results on these items will be released to the market shortly
after conclusion of the BHP Group Limited Annual General Meeting.
The meeting can be accessed at: https://web.lumiagm.com/367084684
Further information on BHP can be found at bhp.com.
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Sponsor: UBS South Africa (Pty) Limited
BHP Group Limited ABN 49 004 028 077 BHP Group plc Registration number 3196209
LEI WZE1WSENV6JSZFK0JC28 LEI 549300C116EOWV835768
Registered in Australia Registered in England and Wales
Registered Office: Level 18, 171 Collins Street Registered Office: Nova South, 160 Victoria Street
Melbourne Victoria 3000 Australia London SW1E 5LB United Kingdom
Tel +61 1300 55 4757 Fax +61 3 9609 3015 Tel +44 20 7802 4000 Fax +44 20 7802 4111
Members of the BHP Group which is headquartered in Australia
BHP Group Limited Annual General Meeting
Speeches by Ken MacKenzie, Chair
and
Mike Henry, Chief Executive Officer
11 November 2021
BHP Group Limited Annual General Meeting
11 November 2021
Ken MacKenzie, Chair
Global uncertainty and complexity
This year has been exceptionally challenging. The Covid-19 pandemic has continued to
spread across the globe, and has tested all of us.
I have always felt honoured to serve as your Chair, however, never before have I been more
proud of the performance of our Company and people than in the past year.
During this period of global disruption, we have continued to produce the commodities the
world requires, kept our world-class assets running safely and efficiently, and played a
substantial role in global economic development. Importantly, we have been able to continue
to make a valuable contribution to the communities where we operate – partnering with local
businesses and communities, supporting local jobs and continuing to pay taxes and
royalties to governments – an economic contribution of approximately US$41 billion for the
year.
Throughout this time, we have been grateful for the support of all our partners – our
customers, our suppliers and our communities.
We are also grateful for the support from you – our shareholders. I have always enjoyed the
opportunity presented by the AGM to thank you in person for your ongoing support and as
Australia opens up, I look forward to the time when we can all meet again in person.
FY2021 Financial Highlights
BHP performed very strongly in FY2021.
- Earnings were up 69% to US$37.4 billion
- We generated record free cash flow of US$19.4 billion up 140%
- Net debt finished down 66% for the year at US$4.1 billion
- Return on capital employed strengthened to 32.5%.
On the back of these strong results, a record total dividend of US$3.01 was paid per share
for FY2021, bringing BHP’s returns to shareholders to more than US$15 billion for the full
year, and more than US$38 billion over the past three years.
Driven by our purpose
Priorities
Our performance is underpinned by our purpose – to bring people and resources together to
build a better world.
Our five priorities – Safety, Portfolio, Capital Discipline, Capability and Culture, and Social
Value – are the foundations that enable us to deliver now and into the future.
The safety and wellbeing of our people remains our top priority. It is pleasing that we have
had over two and a half years without a fatality at our operated assets and key indicators
continue to improve.
However, we know that our commitment to health and safety requires more work. Sexual
harassment is a critical health and safety issue for BHP and for our industry – and we remain
committed to ensuring that all our people can go to work feeling safe and respected.
Unlocking value and positioning for the future
Unification
Moving to another of our priorities – portfolio.
At BHP, we are always looking to the future. As our world continues to evolve, we must be
ready to position the organisation to capture future opportunities, and unlock value for our
shareholders.
Given the strength of our position we believe now is the right time to make a number of
strategic, transformative changes.
The first of these is our intention to unify BHP’s corporate structure under BHP Group
Limited.
The current Dual Listing structure was established to help facilitate the BHP and Billiton
merger in 2001 and, although it has served us well, its suitability for our organisation has
diminished over time.
Unification will offer a number of benefits due to the simplification of the company’s structure.
These include moving from two parent companies to one parent company, with one share
register and one share price globally.
If unification is implemented BHP Group Plc shareholders will have their shares exchanged
for BHP Group Limited shares on a one-for-one basis. There will be no change for BHP
Group Limited shareholders and BHP’s Board, management, strategy, and dividend policy
will remain the same.
The unification proposal is subject to a number of approvals including shareholder meetings
and votes in the first quarter of 2022. I look forward to discussing the proposal with you at
that time.
Portfolio
In addition to unification, we have also announced a number of strategic steps towards
transforming our portfolio for the future.
As the world moves towards decarbonisation, we will continue to assess our portfolio to help
meet the global demands of the energy transition and determine the right mix of attractive
commodities and assets to create shareholder value.
It is against these dimensions of value and decarbonisation that we have made two
important announcements:
- First, our investment in the Jansen Stage 1 potash project in Canada, which provides
significant exposure to this future-facing commodity with strong demand and potential
growth; and
- Second, is the proposed merger of our petroleum business with Woodside, which we
believe will unlock value for BHP shareholders as the combined business will be
better positioned to navigate the energy transition.
We are confident these changes, alongside our commitments to climate leadership, and our
financial and value-based decision-making, will ensure we are well positioned to be at the
centre of global demand for key commodities into the future.
Climate Change
Now moving to climate change.
This year we have made strong progress towards meeting our commitments including
initiatives focused on reducing our operational and value-chain emissions.
We have, at an estimated cost of US$2-4 billion, established a substantial pipeline of
decarbonisation projects and plans at our operated assets aimed at achieving our emissions
reduction target of at least 30 per cent by FY2030; and as part of our US$400 million Climate
Investment Program we have also committed a further US$75 million to partnerships
focused on steel decarbonisation with four of our major customers who represent more than
10 per cent of global steel production.
As you know, we have asked our shareholders to vote on our new Climate Transition Action
Plan. BHP is the first company in the Australian market to provide this opportunity to
shareholders. We believe it is important that all of our shareholders have an opportunity to
engage with us on our climate strategy and actions, and this advisory vote has provided an
important forum for discussion and feedback on the Plan.
We look forward to continuing to hear your views on this important topic.
Social Value
Today I have spoken about our climate change position, however it represents only one
aspect of our social value agenda.
We are committed to making a positive contribution to society – to our people, partners,
economy, environment and local communities.
Today, there is one other key area of social value I would particularly like to highlight – our
continued work with Traditional Owners and other Indigenous representative organisations
to further strengthen our cultural heritage management practices.
The long-term nature of our business gives BHP the opportunity to establish lasting
relationships with Indigenous peoples.
We understand that Indigenous peoples have a deep connection to their natural
environments and that these are tied to their physical, spiritual, cultural and economic
wellbeing.
BHP recognises and respects the significant contribution that Indigenous peoples make to
national and international economic prosperity.
As one of many examples across the world, the journey of iron ore from Banjima or
Nyiyaparli Country in Western Australia is a story in which an essential element of global
growth is enabled by two proud and culturally strong Traditional Owner communities.
We recognise our responsibility to respect and sustain the cultural landscapes in which we
operate and work in partnership to ensure we respect the rights of Indigenous peoples who
are its custodians.
This year in Australia we have worked closely with the First Nations Heritage Protection
Alliance to jointly develop a set of Principles to guide BHP’s approach to Indigenous cultural
heritage in Australia. I sincerely wish to thank those who have given their support and
guidance on this important work.
Board renewal
Before I hand across to Mike Henry, I would like to acknowledge our directors, Anita Frew
and Susan Kilsby, who will retire at the conclusion of this meeting. I would like to sincerely
thank Anita and Susan for their considerable contribution to the Board and to the
shareholders of BHP.
During the year we continued our focus on board renewal and welcomed Xiaoqun Clever
and Christine O’Reilly to the Board in October 2020.
I am also pleased that Michelle Hinchliffe will join us as a director in March. Michelle brings
significant expertise in financial risk management and strong global experience, and we look
forward to welcoming her early next year.
We will continue to focus on our board renewal process and will seek to appoint another
female independent Non-executive Director in this financial year.
Conclusion
In conclusion, there is no doubt we continue to live in an uncertain and challenging world.
Despite this complexity, the good news is BHP is in a strong and resilient position:
- We have a clear strategy to deliver long-term value by repositioning our portfolio
towards future-facing commodities;
- We have strength in our balance sheet, our people and performance culture; and
- We have announced an important step towards redefining our corporate structure for
the opportunities that lie ahead.
In short, we believe the future is clear.
It has been a significant year for BHP – one that will transform the Company and unlock
long-term value for our shareholders.
I wish to thank you for your ongoing support and it is now my pleasure to invite Mike Henry
to speak with you.
Mike Henry, Chief Executive Officer
Welcoming remarks
Thanks Ken.
It is a pleasure to join you today.
In current times we’ve all needed to get used to connecting virtually, but I have to say that I
am really looking forward to when we can return to getting together in person.
Main Introduction
Following on from Ken, I’d like to talk a bit more about the underlying business:
- Our recent operational and financial performance;
- How we are shaping the company to create value and returns through meeting the
world’s resources needs;
- And, our approach to our operations and engagement with those around us in a way
that maximises long term shareholder value and generates value for others who
depend on and support BHP.
Strong operational and financial results
Thanks to the resilience and commitment of BHP employees and contractors, and support
from our partners and communities, we delivered a strong set of outcomes in the last
financial year.
Most importantly, we improved overall underlying safety performance and it has now been
more than two and a half years without a fatality in BHP operations. Safety remains priority
number one.
As Ken noted, our strong operational performance, coupled with the tailwind of high
commodity prices, saw us deliver record free cash flow, an even stronger balance sheet, and
of course a record final dividend to shareholders.
In addition to seeking to maximise returns for every dollar invested through running the base
business very well – with a strong focus on operational and cost discipline – we are also
seeking to grow value through ensuring that we have the right portfolio and are able to
capitalise on the opportunity to meet the world’s growing needs for certain resources.
Guided by our Capital Allocation Framework, last year we invested US$2.3 billion in
maintenance, in line with our intent to ensure reliable operations.
We also invested more than US$5 billion in development, growth and exploration across our
business.
Creating significant value
Our focus on operational excellence shone through in:
- Production and throughput records at Western Australian Iron Ore and Escondida.
- Our highest ever copper production at Olympic Dam since BHP acquired it 16 years
ago.
- And delivery of four major projects on budget, and on or ahead of time.
This focus is unlocking further significant value for shareholders and is supporting our ability
to continue to grow value for those others who benefit from BHP’s presence.
In the year past we paid US$2.1 billion to local suppliers in the communities where we
operate.
We announced significant funding towards global response and recovery efforts from the
Covid-19 pandemic last year. More than US$50 million was invested in community programs
in areas where we operate in Australia, North America, South America and Asia to support
greater access to local health services and relief programs.
And the BHP Foundation is now working with 40 partner organisations across 49 countries
to advance solutions to some of the world’s most pressing sustainable development
challenges. This includes:
- Working with Transparency International to identify corruption risks in mining
licensing and permitting processes.
- Partnering with the United Nations Office of Women to provide “second chance”
education for marginalised women and girls to re-enter formal learning environments.
- And supporting Indigenous Australians in landscape-scale conservation programs
through the Ten Deserts project, covering a vast area of the Australian continent.
Advancing decarbonisation
Now, in addition to the economic and social benefit our presence brings to so many others,
we are also very focused on ensuring that the assets we run and our supply chains are
operating sustainably.
This includes a strong focus on showing leadership when it comes to reducing the
greenhouse gas emissions that accompany the production and processing of our products.
We recently released our Climate Transition Action Plan, which reflects our resolve in this
regard. Shareholders are being asked to vote on this today through the Say on Climate
resolution.
Within this plan we outline our continuing commitment to net zero operational emissions by
no later than 2050, and our mid-term target of at least 30 per cent emissions reduction by
2030 on 2020 levels. We’ve been taking action on this front for over two decades now and
our signing of multiple renewable energy contracts recently will help accelerate this reduction
in the near term.
Of course it is not just about operational emissions, or Scope 1 and 2 emissions. We also
must focus on the emissions generated by others in the value chain through the transport
and processing of our products, and the provision of goods and services to BHP. These are
our Scope 3 emissions.
While we can’t determine the outcomes on that front alone, we are working with our
customers and suppliers to stimulate and support their efforts to reduce emissions. This is in
keeping with our long-term goal to pursue net zero Scope 3 greenhouse gas emissions by
2050 for our reshaped portfolio.
In the past year, we have entered into research and development partnerships with
companies covering 12 per cent of the world’s steel production to assist steelmaking
decarbonisation efforts.
We undertook the world’s first LNG-fuelled bulk carrier tender, which will lower emissions of
shipping our iron ore, and have subsequently set a target of net zero emissions from the
maritime transport of our products by 2050.
We are also targeting net zero for our direct suppliers’ emissions from the provision of goods
and services to BHP, also by 2050.
We continue to deliver strong operational and financial performance, and ever more
sustainable outcomes.
Reshaping our portfolio for a changing world
Our Company is in great shape and this is shining through in the numbers.
Building upon this solid base, as we look to the future, we will seek to grow value through
positioning the BHP portfolio to benefit from the big trends unfolding in the world around us.
These include population growth, rising living standards, electrification and decarbonisation.
We want to grow in those commodities that stand to benefit greatest from these trends.
Against that backdrop:
- we took the decision to proceed with the Jansen potash project in Canada, which will
contribute to more sustainable farming;
- we announced the intent to merge our petroleum business with Woodside, creating a
large, more resilient company, better able to navigate the energy transition and grow
value while doing so;
- earlier this week we announced the sale of our interest in the BMC coal assets in
Queensland as we re-shape our portfolio to focus on higher quality metallurgical
coal to increase efficiency and lower emissions in steelmaking; and
- we intend to continue to grow our already strong positions in nickel and copper.
In copper, we have some solid growth ahead over the next five years, thanks to the recently
commissioned Spence Growth project, improving grades at Escondida and more reliable
production out of Olympic Dam.
We have increased our exploration effort and have work underway in Ecuador, Peru, Chile,
Mexico, the US and Australia.
And we are currently looking at targeted investment in early stage development options – as
we did with SolGold in Ecuador and the Elliott copper project in Australia.
In nickel, we have established agreements with Midland Exploration in Canada and made an
offer to acquire Noront Resources.
This combination of exploration, targeted early stage investments, and unlocking significant
organic growth in our existing operated assets sets us up to deliver more of our products to
meet the world’s needs.
Creating competitive advantage through our people and culture
Now, everything I’ve spoken about – safety, strong operational and financial performance,
growth - only happens with great people and culture.
This is something that I am really passionate about.
We need to continue to build capability and have a number of efforts underway to do so.
We are strengthening our organisational capability as a competitive advantage.
We’re recruiting new talent as well as developing even greater technical and operational
capability through our Centres of Excellence.
We are investing in building skills through the BHP FutureFit Academy, where we trained
more than 500 apprentices and trainees in the past year, with a commitment to 2,500 over
five years.
We are enabling our people and improving the way we work through the BHP Operating
System, which makes continuous improvement part of what we do in our business every
day.
Our plans to unify the BHP corporate structure and provide a single share register will make
us simpler and more agile - which is in line with our broader drive for a high performance,
inclusive workforce and culture.
We are not yet fully where we want to be, and perhaps there will always be more to do, but
we are making some strong progress.
Female participation at BHP has increased by more than two thirds since we set our
aspirational gender goal in 2016 and we are a better performing company for it. We remain
wholeheartedly committed to the important effort underway towards gender balance.
Indigenous representation in our Australian workforce has risen to 7.2 per cent and 7.5 per
cent in Chile. We remain focused on partnering with Indigenous and First Nations peoples in
all the regions in which we work.
Our proximity to Indigenous communities makes them critical partners, whose rights,
connection to land and cultural heritage we respect. Understanding these rights and working
with Indigenous peoples is integral to our exploration and mine planning processes.
At our Jansen Stage 1 Project, our goal is for First Nations employees to make up 20 per
cent of the workforce and we have Opportunity Agreements in place with six First Nations
communities around the site. These are both firsts in the potash industry.
We remain frustrated that we continue to experience instances of sexual harassment and
assault in our camps and operations. This conduct is completely unacceptable and we are
absolutely committed to eliminating it from BHP.
This year, we introduced a policy to limit alcohol consumption at our Australian camps and
launched a dedicated support service providing assistance to anyone in our workforce
impacted by sexual assault or harassment. We’ve focused initiatives on education and on-
site security, with a further A$300 million committed for security improvements in 2022. We
also continue to take an approach to ensuring consequences for those that behave badly
that is designed to send a clear message that there is simply no place for this conduct in our
workplaces.
We are determined to create and maintain an environment at BHP where we attract and
retain the best talent and empower our people to make the daily decisions that make us
safer, more productive and more capable of meeting the needs of our customers,
communities and nations.
Conclusion
The future for BHP is clear.
We are shaping our Company to meet the world’s needs, and we are shaping our teams to
get the very best out of our assets.
We are doing so because it drives results and fosters high performance. It enables us to get
the most out of ourselves, and out of the commodities we produce.
And importantly, we are doing it because it adds value: to the world, to the communities we
work in, and of course to our shareholders.
The plans we have announced and the strategy underpinning them will allow us to continue
to create even greater value now and into the future.
It is an exciting time for the Company.
I want to thank everyone – our stakeholders and especially our shareholders – for your
ongoing support for our Company.
The Chair then conducted the formal items of business.
Date: 11-11-2021 07:05:00
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