Wrap Text
Quarterly Activities Report
BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins Street Melbourne Victoria 3000
Share code: BHG
ISIN: AU000000BHP4
NEWS RELEASE
Release Time IMMEDIATE
Date 19 January 2023
Release Number 1/23
BHP OPERATIONAL REVIEW
FOR THE HALF YEAR ENDED 31 DECEMBER 2022
. We remained fatality free at our operated assets for the fourth consecutive
year and continued to deliver reliable operational performance during the
quarter.
. Western Australia Iron Ore (WAIO) achieved record production of 146 Mt
(100% basis) for the half year.
. Production guidance for the 2023 financial year remains unchanged, with
Escondida and BHP Mitsubishi Alliance (BMA) trending to the low end of
their respective guidance ranges.
. Full year unit cost guidance/1/ for Escondida and WAIO remains unchanged.
Unit cost guidance for BMA and New South Wales Energy Coal (NSWEC) has been
increased, largely reflecting production impacts from significant wet
weather and inflationary pressures.
. BHP entered into a Scheme Implementation Deed with OZ Minerals Ltd (OZL) to
acquire 100% of OZL by way of a scheme arrangement for a cash price of
A$28.25 per OZL share.
BHP Chief Executive Officer, Mike Henry:
"BHP delivered safe and reliable operating performance in the first half of the
2023 financial year. Employees and contractors across BHP continued to
prioritise safety, resulting in the fourth consecutive year without a fatality.
WA Iron Ore (WAIO) delivered record production for the half year through
strong suppy chain performance, supported by the ongoing ramp-up at South
Flank. Copper production at Escondida rose despite road blockades in Chile in
the December quarter and the Spence Growth Option continued to ramp up, while
Olympic Dam's ongoing smelter performance saw near-record material processing
and record gold production. In Queensland, coal production was again impacted
by heavy rainfall. As foreshadowed, we are seeing the impact of inflation
across our global supply chains and continue to focus on productivity and
controllable costs.
BHP believes China will be a stabilising force when it comes to commodity
demand in the 2023 calendar year, with OECD nations experiencing economic
headwinds. China's pro-growth policies, including in the property sector, and
an easing of COVID-19 restrictions are expected to support progressive
improvement from the difficult economic conditions of the first half. China is
expected to achieve its fifth straight year of over 1 billion tonnes of steel
production.
During the quarter, we continued to progress a number of growth pathways to
shape our portfolio toward future facing commodities and reduce our operational
emissions. In December 2022, BHP's scheme implementation deed to acquire 100%
of Australian copper producer OZ Minerals received unanimous support from the
OZ Minerals Board ahead of a shareholder vote in the coming months."
Dec H22 Dec Q22
Production (vs Dec H21) (vs Sep Q22) Dec Q22 vs Sep Q22 commentary
---------- -------------- ------------ -----------------------------
Copper (kt)..................... 834.4 424.3 Higher volumes at Escondida due to higher throughput, higher
12% 3% concentrate volumes at Spence reflecting the ramp up of the Spence
Growth Option, and strong volumes at Olympic Dam as a result of
planned refinery maintenance in the prior period.
Iron ore (Mt)................... 132.0 66.9 Record production at WAIO in the month of December 2022 due to strong
2% 3% supply chain performance and reduced impacts of labour constraints
and wet weather.
Metallurgical coal (Mt)......... 13.6 7.0 Higher volumes due to improved strip ratios and the planned longwall
5% 4% move at Broadmeadow in the prior period, partially offset by
continued significant wet weather.
Energy coal (Mt)................ 5.5 2.9 Higher volumes due to improved operating conditions, including less
(24%) 9% significant wet weather impacts and reduced labour shortages in the
December 2022 quarter, partially offset by planned wash plant
maintenance completed in November 2022.
Nickel (kt)..................... 38.4 17.7 Lower volumes due to planned maintenance at the smelter and refinery.
(2%) (14%)
--------------------------------------------------------------------------------
BHP Operational Review for the 1
half year ended 31 December 2022
Summary
Operational performance
Production and guidance are summarised below.
Dec H22 Dec Q22 Dec Q22 Previous Current
Dec Dec vs vs vs FY23 FY23
Production H22 Q22 Dec H21 Dec Q21 Sep Q22 guidance guidance
---------- ----- ----- ------- ------- ------- ------------- -------------
Copper (kt)...................... 834.4 424.3 12% 16% 3% 1,635 - 1,825 1,635 - 1,825
Escondida (kt)................ 510.7 258.0 5% 5% 2% 1,080 - 1,180 1,080 - 1,180 Low end
Pampa Norte (kt).............. 147.3 76.7 8% 12% 9% 240 - 290 240 - 290 Unchanged
Olympic Dam (kt).............. 104.1 54.4 138% 283% 9% 195 - 215 195 - 215 Unchanged
Antamina (kt)................. 72.3 35.2 (3%) (8%) (5%) 120 - 140 120 - 140 Unchanged
Iron ore (Mt).................... 132.0 66.9 2% 1% 3% 249 - 260 249 - 260
WAIO (Mt)..................... 129.7 65.8 2% 1% 3% 246 - 256 246 - 256 Unchanged
WAIO (100% basis) (Mt)........ 146.4 74.3 1% 1% 3% 278 - 290 278 - 290 Unchanged
Samarco (Mt).................. 2.2 1.1 8% 6% (5%) 3 - 4 3 - 4 Unchanged
Metallurgical coal - BMA (Mt).... 13.6 7.0 5% 10% 4% 29 - 32 29 - 32
BMA (100% basis) (Mt)......... 27.2 13.9 5% 10% 4% 58 - 64 58 - 64 Low end
Energy coal - NSWEC (Mt)......... 5.5 2.9 (24%) (4%) 9% 13 - 15 13 - 15 Unchanged
Nickel (kt)...................... 38.4 17.7 (2%) (18%) (14%) 80 - 90 80 - 90 Unchanged
Summary of disclosures
BHP expects its financial results for the half year ended 31 December 2022 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 21 February 2023. Accordingly, the
information in the table below contains preliminary information that is subject
to update and finalisation.
H1 FY23
impact
Description US$M/i/ Classification/ii/
----------------------------------------------------------------------------------------------------------------------------------
Unit costs for the December 2022 half year at Escondida are expected to be -- Operating costs
towards the upper end of full year guidance; unit costs at WAIO, BMA and
NSWEC are expected to be above full year guidance (at guidance exchange
rates)
Note: weaker Australian dollar and Chilean peso than guidance rates in the
period/iii/
----------------------------------------------------------------------------------------------------------------------------------
For the 2023 financial year, unit costs at WAIO and Escondida are tracking -- Operating costs
towards the upper end of full year guidance (at guidance exchange rates)
Unit cost guidance for BMA has been increased to between US$100 and US$105
per tonne (at guidance exchange rates) reflecting full year volumes
tracking to the low end of production guidance due to significant wet
weather, inventory movements and inflationary pressures
Unit cost guidance for NSWEC has been increased to between US$84 and US$91
per tonne (at guidance exchange rates) reflecting production impacts from
record wet weather, inflationary pressures and price-linked logistics costs
--------------------------------------------------------------------------------------------------------------------------------------
Exploration expense 127 Exploration expense
--------------------------------------------------------------------------------------------------------------------------------------
The Group's adjusted effective tax rate for H1 FY23 is expected to be -- Taxation expense
slightly below the full year guidance range of 30 to 35 per cent
--------------------------------------------------------------------------------------------------------------------------------------
Working capital movements relating to royalties, net price impacts on 1,000-1,400 (down arrow) Operating cash flow
receivables and payables, and other movements
--------------------------------------------------------------------------------------------------------------------------------------
Settlement of derivative related to the funding of the final FY22 dividend ~210 (down arrow) Operating cash flow
(note: together with the payment of US$8.7 billion reported in financing
cash outflow, the combined payment of US$8.9 billion represents the final
dividend determined on 16 August 2022 in the financial results for the
year ended 30 June 2022)
--------------------------------------------------------------------------------------------------------------------------------------
Additional net proceeds/iv/ received from the sale of BHP’s 80 per cent interest in BMC 74 (up arrow) Investing cash flow
--------------------------------------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interests 527 (down arrow) Financing cash flow
--------------------------------------------------------------------------------------------------------------------------------------
Financial impact on BHP Brasil of the Samarco dam failure Refer footnote/v/ Exceptional item
The financial impact is expected to primarily relate to amortisation of
discounting on the provision and the impact of foreign exchange
--------------------------------------------------------------------------------------------------------------------------------------
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, unless otherwise noted.
iii Average exchange rates for H1 FY23 of AUD/USD 0.67 (guidance rate AUD/USD 0.72) and
USD/CLP 920 (guidance rate USD/CLP 830).
iv Second purchase price instalment offset by working capital adjustments.
v Financial impact is the subject of ongoing work and is not yet finalised. See
corporate update section for further information on Samarco.
--------------------------------------------------------------------------------
BHP Operational Review for the 2
half year ended 31 December 2022
Average realised prices
The average realised prices achieved for our major commodities are summarised
below.
Dec H22 Dec H22 Dec H22
vs vs vs
Average realised prices/i/ Dec H22 Dec H21 Jun H22 FY22 Dec H21 Jun H22 FY22
-------------------------- ------- ------- ------- ------ ------- ------- -------
Copper (US$/lb)...................... 3.49 4.31 4.02 4.16 (19%) (13%) (16%)
Iron ore (US$/wmt, FOB).............. 85.46 113.54 112.65 113.10 (25%) (24%) (24%)
Metallurgical coal (US$/t)........... 268.73 259.71 423.82 347.10 3% (37%) (23%)
Hard coking coal (US$/t)/ii/......... 270.65 278.60 437.60 366.82 (3%) (38%) (26%)
Weak coking coal (US$/t)/ii/......... 252.12 218.65 382.56 296.51 15% (34%) (15%)
Thermal coal (US$/t)/iii/............ 354.30 137.68 302.60 216.78 157% 17% 63%
Nickel metal (US$/t)................. 24,362 19,651 27,399 23,275 24% (11%) 5%
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 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.
iii Includes thermal coal sales from metallurgical coal mines.
The large majority of iron ore shipments were linked to index pricing for the
month of shipment, with price differentials predominantly a reflection of
market fundamentals and product quality. Iron ore sales for the December 2022
half year were based on an average moisture rate of 6.8 per cent. The large
majority of metallurgical coal and energy coal exports were linked to index
pricing for the month of scheduled shipment or priced on the spot market at
fixed or index-linked prices, with price differentials reflecting product
quality. The large majority of copper cathodes sales were linked to index price
for quotation periods one month after month of shipment, and three to four
months after month of shipment for copper concentrates sales with price
differentials applied for location and treatment costs.
At 31 December 2022, the Group had 319 kt of outstanding copper sales that were
revalued at a weighted average price of US$3.80 per pound. The final price of
these sales will be determined over the remainder of the 2023 financial year.
In addition, 354 kt of copper sales from the 2022 financial year were subject
to a finalisation adjustment in the current period. The provisional pricing and
finalisation adjustments will decrease Underlying EBITDA by US$59 million in
the December 2022 half year and are included in the average realised copper
price in the above table.
Corporate update
Portfolio
In December 2022, BHP announced the signing of a Scheme Implementation Deed
(SID) with OZ Minerals Ltd (OZL) to acquire 100 per cent of OZL through a
scheme of arrangement for a cash price of A$28.25 per OZL share. The SID
confirms the terms of the scheme and BHP's non-binding indicative proposal
announced on 18 November 2022. The implementation of the scheme is subject to
satisfaction of certain conditions including OZL shareholder approval. The OZL
Board has unanimously recommended that OZL shareholders vote in favour of the
scheme in the absence of a superior proposal and subject to an independent
expert concluding that the scheme is in the best interests of OZL shareholders.
In October 2022, BHP agreed to invest an additional US$50 million (the second
investment) in the Kabanga Nickel Project (Kabanga) in Tanzania, subject to the
satisfaction of customary conditions precedent. On closing, BHP's equity stake
in Kabanga will increase to 14.3 per cent. In addition, BHP has signed an
agreement with Kabanga Nickel Limited giving BHP the option to increase its
interest in Kabanga to 51 per cent.
Decarbonisation
Throughout the December 2022 quarter we continued to make progress towards our
decarbonisation targets and goals and supported efforts to reduce greenhouse
gas (GHG) emissions across our value chain.
In October 2022, BHP entered into an agreement with ArcelorMittal, Mitsubishi
Heavy Industries and Mitsubishi Development for a multi-year trial of carbon
capture technology, which will involve a feasibility and design study to
support progress to full scale deployment, and trials at two of ArcelorMittal's
steel plants.
--------------------------------------------------------------------------------
BHP Operational Review for the 3
half year ended 31 December 2022
In November 2022, BHP signed a renewable Power Purchase Agreement (PPA) with
Neoen, which is expected to meet half of Olympic Dam's electricity needs from
the 2026 financial year, based on current forecast demand, and allow Olympic
Dam to record a net zero emission position for the contracted volume of supply.
Samarco
In December 2022, BHP agreed to fund US$915 million in further financial
support for the Renova Foundation. The funding is for the 2023 calendar year
and will be offset against the Group's provision for the Samarco dam failure.
We will provide an update to the ongoing potential financial impacts on BHP
Brasil of the Samarco dam failure with the release of the financial results on
21 February 2023. Any financial impacts will continue to be treated as an
exceptional item.
Copper
Production
Dec H22 Dec Q22 Dec Q22
vs vs vs
Dec H22 Dec Q22 Dec H21 Dec Q21 Sep Q22
------- ------- ------- ------- -------
Copper (kt).............. 834.4 424.3 12% 16% 3%
Zinc (t)................. 62,614 29,929 0% 1% (8%)
Uranium (t).............. 1,760 943 115% 229% 15%
Copper - Total copper production increased by 12 per cent to 834 kt. Guidance
for the 2023 financial year remains unchanged at between 1,635 and 1,825 kt.
Escondida copper production increased by five per cent to 511 kt primarily due
to higher concentrator feed grade of 0.79 per cent, compared to 0.72 per cent
in the December 2021 half year. The higher grade was partially offset by lower
throughput and the impact of road blockades across Chile in the December 2022
quarter, which reduced availability of some key mine supplies. Full year
production is trending towards the low end of the guidance range of between
1,080 and 1,180 kt as a result of lower than expected concentrator feed grade
and throughput. Production is weighted to the second half of the year, with
concentrator feed grade expected to improve compared to the December 2022 half
year. Medium term guidance of 1.2 Mtpa of copper production on average over the
next five years remains unchanged.
Pampa Norte copper production increased by eight per cent to 147 kt reflecting
the continued ramp up of the Spence Growth Option (SGO). Guidance for the 2023
financial year remains unchanged at between 240 and 290 kt. The SGO plant
modifications started in August 2022 and are planned to be completed in the
2023 calendar year. Expected capital expenditure for the works remains
unchanged at approximately US$100 million. Further studies are ongoing for
additional capacity uplift at SGO. Cerro Colorado continues to transition
towards planned closure at the end of the 2023 calendar year.
At Spence, we continue to closely monitor previously identified Tailings
Storage Facility (TSF) anomalies. We have reduced the volume of water in the
tailings facility and continue to work with the local regulatory agencies,
including on the implementation of a remediation plan for the TSF. The SGO
concentrator continues to operate with no impact to production or market
guidance. Spence is expected to reach an average of approximately 270 ktpa of
production for four years (including cathodes) following the completion of the
SGO plant modifications and remediation of TSF anomalies.
Olympic Dam copper production increased by 138 per cent to 104 kt primarily as
a result of the major smelter maintenance campaign (SCM21) in the prior period.
Continued strong concentrator and smelter performance resulted in near record
material milled and concentrate smelted in the half year. Record gold
production was also achieved in the half year as a result of debottlenecking
initiatives implemented in the prior year. Copper production guidance for the
2023 financial year remains unchanged at between 195 and 215 kt.
Antamina copper production decreased by three per cent to 72 kt reflecting
lower copper head grades partially offset by higher throughput. Zinc production
was flat at 63 kt reflecting lower zinc head grades offset by higher
throughput. Guidance remains unchanged for the 2023 financial year, with copper
production of between 120 and 140 kt, and zinc production of between 115 and
135 kt.
--------------------------------------------------------------------------------
BHP Operational Review for the 4
half year ended 31 December 2022
Iron ore
Production
Dec H22 Dec Q22 Dec Q22
vs vs vs
Dec H22 Dec Q22 Dec H21 Dec Q21 Sep Q22
------- ------- ------- ------- -------
Iron ore production (kt)........... 131,975 66,902 2% 1% 3%
Iron ore - Total iron ore production increased by two per cent to 132 Mt.
Guidance for the 2023 financial year remains unchanged at between 249 and 260
Mt.
WAIO achieved record production of 130 Mt (146 Mt on a 100 per cent basis) in
the December 2022 half year. This reflects continued strong supply chain
performance, including improved car dumper utilisation, and lower COVID-19
related impacts than the prior period. This was partially offset by wet weather
impacts in the September 2022 quarter. South Flank ramp up to full production
capacity of 80 Mtpa (100 per cent basis) by the end of the 2024 financial year
remains on track. Natural variability in the ore grade is expected as the mine
progresses through the close to surface material, however this is expected to
stabilise as we move deeper into the ore body and achieve full ramp up.
WAIO production guidance for the 2023 financial year remains unchanged at
between 246 and 256 Mt (278 and 290 Mt on a 100 per cent basis) and reflects
the tie-in of the port debottlenecking project (PDP1) as well as the continued
ramp up of South Flank in the second half of the year.
Samarco production increased by eight per cent to 2.2 Mt (BHP share),
reflecting the successful ramp up of one concentrator, following the
recommencement of iron ore pellet production in December 2020. Guidance for the
2023 financial year remains unchanged at between 3 and 4 Mt (BHP share).
Coal
Production
Dec H22 Dec Q22 Dec Q22
vs vs vs
Dec H22 Dec Q22 Dec H21 Dec Q21 Sep Q22
------- ------- ------- ------- -------
Metallurgical coal (kt)....... 13,614 6,952 5% 10% 4%
Energy coal (kt).............. 5,473 2,851 (24%) (4%) 9%
Metallurgical coal - BMA production increased by five per cent to 14 Mt (27 Mt
on a 100 per cent basis) driven by an improvement in underlying truck
productivity, in particular for the autonomous fleets following completion of
the transitions at Goonyella and Daunia, higher yields as a result of mine
sequencing, as well as the reduced impact of labour constraints relative to the
prior period. This was partially offset by the impact of significant wet
weather during the December 2022 half year/2/. Full year production is trending
to the low end of the guidance range of between 29 and 32 Mt (58 and 64 Mt on a
100 per cent basis) as a result of significant wet weather. An additional long
wall move at Broadmeadow has been accelerated into the June 2023 quarter due to
improved mining rates.
Negotiations for the BMA Enterprise Agreement (EA) 2022 have concluded with a
successful workforce ballot on 22 December 2022. The EA applies to the
Goonyella Riverside, Peak Downs, Saraji and Blackwater mines. The new EA has
been approved by the Fair Work Commission and will operate from 19 January 2023
for a period of three years.
The Queensland Government's decision to raise coal royalties to the highest maximum
rate in the world makes Queensland uncompetitive and puts investment and jobs
at risk. We see strong long-term demand from global steelmakers for
Queensland's high quality metallurgical coal, however in the absence of
government policy that is both competitive and predictable, we are unable to
make significant new investments in Queensland. This increase to royalties will
impact the local businesses, suppliers and communities in Central Queensland
where we operate.
Energy coal - NSWEC production decreased by 24 per cent to 5 Mt, reflecting the
ongoing impacts of record wet weather, continued labour shortages, planned wash
plant maintenance during the December 2022 quarter and an increased proportion
of washed coal. Higher quality coals made up approximately 90 per cent of
sales, compared to approximately 80 per cent in the December 2021 half year.
Production guidance for the 2023 financial year remains unchanged at between 13
and 15 Mt.
--------------------------------------------------------------------------------
BHP Operational Review for the 5
half year ended 31 December 2022
Other
Nickel production
Dec H22 Dec Q22 Dec Q22
vs vs vs
Dec H22 Dec Q22 Dec H21 Dec Q21 Sep Q22
------- ------- ------- ------- -------
Nickel (kt).................... 38.4 17.7 (2%) (18%) (14%)
Nickel - Nickel West production decreased by two per cent to 38 kt, reflecting
the slower than expected ramp up of the refinery following planned smelter and
refinery maintenance during the December 2022 quarter. Guidance for the 2023
financial year remains unchanged at between 80 and 90 kt, with volumes weighted
to the second half of the financial year.
Potash - Our major potash project under development at Jansen is tracking to
plan. For the 2023 financial year, we will continue to focus on civil and
mechanical construction on the surface and underground, as well as equipment
procurement and port construction.
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- ------------------------------------- ----------------------------------
Jansen Stage 1 5,723 End-CY26 Design, engineering and construction Project is 16% complete
(Canada) of an underground potash mine and
100% surface infrastructure, with capacity
to produce 4.35 Mtpa.
Minerals exploration
Minerals exploration expenditure for the December 2022 half year was
US$156 million, of which US$127 million was expensed.
In August 2022, we announced the establishment of BHP Xplor, an innovative
accelerator program to support early-stage mineral exploration companies to
find critical resources, such as copper and nickel. The program merges concepts
from venture capital and early-stage accelerators offering participants in-kind
services, mentorship, and networking opportunities. Applications for the
program closed on 31 October 2022 and we received a significant number of
applications from around the world. We have selected seven companies into the
accelerator program which begins in January 2023.
We initiated greenfield exploration activities in southern Colombia and
continue to progress activity in Australia, Canada, Chile, Ecuador, north-west
Mexico, Peru and the south-west United States.
At Oak Dam in South Australia, BHP is continuing next stage resource definition
drilling with six drill rigs.
Following a review of prospectivity and core results, BHP acquired a 19.9 per
cent interest via a placement in Brixton Metals, providing exposure to a large
block of ground prospective for copper in northern British Columbia, Canada.
The termination agreement in respect of the Earn-In Agreement over the Tarqui
copper project in Ecuador has been signed by BHP and Luminex. BHP's exit from
the project was finalised in early January 2023.
--------------------------------------------------------------------------------
BHP Operational Review for the 6
half year ended 31 December 2022
Variance analysis relates to the relative performance of BHP and/or its
operations during the six months ended December 2022 compared with the six
months ended December 2021, 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.
The following footnotes apply to this Operational Review:
1 2023 financial year unit cost guidance: Escondida US$1.25-1.45/lb, WAIO
US$18-19/t, BMA US$100-105/t and NSWEC US$84-91/t; based on exchange rates
of AUD/USD 0.72 and USD/CLP 830.
2 493 mm of rainfall recorded at Moranbah in the December 2022 half year
compared to 368 mm in the December 2021 half year.
The following abbreviations may have been used throughout this report: 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); megawatt (MW); metre (m); millimetre (mm); million tonnes (Mt);
million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand ounces
(koz); 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', the 'Group', 'BHP Group', 'we', 'us', 'our'
and 'ourselves' are used to refer to BHP Group Limited and, except where the
context otherwise requires, our subsidiaries. Refer to note 28 'Subsidiaries'
of the Financial Statements in BHP's 30 June 2022 Appendix 4E for a list of our
significant subsidiaries. Those terms do not include non-operated assets.
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. Our
non-operated assets include Antamina and Samarco. BHP Group cautions against
undue reliance on any forward-looking statement or guidance in this release,
particularly in light of the current economic climate and significant
volatility, uncertainty and disruption arising in connection with COVID-19.
These forward-looking statements are based on information available as at the
date of this release and are not guarantees or predictions of future
performance and involve known and unknown risks, uncertainties and other
factors, many of which are beyond our control and which may cause actual
results to differ materially from those expressed in the statements contained
in this release.
--------------------------------------------------------------------------------
BHP Operational Review for the 7
half year ended 31 December 2022
Further information on BHP can be found at: bhp.com
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
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--------------------------------------------------------------------------------
BHP Operational Review for the 8
half year ended 31 December 2022
Production summary
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2021 2022 2022 2022 2022 2022 2021
interest ------ ------- ------- ------ ------ ------- -------
Copper/1/
Copper
Payable metal in concentrate (kt)
Escondida /2/ ......................... 57.5% 196.2 178.2 233.5 203.1 208.3 411.4 390.9
Pampa Norte /3/ ....................... 100.0% 24.2 32.4 28.2 28.6 32.5 61.1 50.6
Antamina .............................. 33.8% 38.4 36.1 39.6 37.1 35.2 72.3 74.2
------ ------- ------- ------ ------ ------- -------
Total.................................. 258.8 246.7 301.3 268.8 276.0 544.8 515.7
------ ------- ------- ------ ------ ------- -------
Cathode (kt)
Escondida /2/ ......................... 57.5% 48.4 48.2 55.8 49.6 49.7 99.3 97.4
Pampa Norte /3/ ....................... 100% 44.1 35.8 49.0 42.0 44.2 86.2 85.2
Olympic Dam ........................... 100% 14.2 39.0 55.7 49.7 54.4 104.1 43.7
------ ------- ------- ------ ------ ------- -------
Total ................................. 106.7 123.0 160.5 141.3 148.3 289.6 226.3
------ ------- ------- ------ ------ ------- -------
Total copper (kt) ........................ 365.5 369.7 461.8 410.1 424.3 834.4 742.0
------ ------- ------- ------ ------ ------- -------
Lead
Payable metal in concentrate (t)
Antamina .............................. 33.8% 277 282 181 228 114 342 655
------ ------- ------- ------ ------ ------- -------
Total ................................. 277 282 181 228 114 342 655
------ ------- ------- ------ ------ ------- -------
Zinc
Payable metal in concentrate (t)
Antamina .............................. 33.8% 29,603 32,732 27,576 32,685 29,929 62,614 62,892
------ ------- ------- ------ ------ ------- -------
Total ................................. 29,603 32,732 27,576 32,685 29,929 62,614 62,892
------ ------- ------- ------ ------ ------- -------
Gold
Payable metal in concentrate (troy oz)
Escondida /2/ ......................... 57.5% 42,937 36,303 45,770 38,236 48,402 86,638 84,899
Pampa Norte /3/ ....................... 100% 5,776 7,929 8,198 5,521 3,875 9,396 12,743
Olympic Dam (refined gold) ............ 100% 37,805 29,355 26,080 47,184 43,280 90,464 64,082
------ ------- ------- ------ ------ ------- -------
Total ................................. 86,518 73,587 80,048 90,941 95,557 186,498 161,724
------ ------- ------- ------ ------ ------- -------
Silver
Payable metal in concentrate (troy koz)
Escondida /2/ ......................... 57.5% 1,462 1,270 1,311 1,210 1,510 2,720 2,753
Pampa Norte /3/ ....................... 100% 215 261 262 252 245 497 488
Antamina .............................. 33.8% 1,308 1,191 1,212 1,190 923 2,113 2,675
Olympic Dam (refined silver) .......... 100% 258 149 145 295 261 556 449
------ ------- ------- ------ ------ ------- -------
Total ................................. 3,243 2,871 2,930 2,947 2,939 5,886 6,365
------ ------- ------- ------ ------ ------- -------
Uranium
Payable metal in concentrate (t)
Olympic Dam ........................... 100% 287 781 776 817 943 1,760 818
------ ------- ------- ------ ------ ------- -------
Total ................................. 287 781 776 817 943 1,760 818
------ ------- ------- ------ ------ ------- -------
Molybdenum
Payable metal in concentrate (t)
Pampa Norte /3/ ....................... 100% -- -- 71 34 216 250 --
Antamina .............................. 33.8% 217 190 249 262 348 610 359
------ ------- ------- ------ ------ ------- -------
Total ................................. 217 190 320 296 564 860 359
------ ------- ------- ------ ------ ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for the 9
half year ended 31 December 2022
Production summary
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2021 2022 2022 2022 2022 2022 2021
interest ------ ------- ------- ------ ------ ------- -------
Iron Ore
Iron Ore
Production (kt) /4/
Newman ................................ 85% 14,577 11,940 14,063 14,053 16,172 30,225 31,038
Area C Joint Venture .................. 85% 22,911 24,888 27,685 26,971 26,302 53,273 41,858
Yandi Joint Venture ................... 85% 12,261 8,418 6,409 5,497 5,613 11,110 24,095
Jimblebar /5/ ......................... 85% 15,324 13,444 15,005 17,404 17,720 35,124 30,333
Samarco ............................... 50% 1,029 994 1,000 1,148 1,095 2,243 2,077
------ ------- ------- ------ ------ ------- -------
Total ................................. 66,102 59,684 64,162 65,073 66,902 131,975 129,401
------ ------- ------- ------ ------ ------- -------
Coal
Metallurgical coal
Production (kt) /6/
BHP Mitsubishi Alliance (BMA) ......... 50% 6,300 7,944 8,183 6,662 6,952 13,614 13,015
------ ------- ------- ------ ------ ------- -------
Total ................................. 6,300 7,944 8,183 6,662 6,952 13,614 13,015
------ ------- ------- ------ ------ ------- -------
Energy coal
Production (kt)
NSW Energy Coal ....................... 100% 2,967 2,577 3,919 2,622 2,851 5,473 7,205
------ ------- ------- ------ ------ ------- -------
Total ................................. 2,967 2,577 3,919 2,622 2,851 5,473 7,205
------ ------- ------- ------ ------ ------- -------
Other
Nickel
Saleable production (kt)
Nickel West ........................... 100% 21.5 18.7 18.8 20.7 17.7 38.4 39.3
------ ------- ------- ------ ------ ------- -------
Total ................................. 21.5 18.7 18.8 20.7 17.7 38.4 39.3
------ ------- ------- ------ ------ ------- -------
Cobalt
Saleable production (t)
Nickel West ........................... 100% 220 125 110 238 93 331 397
------ ------- ------- ------ ------ ------- -------
Total ................................. 220 125 110 238 93 331 397
------ ------- ------- ------ ------ ------- -------
1 Metal production is reported on the basis of payable metal.
2 Shown on a 100% basis. BHP interest in saleable production is 57.5%.
3 Includes Cerro Colorado and Spence.
4 Iron ore production is reported on a wet tonnes basis.
5 Shown on a 100% basis. BHP interest in saleable production is 85%.
6 Metallurgical coal production is reported on the basis of saleable product.
Production figures may include some thermal coal.
Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.
--------------------------------------------------------------------------------
BHP Operational Review for the 10
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile /1/
Material mined ................................ (kt) 117,284 107,676 115,409 110,248 101,987 212,235 231,158
Concentrator throughput ....................... (kt) 35,787 30,235 34,318 32,894 33,911 66,805 69,315
Average copper grade - concentrator ........... (%) 0.71% 0.80% 0.88% 0.83% 0.76% 0.79% 0.72%
Production ex mill ............................ (kt) 203.6 191.5 239.5 214.6 212.8 427.4 404.8
Production
Payable copper ................................ (kt) 196.2 178.2 233.5 203.1 208.3 411.4 390.9
Copper cathode (EW) ........................... (kt) 48.4 48.2 55.8 49.6 49.7 99.3 97.4
- Oxide leach ................................ (kt) 13.1 12.2 17.5 15.2 17.6 32.8 27.9
- Sulphide leach ............................. (kt) 35.3 36.0 38.3 34.4 32.1 66.5 69.5
------- ------- ------- ------- ------- ------- -------
Total copper .................................. (kt) 244.6 226.4 289.3 252.7 258.0 510.7 488.3
------- ------- ------- ------- ------- ------- -------
Payable gold concentrate ...................... (troy oz) 42,937 36,303 45,770 38,236 48,402 86,638 84,899
Payable silver concentrate .................... (troy koz) 1,462 1,270 1,311 1,210 1,510 2,720 2,753
Sales
Payable copper ................................ (kt) 200.2 177.0 230.4 196.7 216.0 412.7 390.7
Copper cathode (EW) ........................... (kt) 49.7 47.2 58.9 45.9 53.5 99.4 96.4
Payable gold concentrate ...................... (troy oz) 42,937 36,303 45,770 38,236 48,402 86,638 84,899
Payable silver concentrate .................... (troy koz) 1,462 1,270 1,311 1,210 1,510 2,720 2,753
1 Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Pampa Norte, Chile
Cerro Colorado
Material mined ................................ (kt) 4,782 3,516 3,604 3,179 583 3,762 10,160
Ore stacked ................................... (kt) 4,029 3,181 4,259 4,373 4,119 8,492 7,595
Average copper grade - stacked ................ (%) 0.62% 0.53% 0.55% 0.54% 0.56% 0.55% 0.61%
Production
Copper cathode (EW) ........................... (kt) 15.3 11.6 14.7 12.8 12.2 25.0 28.7
Sales
Copper cathode (EW) ........................... (kt) 16.0 10.5 16.2 13.3 12.2 25.5 28.1
Spence
Material mined ................................ (kt) 24,025 24,040 26,749 26,956 26,980 53,936 45,179
Ore stacked ................................... (kt) 5,071 5,055 5,099 5,577 5,155 10,732 10,329
Average copper grade - stacked ................ (%) 0.66% 0.67% 0.66% 0.70% 0.66% 0.68% 0.65%
Concentrator throughput ....................... (kt) 6,234 6,512 6,311 6,433 7,602 14,035 12,020
Average copper grade - concentrator ........... (%) 0.60% 0.65% 0.66% 0.63% 0.60% 0.61% 0.62%
Production
Payable copper ................................ (kt) 24.2 32.4 28.2 28.6 32.5 61.1 50.6
Copper cathode (EW) ........................... (kt) 28.8 24.2 34.3 29.2 32.0 61.2 56.5
------- ------- ------- ------- ------- ------- -------
Total copper .................................. (kt) 53.0 56.6 62.5 57.8 64.5 122.3 107.1
------- ------- ------- ------- ------- ------- -------
Payable gold concentrate ...................... (troy oz) 5,776 7,929 8,198 5,521 3,875 9,396 12,743
Payable silver concentrate .................... (troy koz) 215 261 262 252 245 497 488
Payable molybdenum ............................ (t) -- -- 71 34 216 250 --
--------------------------------------------------------------------------------
BHP Operational Review for the 11
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
Sales
Payable copper ................................ (kt) 24.9 28.1 28.1 26.0 22.0 48.0 53.3
Copper cathode (EW) ........................... (kt) 31.2 20.2 35.4 29.1 33.4 62.5 58.9
Payable gold concentrate ...................... (troy oz) 5,776 7,929 8,198 5,521 3,875 9,396 12,743
Payable silver concentrate .................... (troy koz) 215 261 262 252 245 497 488
Payable molybdenum ............................ (t) -- -- 25 25 216 241 --
--------------------------------------------------------------------------------
BHP Operational Review for the 12
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%) ......................... (kt) 58,179 58,118 64,026 63,865 68,750 132,615 124,760
Concentrator throughput (100%) ................ (kt) 13,011 13,135 13,131 13,858 14,272 28,130 26,230
Average head grades ...........................
- Copper ...................................... (%) 1.00% 0.94% 1.02% 0.93% 0.86% 0.89% 0.98%
- Zinc ........................................ (%) 1.11% 1.13% 1.05% 1.09% 0.99% 1.04% 1.14%
Production
Payable copper ................................ (kt) 38.4 36.1 39.6 37.1 35.2 72.3 74.2
Payable zinc .................................. (t) 29,603 32,732 27,576 32,685 29,929 62,614 62,892
Payable silver ................................ (troy koz) 1,308 1,191 1,212 1,190 923 2,113 2,675
Payable lead .................................. (t) 277 282 181 228 114 342 655
Payable molybdenum ............................ (t) 217 190 249 262 348 610 359
Sales
Payable copper ................................ (kt) 41.9 32.9 40.7 37.6 34.7 72.3 74.6
Payable zinc .................................. (t) 32,513 29,920 30,847 33,820 29,127 62,947 65,148
Payable silver ................................ (troy koz) 1,405 1,078 1,230 1,015 850 1,865 2,508
Payable lead .................................. (t) 344 269 363 130 91 221 576
Payable molybdenum ............................ (t) 170 199 205 250 298 548 256
Olympic Dam, Australia
Material mined /1/ ............................ (kt) 1,998 2,424 2,477 2,412 2,264 4,676 3,933
Ore milled .................................... (kt) 1,105 2,122 2,436 2,570 2,687 5,257 3,129
Average copper grade .......................... (%) 2.17% 2.21% 2.15% 2.13% 2.08% 2.10% 2.08%
Average uranium grade ......................... (kg/t) 0.55 0.62 0.56 0.58 0.58 0.58 0.55
Production
Copper cathode (ER and EW) .................... (kt) 14.2 39.0 55.7 49.7 54.4 104.1 43.7
Payable uranium ............................... (t) 287 781 776 817 943 1,760 818
Refined gold .................................. (troy oz) 37,805 29,355 26,080 47,184 43,280 90,464 64,082
Refined silver ................................ (troy koz) 258 149 145 295 261 556 449
Sales
Copper cathode (ER and EW) .................... (kt) 17.9 36.3 55.8 45.9 56.8 102.7 47.0
Payable uranium ............................... (t) 541 236 1,031 272 1,127 1,399 1,077
Refined gold .................................. (troy oz) 38,768 30,935 24,622 49,542 41,900 91,442 63,422
Refined silver ................................ (troy koz) 290 182 87 320 233 553 416
1 Material mined refers to underground ore mined, subsequently hoisted or
trucked to surface.
--------------------------------------------------------------------------------
BHP Operational Review for the 13
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.
Western Australia Iron Ore, Australia
Production
Newman ........................................ (kt) 14,577 11,940 14,063 14,053 16,172 30,225 31,038
Area C Joint Venture .......................... (kt) 22,911 24,888 27,685 26,971 26,302 53,273 41,858
Yandi Joint Venture ........................... (kt) 12,261 8,418 6,409 5,497 5,613 11,110 24,095
Jimblebar /1/ ................................. (kt) 15,324 13,444 15,005 17,404 17,720 35,124 30,333
------- ------- ------- ------- ------- ------- -------
Total production .............................. (kt) 65,073 58,690 63,162 63,925 65,807 129,732 127,324
------- ------- ------- ------- ------- ------- -------
Total production (100%) ....................... (kt) 73,852 66,674 71,660 72,135 74,292 146,427 144,439
------- ------- ------- ------- ------- ------- -------
Sales
Lump .......................................... (kt) 17,827 16,966 20,006 19,561 20,375 39,936 35,373
Fines ......................................... (kt) 46,809 42,187 44,308 42,696 44,121 86,817 91,848
------- ------- ------- ------- ------- ------- -------
Total ......................................... (kt) 64,636 59,153 64,314 62,257 64,496 126,753 127,221
------- ------- ------- ------- ------- ------- -------
Total sales (100%) ............................ (kt) 73,222 67,110 72,796 70,276 72,688 142,964 144,037
------- ------- ------- ------- ------- ------- -------
1 Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil
Production .................................... (kt) 1,029 994 1,000 1,148 1,095 2,243 2,077
Sales ......................................... (kt) 950 943 991 1,146 1,097 2,243 2,061
--------------------------------------------------------------------------------
BHP Operational Review for the 14
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
Coal
Coal production is reported on the basis of saleable product.
BHP Mitsubishi Alliance (BMA), Australia
Production /1/
Blackwater .................................... (kt) 1,202 1,478 1,751 1,283 1,160 2,443 2,605
Goonyella ..................................... (kt) 1,797 2,336 2,429 1,780 1,997 3,777 3,595
Peak Downs .................................... (kt) 960 1,395 1,366 1,325 1,480 2,805 2,183
Saraji ........................................ (kt) 1,081 1,366 1,168 1,020 1,243 2,263 2,080
Daunia ........................................ (kt) 304 338 472 324 441 765 681
Caval Ridge ................................... (kt) 956 1,031 997 930 631 1,561 1,871
------- ------- ------- ------- ------- ------- -------
Total production .............................. (kt) 6,300 7,944 8,183 6,662 6,952 13,614 13,015
------- ------- ------- ------- ------- ------- -------
Total production (100%) ....................... (kt) 12,600 15,888 16,366 13,324 13,904 27,228 26,030
------- ------- ------- ------- ------- ------- -------
Sales
Coking coal ................................... (kt) 4,875 6,334 6,734 5,615 5,872 11,487 10,290
Weak coking coal .............................. (kt) 754 805 1,118 600 727 1,327 1,488
Thermal coal .................................. (kt) 455 484 765 267 428 695 1,031
------- ------- ------- ------- ------- ------- -------
Total sales ................................... (kt) 6,084 7,623 8,617 6,482 7,027 13,509 12,809
------- ------- ------- ------- ------- ------- -------
Total sales (100%) ............................ (kt) 12,168 15,246 17,234 12,964 14,054 27,018 25,618
------- ------- ------- ------- ------- ------- -------
1 Production figures include some thermal coal.
--------------------------------------------------------------------------------
BHP Operational Review for the 15
half year ended 31 December 2022
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2021 2022 2022 2022 2022 2022 2021
------- ------- ------- ------- ------- ------- -------
NSW Energy Coal, Australia
Production .................................... (kt) 2,967 2,577 3,919 2,622 2,851 5,473 7,205
Sales - export ................................ (kt) 3,718 2,703 3,923 2,441 2,862 5,303 7,498
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Mt Keith
Nickel concentrate ............................ (kt) 47.0 47.1 48.0 42.6 39.6 82.2 100.7
Average nickel grade .......................... (%) 13.2 14.4 16.1 17.0 15.5 16.3 13.9
Leinster
Nickel concentrate ............................ (kt) 77.4 78.0 76.0 66.8 47.9 114.7 151.2
Average nickel grade .......................... (%) 9.1 8.9 10.3 9.9 9.4 9.7 9.0
Saleable production
Refined nickel /1/ ............................ (kt) 18.2 13.3 11.7 17.5 10.8 28.3 32.6
Nickel sulphate /2/ ........................... (kt) 0.4 0.7 0.5 1.2 0.4 1.6 0.4
Intermediates and nickel by-products /3/ ...... (kt) 2.9 4.7 6.6 2.0 6.5 8.5 6.3
------- ------- ------- ------- ------- ------- -------
Total nickel .................................. (kt) 21.5 18.7 18.8 20.7 17.7 38.4 39.3
------- ------- ------- ------- ------- ------- -------
Cobalt by-products ............................ (t) 220 125 110 238 93 331 397
Sales
Refined nickel /1/ ............................ (kt) 16.9 15.3 11.7 18.1 10.2 28.3 30.7
Nickel sulphate /2/ ........................... (kt) 0.1 0.7 0.5 0.8 0.5 1.3 0.1
Intermediates and nickel by-products /3/ ...... (kt) 3.1 2.7 6.4 1.8 7.7 9.5 7.0
------- ------- ------- ------- ------- ------- -------
Total nickel .................................. (kt) 20.1 18.7 18.6 20.7 18.4 39.1 37.8
------- ------- ------- ------- ------- ------- -------
Cobalt by-products ............................ (t) 220 125 110 238 93 331 397
1 High quality refined nickel metal, including briquettes and powder.
2 Nickel sulphate crystals produced from nickel powder.
3 Nickel contained in matte and by-product streams.
--------------------------------------------------------------------------------
BHP Operational Review for the 16
half year ended 31 December 2022
Date: 19-01-2023 08:10:00
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