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BHP BILLITON PLC - Operational Review for the Year Ended 30 June 2017

Release Date: 19/07/2017 07:05
Code(s): BIL     PDF:  
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).

--------------------------------------------------------------------------------
                     BHP Operational Review for           10
                     the year ended 30 June 2017

Further information on BHP can be found at: bhp.com

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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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