Wrap Text
Operational Review for the Year Ended 30 June 2017
BHP Billiton Plc
Registration number 3196209
Registered in England and Wales
Share code: BIL
ISIN: GB0000566504
NEWS RELEASE LOGO
Release Time IMMEDIATE
Date 19 July 2017
Release Number 19/17
BHP OPERATIONAL REVIEW
FOR THE YEAR ENDED 30 JUNE 2017
. Achieved full year production guidance for petroleum and iron ore, with
annual production records at Western Australia Iron Ore (WAIO), Spence and
two Queensland Coal mines.
. Lower copper production reflected the impact of industrial action at
Escondida and the power outage and unplanned maintenance at Olympic Dam.
Lower metallurgical coal volumes as a result of damage to third party rail
infrastructure caused by Cyclone Debbie.
. We expect to achieve full year unit cost guidance at WAIO and Conventional
petroleum, however industrial action and Cyclone Debbie have impacted unit
costs at Escondida and Queensland Coal respectively.
. Group copper equivalent production expected to increase by 7% in the 2018
financial year.
. In Onshore US, development activity is increasing with up to 10 rigs
operating in the 2018 financial year.
. Divestment of non-core Onshore US acreage is progressing, with the sale of
a portion of the southern Hawkville anticipated in the September
2017 quarter.
. In Petroleum exploration, drilling of the Wildling-2 appraisal well in the
Gulf of Mexico is continuing, with results expected in the September 2017
quarter.
. All major projects under development are tracking to plan.
Production FY17 vs FY16
---------- -------- -------
Petroleum (MMboe)............. 208 (13%) Deferral of development activity in Onshore US for value and natural field
decline in Conventional assets.
Copper (kt)................... 1,326 (16%) Reduced volumes following industrial action at Escondida and the power
outage and unplanned maintenance at Olympic Dam.
Iron ore/(1)/ (Mt)............ 231 4% Record WAIO volumes reflects productivity improvements across the supply
chain and additional capacity at Jimblebar.
Metallurgical coal/(1)/ (Mt).. 40 (6%) Record volumes at two Queensland Coal mines more than offset by the impacts
from Cyclone Debbie.
Energy coal/(1)/ (Mt)......... 29 7% Strong performance at both NSWEC and Cerrejon.
BHP Chief Executive Officer, Andrew Mackenzie said: "Our people have stepped up
to unlock low-cost latent capacity and achieve strong productivity gains across
our tier one assets.
Improved productivity led to record annual production at Western Australia Iron
Ore, Spence and two Queensland Coal mines while production guidance was achieved
by Petroleum and Western Australia Iron Ore. Copper production is expected to
rebound strongly in the 2018 financial year with the commissioning of the
Escondida Water Supply project and ramp-up of the Los Colorados Extension
project during the September 2017 quarter to enable utilisation of Escondida's
three concentrators.
In Petroleum, the recently approved Mad Dog phase 2 project will extend low-risk
oil volumes as supply tightens while in the near-term, Onshore US development
activity is to increase with up to 10 rigs planned for the 2018 financial year.
Our relentless focus on safety, productivity and capital discipline will support
strong growth in shareholder value."
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1
Summary
Operational performance
Production for the 2017 financial year and guidance for the 2018 financial year
are summarised in the table below.
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs FY18 FY18e
Production FY17 Qtr FY16 Jun Q16 Mar Q17 guidance vs FY17
---------- -------- -------- ------- ------- ------- ------------- -------------
Petroleum (MMboe).............. 208 52 (13%) (7%) 3% 180 - 190 (9%) - (13%)
Onshore US (MMboe).......... 80 20 (26%) (15%) (4%) 61 - 67 (16%) - (24%)
Conventional (MMboe)........ 128 32 (2%) (2%) 7% 119 - 123 (4%) - (7%)
Copper (kt).................... 1,326 387 (16%) (6%) 71% 1,655 - 1,790 25% - 35%
Escondida (kt).............. 772 225 (21%) (16%) 138% 1,130 - 1,230 46% - 59%
Other copper/(i)/ (kt)...... 554 162 (8%) 12% 23% 525 - 560 (5%) - 1%
Iron ore/(ii)/ (Mt)............ 231 60 4% 8% 12% 239 - 243 3% - 5%
WAIO (100% basis) (Mt)...... 268 70 4% 8% 12% 275 - 280/(iii)/ 3% - 4%
Metallurgical coal/(ii)/ (Mt).. 40 8 (6%) (27%) (16%) 44 - 46 10% - 15%
Energy coal/(ii)/ (Mt)......... 29 8 7% 30% 10% 29 - 30 0% - 3%
(i)Other copper comprises Pampa Norte, Olympic Dam and Antamina.
(ii)Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(iii)Subject to regulatory approvals to increase capacity above 270 Mt.
Major development projects
During the year, the Bass Strait Longford Gas Conditioning Plant was fully
commissioned and is running at design capacity, enabling full production from
the Turrum and Kipper fields. The BHP Board also approved the Mad Dog Phase 2
project in the deepwater Gulf of Mexico. The Escondida Water Supply project
achieved mechanical completion in the December 2016 quarter and was transitioned
to operations effective 1 July 2017, following completion of project
commissioning in June 2017.
At the end of the 2017 financial year, BHP had three major projects under
development in Petroleum and Potash, with a combined budget of US$5.1 billion
over the life of the projects.
Corporate update
BHP expects to record exceptional items of US$546 million (US$740 million
post-tax) in the second half of the 2017 financial year. These items relate to
idle capacity and other strike-related costs incurred as a result of the
Escondida industrial action in the March 2017 quarter and Chilean withholding
tax on a one-off dividend paid while a concessional tax rate was available.
Exceptional items to be recognised in the June 2017 half year
Charges/(credits) Loss before Loss after
(US$ million) taxation Taxation taxation
-------------------------------------------------------------- ----------- -------- ----------
Escondida industrial action costs............................. 546 (179) 367
Withholding tax on Chilean dividends.......................... -- 373 373
On 18 January 2017, Samarco and its shareholders, Vale S.A. and BHP Billiton
Brasil, entered into a preliminary agreement with the Federal Prosecutors'
Office in Brazil in relation to the Samarco dam failure (Preliminary Agreement).
The Preliminary Agreement outlines the process and timeline for negotiation of a
settlement of the BRL 155 billion (approximately US$47.5 billion) and BRL 20
billion (approximately US$6.1 billion) Public Civil Claims relating to the dam
failure. The Court has extended the final date for negotiation of a settlement
until 30 October 2017, allowing for the continuation of the interim security
arrangements provided to the Court on 24 January 2017 and the provision of
ongoing expert advice to the Federal Prosecutors in respect of the remediation
and compensation programs identified under the Framework Agreement.
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BHP Operational Review for 2
the year ended 30 June 2017
On 30 June 2017, BHP announced a total of US$250 million in financial support
for the Renova Foundation and Samarco until 31 December 2017. The amount of
US$174 million will be used to fund the Renova Foundation and will be offset
against the Group's provision for the Samarco dam failure. A short-term facility
of up to US$76 million will be made available to Samarco to carry out
remediation and stablisation work and to support Samarco's operations. These
funds will be released to Samarco only as required, and subject to achievement
of key milestones.
For the second half of the 2017 financial year, we are not yet in a position to
provide an update to the ongoing potential financial impacts on BHP Billiton
Brasil of the Samarco dam failure. Any financial impacts will continue to be
classified as an exceptional item.
The above guidance will be updated should material information or events arise
as the Group finalises its financial statements.
On 16 June 2017, the BHP Board elected Ken MacKenzie to succeed Jac Nasser as
Chairman. Mr MacKenzie will assume the role of Chairman effective 1 September
2017, following Mr Nasser's retirement as both Chairman and a Non-executive
Director.
In July 2017, BHP filed an amendment to its 2016 20-F (2016 20-F/A) to restate
its 2016 report on internal controls over financial reporting, as deficiencies
were identified in the controls and processes that were used to determine the
impairments of certain Onshore US assets. The identified deficiencies did not
require any change to the carrying values of the Company's Onshore US assets at
31 December 2016 or any prior period and there is no need for a restatement of
any of the Group's financial statements. A remediation plan has been implemented
and we expect to confirm the controls are operating effectively as part of the
2017 financial year annual reporting process.
Marketing update
The average realised prices achieved for our major commodities are summarised in
the table below. The majority of iron ore shipments were linked to the index
price for the month of shipment, with price differentials predominantly a
reflection of product quality and market fundamentals. The majority of
metallurgical coal and energy coal exports were linked to the index price for
the month of shipment or sold on the spot market at fixed or index-linked
prices, with price differentials reflecting product quality.
FY17 Jun H17 Jun H17
vs vs vs
Average realised prices/(i)/ Jun H17 Dec H16 FY17 FY16 FY16 Jun H16 Dec H16
--------------------------------------- ------- ------- ------ ------ ------ ------- -------
Oil (crude and condensate) (US$/bbl)... 50 45 48 39 23% 35% 11%
Natural gas (US$/Mscf)/(ii)/........... 3.48 3.21 3.34 2.83 18% 27% 8%
US natural gas (US$/Mscf).............. 2.98 2.79 2.88 2.16 33% 52% 7%
LNG (US$/Mscf)......................... 7.37 6.35 6.84 7.71 (11%) 4% 16%
Copper (US$/lb)........................ 2.70 2.41 2.54 2.14 19% 25% 12%
Iron ore (US$/wmt, FOB)................ 62 55 58 44 32% 41% 13%
Hard coking coal (US$/t)............... 180 179 180 83 117% 117% 1%
Weak coking coal (US$/t)............... 121 122 121 69 75% 73% (1%)
Thermal coal (US$/t)/(iii)/............ 75 74 75 48 56% 63% 1%
Nickel metal (US$/t)................... 9,799 10,581 10,184 9,264 10% 11% (7%)
(i) Based on provisional, unaudited estimates. Prices exclude third party
product and internal sales, and represent the weighted average of various
sales terms (for example: FOB, CIF and CFR), unless otherwise noted.
Includes the impact of provisional pricing and finalisation adjustments. In
Copper, the adjustment will increase Underlying EBITDA by US$27 million in
the 2017 financial year.
(ii) Includes internal sales.
(iii)Export sales only; excludes Cerrejon. Includes thermal coal sales from
metallurgical coal mines.
At 30 June 2017, the Group had 254 kt of outstanding copper sales that were
revalued at a weighted average price of US$2.69 per pound. The final price of
these sales will be determined in the 2018 financial year. In addition, 316 kt
of copper sales from the 2016 financial year were subject to a finalisation
adjustment in the current period. The provisional pricing and finalisation
adjustments will increase Underlying EBITDA/(2)/ by US$27 million in the 2017
financial year.
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BHP Operational Review for 3
the year ended 30 June 2017
Petroleum
Production
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs
FY17 Qtr FY16 Jun Q16 Mar Q17
-------- -------- ------- ------- -------
Crude oil, condensate and natural gas liquids (MMboe).. 97 24 (16%) (9%) (3%)
Natural gas (bcf)...................................... 668 167 (10%) (6%) 8%
---- ---- ---- --- --
Total petroleum production (MMboe)..................... 208 52 (13%) (7%) 3%
---- ---- ---- --- --
Total petroleum production - Total petroleum production for the 2017 financial
year decreased by 13 per cent to 208 MMboe.
Petroleum production is forecast to decrease to between 180 and 190 MMboe in the
2018 financial year.
In Onshore US, volumes are expected to decline to between 61 and 67 MMboe as
production from the phased ramp-up of development activity is more than offset
by natural field decline. The expanded rig program is forecast to deliver
production growth of approximately 35 per cent in the 2019 financial year, with
investment plans subject to market conditions.
In our Conventional business, volumes are expected to decrease to between 119
and 123 MMboe as infill drilling and brownfield projects are more than offset by
planned maintenance at Mad Dog and natural field decline across the portfolio.
Crude oil, condensate and natural gas liquids - Production for the 2017
financial year decreased by 16 per cent to 97 MMboe.
Onshore US liquids volumes decreased by 29 per cent to 34 MMboe as value
accretive deferral of activity in the Black Hawk and natural field decline
across all fields were partially offset by increased production from the
Permian.
Conventional liquids volumes decreased by eight per cent to 63 MMboe as an
additional infill well at Mad Dog and higher production at North West Shelf and
Algeria partially offset planned maintenance at Atlantis and natural field
decline across the portfolio.
Natural gas - Production for the 2017 financial year declined by 10 per cent to
668 bcf.
Divestment of our Pakistan gas business in December 2015 and lower Onshore US
gas volumes as a result of deferred development activity for value, were
partially offset by strong performance at Bass Strait and Macedon and increased
LNG volumes at North West Shelf.
Projects
Capital Initial
expenditure production
Project and ownership (US$m) target date Capacity Progress
--------------------- ----------- ----------- ----------------------------------- ---------------------------------
North West Shelf Greater 314 CY19 To maintain LNG plant throughput On schedule and budget. The
Western Flank-B from the North West Shelf overall project is 47% complete.
(Australia) operations.
16.67% (non-operator)
Mad Dog Phase 2 2,154 CY22 New floating production facility On schedule and budget. The
(US Gulf of Mexico) with the capacity to produce up to overall project is 3% complete.
23.9% (non-operator) 140,000 gross barrels of crude oil
per day.
Petroleum capital expenditure for the 2017 financial year declined by
approximately 41 per cent to US$1.5 billion. In the 2018 financial year we
expect an increase to approximately US$2.0 billion (including higher forecast
capital creditor movements of approximately US$0.2 billion, the majority
relating to Onshore US). This includes Conventional capital expenditure of
US$0.8 billion, which remains focused on high-return infill drilling
opportunities in the Gulf of Mexico, a life extension project at North West
Shelf along with investments related to the recently approved Mad Dog Phase 2
project.
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BHP Operational Review for 4
the year ended 30 June 2017
Onshore US development activity
Onshore US drilling and development expenditure for the 2017 financial year was
approximately US$554 million. During the June 2017 quarter, our operated rig
count increased to five, as two additional rigs commenced operations in the
Haynesville.
Liquids focused areas Gas focused areas
FY17 --------------------- --------------------------
(FY16) Eagle Ford Permian Haynesville Fayetteville Total
------ ---------- --------- ----------- ------------- -------------
Capital expenditure/(i)/... US$ billion 0.3 (0.8) 0.2 (0.4) 0.1 (0.0) 0.0 (0.0) 0.6 (1.2)
Rig allocation............. At period end 1 (2) 1 (2) 3 (0) 0 (0) 5 (4)
Net wells drilled
and completed/(ii)/...... Period total 51 (89) 21 (30) 5 (5) 2 (11) 79 (136)
Net productive wells....... At period end 963 (929) 126 (107) 394 (411) 1,044 (1,086) 2,527 (2,533)
(i) Includes land acquisition, site preparation, drilling, completions, well
site facilities, mid-stream infrastructure and pipelines.
(ii) Can vary between periods based on changes in rig activity and the inventory
of wells drilled but not yet completed at period end.
Onshore US capital expenditure is expected to be approximately US$1.2 billion in
the 2018 financial year. Our plan considers up to five additional rigs.
. Evaluation of trials in the Black Hawk are expected to be completed in the
September 2017 quarter and, subject to approval, one additional rig will
commence toward the end of that quarter.
. One rig has recently commenced operations in the Hawkville executing a 14
well program that will include a mix of completion trials and acreage
retention drilling.
. In the Permian, the current rig will focus on near-term lease obligations
while an additional one to two rigs will continue to focus on completion
trials that will inform a transition to full pad development as early as the
2019 financial year.
. One additional rig is expected to commence in the Haynesville in the
September 2017 quarter. Further, our hedging strategy allows us to reduce
price risk and secure average rates of return in excess of 20 per cent.
. At this point we do not anticipate any operated development in the
Fayetteville, however we continue to work with joint venture partners to
assess the potential of the Moorefield horizon through non-operated
activity.
The divestment of non-core acreage for value is progressing, with the sale of a portion of the southern
Hawkville anticipated to be executed in the September 2017 quarter. Our Fayetteville acreage is currently
under review and we are considering all options including divestment.
Petroleum exploration
Exploration and appraisal wells drilled during the June 2017 quarter are
summarised below.
Total well
Well Location Target BHP equity Spud date Water depth depth Status
---- -------------- ------ ---------- ------------- ----------- ---------- --------------
Wildling-2.. US Gulf of Oil 100% 15 April 2017 1,267 m 8,928 m Drilling ahead
Mexico GC520 (Operator)
The Wildling-2 well was spud on 15 April 2017 and drilling is in progress, with
results expected in the September 2017 quarter. The Scimitar exploration well is
expected to be spud in the September 2017 quarter.
In Mexico, BHP has commenced working in partnership with Pemex to plan and
execute, during the next 24 months, the Minimum Work Program for blocks AE-0092
and AE-0093 consisting of one appraisal well, one exploration well and the
acquisition of additional seismic data.
In Trinidad and Tobago, we continued appraisal work to assess the potential
commercialisation of the gas discovery at LeClerc and to prepare for deepwater
oil exploration in Phase 2, which is expected to commence in the second half of
the 2018 financial year.
In the US Gulf of Mexico, BHP was the apparent high bidder on two leases
adjacent to the Scimitar prospect (GC260 and GC304) in the Central Gulf of
Mexico Lease Sale 247. BHP (28.32 per cent equity interest), with BP (Operator),
was the apparent high bidder on two leases adjacent to the Mad Dog field (GC738
and GC870). All four leases were awarded by the Regulator during the June 2017
quarter.
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BHP Operational Review for 5
the year ended 30 June 2017
In Australia, BHP has completed its evaluation of the WA-480-P permit in the
Northern Beagle sub-basin and has elected to exit this exploration permit.
Acquisition of the seismic survey in the Exmouth sub-basin was completed on 1
May 2017. Processed data will be delivered during the June 2018 quarter.
Petroleum exploration expenditure for the 2017 financial year was US$805
million, of which US$473 million was expensed. We are pursuing high-quality oil
plays in our priority basins and an US$840 million exploration program is
planned for the 2018 financial year taking advantage of low rig rates. This
program includes one well in the US Gulf of Mexico, three wells in Trinidad and
Tobago, and one well in Mexico.
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BHP Operational Review for 6
the year ended 30 June 2017
Copper
Production
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs
FY17 Qtr FY16 Jun Q16 Mar Q17
-------- -------- --------- ------- -------
Copper (kt)................... 1,326 387 (16%) (6%) 71%
Zinc (t)...................... 87,502 29,076 58% 349% 41%
Uranium oxide concentrate (t). 3,661 737 (16%) (16%) (22%)
Copper - Total copper production for the 2017 financial year decreased by 16 per
cent to 1.3 Mt. Total copper production is forecast to increase to between 1,655
and 1,790 kt in the 2018 financial year.
Escondida copper production for the 2017 financial year decreased by 21 per cent
to 772 kt. The decrease was due to: a four day site-wide suspension of
operations following a fatality in October 2016, 44 days of industrial action in
the March 2017 quarter and severe weather in early June 2017, reducing
production by 21 kt, 214 kt and 12 kt, respectively. Copper production of
between 1,130 and 1,230 kt is expected in the 2018 financial year, supported by
the ramp-up of the Los Colorados Extension project during the September 2017
quarter, enabling utilisation of three concentrators.
Pampa Norte copper production for the 2017 financial year increased by one per
cent to 254 kt, supported by record cathode production and ore milled at Spence
following the completion of the Recovery Optimisation project. Pampa Norte
copper production for the 2018 financial year is expected to be higher than the
prior year.
Olympic Dam copper production for the 2017 financial year decreased by 18 per
cent to 166 kt following the state-wide power outage during September and
October 2016 and unplanned maintenance at the refinery during December 2016 and
January 2017. Copper production of 150 kt is expected in the 2018 financial year
as a major smelter maintenance campaign is phased through August to November
2017, including a rebuild of the electric slag furnace, the flash furnace and
the electro static precipitator. This is the largest maintenance program
undertaken by BHP at Olympic Dam and on completion, the improved operational
performance will underpin an expected increase in copper production to
approximately 215 kt in the 2019 financial year. This will provide a stable base
for the potential to increase capacity to 280 kt in the 2022 financial year.
Antamina copper production for the 2017 financial year decreased by nine per
cent to 134 kt as record material mined was more than offset by lower copper
grades as mining progressed through a zinc rich ore zone. Copper production is
expected to decrease in the 2018 financial year to approximately 125 kt, as
mining continues through a zinc rich ore zone consistent with the mine plan.
Zinc production is expected to increase from 88 kt to approximately 100 kt in
the 2018 financial year.
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BHP Operational Review for 7
the year ended 30 June 2017
Iron Ore
Production
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs
FY17 Qtr FY16 Jun Q16 Mar Q17
-------- -------- --------- ------- -------
Iron ore/(i)/ (kt)...... 231,352 60,141 4% 8% 12%
(i)Represents Western Australia Iron Ore (WAIO). Excludes production from
Samarco.
Iron ore - Total iron ore production for the 2017 financial year increased by
four per cent to 231 Mt, or 268 Mt on a 100 per cent basis. WAIO production is
expected to increase to between 239 and 243 Mt, or between 275 and 280 Mt on a
100 per cent basis, in the 2018 financial year. BHP will continue to work with
the relevant authorities to obtain the necessary approvals to increase system
capacity to 290 Mtpa (100 per cent basis).
Record annual production of 268 Mt (100 per cent basis) at WAIO reflects strong
productivity improvements across the supply chain as well as the commissioning
of a new primary crusher and additional conveying capacity at Jimblebar.
Following recovery from the wet season, WAIO produced at a record annualised
rate of 280 Mt (100 per cent basis) in the June 2017 quarter. The rail renewal
and maintenance program was completed in May 2017.
In June 2017, BHP approved initial funding of US$184 million (BHP share) for the
South Flank sustaining mine project. The initial funding will be used primarily
for the expansion of accommodation facilities to support construction and future
operational workforce requirements. The South Flank project, which will leverage
and expand the existing Mining Area C hub, is BHP's preferred option to replace
production from the 80 Mtpa (100 per cent basis) Yandi mine when it reaches the
end of its economic life in the early-to-mid 2020s. The project is expected to
be submitted for Board approval in the middle of the 2018 calendar year and, if
approved, first ore is targeted in the 2021 calendar year with ramp-up timed to
coincide with the ramp-down of Yandi. The capital cost for South Flank is
expected to be in the range of US$30 to US$40 per tonne, with expenditure
fitting within WAIO's previously indicated average annual sustaining capital
expenditure of US$4 per tonne over the next five years.
Mining and processing operations at Samarco remain suspended following the
failure of the Fundao tailings dam and Santarem water dam on 5 November 2015.
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BHP Operational Review for 8
the year ended 30 June 2017
Coal
Production
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs
FY17 Qtr FY16 Jun Q16 Mar Q17
-------- -------- --------- ------- -------
Metallurgical coal/(i)/ (kt).. 39,770 8,494 (6%) (27%) (16%)
Energy coal/(ii)/ (kt) ....... 29,135 8,186 7% 30% 10%
(i) Represents Queensland Coal. Excludes production from Haju following the
divestment of IndoMet Coal (2017 financial year: 129 kt).
(ii)Excludes production from New Mexico Coal following divestments (2017
financial year: 451 kt).
Metallurgical coal - Metallurgical coal production for the 2017 financial year
decreased by six per cent to 40 Mt. Production is expected to increase to
between 44 and 46 Mt in the 2018 financial year.
At Queensland Coal, production for the 2017 financial year was lower as a result
of damage caused by Cyclone Debbie to the network infrastructure of rail track
provider Aurizon. Mine operations recovered quickly after the cyclone, as
dewatering infrastructure installed after the 2011 floods worked as designed.
Force majeure was declared for all Queensland Coal products on 5 April 2017 and
was lifted on 1 July 2017.
Despite the impacts of Cyclone Debbie, Peak Downs and Saraji achieved record
annual production underpinned by improved stripping and mining performance, and
utilisation of latent wash-plant capacity, including approximately 2 Mt trucked
to Caval Ridge (100 per cent). Three additional mines were on track for record
production prior to Cyclone Debbie.
The Caval Ridge Southern Circuit latent capacity project is progressing
according to plan, with production expected to ramp-up early in the 2019
financial year.
Energy coal - Energy coal production for the 2017 financial year increased by
seven per cent to 29 Mt. Production is expected to remain broadly unchanged at
approximately 29 to 30 Mt in the 2018 financial year.
New South Wales Energy Coal production increased by six per cent as it
benefitted from a lower strip ratio and additional bypass coal. Cerrejon
production increased by nine per cent compared to the prior year, which was
constrained by drought conditions.
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BHP Operational Review for 9
the year ended 30 June 2017
Other
Nickel production
FY17 Jun Q17 Jun Q17
Jun 2017 vs vs vs
FY17 Qtr FY16 Jun Q16 Mar Q17
-------- -------- --------- ------- -------
Nickel (kt)...... 85.1 25.2 5% 8% 33%
Nickel - Nickel West production for the 2017 financial year increased by five
per cent to 85.1 kt. Debottlenecking activities at the Kwinana refinery have
resulted in record refined metal production. Nickel production for the 2018
financial year is expected to remain broadly unchanged from the 2017 financial
year.
Potash project
Investment
Project and ownership (US$m) Scope Progress
--------------------- ---------- ------------------------------------------------------ --------------------------------
Jansen Potash..... 2,600 Investment to finish the excavation and lining of the The project is 70% complete and
(Canada).......... production and service shafts, and to continue the within the approved budget.
100%.............. installation of essential surface infrastructure and Shaft excavation is progressing.
utilities.
Minerals exploration
Minerals exploration expenditure for the 2017 financial year was US$163 million,
of which US$139 million was expensed. Greenfield minerals exploration is
predominantly focused on advancing copper targets within Chile, Peru, Canada,
South Australia and the South-West United States. BHP was awarded five
exploration concessions in Ecuador in June 2017.
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Variance analysis relates to the relative performance of BHP and/or its
operations during the 2017 financial year compared with the 2016 financial year,
unless otherwise noted. Production volumes, sales volumes and capital and
exploration expenditure from subsidiaries are reported on a 100 per cent basis;
production and sales volumes from equity accounted investments and other
operations are reported on a proportionate consolidation basis. Copper
equivalent production based on 2017 financial year average realised prices.
The following footnotes apply to this Operational Review:
--------
(1) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(2) Underlying EBITDA and Underlying attributable profit are used to reflect
the underlying performance of BHP. Underlying EBITDA is earnings before net
finance costs, taxation, depreciation, amortisation, impairment and any
exceptional items. Underlying attributable profit is Attributable profit
excluding any exceptional items.
The following abbreviations may have been used throughout this report: barrels
(bbl); billion cubic feet (bcf); cost and freight (CFR); cost, insurance and
freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per
tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million
barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million
tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand
barrels of oil equivalent (Mboe); thousand ounces (koz); thousand standard cubic
feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand
tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
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BHP Operational Review for 10
the year ended 30 June 2017
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--------------------------------------------------------------------------------
BHP Operational Review for 11
the year ended 30 June 2017
Production summary
Quarter ended Year to date
---------------------------------- ---------------
Jun Sep Dec Mar Jun Jun Jun
BHP 2016 2016 2016 2017 2017 2017 2016
interest ------ ------ ------ ------ ------ ------- -------
Petroleum /(1)/
Petroleum
Crude oil, condensate and NGL (Mboe)
Onshore US........................... 9,469 8,288 8,143 9,439 8,501 34,371 48,181
Conventional......................... 16,896 15,959 15,768 15,369 15,612 62,708 67,858
------ ------ ------ ------ ------ ------- -------
Total................................ 26,365 24,247 23,911 24,808 24,113 97,079 116,039
------ ------ ------ ------ ------ ------- -------
Natural gas (bcf)
Onshore US........................... 82.0 73.9 67.8 66.1 67.2 275.0 364.5
Conventional......................... 95.7 107.8 97.1 88.4 99.5 392.8 380.2
------ ------ ------ ------ ------ ------- -------
Total................................ 177.7 181.7 164.9 154.5 166.7 667.8 744.7
------ ------ ------ ------ ------ ------- -------
------ ------ ------ ------ ------ ------- -------
Total petroleum production (MMboe)...... 56.0 54.5 51.4 50.6 51.9 208.4 240.1
------ ------ ------ ------ ------ ------- -------
Copper /(2)/
Copper
Payable metal in concentrate (kt)
Escondida /(3)/...................... 57.5% 182.7 147.0 162.6 67.6 162.4 539.6 648.9
Antamina............................. 33.8% 38.7 34.1 32.0 29.2 38.5 133.8 146.4
------ ------ ------ ------ ------ ------- -------
Total................................ 221.4 181.1 194.6 96.8 200.9 673.4 795.3
------ ------ ------ ------ ------ ------- -------
Cathode (kt)
Escondida /(3)/...................... 57.5% 85.3 70.5 71.5 27.2 62.8 232.0 330.3
Pampa Norte /(4)/.................... 100% 65.8 62.1 53.8 66.1 72.3 254.3 251.4
Olympic Dam.......................... 100% 40.7 40.9 37.2 36.8 51.4 166.3 202.8
------ ------ ------ ------ ------ ------- -------
Total................................ 191.8 173.5 162.5 130.1 186.5 652.6 784.5
------ ------ ------ ------ ------ ------- -------
------ ------ ------ ------ ------ ------- -------
Total copper (kt)....................... 413.2 354.6 357.1 226.9 387.4 1,326.0 1,579.8
------ ------ ------ ------ ------ ------- -------
Lead
Payable metal in concentrate (t)
Antamina............................. 33.8% 645 1,146 1,220 1,308 1,799 5,473 3,719
------ ------ ------ ------ ------ ------- -------
Total................................ 645 1,146 1,220 1,308 1,799 5,473 3,719
------ ------ ------ ------ ------ ------- -------
Zinc
Payable metal in concentrate (t)
Antamina............................. 33.8% 6,474 15,367 22,406 20,653 29,076 87,502 55,438
------ ------ ------ ------ ------ ------- -------
Total................................ 6,474 15,367 22,406 20,653 29,076 87,502 55,438
------ ------ ------ ------ ------ ------- -------
Gold
Payable metal in concentrate (troy oz)
Escondida /(3)/...................... 57.5% 35,894 27,561 37,784 11,572 33,941 110,858 108,996
Olympic Dam (refined gold)........... 100% 20,010 24,366 29,651 21,941 28,188 104,146 117,686
------ ------ ------ ------ ------ ------- -------
Total................................ 55,904 51,927 67,435 33,513 62,129 215,004 226,682
------ ------ ------ ------ ------ ------- -------
Silver
Payable metal in concentrate (troy koz)
Escondida /(3)/...................... 57.5% 1,874 1,229 1,323 540 1,234 4,326 5,561
Antamina............................. 33.8% 1,558 1,345 1,446 1,301 1,691 5,783 6,711
Olympic Dam (refined silver)......... 100% 232 163 188 174 243 768 917
------ ------ ------ ------ ------ ------- -------
Total................................ 3,664 2,737 2,957 2,015 3,168 10,877 13,189
------ ------ ------ ------ ------ ------- -------
Uranium
Payable metal in concentrate (t)
Olympic Dam.......................... 100% 876 916 1,060 948 737 3,661 4,363
------ ------ ------ ------ ------ ------- -------
Total................................ 876 916 1,060 948 737 3,661 4,363
------ ------ ------ ------ ------ ------- -------
Molybdenum
Payable metal in concentrate (t)
Antamina............................. 33.8% 562 561 225 30 328 1,144 1,113
------ ------ ------ ------ ------ ------- -------
Total................................ 562 561 225 30 328 1,144 1,113
------ ------ ------ ------ ------ ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for 12
the year ended 30 June 2017
Production summary
Quarter ended Year to date
---------------------------------- ---------------
Jun Sep Dec Mar Jun Jun Jun
BHP 2016 2016 2016 2017 2017 2017 2016
interest ------ ------ ------ ------ ------ ------- -------
Iron Ore
Iron Ore
Production (kt) /(5)/
Newman............................... 85% 15,115 18,008 17,751 16,283 16,241 68,283 65,941
Area C Joint Venture................. 85% 11,911 12,384 12,179 11,165 13,016 48,744 46,799
Yandi Joint Venture.................. 85% 18,325 15,729 17,555 14,656 17,415 65,355 67,375
Jimblebar /(6)/...................... 85% 5,304 6,057 5,178 4,824 5,891 21,950 18,890
Wheelarra............................ 85% 4,971 5,409 7,386 6,647 7,578 27,020 22,549
Samarco.............................. 50% -- -- -- -- -- -- 5,404
------ ------ ------ ------ ------ ------- -------
Total................................ 55,626 57,587 60,049 53,575 60,141 231,352 226,958
------ ------ ------ ------ ------ ------- -------
Coal
Metallurgical coal
Production (kt) /(7)/
BMA.................................. 50% 9,225 8,384 8,684 7,996 6,394 31,458 33,413
BHP Mitsui Coal /(8)/................ 80% 2,345 2,145 1,929 2,138 2,100 8,312 8,898
Haju /(9)/........................... 75% 260 102 27 -- -- 129 529
------ ------ ------ ------ ------ ------- -------
Total................................ 11,830 10,631 10,640 10,134 8,494 39,899 42,840
------ ------ ------ ------ ------ ------- -------
Energy coal
Production (kt)
USA.................................. 100% 632 451 -- -- -- 451 7,052
Australia............................ 100% 3,991 3,952 3,851 4,662 5,711 18,176 17,101
Colombia............................. 33.3% 2,329 2,928 2,800 2,756 2,475 10,959 10,094
------ ------ ------ ------ ------ ------- -------
Total................................ 6,952 7,331 6,651 7,418 8,186 29,586 34,247
------ ------ ------ ------ ------ ------- -------
Other
Nickel
Saleable production (kt)
Nickel West.......................... 100% 23.4 18.8 22.1 19.0 25.2 85.1 80.7
------ ------ ------ ------ ------ ------- -------
Total................................ 23.4 18.8 22.1 19.0 25.2 85.1 80.7
------ ------ ------ ------ ------ ------- -------
(1)LPG and ethane are reported as natural gas liquids (NGL). Product-specific
conversions are made and NGL is reported in barrels of oil equivalent (boe).
Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe.
(2)Metal production is reported on the basis of payable metal.
(3)Shown on a 100% basis. BHP interest in saleable production is 57.5%.
(4)Includes Cerro Colorado and Spence.
(5)Iron ore production is reported on a wet tonnes basis.
(6)Shown on a 100% basis. BHP interest in saleable production is 85%.
(7)Metallurgical coal production is reported on the basis of saleable product.
Production figures include some thermal coal.
(8)Shown on a 100% basis. BHP interest in saleable production is 80%.
(9)Shown on a 100% basis. BHP interest in saleable production is 75%.
Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.
--------------------------------------------------------------------------------
BHP Operational Review for 13
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
---------------------------------- ---------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
------ ------ ------ ------ ------ ------- -------
Petroleum /(1)/
Bass Strait
Crude oil and condensate.................. (Mboe) 1,745 1,922 1,770 1,355 1,552 6,599 6,825
NGL....................................... (Mboe) 1,831 2,102 1,460 1,236 1,661 6,459 6,684
Natural gas............................... (bcf) 38.1 41.9 31.3 28.7 37.4 139.3 131.0
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 9.9 11.0 8.4 7.4 9.4 36.3 35.3
------ ------ ------ ------ ------ ------- -------
North West Shelf
Crude oil and condensate.................. (Mboe) 925 1,486 1,468 1,239 1,314 5,507 4,834
NGL....................................... (Mboe) 241 292 263 200 209 964 962
Natural gas............................... (bcf) 27.6 38.7 36.9 32.2 32.5 140.3 130.2
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 5.8 8.2 7.9 6.8 6.9 29.9 27.5
------ ------ ------ ------ ------ ------- -------
Pyrenees
Crude oil and condensate.................. (Mboe) 2,097 1,676 1,726 1,509 1,606 6,517 8,617
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 2.1 1.7 1.7 1.5 1.6 6.5 8.6
------ ------ ------ ------ ------ ------- -------
Other Australia /(2)/
Crude oil and condensate.................. (Mboe) 9 10 8 8 9 35 39
Natural gas............................... (bcf) 17.2 17.5 17.1 15.2 16.3 66.1 64.4
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 2.9 2.9 2.9 2.5 2.7 11.1 10.8
------ ------ ------ ------ ------ ------- -------
Atlantis /(3)/
Crude oil and condensate.................. (Mboe) 4,058 3,054 3,263 3,881 3,637 13,835 16,008
NGL....................................... (Mboe) 269 208 207 295 213 923 1,048
Natural gas............................... (bcf) 1.9 1.5 1.6 2.1 1.9 7.1 7.4
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 4.6 3.5 3.7 4.5 4.2 15.9 18.3
------ ------ ------ ------ ------ ------- -------
Mad Dog /(3)/
Crude oil and condensate.................. (Mboe) 1,134 950 1,170 1,185 1,167 4,472 3,250
NGL....................................... (Mboe) 52 36 52 59 68 215 157
Natural gas............................... (bcf) 0.2 0.1 0.2 0.2 0.2 0.7 0.5
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 1.2 1.0 1.3 1.3 1.3 4.8 3.5
------ ------ ------ ------ ------ ------- -------
Shenzi /(3)/
Crude oil and condensate.................. (Mboe) 2,813 2,632 2,692 2,675 2,588 10,587 12,369
NGL....................................... (Mboe) 192 94 131 161 179 565 903
Natural gas............................... (bcf) 0.6 0.5 0.5 0.5 0.6 2.1 2.7
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 3.1 2.8 2.9 2.9 2.9 11.5 13.7
------ ------ ------ ------ ------ ------- -------
Eagle Ford /(4)/
Crude oil and condensate.................. (Mboe) 4,949 3,871 4,008 5,451 4,278 17,608 26,823
NGL....................................... (Mboe) 2,717 2,268 2,159 2,354 2,240 9,021 13,971
Natural gas............................... (bcf) 19.5 16.5 15.2 17.0 15.1 63.8 95.8
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 10.9 8.9 8.7 10.6 9.0 37.3 56.8
------ ------ ------ ------ ------ ------- -------
Permian /(4)/
Crude oil and condensate.................. (Mboe) 1,410 1,415 1,378 1,202 1,336 5,331 5,744
NGL....................................... (Mboe) 393 734 580 428 646 2,388 1,642
Natural gas............................... (bcf) 4.9 4.4 4.4 4.0 6.2 19.0 14.6
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 2.6 2.9 2.7 2.3 3.0 10.9 9.8
------ ------ ------ ------ ------ ------- -------
Haynesville /(4)/
Crude oil and condensate.................. (Mboe) -- -- 3 1 1 5 1
NGL....................................... (Mboe) -- -- 15 3 -- 18 --
Natural gas............................... (bcf) 31.1 28.2 24.0 22.0 21.4 95.6 136.6
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 5.2 4.7 4.0 3.7 3.6 16.0 22.8
------ ------ ------ ------ ------ ------- -------
Fayetteville /(4)/
Natural gas............................... (bcf) 26.5 24.8 24.2 23.1 24.5 96.6 117.5
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 4.4 4.1 4.0 3.9 4.1 16.1 19.6
------ ------ ------ ------ ------ ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for 14
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
---------------------------------- ---------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
------ ------ ------ ------ ------ ------- -------
Petroleum /(1)/ (continued)
Trinidad/Tobago
Crude oil and condensate.................. (Mboe) 162 140 156 127 139 562 709
Natural gas............................... (bcf) 8.6 6.4 8.4 8.4 9.4 32.6 31.0
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 1.6 1.2 1.6 1.5 1.7 6.0 5.9
------ ------ ------ ------ ------ ------- -------
Other Americas /(3) (5)/
Crude oil and condensate.................. (Mboe) 308 275 269 257 238 1,039 1,363
NGL....................................... (Mboe) 10 1 5 6 10 22 50
Natural gas............................... (bcf) 0.2 0.1 0.1 0.1 0.1 0.4 0.8
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 0.4 0.3 0.3 0.3 0.3 1.1 1.5
------ ------ ------ ------ ------ ------- -------
UK
Crude oil and condensate.................. (Mboe) 76 69 63 72 64 268 274
NGL....................................... (Mboe) 10 22 49 32 16 119 43
Natural gas............................... (bcf) 1.3 1.1 1.0 1.0 1.1 4.2 4.3
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 0.3 0.3 0.3 0.3 0.3 1.1 1.0
------ ------ ------ ------ ------ ------- -------
Algeria
Crude oil and condensate.................. (Mboe) 964 990 1,016 1,072 942 4,020 3,689
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) 1.0 1.0 1.0 1.1 0.9 4.0 3.7
------ ------ ------ ------ ------ ------- -------
Pakistan /(6)/
Crude oil and condensate.................. (Mboe) -- -- -- -- -- -- 42
Natural gas............................... (bcf) -- -- -- -- -- -- 7.9
------ ------ ------ ------ ------ ------- -------
Total petroleum products.................. (MMboe) -- -- -- -- -- -- 1.4
------ ------ ------ ------ ------ ------- -------
BHP Petroleum
Crude oil and condensate
Onshore US................................ (Mboe) 6,359 5,286 5,389 6,654 5,615 22,944 32,568
Conventional /(7)/......................... (Mboe) 14,291 13,204 13,601 13,380 13,256 53,441 58,011
------ ------ ------ ------ ------ ------- -------
Total..................................... (Mboe) 20,650 18,490 18,990 20,034 18,871 76,385 90,579
------ ------ ------ ------ ------ ------- -------
NGL
Onshore US................................ (Mboe) 3,110 3,002 2,754 2,785 2,886 11,427 15,613
Conventional.............................. (Mboe) 2,605 2,755 2,167 1,989 2,356 9,267 9,847
------ ------ ------ ------ ------ ------- -------
Total..................................... (Mboe) 5,715 5,757 4,921 4,774 5,242 20,694 25,460
------ ------ ------ ------ ------ ------- -------
Natural gas
Onshore US................................ (bcf) 82.0 73.9 67.8 66.1 67.2 275.0 364.5
Conventional.............................. (bcf) 95.7 107.8 97.1 88.4 99.5 392.8 380.2
------ ------ ------ ------ ------ ------- -------
Total..................................... (bcf) 177.7 181.7 164.9 154.5 166.7 667.8 744.7
------ ------ ------ ------ ------ ------- -------
Total petroleum products
Onshore US................................ (Mboe) 23,136 20,605 19,443 20,456 19,701 80,204 108,931
Conventional /(7)/......................... (Mboe) 32,846 33,926 31,951 30,102 32,195 128,175 131,225
------ ------ ------ ------ ------ ------- -------
Total..................................... (Mboe) 55,982 54,530 51,394 50,558 51,896 208,379 240,156
------ ------ ------ ------ ------ ------- -------
(1)Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe.
Negative production figures represent finalisation adjustments.
(2)Other Australia includes Minerva and Macedon.
(3)Gulf of Mexico volumes are net of royalties.
(4)Onshore US volumes are net of mineral holder royalties.
(5)Other Americas includes Neptune, Genesis and Overriding Royalty Interest.
(6)BHP completed the sale of the Pakistan gas business on 31 December 2015.
(7)September 2015 includes (8) Mboe for the finalisation adjustment following
the cessation of production at Stybarrow on 26 June 2015.
--------------------------------------------------------------------------------
BHP Operational Review for 15
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
-------------------------------------------- -----------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
-------- -------- -------- -------- -------- -------- --------
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile /(1)/
Material mined............................ (kt) 108,037 106,504 90,863 26,045 93,389 316,801 433,274
Sulphide ore milled....................... (kt) 22,905 20,787 19,866 8,054 18,777 67,484 84,989
Average copper grade...................... (%) 0.94% 0.87% 1.02% 1.01% 1.07% 0.99% 0.98%
Production ex mill........................ (kt) 181.7 153.2 168.6 68.7 167.0 557.5 670.0
Production................................
Payable copper............................ (kt) 182.7 147.0 162.6 67.6 162.4 539.6 648.9
Copper cathode (EW)....................... (kt) 85.3 70.5 71.5 27.2 62.8 232.0 330.3
- Oxide leach............................. (kt) 31.3 26.8 24.4 8.9 20.3 80.4 117.8
- Sulphide leach.......................... (kt) 54.0 43.7 47.1 18.3 42.5 151.6 212.5
-------- -------- -------- -------- -------- -------- --------
Total copper.............................. (kt) 268.0 217.5 234.1 94.8 225.2 771.6 979.2
-------- -------- -------- -------- -------- -------- --------
Payable gold concentrate.................. (troy oz) 35,894 27,561 37,784 11,572 33,941 110,858 108,996
Payable silver concentrate................ (troy koz) 1,874 1,229 1,323 540 1,234 4,326 5,561
Sales.....................................
Payable copper............................ (kt) 186.6 134.9 172.7 63.7 163.3 534.6 649.7
Copper cathode (EW)....................... (kt) 83.8 65.6 71.8 39.4 56.0 232.8 329.0
Payable gold concentrate.................. (troy oz) 35,894 27,561 37,784 11,572 33,941 110,858 108,996
Payable silver concentrate................ (troy koz) 1,874 1,229 1,323 540 1,234 4,326 5,561
(1)Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Pampa Norte, Chile
Cerro Colorado............................
Material mined............................ (kt) 12,453 13,011 14,286 15,178 15,760 58,235 53,668
Ore milled................................ (kt) 4,375 3,241 3,342 4,179 4,411 15,173 17,946
Average copper grade...................... (%) 0.80% 0.68% 0.65% 0.57% 0.53% 0.60% 0.77%
Production................................
Copper cathode (EW)....................... (kt) 24.8 17.1 12.1 16.7 18.8 64.7 77.3
Sales.....................................
Copper cathode (EW)....................... (kt) 25.2 16.4 13.7 15.6 19.8 65.5 76.5
Spence....................................
Material mined............................ (kt) 21,124 23,638 22,635 22,939 24,230 93,442 88,188
Ore milled................................ (kt) 4,836 4,713 5,187 5,225 4,968 20,093 19,256
Average copper grade...................... (%) 1.22% 1.17% 1.19% 1.09% 1.13% 1.14% 1.33%
Production................................
Copper cathode (EW)....................... (kt) 41.0 45.0 41.7 49.4 53.5 189.6 174.1
Sales.....................................
Copper cathode (EW)....................... (kt) 40.9 41.2 41.5 49.0 55.7 187.4 173.6
--------------------------------------------------------------------------------
BHP Operational Review for 16
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
-------------------------------------------- -----------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
-------- -------- -------- -------- -------- -------- --------
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%)..................... (kt) 62,793 65,111 61,355 55,771 62,254 244,491 226,899
Sulphide ore milled (100%)................ (kt) 14,711 13,522 13,399 11,955 13,229 52,105 55,609
Average head grades.......................
- Copper.................................. (%) 0.90% 0.84% 0.84% 0.88% 1.00% 0.89% 0.93%
- Zinc.................................... (%) 0.33% 0.60% 0.83% 0.84% 0.95% 0.80% 0.55%
Production................................
Payable copper............................ (kt) 38.7 34.1 32.0 29.2 38.5 133.8 146.4
Payable zinc.............................. (t) 6,474 15,367 22,406 20,653 29,076 87,502 55,438
Payable silver............................ (troy koz) 1,558 1,345 1,446 1,301 1,691 5,783 6,711
Payable lead.............................. (t) 645 1,146 1,220 1,308 1,799 5,473 3,719
Payable molybdenum........................ (t) 562 561 225 30 328 1,144 1,113
Sales.....................................
Payable copper............................ (kt) 42.4 32.8 33.0 30.2 36.9 132.9 145.4
Payable zinc.............................. (t) 3,035 16,043 22,334 23,669 27,936 89,982 54,302
Payable silver............................ (troy koz) 2,055 1,277 1,388 1,304 1,513 5,482 6,956
Payable lead.............................. (t) 1,108 767 1,100 1,475 1,493 4,835 3,503
Payable molybdenum........................ (t) 331 648 476 -- -- 1,124 803
Olympic Dam, Australia
Material mined /(1)/...................... (kt) 1,993 2,204 1,887 1,943 1,974 8,008 8,932
Ore milled................................ (kt) 2,031 2,279 2,116 2,112 2,097 8,604 9,699
Average copper grade...................... (%) 2.20% 1.97% 2.00% 2.07% 2.30% 2.08% 2.01%
Average uranium grade..................... (kg/t) 0.59 0.60 0.68 0.61 0.58 0.62 0.61
Production................................
Copper cathode (ER and EW)................ (kt) 40.7 40.9 37.2 36.8 51.4 166.3 202.8
Uranium oxide concentrate................. (t) 876 916 1,060 948 737 3,661 4,363
Refined gold.............................. (troy oz) 20,010 24,366 29,651 21,941 28,188 104,146 117,686
Refined silver............................ (troy koz) 232 163 188 174 243 768 917
Sales.....................................
Copper cathode (ER and EW)................ (kt) 43.9 37.5 41.2 33.5 51.5 163.7 203.1
Uranium oxide concentrate................. (t) 778 1,085 883 839 1,298 4,105 3,729
Refined gold.............................. (troy oz) 22,134 21,901 28,234 22,333 24,726 97,194 118,952
Refined silver............................ (troy koz) 201 184 203 108 251 746 877
(1)Material mined refers to run of mine ore mined and hoisted.
--------------------------------------------------------------------------------
BHP Operational Review for 17
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
-------------------------------------------- -----------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
-------- -------- -------- -------- -------- -------- --------
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.
Pilbara, Australia
Production................................
Newman.................................... (kt) 15,115 18,008 17,751 16,283 16,241 68,283 65,941
Area C Joint Venture...................... (kt) 11,911 12,384 12,179 11,165 13,016 48,744 46,799
Yandi Joint Venture....................... (kt) 18,325 15,729 17,555 14,656 17,415 65,355 67,375
Jimblebar /(1)/........................... (kt) 5,304 6,057 5,178 4,824 5,891 21,950 18,890
Wheelarra................................. (kt) 4,971 5,409 7,386 6,647 7,578 27,020 22,549
-------- -------- -------- -------- -------- -------- --------
Total production.......................... (kt) 55,626 57,587 60,049 53,575 60,141 231,352 221,554
-------- -------- -------- -------- -------- -------- --------
Total production (100%)................... (kt) 64,508 66,681 69,730 62,177 69,714 268,302 257,320
-------- -------- -------- -------- -------- -------- --------
Sales.....................................
Lump...................................... (kt) 13,054 14,156 14,127 12,804 15,104 56,191 54,323
Fines..................................... (kt) 42,673 42,278 45,447 41,043 46,249 175,017 167,255
-------- -------- -------- -------- -------- -------- --------
Total..................................... (kt) 55,727 56,434 59,574 53,847 61,353 231,208 221,578
-------- -------- -------- -------- -------- -------- --------
Total sales (100%)........................ (kt) 64,617 65,368 69,196 62,513 71,149 268,226 257,346
-------- -------- -------- -------- -------- -------- --------
(1)Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil /(1)/
Production................................ (kt) -- -- -- -- -- -- 5,404
Sales..................................... (kt) 94 12 -- 35 -- 47 6,274
(1)Mining and processing operations remain suspended following the failure of
the Fundao tailings dam and Santarem water dam on 5 November 2015.
--------------------------------------------------------------------------------
BHP Operational Review for 18
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
-------------------------------------------- -----------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
-------- -------- -------- -------- -------- -------- --------
Coal
Coal production is reported on the basis of saleable product.
Queensland Coal
Production /(1)/..........................
BMA.......................................
Blackwater................................ (kt) 2,206 1,981 1,855 1,694 1,766 7,296 7,626
Goonyella................................. (kt) 2,709 2,123 2,204 1,871 1,157 7,355 8,996
Peak Downs................................ (kt) 1,385 1,520 1,715 1,582 1,238 6,055 5,031
Saraji.................................... (kt) 1,123 1,238 1,307 1,276 913 4,734 4,206
Gregory Joint Venture /(2)/............... (kt) -- -- -- -- -- -- 1,329
Daunia.................................... (kt) 684 646 680 674 560 2,560 2,624
Caval Ridge............................... (kt) 1,118 876 923 899 760 3,458 3,601
-------- -------- -------- -------- -------- -------- --------
Total BMA................................. (kt) 9,225 8,384 8,684 7,996 6,394 31,458 33,413
-------- -------- -------- -------- -------- -------- --------
BHP Mitsui Coal /(3)/.....................
South Walker Creek........................ (kt) 1,382 1,341 1,080 1,354 1,348 5,123 5,436
Poitrel................................... (kt) 963 804 849 784 752 3,189 3,462
-------- -------- -------- -------- -------- -------- --------
Total BHP Mitsui Coal..................... (kt) 2,345 2,145 1,929 2,138 2,100 8,312 8,898
-------- -------- -------- -------- -------- -------- --------
Total Queensland Coal..................... (kt) 11,570 10,529 10,613 10,134 8,494 39,770 42,311
-------- -------- -------- -------- -------- -------- --------
Sales.....................................
Coking coal............................... (kt) 8,059 7,240 7,658 7,133 5,496 27,527 30,064
Weak coking coal.......................... (kt) 3,196 2,799 2,659 2,761 2,502 10,721 11,818
Thermal coal.............................. (kt) 310 206 154 96 142 598 927
-------- -------- -------- -------- -------- -------- --------
Total..................................... (kt) 11,565 10,245 10,471 9,990 8,140 38,846 42,809
-------- -------- -------- -------- -------- -------- --------
(1)Production figures include some thermal coal.
(2)Longwall mining at Crinum completed during the December 2015 quarter.
(3)Shown on a 100% basis. BHP interest in saleable production is 80%.
Haju, Indonesia /(1)/
Production................................ (kt) 260 102 27 -- -- 129 529
Sales - export............................ (kt) 239 117 -- -- -- 117 239
(1)Shown on 100% basis. BHP interest in saleable production is 75%. BHP completed the sale of IndoMet Coal on 14 October 2016.
New Mexico, USA
Production................................
Navajo Coal /(1)/........................ (kt) 632 451 -- -- -- 451 3,999
San Juan Coal /(2)/...................... (kt) -- -- -- -- -- -- 3,053
-------- -------- -------- -------- -------- -------- --------
Total.................................... (kt) 632 451 -- -- -- 451 7,052
-------- -------- -------- -------- -------- -------- --------
Sales thermal coal - local utility....... 613 105 -- -- -- 105 7,051
(1)The divestment of Navajo Coal was completed on 29 July 2016, with no further production reported by BHP.
Management of Navajo Coal was transferred to Navajo Transitional Energy Company on 31 December 2016.
(2)BHP completed the sale of San Juan Mine on 31 January 2016.
NSW Energy Coal, Australia
Production................................ (kt) 3,991 3,952 3,851 4,662 5,711 18,176 17,101
Sales.....................................
Export thermal coal....................... (kt) 3,993 3,640 3,539 4,407 4,913 16,499 16,614
Inland thermal coal....................... (kt) 440 331 311 431 327 1,400 1,156
-------- -------- -------- -------- -------- -------- --------
Total..................................... (kt) 4,433 3,971 3,850 4,838 5,240 17,899 17,770
-------- -------- -------- -------- -------- -------- --------
Cerrejon, Colombia
Production................................ (kt) 2,329 2,928 2,800 2,756 2,475 10,959 10,094
Sales thermal coal - export............... (kt) 2,844 2,905 2,722 2,613 2,803 11,043 10,601
--------------------------------------------------------------------------------
BHP Operational Review for 19
the year ended 30 June 2017
Production and sales report
Quarter ended Year to date
-------------------------------------------- -----------------
Jun Sep Dec Mar Jun Jun Jun
2016 2016 2016 2017 2017 2017 2016
-------- -------- -------- -------- -------- -------- --------
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Production................................
Nickel contained in concentrate........... (kt) 0.3 0.3 0.2 0.2 -- 0.7 1.5
Nickel contained in finished matte........ (kt) 5.8 1.8 4.1 2.3 5.3 13.5 16.2
Nickel metal.............................. (kt) 17.3 16.7 17.8 16.5 19.9 70.9 63.0
-------- -------- -------- -------- -------- -------- --------
Total nickel production................... (kt) 23.4 18.8 22.1 19.0 25.2 85.1 80.7
-------- -------- -------- -------- -------- -------- --------
Sales.....................................
Nickel contained in concentrate........... (kt) 0.3 0.3 0.2 0.2 -- 0.7 1.5
Nickel contained in finished matte........ (kt) 5.9 1.8 4.1 2.2 4.9 13.0 16.5
Nickel metal.............................. (kt) 17.4 16.5 17.6 17.1 18.1 69.3 62.9
-------- -------- -------- -------- -------- -------- --------
Total nickel sales........................ (kt) 23.6 18.6 21.9 19.5 23.0 83.0 80.9
-------- -------- -------- -------- -------- -------- --------
--------------------------------------------------------------------------------
BHP Operational Review for 20
the year ended 30 June 2017
Date: 19/07/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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