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BHP GROUP PLC - Operational Review for the Half Year Ended 31 December 2018

Release Date: 22/01/2019 07:05
Code(s): BHP     PDF:  
Wrap Text
Operational Review for the Half Year Ended 31 December 2018

BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91




 NEWS RELEASE                             LOGO

Release Time      IMMEDIATE

Date              22 January 2019

Release Number    01/19

                             BHP OPERATIONAL REVIEW
                    FOR THE HALF YEAR ENDED 31 DECEMBER 2018

.    Production guidance for the 2019 financial year remains unchanged for
     petroleum, iron ore, metallurgical coal and energy coal. Total copper
     production guidance increased to between 1,645 and 1,740 kt and reflects
     the retention of Cerro Colorado.

.    Group copper equivalent production/(1)/ was broadly unchanged in the December
     2018 half year, with volumes for the full year also expected to be in line
     with last year.

.    Full year unit costs for all major assets are expected to be in line with
     guidance/(2)/, predominantly reflecting stronger anticipated volumes in the second half of
     the year. However, unit costs were tracking above full year guidance
     at the December 2018 half year as a result of planned maintenance and
     production outages during the period.

.    All major projects under development are tracking to plan.

.    In Petroleum, the first appraisal well at Trion in Mexico (Trion-2DEL)
     encountered oil, in line with expectations. A downdip sidetrack is
     currently being drilled to further appraise the field.

.    The Onshore US sale process was completed on 31 October 2018, with the net
     proceeds of US$10.4 billion to be returned to shareholders. On 17 December
     2018, a US$5.2 billion off-market buy-back of BHP Group Limited shares was
     successfully completed. The balance of the net proceeds will be paid on 30
     January 2019 as a special dividend of US$1.02 per share.

.    The financial results for the December 2018 half year are expected to
     reflect certain items as summarised in the table on page two.

.    Productivity for the December 2018 half year has been impacted by unplanned production outages
     at Olympic Dam, Spence and Western Australia Iron Ore, with a total negative impact 
     of approximately US$600 million.

                                  Dec H18      Dec Q18
Production                     (vs Dec H17) (vs Sep Q18) Dec Q18 commentary
----------                     ------------ ------------ ------------------
Petroleum (MMboe).............       63           30     Lower seasonal gas sales at Bass Strait partially offset by
                                    (-1%)        (-8%)   Pyrenees resuming production following maintenance in the
                                                         previous quarter.
Copper (kt)...................      825          416     Record throughput at Cerro Colorado and higher volumes at
                                    (-1%)        (+2%)   Spence as production returned to full capacity following a
                                                         fire in September 2018, partially offset by lower volumes at
                                                         Escondida as a result of expected lower copper grades.
Iron ore (Mt).................      119           58     Volumes at Western Australia Iron Ore (WAIO) impacted by a
                                    (+2%)        (-6%)   train derailment on 5 November 2018.
Metallurgical coal (Mt).......       21           10     Record production at South Walker Creek offset by the impact
                                    (+2%)        (-1%)   of the scheduled longwall move at Broadmeadow.
Energy coal (Mt)..............       13            7     Increased production at New South Wales Energy Coal (NSWEC) as
                                    (-5%)         (0%)   a result of higher bypass coal offset by the impact of mine
                                                         sequence changes at Cerrejon.

BHP Chief Executive Officer, Andrew Mackenzie, said: "Production in the first
half was broadly in line with the prior period despite planned maintenance and
outages. In Petroleum, our first appraisal well at Trion in Mexico encountered
oil and we added to our exploration options with successful bids for two
licences offshore Eastern Canada. We completed the sale of our US shale assets
and returned US$5.2 billion to shareholders through a share buy-back program,
with a further US$5.2 billion to be returned as a special dividend on 30 January
2019."

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                   BHP Operational Review for              1
                   the half year ended 31 December 2018

Summary

Operational performance

Production for the December 2018 half year and guidance for the 2019 financial
year are summarised below.

                                                     Dec H18  Dec Q18  Dec Q18     Previous       Current
                                                       vs       vs       vs          FY19          FY19
Production                         Dec H18  Dec Q18  Dec H17  Dec Q17  Sep Q18     guidance      guidance
---------------------------------- -------- -------- -------- -------- -------- -------------- --------------
Petroleum - Conventional (MMboe)..      63       30      (1%)     (2%)     (8%)      113 - 118      113 - 118   Upper end of range
Copper (kt).......................     825      416      (1%)     (3%)      2%   1,620 - 1,705  1,645 - 1,740            Increased
  Escondida (kt)..................     580      285       0%     (10%)     (4%)  1,120 - 1,180  1,120 - 1,180            Unchanged
  Other copper/(i)/ (kt)..........     245      132      (2%)     15%      16%       500 - 525      525 - 560       Cerro Colorado
                                                                                                               60 - 70 kt for FY19
Iron ore/(ii)/ (Mt)...............     119       58       2%      (6%)     (6%)      241 - 250      241 - 250            Unchanged
  WAIO (100% basis) (Mt)..........     135       66      (1%)     (9%)     (6%)      273 - 283      273 - 283            Unchanged
Metallurgical coal (Mt)...........      21       10       2%       6%      (1%)        43 - 46        43 - 46            Unchanged
Energy coal (Mt)..................      13        7      (5%)     (9%)      0%         28 - 29        28 - 29            Unchanged

(i)  Other copper comprises Pampa Norte (including Cerro Colorado production for
     the full 2019 financial year to reflect its retention, previous guidance only included 
     35 kt of production for the first half of the 2019 financial year), Olympic Dam and Antamina.
(ii) Increase in BHP's share of volumes reflects the expiry of the Wheelarra
     Joint Venture sublease in March 2018, with control of the sublease area
     reverted to the Jimblebar Joint Venture, which is accounted for on a
     consolidated basis with minority interest adjustments.

Summary of disclosures

BHP expects its financial results for the first half of the 2019 financial year
to reflect certain items as summarised in the table below. The table does not
provide a comprehensive list of all items impacting the period. The financial
statements are the subject of ongoing work that will not be finalised until the
release of the financial results on 19 February 2019. Accordingly, the
information is subject to update.

                                                                                H1 FY19
                                                                                impact
Description                                                                    US$M/(i)/               Classification/(ii)/
-----------                                                              ---------------------  ----------------------------------
Continuing operations

Change in the accounting classification of treatment and refining                         ~260                (down arrow) Revenue
charges as a result of IFRS15/(3)/ (reclassification between revenue and                              (down arrow) Operating costs
operating costs)
Unit costs tracking above full                                           Refer footnote/(iii)/          (up arrow) Operating costs
year guidance/(2)/ in H1 FY19 as a result of planned maintenance and
production outages
Exploration expense (including petroleum and minerals exploration                          222      (up arrow) Exploration expense
programs)
Impairment charges related to the Whenan shaft refurbishment project                   100-150            (up arrow) Depreciation,
at Olympic Dam (changes to the mine access plan) and Cerro Colorado                                   amortisation and impairments
(termination of the sale and purchase agreement
The Group's adjusted effective tax rate for H1 FY19 is expected to be    Refer footnote/(iii)/         (up arrow) Taxation expense
slightly above the full year guidance range of 30 to 35 per cent
Non-cash fair value adjustments related to interest rate and exchange    Refer footnote/(iii)/                 (up arrow) Net debt
rate movements are expected to increase net debt in H1 FY19
Higher Australian and Chilean income tax payments in H1 FY19 compared                     ~700  (down arrow) Operating cash inflow
with H1 FY18 primarily due to higher instalment rates and settlement
of an Australian transfer pricing dispute
Dividends paid to non-controlling interests                                               ~620   (up arrow) Financing cash outflow
Reversal of provisions for global taxation matters which were resolved                    ~240             Exceptional item credit
during the period
Financial impact on BHP Billiton Brasil of the Samarco Dam failure       Refer footnote/(iii)/             Exceptional item charge

Discontinued operations

Loss from Onshore US (after taxation) mainly due to incremental costs                  275-325  (down arrow) Profit after taxation
(including redundancy costs and retention payments to employees) and
State and Federal tax expenses
Net proceeds received from the sale of Onshore US (comprising Fayetteville US$0.3        7,028    (up arrow) Investing cash inflow
billion and Eagle Ford, Haynesville and Permian US$6.7 billion, representing one-half
of the gross consideration at completion less customary completion adjustments and two 
instalment payments)

(i)   Numbers are not tax effected, unless otherwise noted.
(ii)  There will be a corresponding balance sheet, cash flow and/or income
      statement impact as relevant.
(iii) Financial impact is the subject of ongoing work and is not yet finalised.

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                   BHP Operational Review for              2
                   the half year ended 31 December 2018

Productivity for the December 2018 half year has been impacted by lower than expected
volumes at Olympic Dam (unplanned acid plant outage in August 2018, volume
impact of 45 kt), Spence (fire at the electro-winning plant in September
2018, volume impact of 25 kt) and WAIO (train derailment in November 2018,
volume impact of 4 Mt), with a total negative impact of approximately US$600 million. 
Productivity guidance for the full year is currently under review and revised guidance 
will be provided in the December 2018 half year financial results.

Average realised prices

The average realised prices achieved for our major commodities are summarised
below.

                                                                         Dec H18 Dec H18 Dec H18
                                                                           vs      vs      vs
Average realised prices/(i)/            Dec H18  Dec H17 Jun H18   FY18  Dec H17 Jun H18  FY18
----------------------------            -------  ------- ------- ------- ------- ------- -------
Oil (crude and condensate) (US$/bbl)...   69.41    53.76   67.07   60.12    29%      3%     15%
Natural gas (US$/Mscf)/(ii)/...........    3.98     3.54    3.71    3.62    12%      7%     10%
US natural gas (US$/Mscf)..............    2.88     2.84    2.77    2.80     1%      4%      3%
LNG (US$/Mscf).........................   10.19     7.48    8.65    8.07    36%     18%     26%
Copper (US$/lb)/(v)/...................    2.54     3.08    2.93    3.00   (18%)   (13%)   (15%)
Iron ore (US$/wmt, FOB)................   55.62    56.54   56.86   56.71    (2%)    (2%)    (2%)
Metallurgical coal (US$/t).............  179.82   164.22  189.66  177.22     9%     (5%)     1%
Hard coking coal (US$/t)/(iii)/........  197.86   182.29  205.80  194.59     9%     (4%)     2%
Weak coking coal (US$/t)/(iii)/........  134.12   120.99  143.40  131.70    11%     (6%)     2%
Thermal coal (US$/t)/(iv)/.............   84.15    87.49   86.47   86.94    (4%)    (3%)    (3%)
Nickel metal (US$/t)...................  12,480   11,083  13,974  12,591    13%    (11%)    (1%)

(i)   Based on provisional, unaudited estimates. Prices exclude sales from
      equity accounted investments, 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.
(ii)  Includes internal sales.
(iii) Hard coking coal (HCC) refers generally to those metallurgical coals with
      a Coke Strength after Reaction (CSR) of 35 and above, which includes coals
      across the spectrum from Premium Coking to Semi Hard Coking coals, while
      weak coking coal (WCC) refers generally to those metallurgical coals with
      a CSR below 35.
(iv)  Export sales only; excludes Cerrejon. Includes thermal coal sales from
      metallurgical coal mines.
(v)   Comparative financial information has been restated for the new accounting
      standard, IFRS15 Revenue from Contracts with Customers, which became
      effective from 1 July 2018.

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.

At 31 December 2018, the Group had 339 kt of outstanding copper sales that were
revalued at a weighted average price of US$2.70 per pound. The final price of
these sales will be determined over the remainder of the 2019 financial year. In
addition, 364 kt of copper sales from the 2018 financial year were subject to a
finalisation adjustment in the current period. The provisional pricing and
finalisation adjustments will decrease Underlying EBITDA/(4)/ by US$272 million in
the 2019 financial year and is included in the average realised copper price in
the above table.

Major development projects

During the December 2018 quarter, the North West Shelf Greater Western Flank-B
project achieved first production ahead of schedule and under
budget. The North West Shelf Greater Western Flank-B project will not be
reported in future Operational Reviews.

At the end of December 2018, BHP had five major projects under development in
petroleum, copper, iron ore and potash, with a combined budget of US$10.6
billion over the life of the projects.

--------------------------------------------------------------------------------
                   BHP Operational Review for              3
                   the half year ended 31 December 2018

Corporate update

The Onshore US sales process was completed on 31 October 2018, with the net
proceeds of US$10.4 billion to be returned to shareholders through an off-market
buy-back and a special dividend shareholder return program. On 17 December 2018,
the US$5.2 billion off-market buy-back of BHP Group Limited shares was
successfully completed and enabled the buy-back of approximately 265.8 million
shares (5.0 per cent of the total issued capital of BHP Group Limited and BHP
Group Plc) at A$27.64 per share. In addition, the Board of BHP determined to pay
a special dividend to shareholders of US$1.02 per share, representing the
residual US$5.2 billion of net proceeds, based on the reduced number of shares
on issue (approximately 5,058 million) following completion of the off-market
buy-back.

On 19 November 2018, BHP settled its transfer pricing dispute relating to its
marketing operations in Singapore with the Australian Taxation Office. The
settlement fully resolved all prior years, being 2003 to 2018, with no admission
of tax avoidance by BHP. As part of the settlement, BHP paid a total of
approximately A$529 million in additional taxes for the prior years (BHP paid
A$328 million of this amount when the amended assessments were received in prior
years, with the balance of A$201 million paid in the December 2018 quarter). In
addition, the settlement provides certainty in relation to the future taxation
treatment as, due to a change in ownership of the main marketing entity, all
profits made in Singapore in relation to the Australian assets owned by BHP
Group Limited will be fully subject to Australian tax under the Controlled
Foreign Company tax rules from the 2020 financial year.

BHP has agreed to fund a total of US$515 million in further financial support
for the Renova Foundation and Samarco. This comprises US$438 million to fund the
Renova Foundation until 31 December 2019 which will be offset against the
Group's provision for the Samarco dam failure, and a short-term facility of up
to US$77 million to be made available to Samarco until 30 June 2019.

As at the date of this Operational Review, we are not in a position to provide
an update, for the purpose of the December 2018 half year financial results, on
the ongoing potential financial impacts on BHP Billiton Brasil of the Samarco
dam failure. Any financial impacts will continue to be treated as an exceptional
item.

--------------------------------------------------------------------------------
                   BHP Operational Review for              4
                   the half year ended 31 December 2018

Petroleum

Production

                                                                         Dec H18 Dec Q18 Dec Q18
                                                                           vs      vs      vs
                                                         Dec H18 Dec Q18 Dec H17 Dec Q17 Sep Q18
                                                         ------- ------- ------- ------- -------
Crude oil, condensate and natural gas liquids (MMboe)...     29      14    (5%)    (3%)     3%
Natural gas (bcf).......................................    206      94     1%     (2%)   (16%)
                                                         ------- ------- ------- ------- -------
Total petroleum production (MMboe)......................     63      30    (1%)    (2%)    (8%)
                                                         ------- ------- ------- ------- -------

Petroleum - Total Conventional petroleum production was broadly flat at 63
MMboe. Guidance for the 2019 financial year remains unchanged at between 113 and
118 MMboe, with volumes expected to be towards the upper end of the guidance
range.

Crude oil, condensate and natural gas liquids production declined by five per
cent to 29 MMboe due to natural field decline across the portfolio and a 70 day
planned dry dock maintenance program at Pyrenees completed during the September
2018 quarter. This decline was partially offset by higher uptimes at our Gulf of
Mexico assets.

Natural gas production was broadly flat at 206 bcf, reflecting increased tax
barrels at Trinidad and Tobago in accordance with the terms of our Production
Sharing Contract. This was partially offset by planned maintenance at Trinidad
and Tobago in the December 2018 quarter and natural field decline across the
portfolio.

On 30 November 2018, BHP completed the sale of its interests in the Bruce and
Keith oil and gas fields in the United Kingdom to Serica Energy UK Ltd, with an
effective date of 1 January 2018.

Projects

                           Capital     Initial
Project and              expenditure  production
ownership                   US$M     target date                 Capacity                                 Progress
------------------------ ----------- -----------  -------------------------------------  -----------------------------------------
North West Shelf Greater     216         CY19     To maintain LNG plant throughput from  First production achieved in October
Western Flank-B                                   the North West Shelf operations.       2018, ahead of schedule and below budget.
(Australia)                                                                              The overall project is 98% complete.
16.67% (non-operator)
Mad Dog Phase 2            2,154         CY22     New floating production facility with  On schedule and budget. The overall
(US Gulf of Mexico)                               the capacity to produce up to 140,000  project is 37% complete.
23.9% (non-operator)                              gross barrels of crude oil per day.

During the December 2018 quarter, the Bass Strait West Barracouta project was
approved. The A$200 million (BHP share) investment is expected to produce first
gas in the 2021 calendar year to help offset Bass Strait production decline, and
to deliver competitive returns.

On 8 January 2019, BP (the operator) announced the sanction of the Atlantis
Phase 3 project. Approval from BHP's Board will be sought during the March 2019
quarter. Study work continues on the Ruby project in Trinidad and Tobago.

Petroleum exploration

Exploration and appraisal wells drilled during the December 2018 quarter are
summarised below.

                                         Formation                                           Total well
Well          Location          Target      age     BHP equity     Spud date     Water depth    depth   Status
------------- ----------------- ------ ------------ ---------- ----------------- ----------- ---------- --------------------------
Samurai-2     US Gulf of Mexico   Oil       Miocene     50%       25 August 2018   1,088 m    10,088 m  Plugged and abandoned
ST01          GC476                                   (Murphy
(sidetrack)                                          Operator)
Concepcion-1  Trinidad & Tobago   Gas  Pleistocene/     65%    30 September 2018   1,721 m     3,506 m  No commercial hydrocarbons
              Block TTDAA 5                Pliocene    (BHP                                             encountered; plugged and
                                                     Operator)                                          abandoned
Trion-2DEL    Mexico              Oil        Eocene     60%     15 November 2018   2,379 m     4,659 m  Hydrocarbons encountered
              Block AE-0093                            (BHP
                                                     Operator)

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                   BHP Operational Review for              5
                   the half year ended 31 December 2018

In the US Gulf of Mexico, a sidetrack of the Samurai-2 exploration well
commenced on 25 August 2018 to further appraise the discovery, and was plugged
and abandoned on 2 November 2018 after delineating the Samurai discovery.
Appraisal and development planning is in progress. In the Western US Gulf of
Mexico, the Ocean Bottom Node/(5)/ seismic acquisition is expected to be completed
in the March 2019 quarter. This is the world's first deepwater exploration ocean
bottom node seismic acquisition.

In Trinidad and Tobago, the Concepcion-1 well was spud on 30 September 2018 to
further test the Magellan play, with no commercial hydrocarbons encountered. The
well was plugged and abandoned on 25 October 2018. This completed Phase 2 of our
deepwater exploration drilling campaign in Trinidad and Tobago.

In Mexico, we spud the Trion-2DEL appraisal well on 15 November 2018 and
encountered oil in line with expectations. This was the first well drilled by an
international operator in the Mexican deepwater. A downdip sidetrack of the
Trion-2DEL well commenced on 4 January 2019 to further appraise the field,
including the oil water contact.

BHP was successful in its bids to acquire a 100 per cent interest in, and
operatorship of, two exploration licences for blocks 8 and 12 in the Orphan
Basin, offshore Eastern Canada. BHP's aggregate bid amount of US$625 million
reflects the costs of the drilling and seismic work likely to be performed
during the exploration phase, although there is no minimum work program under
the licence agreements. BHP's minimum commitment under the licence agreements,
if no work is performed, is approximately US$119 million for block 8 and US$38
million for block 12.

Petroleum exploration expenditure for the December 2018 half year was US$316
million, of which US$166 million was expensed. A US$750 million exploration and
appraisal program is being executed for the 2019 financial year.

Onshore US - Discontinued operations

The Onshore US sales process was completed on 31 October 2018, with the rights
to the economic profits transferring to the purchasers from 1 July 2018. Onshore
US production for the July 2018 to October 2018 period was 26 MMboe, with
drilling and development expenditure of US$0.4 billion. Our operated rig count
remained unchanged at five, with two rigs at Eagle Ford, two rigs at Permian and
one at Haynesville. We continue to provide certain transitional services to BP
for up to nine months following completion, however no further production will
be reported by BHP.

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                   BHP Operational Review for              6
                   the half year ended 31 December 2018

Copper

Production

                                                     Dec H18 Dec Q18 Dec Q18
                                                       vs      vs      vs
                                     Dec H18 Dec Q18 Dec H17 Dec Q17 Sep Q18
                                     ------- ------- ------- ------- -------
    Copper (kt).....................     825     416   (1%)     (3%)     2%
    Zinc (t)........................  54,795  24,237   (6%)    (17%)   (21%)
    Uranium oxide concentrate (t)...   1,495     936   33%     285%     67%

Copper - Total copper production decreased by one per cent to 825 kt. Guidance
for the 2019 financial year has been increased to between 1,645 and 1,740 kt and
reflects the retention of Cerro Colorado.

Escondida copper production was broadly unchanged at 580 kt as higher
concentrator throughput and improved recoveries offset the impact of expected
lower copper grades. Production guidance remains unchanged at between 1,120 and
1,180 kt for the 2019 financial year.

Pampa Norte copper production decreased by 17 per cent to 105 kt and reflects
planned maintenance and a production outage at Spence following a fire at the
electro-winning plant in September 2018. Record ore milled was achieved in the
half year at both Spence and Cerro Colorado. Spence returned to full capacity
during the December 2018 quarter, with production guidance of between 160 and
175 kt unchanged for the 2019 financial year. In the December 2018 quarter, BHP
and EMR Capital agreed to terminate their agreement for the sale and purchase of
Cerro Colorado after it became clear that the financing conditions of the
transaction would not be satisfied by the end of the 2018 calendar year.
Production at Cerro Colorado for the 2019 financial year is expected to be
between 60 and 70 kt.

Olympic Dam copper production increased by 20 per cent to 65 kt as a result of
the major smelter maintenance campaign in the prior period, which was partially
offset by an unplanned acid plant outage in August 2018. Surface operations
resumed at the end of October 2018 following completion of acid plant
remediation works. Underground operations continue to progress into the Southern
Mine Area, with record development kilometres achieved and the mine's third
decline becoming fully operational in the quarter. Production guidance for the
2019 financial year remains unchanged at between 170 and 180 kt.

Antamina copper production increased by eight per cent to 75 kt due to higher
head grades. Production guidance for the 2019 financial year remains unchanged
at approximately 135 kt for copper and approximately 85 kt for zinc.

Projects

                               Capital      Initial
Project and                  expenditure   production
ownership                       US$M       target date                Capacity                             Progress
-----------                 ------------- ------------ ------------------------------------ -------------------------------------
Spence Growth Option.......     2,460         FY21     New 95 ktpd concentrator is          On schedule and budget. The overall
(Chile)                                                expected to increase Spence's        project is 34% complete.
100%                                                   payable copper in concentrate
                                                       production by approximately
                                                       185 ktpa in the first 10 years of
                                                       operation and extend the mining
                                                       operations by more than 50 years.

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                   BHP Operational Review for              7
                   the half year ended 31 December 2018

Iron Ore

Production

                                                 Dec H18 Dec Q18 Dec Q18
                                                   vs      vs      vs
                                 Dec H18 Dec Q18 Dec H17 Dec Q17 Sep Q18
                                 ------- ------- ------- ------- -------
        Iron ore (kt)........... 119,226  57,835    2%     (6%)    (6%)

Iron ore - Total iron ore production increased by two per cent to 119 Mt (135 Mt
on a 100 per cent basis). Guidance for the 2019 financial year remains unchanged
at between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per cent basis.

At WAIO, increased volumes reflected record production at Jimblebar and the
impact from the Mt Whaleback fire in the prior period. This was partially offset
by the impact of planned maintenance in the September 2018 quarter and a train
derailment on 5 November 2018 which resulted in the suspension of rail
operations for five days and a production impact of approximately 4 Mt. During
the rail outage, mine stockpile levels were built and are expected to be
partially drawn down in the March 2019 quarter.

Mining and processing operations at Samarco remain suspended following the
failure of the Fundao tailings dam and Santarem water dam on 5 November 2015.

Projects

                               Capital      Initial
Project and                  expenditure   production
ownership                       US$M       target date                Capacity                             Progress
-----------                 ------------- ------------ ------------------------------------ -------------------------------------
South Flank................     3,061         CY21     Sustaining iron ore mine to replace  On schedule and budget. The overall
(Australia)                                            production from the 80 Mtpa          project is 21% complete.
85%                                                    (100 per cent basis) Yandi mine.

Coal

Production

                                                Dec H18 Dec Q18 Dec Q18
                                                  vs      vs      vs
                                Dec H18 Dec Q18 Dec H17 Dec Q17 Sep Q18
                                ------- ------- ------- ------- -------
     Metallurgical coal (kt)...  20,630  10,272    2%      6%     (1%)
     Energy coal (kt)..........  13,307   6,667   (5%)    (9%)     0%

Metallurgical coal - Metallurgical coal production increased by two per cent to
21 Mt. Guidance for the 2019 financial year remains unchanged at between 43 and
46 Mt, with volumes weighted to the second half of the year as expected.

At Queensland Coal, increased production was supported by record production at
South Walker Creek and higher wash-plant throughput at Poitrel following the
purchase of the Red Mountain processing facility. This increase was partially
offset by the scheduled longwall move at Broadmeadow which was successfully
completed during the quarter.

The Caval Ridge Southern Circuit project was completed according to plan with
the conveying of first coal in October 2018.

Energy coal - Energy coal production decreased by five per cent to 13 Mt.
Guidance for the 2019 financial year remains unchanged at approximately 28 to 29
Mt.

New South Wales Energy Coal production decreased by four per cent as a result of
a higher average strip ratio. Cerrejon production decreased by seven per cent
due to mine sequence changes.

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                   BHP Operational Review for              8
                   the half year ended 31 December 2018

Other

Nickel production

                                        Dec H18 Dec Q18 Dec Q18
                                          vs      vs      vs
                        Dec H18 Dec Q18 Dec H17 Dec Q17 Sep Q18
                        ------- ------- ------- ------- -------
         Nickel (kt)...   39.5    18.1   (15%)   (22%)   (15%)

Nickel - Nickel West production decreased by 15 per cent to 40 kt as operations
were suspended following a fire at the Kalgoorlie smelter in September 2018. The
smelter returned to operation on 1 October 2018, with full repairs now expected
to be completed in the March 2019 quarter. Planned maintenance at the Kwinana
refinery was brought forward to align with the smelter outage and, as a result,
production guidance for the 2019 financial year remains unchanged and is
expected to be broadly in line with the 2018 financial year.

Potash project

                        Investment
Project and ownership      US$M                       Scope                                      Progress
---------------------   ---------- -------------------------------------------- ------------------------------------------
   Jansen Potash.....      2,700   Investment to finish the excavation and      The project is 82% complete and within the
   (Canada)                        lining of the production and service         approved budget. The main activity for the
   100%                            shafts, and to continue the installation of  quarter focussed on removing the boring
                                   essential surface infrastructure and         equipment from both shafts.
                                   utilities.

Minerals exploration

Minerals exploration expenditure for the December 2018 half year was US$81
million, of which US$56 million was expensed. Greenfield minerals exploration is
predominantly focused on advancing copper targets within Chile, Ecuador, Peru,
Canada, South Australia and the South-West United States.

--------------------------------------------------------------------------------

Consistent with our exploration focus on copper, in September 2018, BHP acquired
an initial 6.1 per cent interest in SolGold Plc (SolGold), the majority owner
and operator of the Cascabel porphyry copper-gold project in Ecuador. On 15
October 2018, BHP entered into an agreement to acquire an additional 100 million
shares in SolGold, for an investment of US$59 million, with our total interest
now approximately 11.2 per cent.

In November 2018, BHP confirmed identification of a potential new iron oxide,
copper, gold (IOCG) mineralised system, located 65 kilometres to the south east
of BHP's operations at Olympic Dam in South Australia. BHP is evaluating and
interpreting the results reported and planning a further drilling program, to
commence in early in the 2019 calendar year.

Variance analysis relates to the relative performance of BHP and/or its
operations during the December 2018 half year compared with the December 2017
half 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. Numbers
presented may not add up precisely to the totals provided due to rounding.
Copper equivalent production based on 2018 financial year average realised
prices.

The following footnotes apply to this Operational Review:
----------
(1) Excludes production from Onshore US.
(2) 2019 financial year unit cost guidance: Conventional Petroleum <US$11/boe,
    Escondida <US$1.15/lb, WAIO <US$14/t, Queensland Coal US$68-72/t and NSWEC
    US$43-48/t; based on exchange rates of AUD/USD 0.75 and USD/CLP 663.
(3) IFRS15 Revenue from Contracts with Customers became effective for the Group
    from 1 July 2018.
(4) Underlying EBIT and Underlying EBITDA are used to reflect the underlying
    performance of BHP. Underlying EBIT is earnings before net finance costs,
    taxation and any exceptional items. Underlying EBITDA is Underlying EBIT
    before depreciation, amortisation and impairment.
(5) WGOM OBN 2018 Seismic Permit is OCS Permit T18-010.

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).

In this release, the terms `BHP', `Group', `BHP Group', `we', `us', `our' and
ourselves' are used to refer to BHP Group Limited, BHP Group Plc and, except
where the context otherwise requires, their respective subsidiaries as defined
in note 27 `Subsidiaries' in section 5.1 of BHP's 30 June 2018 Annual Report on
Form 20-F, unless stated otherwise. Notwithstanding that this release may
include production, financial and other information from non-operated assets,
non-operated assets are not included in the BHP Group and, as a result,
statements regarding our operations, assets and values apply only to our
operated assets unless stated otherwise.

--------------------------------------------------------------------------------
                   BHP Operational Review for              9
                   the half year ended 31 December 2018

Sponsor: UBS South Africa (Pty) Limited

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

Media Relations                                    Investor Relations

Email: media.relations@bhp.com                     Email: investor.relations@bhp.com

Australia and Asia                                 Australia and Asia

Matthew Nette                                      Tara Dines
Tel: +65 6421 6719  Mobile: +65 9169 1017          Tel: +61 3 9609 2222  Mobile: +61 499 249 005

United Kingdom and South Africa                    United Kingdom and South Africa

Neil Burrows                                       Elisa Morniroli
Tel: +44 20 7802 7484  Mobile: +44 7786 661 683    Tel: +44 20 7802 7611  Mobile: +44 7825 926 646

North America                                      Americas

Judy Dane                                          James Wear
Tel: +1 713 961 8283  Mobile: +1 713 299 5342      Tel: +1 713 993 3737  Mobile: +1 347 882 3011


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--------------------------------------------------------------------------------
                   BHP Operational Review for             10
                   the half year ended 31 December 2018

Production summary

                                                                 Quarter ended             Year to date
                                                      ----------------------------------- ---------------
                                                       Dec    Mar    Jun     Sep    Dec    Dec     Dec
                                             BHP       2017   2018   2018    2018   2018   2018    2017
                                           interest   ------ ------ ------- ------ ------ ------- -------
Petroleum /(1)/
Petroleum
Conventional
   Crude oil, condensate and NGL (Mboe)..             14,869 13,960  13,486 14,087 14,497  28,584  29,959
   Natural gas (bcf).....................               96.1   82.9    90.7  112.3   93.9   206.2   203.4
                                                      ------ ------ ------- ------ ------ ------- -------
   Total (Mboe)..........................             30,886 27,777  28,603 32,804 30,147  62,951  63,859
                                                      ------ ------ ------- ------ ------ ------- -------
Total petroleum production (MMboe).......               48.4   44.7    49.0   52.8   36.1    88.9    98.7
                                                      ------ ------ ------- ------ ------ ------- -------

Copper /(2)/
Copper
Payable metal in concentrate (kt)
   Escondida /(3)/.......................    57.5%     238.5  244.9   246.1  240.0  212.6   452.6   434.8
   Antamina..............................    33.8%      33.8   35.2    34.6   37.0   38.3    75.3    69.7
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              272.3  280.1   280.7  277.0  250.9   527.9   504.5
                                                      ------ ------ ------- ------ ------ ------- -------

Cathode (kt)
   Escondida /(3)/.......................    57.5%      76.1   69.4    70.1   55.4   71.9   127.3   148.0
   Pampa Norte /(4)/.....................     100%      68.4   66.8    70.6   43.4   61.8   105.2   126.4
   Olympic Dam...........................     100%      12.2   40.5    42.0   33.3   31.6    64.9    54.2
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              156.7  176.7   182.7  132.1  165.3   297.4   328.6
                                                      ------ ------ ------- ------ ------ ------- -------
                                                      ------ ------ ------- ------ ------ ------- -------
Total copper (kt)........................              429.0  456.8   463.4  409.1  416.2   825.3   833.1
                                                      ------ ------ ------- ------ ------ ------- -------

Lead
Payable metal in concentrate (t)
   Antamina..............................    33.8%     1,009    464     546    563    600   1,163   2,424
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              1,009    464     546    563    600   1,163   2,424
                                                      ------ ------ ------- ------ ------ ------- -------

Zinc
Payable metal in concentrate (t)
   Antamina..............................    33.8%    29,054 25,562  35,983 30,558 24,237  54,795  58,255
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................             29,054 25,562  35,983 30,558 24,237  54,795  58,255
                                                      ------ ------ ------- ------ ------ ------- -------

Gold
Payable metal in concentrate (troy oz)
   Escondida /(3)/.......................    57.5%    50,279 59,953  68,345 63,578 73,726 137,304 100,804
   Olympic Dam (refined gold)............     100%    15,969 28,989  33,497 23,471 17,856  41,327  29,070
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................             66,248 88,942 101,842 87,049 91,582 178,631 129,874
                                                      ------ ------ ------- ------ ------ ------- -------

Silver
Payable metal in concentrate (troy koz)
   Escondida /(3)/.......................    57.5%     2,193  2,339   2,527  1,997  2,570   4,567   3,930
   Antamina..............................    33.8%     1,331  1,189   1,321  1,309  1,178   2,487   2,927
   Olympic Dam (refined silver)..........     100%       135    248     278    213    212     425     266
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              3,659  3,776   4,126  3,519  3,960   7,479   7,123
                                                      ------ ------ ------- ------ ------ ------- -------

Uranium
Payable metal in concentrate (t)
   Olympic Dam...........................     100%       243  1,118   1,123    559    936   1,495   1,123
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................                243  1,118   1,123    559    936   1,495   1,123
                                                      ------ ------ ------- ------ ------ ------- -------

Molybdenum
Payable metal in concentrate (t)
   Antamina..............................    33.8%       579    420     261    464    417     881     981
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................                579    420     261    464    417     881     981
                                                      ------ ------ ------- ------ ------ ------- -------

--------------------------------------------------------------------------------
                   BHP Operational Review for             11
                   the half year ended 31 December 2018

                                                                 Quarter ended             Year to date
                                                      ----------------------------------- ---------------
                                                       Dec    Mar    Jun     Sep    Dec    Dec     Dec
                                             BHP       2017   2018   2018    2018   2018   2018    2017
                                           interest   ------ ------ ------- ------ ------ ------- -------
Iron Ore
Iron Ore
Production (kt) /(5)/
   Newman................................      85%    18,317 16,412  18,500 16,378 17,578  33,956  32,159
   Area C Joint Venture..................      85%    13,575 12,802  12,041 11,696 10,280  21,976  26,674
   Yandi Joint Venture...................      85%    16,348 15,802  17,339 16,870 15,627  32,497  30,907
   Jimblebar /(6)/.......................      85%     4,583  4,669  15,092 16,333 14,320  30,653  10,866
   Wheelarra.............................      85%     8,734  8,006     614    114     30     144  16,538
   Samarco...............................      50%        --     --      --     --     --      --      --
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................             61,557 57,691  63,586 61,391 57,835 119,226 117,144
                                                      ------ ------ ------- ------ ------ ------- -------

Coal
Metallurgical coal
Production (kt) /(7)/
   BMA...................................      50%     7,394  7,983   9,220  7,744  7,694  15,438  15,690
   BHP Mitsui Coal /(8)/.................      80%     2,291  2,396   2,789  2,614  2,578   5,192   4,562
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              9,685 10,379  12,009 10,358 10,272  20,630  20,252
                                                      ------ ------ ------- ------ ------ ------- -------

Energy coal
Production (kt)
   Australia.............................     100%     4,383  3,662   6,261  3,982  4,311   8,293   8,618
   Colombia..............................    33.3%     2,914  2,444   2,762  2,658  2,356   5,014   5,411
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................              7,297  6,106   9,023  6,640  6,667  13,307  14,029
                                                      ------ ------ ------- ------ ------ ------- -------

Other
Nickel
Saleable production (kt)
   Nickel West /(9)/.....................     100%      23.1   21.1    25.6   21.4   18.1    39.5    46.4
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................               23.1   21.1    25.6   21.4   18.1    39.5    46.4
                                                      ------ ------ ------- ------ ------ ------- -------

Cobalt
Saleable production (t)
   Nickel West...........................     100%       263    240     277    249    154     403     543
                                                      ------ ------ ------- ------ ------ ------- -------
   Total.................................                263    240     277    249    154     403     543
                                                      ------ ------ ------- ------ ------ ------- -------

(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) Production restated to include other nickel by-products.

Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.

--------------------------------------------------------------------------------
                   BHP Operational Review for             12
                   the half year ended 31 December 2018

Production and sales report

                                                                       Quarter ended                  Year to date
                                                        -------------------------------------------- -------------
                                                          Dec      Mar      Jun      Sep      Dec     Dec    Dec
                                                          2017     2018     2018     2018     2018    2018   2017
                                                        -------- -------- -------- -------- -------- ------ ------
Petroleum - Conventional /(1)/

Bass Strait
   Crude oil and condensate.................. (Mboe)       1,513    1,126    1,361    1,653    1,401  3,054  3,328
   NGL....................................... (Mboe)       1,584    1,170    1,428    1,840    1,447  3,287  3,534
   Natural gas............................... (bcf)         32.9     20.5     29.9     35.1     25.2   60.3   75.5
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        8.6      5.7      7.8      9.3      7.0   16.4   19.4
                                                        -------- -------- -------- -------- -------- ------ ------

North West Shelf
   Crude oil and condensate.................. (Mboe)       1,442    1,377    1,267    1,514    1,520  3,034  2,916
   NGL....................................... (Mboe)         200      210      186      242      206    448    427
   Natural gas............................... (bcf)         36.2     35.8     34.2     36.6     37.5   74.1   72.4
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        7.7      7.6      7.2      7.9      8.0   15.8   15.4
                                                        -------- -------- -------- -------- -------- ------ ------

Pyrenees
   Crude oil and condensate.................. (Mboe)       1,210    1,250    1,168      282    1,101  1,383  2,720
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        1.2      1.3      1.2      0.3      1.1    1.4    2.7
                                                        -------- -------- -------- -------- -------- ------ ------

Other Australia /(2)/
   Crude oil and condensate.................. (Mboe)           8        8        7        7        8     15     17
   Natural gas............................... (bcf)         13.3     13.4     13.9     13.8     13.9   27.7   29.4
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        2.2      2.2      2.3      2.3      2.3    4.6    4.9
                                                        -------- -------- -------- -------- -------- ------ ------

Atlantis /(3)/
   Crude oil and condensate.................. (Mboe)       3,377    3,459    3,471    3,190    3,802  6,992  6,399
   NGL....................................... (Mboe)         195      248      217      215      268    483    413
   Natural gas............................... (bcf)          1.8      1.8      1.5      1.5      1.9    3.4    3.4
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        3.9      4.0      3.9      3.7      4.4    8.0    7.4
                                                        -------- -------- -------- -------- -------- ------ ------

Mad Dog /(3)/
   Crude oil and condensate.................. (Mboe)       1,231    1,140      581    1,270    1,158  2,428  2,251
   NGL....................................... (Mboe)          72       55       27       61       54    115    116
   Natural gas............................... (bcf)          0.2      0.2      0.1      0.2      0.2    0.4    0.3
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        1.3      1.2      0.6      1.4      1.2    2.6    2.4
                                                        -------- -------- -------- -------- -------- ------ ------

Shenzi /(3)/
   Crude oil and condensate.................. (Mboe)       2,513    2,323    2,110    2,016    2,024  4,040  4,804
   NGL....................................... (Mboe)         184      140      151      122      121    243    325
   Natural gas............................... (bcf)          0.5      0.4      0.4      0.4      0.4    0.8    0.9
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        2.8      2.5      2.3      2.2      2.2    4.4    5.3
                                                        -------- -------- -------- -------- -------- ------ ------

Trinidad/Tobago
   Crude oil and condensate.................. (Mboe)         135      232      233      447      200    647    253
   Natural gas............................... (bcf)         10.5     10.0      9.8     24.0     14.0   38.0   20.2
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        1.9      1.9      1.9      4.4      2.5    7.0    3.6
                                                        -------- -------- -------- -------- -------- ------ ------
Other Americas /(3)//(4)/
   Crude oil and condensate.................. (Mboe)         207      189      313      207      218    425    436
   NGL....................................... (Mboe)           3        3       22        3        4      7      8
   Natural gas............................... (bcf)          0.1       --      0.3       --      0.1    0.1    0.2
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        0.2      0.2      0.4      0.2      0.2    0.4    0.5
                                                        -------- -------- -------- -------- -------- ------ ------

--------------------------------------------------------------------------------
                   BHP Operational Review for             13
                   the half year ended 31 December 2018

Production and sales report

                                                                       Quarter ended                  Year to date
                                                        -------------------------------------------- -------------
                                                          Dec      Mar      Jun      Sep      Dec     Dec    Dec
                                                          2017     2018     2018     2018     2018    2018   2017
                                                        -------- -------- -------- -------- -------- ------ ------
UK /(5)/
   Crude oil and condensate.................. (Mboe)          22       43       38       36       36     72     62
   NGL....................................... (Mboe)          13       18       18       21       21     42     52
   Natural gas............................... (bcf)          0.6      0.8      0.6      0.7      0.7    1.4    1.1
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        0.1      0.2      0.2      0.2      0.2    0.3    0.3
                                                        -------- -------- -------- -------- -------- ------ ------

Algeria
   Crude oil and condensate.................. (Mboe)         960      969      888      961      908  1,869  1,898
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum products.................. (MMboe)        1.0      1.0      0.9      1.0      0.9    1.9    1.9
                                                        -------- -------- -------- -------- -------- ------ ------
Petroleum - Total /(1)/
   Conventional..............................
   Crude oil and condensate.................. (Mboe)      12,618   12,116   11,437   11,583   12,376 23,959 25,084
   NGL....................................... (Mboe)       2,251    1,844    2,049    2,504    2,121  4,625  4,875
   Natural gas............................... (bcf)         96.1     82.9     90.7    112.3     93.9  206.2  203.4
                                                        -------- -------- -------- -------- -------- ------ ------
   Total..................................... (Mboe)      30,886   27,777   28,603   32,804   30,147 62,951 63,859
                                                        -------- -------- -------- -------- -------- ------ ------
   Total petroleum production (MMboe)........           48,392.0 44,716.0 48,952.0 52,854.7 36,061.0 88,916 98,678
                                                        -------- -------- -------- -------- -------- ------ ------

(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) Other Americas includes Neptune, Genesis and Overriding Royalty Interest.
(5) BHP completed the sale of its interest in the Bruce and Keith oil and gas
    fields on 30 November 2018. The sale has an effective date of 1 January
    2018.

--------------------------------------------------------------------------------
                   BHP Operational Review for             14
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Copper
Metals production is payable metal unless otherwise stated.

Escondida, Chile /(1)/
   Material mined........................... (kt)         101,371  103,385  106,788  107,260  105,580  212,840  206,238
   Sulphide ore milled...................... (kt)          30,260   32,203   31,732   30,513   30,507   61,020   54,340
   Average concentrator head grade.......... (%)             0.98%    0.96%    0.96%    0.94%    0.87%    0.91%    1.02%
   Production ex mill....................... (kt)           245.7    252.6    253.6    241.9    219.9    461.8    449.9

   Production
   Payable copper........................... (kt)           238.5    244.9    246.1    240.0    212.6    452.6    434.8
   Copper cathode (EW)...................... (kt)            76.1     69.4     70.1     55.4     71.9    127.3    148.0
   - Oxide leach............................ (kt)            27.4     24.5     27.1     19.5     23.4     42.9     49.8
   - Sulphide leach......................... (kt)            48.7     44.9     43.0     35.8     48.5     84.3     98.2
                                                          -------  -------  -------  -------  -------  -------  -------
   Total copper............................. (kt)           314.6    314.3    316.2    295.4    284.5    579.9    582.8
                                                          -------  -------  -------  -------  -------  -------  -------
   Payable gold concentrate................. (troy oz)     50,279   59,953   68,345   63,578   73,726  137,304  100,804
   Payable silver concentrate............... (troy koz)     2,193    2,339    2,527    1,997    2,570    4,567    3,930

   Sales
   Payable copper........................... (kt)           236.7    228.3    260.3    216.5    229.2    445.7    431.8
   Copper cathode (EW)...................... (kt)            84.1     61.7     80.9     53.2     72.3    125.5    145.7
   Payable gold concentrate................. (troy oz)     50,279   59,953   68,345   63,578   73,726  137,304  100,804
   Payable silver concentrate............... (troy koz)     2,193    2,339    2,527    1,997    2,570    4,567    3,930

(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.

Pampa Norte, Chile
   Cerro Colorado
   Material mined........................... (kt)          20,191   17,766   17,918   18,488   19,875   38,363   41,572
   Ore milled............................... (kt)           4,611    4,905    4,833    4,802    5,069    9,871    8,562
   Average copper grade..................... (%)             0.59%    0.58%    0.58%    0.53%    0.62%    0.58%    0.60%

   Production
   Copper cathode (EW)...................... (kt)            17.4     13.6     19.0     14.2     19.4     33.6     30.7

   Sales
   Copper cathode (EW)...................... (kt)            17.7     13.7     20.9     13.8     19.0     32.8     30.0

   Spence
   Material mined........................... (kt)          23,096   21,463   23,103   23,007   21,661   44,668   45,410
   Ore milled............................... (kt)           4,919    5,144    4,009    5,642    5,428   11,070   10,294
   Average copper grade..................... (%)             1.18%    1.03%    1.11%    1.15%    1.07%    1.11%    1.20%

   Production
   Copper cathode (EW)...................... (kt)            51.0     53.2     51.6     29.2     42.4     71.6     95.7

   Sales
   Copper cathode (EW)...................... (kt)            52.2     49.8     57.1     29.7     39.1     68.8     95.2

--------------------------------------------------------------------------------
                   BHP Operational Review for             15
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Copper (continued)
Metals production is payable metal unless otherwise stated.

Antamina, Peru
   Material mined (100%).................... (kt)          59,125   58,085   59,002   62,470   62,850  125,320  118,341
   Sulphide ore milled (100%)............... (kt)          13,098   12,166   12,973   13,197   12,912   26,109   25,920
   Average head grades
   - Copper................................. (%)             0.89%    1.01%    0.91%    0.96%    1.02%    0.99%    0.91%
   - Zinc................................... (%)             0.93%    1.01%    1.19%    1.10%    0.85%    0.98%    0.96%

   Production
   Payable copper........................... (kt)            33.8     35.2     34.6     37.0     38.3     75.3     69.7
   Payable zinc............................. (t)           29,054   25,562   35,983   30,558   24,237   54,795   58,255
   Payable silver........................... (troy koz)     1,331    1,189    1,321    1,309    1,178    2,487    2,927
   Payable lead............................. (t)            1,009      464      546      563      600    1,163    2,424
   Payable molybdenum....................... (t)              579      420      261      464      417      881      981

   Sales
   Payable copper........................... (kt)            37.0     32.1     36.6     33.6     40.7     74.3     68.9
   Payable zinc............................. (t)           30,340   26,456   33,088   31,822   26,072   57,894   55,564
   Payable silver........................... (troy koz)     1,470    1,052    1,311    1,193    1,236    2,429    2,945
   Payable lead............................. (t)              972      859      595      612      649    1,261    2,596
   Payable molybdenum....................... (t)              693      500      388      208      535      743      861

Olympic Dam, Australia
   Material mined /(1)/..................... (kt)           1,391    2,056    2,201    2,044    2,434    4,478    3,242
   Ore milled............................... (kt)             554    2,188    2,171    1,242    2,157    3,399    2,856
   Average copper grade..................... (%)             2.22%    2.36%    2.12%    2.05%    2.10%    2.08%    2.12%
   Average uranium grade.................... (kg/t)          0.58     0.71     0.69     0.62     0.62     0.62     0.56

   Production
   Copper cathode (ER and EW)............... (kt)            12.2     40.5     42.0     33.3     31.6     64.9     54.2
   Uranium oxide concentrate................ (t)              243    1,118    1,123      559      936    1,495    1,123
   Refined gold............................. (troy oz)     15,969   28,989   33,497   23,471   17,856   41,327   29,070
   Refined silver........................... (troy koz)       135      248      278      213      212      425      266

   Sales
   Copper cathode (ER and EW)............... (kt)            24.3     36.8     46.0     33.9     26.6     60.5     55.9
   Uranium oxide concentrate................ (t)              338      509    1,230      765      828    1,593    1,018
   Refined gold............................. (troy oz)     17,999   20,715   35,714   21,145   17,812   38,957   40,434
   Refined silver........................... (troy koz)       118      202      307      216      177      393      337

(1) Material mined refers to run of mine ore mined and hoisted.

--------------------------------------------------------------------------------
                   BHP Operational Review for             16
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.

Pilbara, Australia
   Production
   Newman................................... (kt)          18,317   16,412   18,500   16,378   17,578   33,956   32,159
   Area C Joint Venture..................... (kt)          13,575   12,802   12,041   11,696   10,280   21,976   26,674
   Yandi Joint Venture...................... (kt)          16,348   15,802   17,339   16,870   15,627   32,497   30,907
   Jimblebar /(1)/.......................... (kt)           4,583    4,669   15,092   16,333   14,320   30,653   10,866
   Wheelarra................................ (kt)           8,734    8,006      614      114       30      144   16,538
                                                         -------- -------- -------- -------- -------- -------- --------
   Total production......................... (kt)          61,557   57,691   63,586   61,391   57,835  119,226  117,144
                                                         -------- -------- -------- -------- -------- -------- --------
   Total production (100%).................. (kt)          71,611   67,048   72,145   69,342   65,515  134,857  135,898
                                                         -------- -------- -------- -------- -------- -------- --------

   Sales
   Lump..................................... (kt)          15,145   13,993   15,173   15,014   14,020   29,034   29,041
   Fines.................................... (kt)          45,769   44,332   47,730   46,527   44,059   90,586   86,502
                                                         -------- -------- -------- -------- -------- -------- --------
   Total.................................... (kt)          60,914   58,325   62,903   61,541   58,079  119,620  115,543
                                                         -------- -------- -------- -------- -------- -------- --------
   Total sales (100%)....................... (kt)          70,733   67,799   71,385   69,421   65,758  135,179  134,055
                                                         -------- -------- -------- -------- -------- -------- --------

(1) Shown on a 100% basis. BHP interest in saleable production is 85%.

Samarco, Brazil /(1)/
   Production............................... (kt)              --       --       --       --       --       --       --

   Sales.................................... (kt)              14       25       --       --       10       10       14

(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             17
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Coal
Coal production is reported on the basis of saleable product.

Queensland Coal
   Production /(1)/
   BMA
   Blackwater............................... (kt)           1,470    1,384    1,849    1,704    1,680    3,384    3,455
   Goonyella................................ (kt)           1,369    2,314    2,639    1,989    1,813    3,802    3,008
   Peak Downs............................... (kt)           1,367    1,723    1,658    1,131    1,662    2,793    2,969
   Saraji................................... (kt)           1,198    1,240    1,201    1,111    1,288    2,399    2,612
   Daunia................................... (kt)             718      547      629      620      419    1,039    1,380
   Caval Ridge.............................. (kt)           1,272      775    1,244    1,189      832    2,021    2,266
                                                         -------- -------- -------- -------- -------- -------- --------
   Total BMA................................ (kt)           7,394    7,983    9,220    7,744    7,694   15,438   15,690
                                                         -------- -------- -------- -------- -------- -------- --------

   BHP Mitsui Coal /(2)/
   South Walker Creek....................... (kt)           1,524    1,490    1,615    1,505    1,636    3,141    2,924
   Poitrel.................................. (kt)             767      906    1,174    1,109      942    2,051    1,638
                                                         -------- -------- -------- -------- -------- -------- --------
   Total BHP Mitsui Coal.................... (kt)           2,291    2,396    2,789    2,614    2,578    5,192    4,562
                                                         -------- -------- -------- -------- -------- -------- --------
   Total Queensland Coal.................... (kt)           9,685   10,379   12,009   10,358   10,272   20,630   20,252
                                                         -------- -------- -------- -------- -------- -------- --------

   Sales
   Coking coal.............................. (kt)           6,341    7,177    8,489    7,356    7,514   14,870   14,275
   Weak coking coal......................... (kt)           2,816    2,598    2,866    2,813    3,058    5,871    5,966
   Thermal coal............................. (kt)             173      168       85      141      157      298      275
                                                         -------- -------- -------- -------- -------- -------- --------
   Total.................................... (kt)           9,330    9,943   11,440   10,310   10,729   21,039   20,516
                                                         -------- -------- -------- -------- -------- -------- --------

(1) Production figures include some thermal coal.
(2) Shown on a 100% basis. BHP interest in saleable production is 80%.

NSW Energy Coal, Australia
   Production............................... (kt)           4,383    3,662    6,261    3,982    4,311    8,293    8,618

   Sales....................................
   Export thermal coal...................... (kt)           4,048    3,181    5,795    3,549    4,809    8,358    7,670
   Inland thermal coal...................... (kt)             411      400      160      332      393      725      816
                                                         -------- -------- -------- -------- -------- -------- --------
   Total.................................... (kt)           4,459    3,581    5,955    3,881    5,202    9,083    8,486
                                                         -------- -------- -------- -------- -------- -------- --------

Cerrejon, Colombia
   Production............................... (kt)           2,914    2,444    2,762    2,658    2,356    5,014    5,411

   Sales thermal coal - export.............. (kt)           2,619    2,480    2,763    2,589    2,297    4,886    5,137

--------------------------------------------------------------------------------
                   BHP Operational Review for             18
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Other
Nickel production is reported on the basis of saleable product.

Nickel West, Australia
   Mt Keith
   Nickel concentrate....................... (kt)            49.8     44.9     55.6     50.2     44.9     95.1    104.2
   Average nickel grade..................... (%)             20.3     21.3     18.8     18.9     19.8     38.7     40.7

   Leinster
   Nickel concentrate....................... (kt)            87.6     54.7     78.4     78.8     65.3    144.1    166.3
   Average nickel grade..................... (%)              8.8      9.3      9.8      8.4      8.4     16.8     18.1

   Saleable production
   Refined nickel /(1)//(2)/................ (kt)            17.7     19.2     18.5     19.8     16.3     36.1     33.7
   Intermediates and nickel
      by-products /(1)//(3)/................ (kt)             5.4      1.9      7.1      1.6      1.8      3.4     12.7
                                                         -------- -------- -------- -------- -------- -------- --------
   Total nickel /(1)/....................... (kt)            23.1     21.1     25.6     21.4     18.1     39.5     46.4
                                                         -------- -------- -------- -------- -------- -------- --------

   Cobalt by-products....................... (t)              263      240      277      249      154      403      543

   Sales
   Refined nickel /(1)//(2)/................ (kt)            17.7     19.5     17.5     19.3     17.3     36.6     34.0
   Intermediates and nickel
      by-products /(1)//(3)/................ (kt)             6.9      2.5      6.3      2.2      2.1      4.3     11.9
                                                         -------- -------- -------- -------- -------- -------- --------
   Total nickel /(1)/....................... (kt)            24.6     21.9     23.8     21.5     19.4     40.9     45.9
                                                         -------- -------- -------- -------- -------- -------- --------
   Cobalt by-products........................(t)              263      240      277      249      154      403      543

(1) Production and sales restated to include other nickel by-products.
(2) High quality refined nickel metal, including briquettes and powder.
(3) Nickel contained in matte and by-product streams.

--------------------------------------------------------------------------------
                   BHP Operational Review for             19
                   the half year ended 31 December 2018

Production and sales report

                                                                        Quarter ended                    Year to date
                                                         -------------------------------------------- -----------------
                                                           Dec      Mar      Jun      Sep      Dec      Dec      Dec
                                                           2017     2018     2018     2018     2018     2018     2017
                                                         -------- -------- -------- -------- -------- -------- --------
Onshore US - Discontinued operations /(1)//(2)/

Eagle Ford /(3)/
   Crude oil and condensate................. (Mboe)         3,720    2,838    3,826    3,256    1,035    4,291    7,177
   NGL...................................... (Mboe)         2,100    1,555    1,767    1,919      614    2,533    3,956
   Natural gas.............................. (bcf)           14.4     12.6     13.9     13.8      4.3     18.1     28.2
                                                         -------- -------- -------- -------- -------- -------- --------
   Total petroleum products................. (MMboe)          8.2      6.5      7.9      7.5      2.4      9.8     15.8
                                                         -------- -------- -------- -------- -------- -------- --------

Permian /(3)/
   Crude oil and condensate................. (Mboe)         1,142    1,398    1,903    1,478      631    2,109    2,321
   NGL...................................... (Mboe)           460      465      770      687      284      971    1,047
   Natural gas.............................. (bcf)            3.6      4.1      6.4      4.8      1.9      6.7      8.1
                                                         -------- -------- -------- -------- -------- -------- --------
   Total petroleum products................. (MMboe)          2.2      2.5      3.7      3.0      1.2      4.2      4.7
                                                         -------- -------- -------- -------- -------- -------- --------

Haynesville /(3)/
   Crude oil and condensate................. (Mboe)             1       --       --       11       --       11        1
   NGL...................................... (Mboe)            --       --       --       --       --       --       --
   Natural gas.............................. (bcf)           22.0     28.7     33.1     39.0     13.9     52.9     43.5
                                                         -------- -------- -------- -------- -------- -------- --------
   Total petroleum products................. (MMboe)          3.7      4.8      5.5      6.5      2.3      8.8      7.3
                                                         -------- -------- -------- -------- -------- -------- --------

Fayetteville /(4)/
   Natural gas.............................. (bcf)           20.5     18.7     19.1     18.6       --     18.6     42.1
                                                         -------- -------- -------- -------- -------- -------- --------
   Total petroleum products................. (MMboe)          3.4      3.1      3.2      3.1       --      3.1      7.0
                                                         -------- -------- -------- -------- -------- -------- --------

Onshore US
   Crude oil and condensate................. (Mboe)         4,863    4,236    5,729    4,745    1,666    6,411    9,499
   NGL...................................... (Mboe)         2,560    2,020    2,537    2,606      898    3,504    5,003
   Natural gas.............................. (bcf)           60.5     64.1     72.5     76.2     20.1     96.3    121.9
                                                         -------- -------- -------- -------- -------- -------- --------
   Total.................................... (Mboe)        17,506   16,939   20,349   20,051    5,914   25,965   34,819
                                                         -------- -------- -------- -------- -------- -------- --------

(1) Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe.
    Negative production figures represent finalisation adjustments.
(2) Volumes are net of mineral holder royalties.
(3) BHP completed the sale of its interests in the Eagle Ford, Haynesville and
    Permian assets on 31 October 2018.
(4) BHP completed the sale of its Fayetteville assets on 28 September 2018.

--------------------------------------------------------------------------------
                   BHP Operational Review for             20
                   the half year ended 31 December 2018

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