TIDMBHP
RNS Number : 5531T
BHP Group PLC
21 July 2020
Release Time IMMEDIATE
Date 21 July 2020
Release Number 07/20
BHP OPERATIONAL REVIEW
FOR THE YEARED 30 JUNE 2020
Note: All guidance is subject to further potential impacts from
COVID-19 during the 2021 financial year.
-- The commitment of our workforce, our disciplined controls and
financial strength has enabled us to continue to safely operate
through the COVID-19 pandemic and deliver a strong performance.
-- Met full year production guidance for iron ore, metallurgical
coal and our operated copper and energy coal assets. Petroleum
production marginally below guidance with lower than expected gas
demand due to the impact of COVID-19 in the June 2020 quarter.
Antamina and Cerrejón production lower than guidance following the
temporary suspension of operations due to COVID-19, with both
operations now ramping back up.
-- R ecord production was achieved at Western Australia Iron Ore
(WAIO), Caval Ridge and Poitrel despite impacts from wet weather
and COVID-19, while record coal was mined at Broadmeadow and record
average concentrator throughput was delivered at Escondida.
-- Group copper equivalent production for the 2020 financial
year broadly in line with the prior year, with volumes expected to
be slightly lower in the 2021 financial year due to impacts from a
reduction in operational workforces in copper in response to
COVID-19 and petroleum natural field decline.
-- We expect to achieve full year unit cost guidance(1) at WAIO,
Queensland Coal and New South Wales Energy Coal (NSWEC). Petroleum
and Escondida unit costs are expected to be slightly better than
guidance (based on 2020 financial year guidance exchange rates of
AUD/USD 0.70 and USD/CLP 683).
-- Our major projects under development in petroleum and iron
ore are tracking to plan. As a result of measures put in place to
reduce the spread of COVID-19 in Chile, first production from the
Spence Growth Option is now expected between December 2020 and
March 2021. We continue to assess the impacts of COVID-19 and the
temporary reduction in construction activity at Jansen.
-- As previously announced, we will provide updated capital and
exploration expenditure guidance for the 2021 financial year with
our full year results.
-- An update on our short-term economic and commodities outlook is included on pages 4 to 5.
Production FY20 Jun Q20
(vs FY19) (vs Mar
Q20) Jun Q20 vs Mar Q20 commentary
Petroleum (MMboe) 109 26 Increased production at Bass Strait
due to higher seasonal demand, partially
offset by lower volumes at Atlantis
due to planned maintenance and preparation
work for Phase 3 project commissioning,
and lower demand in Trinidad and
Tobago.
(10%) 5%
Higher production at Escondida (record
concentrator throughput) and Olympic
Dam (improved operating stability)
offset by lower production at Antamina
due to temporary suspension in response
Copper (kt) 1,724 414 to COVID-19.
2% (3%)
Iron ore (Mt) 248 67 Higher volumes reflecting record
quarter production at Mining Area
C and Yandi, strong supply chain
performance (increased car dumper
availability and utilisation and
reduced rail cycle times), coupled
with wet weather impacts in the previous
quarter.
4% 11%
Higher volumes at Queensland Coal
including record production at Poitrel
mine, following significant wet weather
Metallurgical events impacting operations in the
coal (Mt) 41 12 prior quarter.
(3%) 26%
Higher production at NSWEC was offset
by lower volumes at Cerrejón
Energy coal as a result of a temporary shutdown
(Mt) 23 6 in response to COVID-19.
(16%) (2%)
Higher volumes following ramp back
up to full capacity at the Kwinana
refinery and Kalgoorlie smelter during
Nickel (kt) 80 24 the prior quarter.
(8%) 14%
Summary
BHP Chief Executive Officer, Mike Henry:
"BHP safely delivered a strong operational performance in the
2020 financial year, achieving record production in a number of our
operations, and an improved cost base. This performance, achieved
in the face of COVID-19 and other challenges, is a result of the
outstanding effort of our people and the support of our
communities, governments, customers and suppliers. We have sought
to support those who rely on BHP through the pandemic with
increased hiring, shorter payment terms for small, local and
indigenous suppliers, support for contract workers and community
funding for health and social services.
Our diversified portfolio and high quality assets, together with
our strong balance sheet, make us resilient to the ongoing
uncertainty in the markets for our commodities. We expect to
continue to generate solid cash flow through the cycle and we
remain confident in the outlook for demand for our products over
the medium to long-term. We continue to focus on becoming even
safer, delivering exceptional operational performance, maintaining
disciplined capital allocation, creating and securing more options
in future facing commodities and building social value. We have
learned new ways of working, both internally and with others,
through the COVID-19 pandemic. We will seek to embed these in a way
that helps to reinforce these priorities."
Operational performance
Production and guidance are summarised below.
Note: All guidance is subject to further potential impacts from
COVID-19 during the 2021 financial year.
Jun Q20 Jun Q20
FY20 vs vs
Jun vs Jun Mar FY21 FY21e
Production FY20 Q20 FY19 Q19 Q20 guidance vs FY20
(13%) -
Petroleum (MMboe) 109 26 (10%) (11%) 5% 95 - 102 (6%)
1,480 (14%) -
Copper (kt) 1,724 414 2% (7%) (3%) - 1,645 (5%)
940 - (21%) -
Escondida (kt) 1,185 294 4% 2% 1% 1,030 (13%)
240 - (1%) -
Pampa Norte (kt) 243 55 (2%) (26%) (15%) 270 11%
180 -
Olympic Dam (kt) 172 48 7% 5% 24% 205 5% - 19%
120 - (4%) -
Antamina (kt) 125 18 (15%) (52%) (46%) 140 12%
244 - (2%) -
Iron ore (Mt) 248 67 4% 7% 11% 253 2%
WAIO (100% basis) 276 - (2%) -
(Mt) 281 76 4% 6% 11% 286 2%
Metallurgical coal (3%) -
(Mt) 41 12 (3%) (2%) 26% 40 - 44 7%
Queensland Coal (100% (2%) -
basis) (Mt) 73 21 (2%) (1%) 29% 71 - 77 6 %
(5%) -
Energy coal (Mt) 23 6 (16%) (24%) (2%) 22 - 24 4%
(7%) -
NSWEC (Mt) 16 5 (12%) (10%) 28% 15 - 17 6%
Broadly
Cerrejón (Mt) 7 1 (23%) (62%) (61%) 7 unchanged
Nickel (kt) 80 24 (8%) (17%) 14% 85 - 95 6% - 19%
------------------------ ----- ---- ------ ------- ------- --------- ----------
Summary of disclosures
BHP expects its financial results for the second half of the
2020 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 our full year financial results on 18 August 2020.
Accordingly the information is subject to update.
H2 FY20
impact
Description US$M(i) Classification(ii)
Unit costs for WAIO, Queensland Coal and NSWEC expected to be in line Refer footnote(iii) Operating costs
with full year guidance
(at guidance exchange rates)
Unit costs for Petroleum and Escondida tracking slightly better than Refer footnote(iii) Operating costs
full year guidance (at
guidance exchange rates) due to lower price linked costs, cost
efficiencies and deferred activity
due to COVID-19 (Petroleum) and higher than expected by-product credits
and lower than expected
deferred stripping costs (Escondida)
Increase in closure and rehabilitation provision for closed mines 600 - 700 Operating costs
(reported in group and unallocated)
Exploration expense (including petroleum and minerals exploration 286 Exploration expense
programs)
The Group's net debt target range is US$12 to US$17 billion, with net - Net debt
debt expected to be
towards the lower end of the range(iv)
Settlement of derivative related to the funding of the interim dividend 320 Operating cash outflow
(Note: together with
the payment of US$2.9 billion reported in financing cash outflow, the
combined payment of
US$3.3 billion represents the interim dividend determined on 18 February
2020 in the financial
results for the half year ended 31 December 2019)
Insurance proceeds received in relation to the Samarco dam failure 450 Operating cash inflow
(Note: income statement impact will be treated as an exceptional item)
Dividends paid to non-controlling interests 430 Financing cash outflow
Impairment charge related to property, plant and equipment at Cerro 450 - 500 Exceptional item charge
Colorado, in addition
to a valuation allowance recognised against Cerro Colorado's deferred
tax assets (after tax)
Costs directly attributable to COVID-19 (after tax) 100 - 150 Exceptional item charge
Financial impact on BHP Brasil of the Samarco dam failure Refer footnote(iii) Exceptional item
(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.
(iv) Our Net Debt definition is currently under review in
relation to vessel lease contracts that are priced with reference
to a freight index. Such contracts are required to be re-measured
to the prevailing index at each reporting date. Volatility in the
index throughout FY2020 has created significant short-term
fluctuation in these liabilities which, if included, does not align
with how the Group uses net debt for decision making in relation to
the capital allocation framework.
Major development projects
During the year, the BHP Board approved the Ruby oil and gas
project in Trinidad and Tobago. At the end of the 2020 financial
year, BHP had six major projects under development in petroleum,
copper, iron ore and potash, with a combined budget of US$11.4
billion over the life of the projects. Our major projects under
development in petroleum and iron ore are tracking to plan.
The Spence Growth Option is continuing to progress, however, as
a result of measures put in place to reduce the spread of COVID-19,
first production is now expected between December 2020 and March
2021. As a result of the reduction of the on-site workforce, the
commissioning of the desalination plant and capitalisation of the
associated US$600 million lease (approximate) will now occur in the
first half of the 2021 financial year.
In June 2020, final shaft lining work for the Jansen project,
which was reduced to focus on one shaft as part of our COVID-19
response plan to reduce our on-site interprovincial workforce, was
resumed in both shafts. Timing for completion of the shafts
continues to be under review. BHP continues to assess the impacts
of COVID-19 and the temporary reduction in construction
activity.
COVID-19 update
During the June 2020 quarter, our operated assets have continued
with additional protocols in place to protect our workforce and
communities from the spread of COVID-19, in line with guidelines
from local and federal government bodies and expert health advice
in the geographies where we operate.
In Australia, we have only had a small number of cases among our
workforce since COVID-19 began, none with workplace exposure, and
some assets are returning to more normal rosters. We remain
vigilant and will continue with social distancing and hygiene
practices and other protocols as appropriate to minimise the risk
of transmission.
In South America, COVID-19 infection rates have seen governments
continue with travel and lockdown restrictions. We continue to
operate with a reduced number of people at mine sites and other
operational facilities, with only business critical personnel on
site. We have implemented a comprehensive plan for COVID-19
including various hygiene and health controls and a proactive
testing regime for people before entering sites and boarding
transportation.
In addition, we have implemented a company-wide COVID-19 app for
employees and contractors so that in the event of a positive
result, movement on site can be tracked to trace others who may
have been in contact, and targeted isolation and sanitation can be
undertaken. Medical and wellbeing support is in place for the
workforce.
Our supply chains remain open and we have adequate supplies to
operate and maintain critical equipment, with alternative suppliers
identified for many of these.
Marketing update (2)
Short term economic outlook
The global economy has been dramatically impacted by COVID-19.
Many major economies contracted heavily in the June 2020 quarter,
including the United States (US), Europe and India. In contrast,
China has moved from intensive viral suppression to economic
recovery. Much of the developing world is still in the escalation
phase of their COVID-19 outbreaks. The developed world has begun to
re-emerge from wave one lockdowns, but early indications are that
there is likely to be a period of uncertainty, with re-escalation
of infection rates and re-implementation of COVID-19 response
measures in some jurisdictions.
The pace and scope of recovery will vary across countries. Where
"hibernation policies"(3) have been enacted, we anticipate a
smoother resumption of activity after the first wave. A
considerable amount of monetary, liquidity and fiscal policy
support has been mobilised in response to COVID-19. It is still
uncertain how significant the multiplier effect will be of the
monetary and fiscal stimulus policies measures that have been
taken. A lower multiplier could result from depressed consumer and
business confidence due to the impact of COVID-19 on both jobs and
profitability. A higher multiplier could occur if the lagged impact
of stimulus coincides with the release of pent-up demand as
economies emerge from the lockdown, with the caveat that major
second waves do not occur.
The International Monetary Fund's (IMF) latest forecasts predict
that the world economy will contract by 4.9 per cent in the 2020
calendar year and rebound by 5.4 per cent in the 2021 calendar
year. While we plan against a range, our base case is similar
across the two years. If this case eventuated, the world economy
would be around 6 per cent smaller, on average, in the 2021
calendar year than it would otherwise have been if COVID-19 had not
occurred.
Regionally, we note that Chinese domestic industrial activity
has been improving, spurred on by supportive credit and fiscal
policy. The major risk to maintaining that positive trajectory is
the possibility of a widespread second wave of infections emerging.
That is among the range of pathways that we consider and it is the
key uncertainty in each of our regional outlooks. Elsewhere,
indications are that the US, India, Japan and Europe will all
experience a flatter recovery trajectory than China. Negative
feedback loops to China from the downturn in the rest of the world
are factored in to our range analysis.
Short term commodities outlook
Exchange traded commodity prices have recovered slightly from
their March/April 2020 lows. Bulk commodity prices have diverged,
with iron ore higher than in April 2020 while metallurgical coal
prices are lower. Across the suite of commodities, a combination of
economic supply-side curtailments and COVID-19 induced supply-side
disruptions have served as a partial offset to the lower
demand.
We maintain our view that steel production ex-China could
contract by a double-digit percentage in the 2020 calendar year. We
estimate that capacity utilisation ex-China fell to between 50 and
60 per cent across the June quarter. Steel makers from other
regions, including Europe, the Americas, India and Japan have cut
production. This reflects logistical difficulties created by
COVID-19 (e.g. inter-state labour availability in India) as well as
collapsing demand in downstream industries, such as automotive
(e.g. Europe and Japan).
In China, blast furnace utilisation rates have increased from
around 80 per cent earlier in February 2020 to above 90 per cent in
June 2020. Daily rebar transactions were above normal seasonal
levels for much of the June 2020 quarter, helping support a crude
steel run-rate of 1,117 Mtpa in June 2020 (+4.5 per cent
year-on-year). Year-to-date annualised production of 1,004 Mt is
broadly consistent with our base case. Finished inventories have
fallen as downstream activity has improved. While we note that only
about 10 per cent of Chinese apparent steel demand(4) is exported
in finished products, the weakness in global demand will weigh on
Chinese flat products manufacturers. However, better than expected
outcomes for domestic machinery and auto production have narrowed
the gap between long and flat product performance seen early in the
year. Electric-arc furnace utilisation fell as low as 12 per cent
in February 2020, but has now recovered to normal seasonal levels
around 70 per cent. We continue to believe that if China can avoid
a second wave of COVID-19, steel and pig iron production can both
rise in the 2020 calendar year versus the prior year.
The Platts 62% Fe Iron Ore Fines price index has been resilient
so far. This reflects solid Chinese pig iron production of 935 Mtpa
in June 2020 (+4.1 per cent year-on-year), and the impact of
constrained Brazilian exports. Meanwhile, preliminary shipping data
suggest Australian exports hit a record of 1,072 Mtpa in June 2020.
Weakness ex-China is less consequential for price formation in iron
ore than in other commodities.
The Platts Premium Low-Volatile Metallurgical Coal price index
has been under downward pressure through the June 2020 quarter.
Negative demand impacts from COVID-19 lockdowns in the major
importing regions of Europe, India and developed Asia have been the
major influence on the market. Chinese demand, on the other hand
has been firm. However, China's coal import policy remains a key
uncertainty. As demand disruption ex-China accelerated early in the
June quarter, prices traded below the lows seen in the second half
of the 2019 calendar year. They have since stabilised at these
levels. The geographic diversification of metallurgical coal demand
is a long term advantage but an impediment under today's unique
circumstances. Developments in both supply and demand imply that
lower quality products may face headwinds for an extended period.
Premium coking coals exhibit attractive medium-term
fundamentals.
The energy coal market is in a difficult state. The GCNewc
6000kcal price recently fell below the levels reached during the
2015/16 downturn. Wood Mackenzie has estimated that at late June
2020 spot prices around two-thirds of seaborne supply was likely to
be earning negative margins. Short term increases in producer
currencies and diesel prices have amplified cost challenges. An
uplift in power demand across developed Asia as re-starts progress
could help to stabilise the market. China's policy in respect of
energy coal imports remains a key uncertainty.
Copper prices fell sharply in March 2020 amidst depressed macro
investor sentiment. They have since rebounded, first on improving
sentiment towards pro-growth assets, and more recently on news of
supply challenges in South America due to COVID-19. In terms of
demand fundamentals, our view is that the decline in ex-China
copper demand will be less severe than for steel. Conversely, in
China, copper demand could be marginally weaker than steel in the
2020 calendar year, based partly on copper's greater exposure to
indirect exports from China (approximately 20 per cent versus
approximately 10 per cent for steel). Copper also benefits less
than steel from transport and non-power utilities infrastructure,
which are benefitting from strong policy support. On the supply
side, Peru and Chile have experienced difficulty in containing
COVID-19, with flow-on impacts to copper operations and the broader
supply chain. This has led to a material tightening of the copper
concentrate balance, with treatment and refining charges moving
lower in response. Scrap availability has also been
constrained.
After crashing in March 2020, crude oil prices exhibited
considerable volatility in April 2020. However, conditions improved
in May and June 2020, as the early impact of global supply cuts,
China's demand recovery and activity re-starts in the US and Europe
took some pressure off global storage. Large and small producers
alike have announced sharp cuts in capital spending in response to
the price decline. In North America, rigs targeting oil have
declined by more than 70 per cent, to a level last seen before the
shale boom. We believe that the most significant risks to the
physical market have passed. However, a return to pre-COVID-19
demand levels is not expected to occur before the end of the 2021
calendar year.
Average realised prices
The average realised prices achieved for our major commodities
are summarised below.
Jun H20 Jun H20
FY20 vs vs
Average realised vs Jun Dec
prices(i) Jun H20 Dec H19 FY20 FY19 FY19 H19 H19
--------------------------- -------- -------- ------ ------ ------ -------- --------
Oil (crude and condensate)
(US$/bbl) 37.51 60.64 49.53 66.59 (26%) (41%) (38%)
Natural gas (US$/Mscf)(ii) 3.76 4.26 4.04 4.55 (11%) (15%) (12%)
LNG (US$/Mscf) 6.87 7.62 7.26 9.43 (23%) (19%) (10%)
Copper (US$/lb) 2.39 2.60 2.50 2.62 (5%) (11%) (8%)
Iron ore (US$/wmt,
FOB) 76.67 78.30 77.36 66.68 16% (1%) (2%)
Metallurgical coal
(US$/t) 121.25 140.94 130.97 179.67 (27%) (32%) (14%)
Hard coking coal
(US$/t)(iii) 133.51 154.01 143.65 199.61 (28%) (34%) (13%)
Weak coking coal
(US$/t)(iii) 84.43 101.06 92.59 130.18 (29%) (33%) (16%)
Thermal coal (US$/t)(iv) 55.91 58.55 57.10 77.90 (27%) (23%) (5%)
Nickel metal (US$/t) 12,459 15,715 13,860 12,462 11% 0% (21%)
(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 Cerrejón. Includes thermal coal
sales from metallurgical coal mines.
The large majority of oil sales were linked to West Texas
intermediate (WTI) or Brent based indices, with differentials
applied for quality, locational and transportation costs. 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 were based on an average moisture rate of 7.5 per cent. The
large majority of metallurgical coal and energy coal exports were
linked to index pricing for the month of shipment or sold on the
spot market at fixed or index-linked prices, with price
differentials reflecting product quality. The 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 30 June 2020, the Group had 304 kt of outstanding copper
sales that were revalued at a weighted average price of US$2.73 per
pound. The final price of these sales will be determined in the
2021 financial year. In addition, 322 kt of copper sales from the
2019 financial year were subject to a finalisation adjustment in
the current period. The provisional pricing and finalisation
adjustments will increase Underlying EBITDA(5) by US$125 million in
the 2020 financial year and is included in the average realised
copper price in the above table.
Corporate update
In December 2019, BHP agreed to fund a total of US$793 million
in financial support for the Renova Foundation and Samarco. This
comprises US$581 million to fund the Renova Foundation until 31
December 2020 which will be offset against the Group's provision
for the Samarco dam failure, and a short-term facility of up to
US$212 million to be made available to Samarco until 31 December
2020.
We will provide an update to the ongoing potential financial
impacts on BHP Brasil of the Samarco dam failure with our full year
Results Announcement on 18 August 2020. Any financial impacts will
continue to be treated as an exceptional item.
Petroleum
Production
Jun Q20 Jun Q20
FY20 vs vs
Jun vs Jun Mar
FY20 Q20 FY19 Q19 Q20
---- ---- ----- ------- -------
Crude oil, condensate and natural
gas liquids (MMboe) 49 11 (11%) (15%) (2%)
Natural gas (bcf) 360 90 (9%) (8%) 11%
Total petroleum production (MMboe) 109 26 (10%) (11%) 5%
Petroleum - Total petroleum production decreased by 10 per cent
to 109 MMboe, with volumes marginally below guidance as a result of
weaker than expected gas demand due to the impact of COVID-19 and a
decrease in tax barrels at Trinidad and Tobago due to low commodity
prices in the June 2020 quarter. Volumes are expected to decrease
to between 95 and 102 MMboe in the 2021 financial year, reflecting
expected lower gas demand in Eastern Australia and Trinidad and
Tobago, the previously announced delay of several small and medium
sized projects with short lifecycles and natural field decline
across the portfolio.
Crude oil, condensate and natural gas liquids production
decreased by 11 per cent to 49 MMboe due to the impacts of Tropical
Storm Barry in the Gulf of Mexico, Tropical Cyclone Damien at our
North West Shelf operations, maintenance at Atlantis and natural
field decline across the portfolio. Weaker market conditions,
including impacts from COVID-19, also contributed to lower volumes
in the June 2020 quarter. This decline was partially offset by
higher uptime at Pyrenees following the 70 day dry dock maintenance
program during the prior year.
Natural gas production decreased by nine per cent to 360 bcf,
reflecting a decrease in both production and tax barrels (in
accordance with the terms of our Production Sharing Contract) due
to weaker market conditions in Trinidad and Tobago, impacts of
maintenance and Tropical Cyclone Damien at North West Shelf and
natural field decline across the portfolio.
Projects
Initial
Capital production
Project and expenditure target
ownership US$M date Capacity Progress
--------------------- ------------ ----------- --------------------------- -----------------------
Atlantis Phase 696 CY20 New subsea production On schedule and budget.
3 system that will tie The overall project
(US Gulf of back to the existing is 79% complete.
Mexico) Atlantis facility, with
44% (non-operator) capacity to produce
up to 38,000 gross barrels
of oil equivalent per
day.
Ruby 283 CY21 Five production wells On schedule and budget.
tied back into existing
operated processing
facilities, with capacity
to produce up to 16,000
gross barrels of oil
per day and 80 million
gross standard cubic
feet of natural gas
per day.
(Trinidad The overall project
& Tobago) is 28% complete.
68.46% (operator)
Mad Dog Phase 2,154 CY22 New floating production On schedule and budget.
2 facility with the capacity The overall project
(US Gulf of to produce up to 140,000 is 77% complete.
Mexico) gross barrels of crude
23.9% (non-operator) oil per day.
The Bass Strait West Barracouta project is on schedule and
budget, and is still expected to achieve first production in the
2021 calendar year, despite delays in component delivery and
equipment fabrication due to COVID-19 restrictions.
Additional measures have been put in place across each of our
projects to protect workforce health and safety as a result of
COVID-19. All projects currently in execution remain on track and
we do not expect an impact on the timing of first production.
As previously announced, in light of the recent significant
disruption to oil and gas markets and heightened risk of
interruption to field activity, we have reviewed our capital,
operating, exploration and appraisal expenditure programs. We will
provide updated capital and exploration expenditure guidance for
the 2021 financial year with our full year Results Announcement to
be released on 18 August 2020.
Petroleum exploration
No exploration and appraisal wells were drilled during the June
2020 quarter.
The Deepwater Invictus rig is anticipated to mobilise to
Trinidad and Tobago in the September 2020 quarter to drill one
exploration well, Broadside, in our Southern licences as part of
Phase 5 of our deepwater drilling campaign, subject to any further
COVID-19 constraints on mobilisation .
In the US Gulf of Mexico, following lease sale 254, blocks GC80
and GC123 were awarded in July 2020 in the central Gulf of Mexico,
building on our Green Canyon position. Block GB721 was also awarded
in June 2020, expanding our western Gulf of Mexico position. As
previously announced, we are the apparent high bidder on Blocks
AC36, AC80, AC81 in the western Gulf of Mexico. We are completing
prospect maturation of the Green Canyon blocks we acquired in the
recent lease sales, with plans to drill an exploration well during
the 2021 calendar year.
In the Gippsland Basin, we participated in a multi-client 3D
seismic survey (non-operated)(6) which is expected to be completed
in the September 2020 quarter.
Petroleum exploration expenditure for the 2020 financial year
was US$564 million, of which US$394 million was expensed.
Copper
Production
FY20 Jun Q20 Jun Q20
vs vs vs
FY20 Jun Q20 FY19 Jun Q19 Mar Q20
------ ------- ----- -------- --------
Copper (kt) 1,724 414 2% (7%) (3%)
Zinc (t) 88,462 13,736 (10%) (39%) (57%)
Uranium (t) 3,678 1,016 3% 4% 31%
Copper - Total copper production increased by two per cent to
1,724 kt. Production of between 1,480 and 1,645 kt is expected in
the 2021 financial year.
For the majority of the June 2020 quarter, our Chilean assets
operated with a reduction in their operational workforces of
approximately 35 per cent to incorporate measures in response to
COVID-19. We have implemented a comprehensive plan for COVID-19
including various hygiene and health controls and a proactive
testing regime for people before entering sites and boarding
transportation. The operating environment across our Chilean assets
is likely to remain challenging, with reductions in our workforce
expected to remain at a similar level during the September 2020
quarter.
Escondida copper production increased by four per cent to 1,185
kt, with record June 2020 quarter concentrator throughput of 382
ktpd lifting annual concentrator throughput to a record 371 ktpd.
This offsets the impact of a three per cent decline in copper
grade, stoppages associated with the social unrest in Chile (7 kt
impact) and a reduced workforce due to COVID-19 preventative
measures. The new records were achieved through continued
improvements in operational and maintenance practices leading to
increased availability and utilisation at the site's three
concentrators. Production of between 940 and 1,030 kt is expected
for the 2021 financial year, with a decline in copper grade of
concentrator feed approximately four per cent. Lower volumes
reflect the need to continue to balance mine development and
production requirements, with processing capacity at concentrators
and leaching plants, as a result of a reduced operational workforce
due to COVID-19. It is expected that production levels are likely
to be impacted in the 2022 financial year as a result of reduced
operational workforce and material movement in the 2021 financial
year. Guidance of an annual average of 1,200 kt of copper
production over the next five years remains unchanged.
Pampa Norte copper production decreased by two per cent to 243
kt, with strong operating performance offset by grade decline of
approximately 14 per cent. Production for the 2021 financial year
is expected to be between 240 and 270 kt, reflecting the reduced
operational workforce due to COVID-19, the start-up of the Spence
Growth Option project and expected grade decline of approximately
seven per cent. On 1 July 2020, Cerro Colorado announced it had
started a four-month process to adjust its mine plan to reduce
throughput and costs to achieve improved cash returns and ensure
viable mining operations for the remaining period of its current
environmental licence, which expires at the end of the 2023
calendar year.
Olympic Dam copper production increased by seven per cent to 172
kt supported by solid underground mine performance with strong
development metres achieved, record grade and the prior period acid
plant outage. This was partially offset by the impact of planned
preparatory work undertaken in the September 2019 quarter related
to the replacement of the refinery crane and unplanned downtime at
the smelter during the March 2020 quarter. The physical replacement
and commissioning of the refinery crane is expected to be completed
in the March 2021 quarter. Underground development into the
Southern Mine Area progressed to plan over the year, and provided
access to higher copper grade ore. Following strong mine
development over a number of years, we plan to draw down surplus
run-of-mine stockpiles. Production for the 2021 financial year is
expected to increase to between 180 and 205 kt. Production for the
2022 financial year is expected to be lower as a result of the
major smelter maintenance campaign planned for the first half of
the year.
Antamina copper production decreased by 15 per cent to 125 kt
and zinc production decreased by 10 per cent to 88 kt, reflecting
lower copper head grades and the impacts of operating with a
reduced workforce and a six-week shutdown during the June 2020
quarter in response to COVID-19. Antamina is ramping back up and
will continue to operate with a reduced workforce, which will
impact material mined in the 2021 financial year. Copper production
of between 120 and 140 kt, and zinc production of between 140 and
160 kt is expected for the 2021 financial year.
Projects
Initial
Capital production
Project and expenditure target
ownership US$M date Capacity Progress
-------------------- ----------- ---------- --------------------------------------------------------------------------------------------- --------------------------------------------------------------------
Spence Growth Option 2,460 FY21 New 95 ktpd concentrator is expected to increase payable copper in concentrate production On budget.
by 185 ktpa in the first 10 years of operation and extend the mining operations by more than
50 years.
(Chile) First production is expected between December 2020 and March 2021.
100% The overall project is 93% complete.
The Spence Growth Option schedule is continuing to progress,
however, as a result of measures put in place to reduce the spread
of COVID-19, first production is now expected between December 2020
and March 2021. The commissioning of the desalination plant and
capitalisation of the associated US$600 million lease (approximate)
will now occur in the first half of the 2021 financial year.
Iron Ore
Production
FY20 Jun Q20 Jun Q20
vs vs vs
FY20 Jun Q20 FY19 Jun Q19 Mar Q20
------- ------- ----- -------- --------
Iron ore production (kt) 248,159 66,729 4% 7% 11%
Iron ore - Total iron ore production increased by four per cent
to a record 248 Mt (281 Mt on a 100 per cent basis). Production of
between 244 and 253 Mt (276 and 286 Mt on a 100 per cent basis) is
expected in the 2021 financial year. We continue with our program
to improve productivity and provide a stable base for our tightly
coupled supply chain and this includes a major maintenance campaign
on car dumper three planned for the September 2020 quarter, with a
corresponding impact expected on production.
WAIO achieved record production, with higher volumes reflecting
record production at Jimblebar and Yandi. Weather impacts from
Tropical Cyclone Blake and Tropical Cyclone Damien, were offset by
strong performance across the supply chain, with significant
improvements in productivity and reliability following a series of
targeted maintenance programs over the past four years. This
enabled WAIO to produce at a record annualised run rate above 300
Mt (100 per cent basis) during the June 2020 quarter.
Consistent with our revised mine plan, the typical specification
of Jimblebar fines improved to above 60 per cent Fe grade in the
June 2020 quarter.
WAIO continues to focus on operating safely and despite the
de-escalation of COVID-19 restrictions in Western Australia, a
series of preventative measures remain in place to minimise the
spread of COVID-19. WAIO has returned to normal shift rosters and
has reopened the Perth office. To meet border controls introduced
by the Western Australian Government, over 900 employees and
contractors in business critical roles temporarily relocated to
Western Australia, including the majority of specialist roles who
are based interstate, such as train drivers and train load out
operators. These employees remain in Western Australia.
Mining and processing operations at Samarco remain suspended
following the failure of the Fundão tailings dam and Santarém water
dam on 5 November 2015. Operation readiness activities for
Samarco's restart have been slowed as a result of a reduced
workforce, as part of the COVID-19 response. Restart can occur when
the filtration system is complete and Samarco has met all necessary
safety requirements, and will be subject to final approval by
Samarco's shareholders.
Projects
Initial
Capital production
Project and expenditure target
ownership US$M date Capacity Progress
------------ ----------- -------------------- ---------------------
South Flank 3,061 Mid-CY21 Sustaining iron On schedule and
ore mine to replace budget.
production from
the 80 Mtpa (100
per cent basis)
Yandi mine.
(Australia) The overall project
is 76% complete.
85%
The South Flank project is tracking well and remains on schedule
for first production in the middle of the 2021 calendar year.
Consistent with our other assets, measures designed to conduct safe
operations in compliance with strict health and travel guidelines
remain in place at South Flank to help reduce the spread of
COVID-19.
Coal
Production
FY20 Jun Q20 Jun Q20
vs vs vs
FY20 Jun Q20 FY19 Jun Q19 Mar Q20
------ -------- ---------------------- ------------------------ ------------------------
Metallurgical coal (kt) 41,118 11,614 (3%) (2%) 26%
Energy coal (kt) 23,167 5,654 (16%) (24%) (2%)
Metallurgical coal - Metallurgical coal production was down
three per cent to 41 Mt (73 Mt on a 100 per cent basis) as a result
of significant wet weather events in the prior quarter and
geotechnical constraints at South Walker Creek . Production is
expected to be between 40 and 44 Mt (71 and 77 Mt on a 100 per cent
basis) in the 2021 financial year, a similar level to the prior
year as it reflects an expected deterioration in market outlook due
to the impact of COVID-19. With Blackwater returning to full
capacity towards the end of the September 2020 quarter after
flooding in the March 2020 quarter, volumes will be weighted to the
second half of the financial year.
At Queensland Coal, strong underlying operational performance,
including record underground coal mined at Broadmeadow and record
annual production at Caval Ridge and Poitrel, was offset by planned
major wash plant shutdowns in the first half of the year and
significantly higher rainfall during January and February 2020
compared with historical averages. Blackwater, our largest mine,
was the most severely impacted , with mining operations stabilised
during the June 2020 quarter and a return to full capacity expected
towards the end of the September 2020 quarter.
Energy coal - Energy coal production decreased by 16 per cent to
23 Mt. Production is expected to be between 22 and 24 Mt in the
2021 financial year. Further potential impacts from COVID-19,
including weak demand, represent possible downside risk to the 2021
financial year guidance.
NSWEC production decreased by 12 per cent to 16 Mt as a result
of the change in product strategy to focus on higher quality
products and unfavourable weather impacts from December 2019 to
February 2020. This was partially offset by a strong performance in
the June 2020 quarter driven by record truck utilisation.
Production is expected to be between 15 and 17 Mt in the 2021
financial year.
Cerrejón production decreased by 23 per cent to 7 Mt due to a
temporary shutdown during the June 2020 quarter in response to
COVID-19, as well as a focus on higher quality products, in line
with the mine plan. The temporary shutdown lasted for approximately
six weeks and allowed for completion of COVID-19 control measures
to meet the Colombian Government's regulations. Production is
expected to be approximately 7 Mt in the 2021 financial year.
Other
Nickel production
FY20 Jun Q20 Jun Q20
vs vs vs
FY20 Jun Q20 FY19 Jun Q19 Mar Q20
---- ------- ----- -------- --------
Nickel (kt) 80.1 23.9 (8%) (17%) 14%
Nickel - Nickel West production decreased by eight per cent to
80 kt due to the major quadrennial maintenance shutdowns at the
Kwinana refinery and the Kalgoorlie smelter, as well as planned
routine maintenance at the concentrators, in the December 2019
quarter. Operations ramped back up to full capacity during the
March 2020 quarter and ran at full capacity during the June 2020
quarter. With the major planned maintenance and the transition to
new mines now complete, total nickel production is expected to
increase to between 85 and 95 kt in the 2021 financial year.
Operations Services - In Australia, we have created 2,800
permanent jobs, with Operations Services deployed at 20 locations
across WAIO, Queensland Coal and NSWEC and successfully
accelerating safety, productivity and efficiency outcomes. In May
2020, Operations Services launched a new national training program
to be delivered through the BHP FutureFit Academy which has been
developed to provide a customised training pathway, utilising
nationally recognised curricula for trade apprenticeships and
maintenance traineeships. The first two FutureFit Academy campuses
opened in Mackay in Queensland and Perth in Western Australia, with
students to graduate and be deployed to an Operations Services
Maintenance team from the 2021 calendar year.
Potash project
Project
and Investment
ownership US$M Scope Progress
------------- ---------- ------------------------------ ----------------------------
Jansen Potash 2,700 Investment to finish The project is 86% complete.
the excavation and lining
of the production and
service shafts, and to
continue the installation
of essential surface
infrastructure and utilities.
(Canada)
100%
In June 2020, final shaft lining work , which was reduced to
focus on one shaft as part of our COVID-19 response, was resumed in
both shafts. Timing for completion of the shafts continues to be
under review. BHP continues to assess the impacts of COVID-19 and
the temporary reduction in construction activity.
Minerals exploration
Minerals exploration expenditure for the 2020 financial year was
US$176 million, of which US$123 million was expensed. Greenfield
minerals exploration is predominantly focused on advancing copper
targets within Chile, Ecuador, Mexico, Peru, Canada, South
Australia and the south-west United States.
At Oak Dam in South Australia, the third phase of the drilling
program was completed in the June 2020 quarter, bringing the total
area drilled to approximately 21,500 m and the results are
currently being analysed. This follows encouraging results from the
previous drilling phases, which confirmed high-grade mineralised
intercepts of copper, with associated gold, uranium and silver.
In June 2020, BHP agreed to acquire the Honeymoon Well
development project and a 50 per cent interest in the Albion Downs
North and Jericho exploration joint ventures from MPI Nickel Pty
Ltd, a wholly owned subsidiary of Norilsk Nickel Australian
Holdings BV. BHP is currently a 50 per cent shareholder in the
Albion Downs North and Jericho Joint Ventures. The combined
tenement package is located in the northern Goldfields region of
Western Australia, approximately 50 km from our Mt Keith mine and
100 km from the Leinster concentrator. Completion of the agreement
is subject to a number of conditions including government and third
party approvals.
Variance analysis relates to the relative performance of BHP
and/or its operations during the 2020 financial year compared with
the 2019 financial year, unless otherwise noted. Production
volumes, sales volumes and capital and exploration expenditure from
subsidiaries are reported on a 100 per cent basis; production and
sales volumes from equity accounted investments and other
operations are reported on a proportionate consolidation basis.
Numbers presented may not add up precisely to the totals provided
due to rounding. Copper equivalent production based on 2020
financial year average realised prices.
The following footnotes apply to this Operational Review:
(1) 2020 financial year unit cost guidance: Petroleum
US$10.50-11.50/boe, Escondida US$1.20-1.35/lb, WAIO US$13-14/t,
Queensland Coal US$67-74/t and NSWEC US$55-61/t; based on exchange
rates of AUD/USD 0.70 and USD/CLP 683.
(2) All data presented in this report is the latest available as of 16 July 2020.
(3) The phrase "economic hibernation" was coined by ANU
Professor's Tourky and Pitchford. It describes the comprehensive
support that the public balance sheet can provide to mitigate the
no-fault unemployment, default and insolvency that the effort to
suppress a pandemic can bring.
(4) Incremental to apparent demand is around 45 Mt in direct net exports of steel.
(5) Underlying EBITDA is used to help assess current operational
profitability excluding the impacts of sunk costs (i.e.
depreciation from initial investment). Underlying EBITDA is
earnings before net finance costs, depreciation, amortisation and
impairments, taxation expense, discontinued operations and
exceptional items. Underlying EBITDA includes BHP's share of
profit/(loss) from investments accounted for using the equity
method including net finance costs, depreciation, amortisation and
impairments and taxation expense/(benefit).
(6) Non-operated CGG, EP:4619.
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 barrels of oil per day (MMbpd); 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 barrels of oil equivalent per day
(Mboe/d); 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 28 'Subsidiaries'
in section 5.1 of BHP's 30 June 2019 Annual Report and 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. Our non-operated assets include Antamina, Cerrejón,
Samarco, Atlantis, Mad Dog, Bass Strait and North West Shelf. BHP
Group cautions against undue reliance on any forward-looking
statement or guidance, particularly in light of the current
economic climate and significant volatility, uncertainty and
disruption, including that caused by the COVID-19 outbreak. These
forward looking statements 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.
Further information on BHP can be found at: bhp.com
Authorised for lodgement by:
Caroline Cox
Group General Counsel and Company Secretary
Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
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Production summary
Quarter ended Year to date
BHP Jun Sep Dec Mar Jun Jun Jun
interest 2019 2019 2019 2020 2020 2020 2019
Petroleum (1)
Petroleum
Production
Crude oil, condensate
and NGL (Mboe) 13,366 12,507 13,412 11,589 11,355 48,863 55,186
Natural gas (bcf) 97.8 100.4 88.7 80.7 89.8 359.6 396.9
Total (Mboe) 29,666 29,240 28,195 25,039 26,322 108,796 121,336
Total petroleum production
(MMboe) 29,666.0 29,240.3 28,195.3 25,045.0 26,317.0 108,797.6 147,267.6
Copper (2)
Copper
Payable metal in
concentrate (kt)
Escondida (3) 57.5% 224.1 237.0 240.3 220.1 228.5 925.9 882.1
Antamina 33.8% 37.4 37.6 36.2 32.9 17.8 124.5 147.2
Total 261.5 274.6 276.5 253.0 246.3 1,050.4 1,029.3
Cathode (kt)
Escondida (3) 57.5% 63.5 55.9 68.4 69.6 65.5 259.4 253.2
Pampa Norte (4) 100% 74.1 63.9 60.0 64.3 54.5 242.7 246.5
Olympic Dam 100% 45.2 35.1 50.5 38.4 47.6 171.6 160.3
Total 182.8 154.9 178.9 172.3 167.6 673.7 660.0
Total copper (kt) 444.3 429.5 455.4 425.3 413.9 1,724.1 1,689.3
Lead
Payable metal in
concentrate (t)
Antamina 33.8% 770 405 383 621 262 1,671 2,389
Total 770 405 383 621 262 1,671 2,389
Zinc
Payable metal in
concentrate (t)
Antamina 33.8% 22,469 20,454 22,483 31,789 13,736 88,462 98,112
Total 22,469 20,454 22,483 31,789 13,736 88,462 98,112
Production summary
Quarter ended Year to date
BHP Jun Sep Dec Mar Jun Jun Jun
interest 2019 2019 2019 2020 2020 2020 2019
Gold
Payable metal in concentrate
(troy oz)
Escondida (3) 57.5% 74,704 48,801 49,209 35,990 43,422 177,422 286,006
Olympic Dam (refined
gold) 100% 37,032 43,205 35,382 33,235 34,150 145,972 106,968
Total 111,736 92,006 84,591 69,225 77,572 323,394 392,974
Silver
Payable metal in concentrate
(troy koz)
Escondida (3) 57.5% 2,074 1,626 1,798 1,390 1,599 6,413 8,830
Antamina 33.8% 1,209 1,101 1,173 1,216 626 4,116 4,758
Olympic Dam (refined
silver) 100% 268 245 203 241 295 984 923
Total 3,551 2,972 3,174 2,847 2,520 11,513 14,511
Uranium
Payable metal in concentrate
(t)
Olympic Dam 100% 975 937 949 776 1,016 3,678 3,565
Total 975 937 949 776 1,016 3,678 3,565
Molybdenum
Payable metal in concentrate
(t)
Antamina 33.8% 178 405 527 491 243 1,666 1,141
Total 178 405 527 491 243 1,666 1,141
Iron Ore
Iron Ore
Production (kt) (5)
Newman 85% 17,058 16,316 15,766 16,449 17,110 65,641 66,622
Area C Joint Venture 85% 13,837 12,620 12,727 12,179 13,973 51,499 47,440
Yandi Joint Venture 85% 17,486 17,827 14,857 17,491 19,087 69,262 65,197
Jimblebar (6) 85% 14,209 14,239 17,045 13,911 16,559 61,754 58,546
Wheelarra 85% 5 3 - - - 3 159
Samarco 50% - - - - - - -
Total 62,595 61,005 60,395 60,030 66,729 248,159 237,964
Production summary
Quarter ended Year to date
BHP Jun Sep Dec Mar Jun Jun Jun
interest 2019 2019 2019 2020 2020 2020 2019
Coal
Metallurgical coal
Production (kt) (7)
BMA 50% 9,090 6,905 8,723 6,869 9,078 31,575 32,136
BHP Mitsui Coal (8) 80% 2,804 2,453 2,201 2,353 2,536 9,543 10,265
Total 11,894 9,358 10,924 9,222 11,614 41,118 42,401
Energy coal
Production (kt)
Australia 100% 5,412 3,592 3,763 3,810 4,887 16,052 18,257
Colombia 33.3% 2,017 2,055 2,315 1,978 767 7,115 9,230
Total 7,429 5,647 6,078 5,788 5,654 23,167 27,487
Other
Nickel
Saleable production
(kt)
Nickel West (9) 100% 28.7 21.6 13.7 20.9 23.9 80.1 87.4
Total 28.7 21.6 13.7 20.9 23.9 80.1 87.4
Cobalt
Saleable production
(t)
Nickel West 100% 302 211 120 132 312 775 899
Total 302 211 120 132 312 775 899
(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 1,000 Mboe.
(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.
Production and sales report
Quarter ended Year to date
Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
Petroleum (1)
Bass Strait
Crude oil and condensate (Mboe) 1,246 1,409 1,427 926 1,231 4,993 5,193
NGL (Mboe) 1,299 1,810 1,405 958 1,493 5,666 5,435
Natural gas (bcf) 30.6 36.6 27.8 18.4 28.1 110.9 111.9
Total petroleum
products (Mboe) 7,645 9,319 7,465 4,957 7,408 29,149 29,278
North West Shelf
Crude oil and condensate (Mboe) 1,357 1,337 1,376 1,266 1,260 5,239 5,822
NGL (Mboe) 189 202 200 191 203 796 830
Natural gas (bcf) 34.8 32.1 32.9 35.0 35.2 135.2 145.5
Total petroleum
products (Mboe) 7,346 6,889 7,059 7,287 7,334 28,569 30,902
Pyrenees
Crude oil and condensate (Mboe) 1,001 979 934 917 971 3,801 3,324
Total petroleum
products (Mboe) 1,001 979 934 917 971 3,801 3,324
Other Australia
(2)
Crude oil and condensate (Mboe) 7 8 1 1 1 11 28
Natural gas (bcf) 12.2 12.0 11.4 11.2 11.9 46.5 52.9
Total petroleum
products (Mboe) 2,040 2,008 1,901 1,874 1,987 7,770 8,845
Atlantis (3)
Crude oil and condensate (Mboe) 3,607 2,759 3,525 2,769 2,223 11,276 14,487
NGL (Mboe) 248 192 245 178 54 669 1,006
Natural gas (bcf) 2.2 1.4 1.8 1.3 1.1 5.6 7.6
Total petroleum
products (Mboe) 4,222 3,184 4,070 3,170 2,456 12,880 16,760
Mad Dog (3)
Crude oil and condensate (Mboe) 1,246 1,096 1,202 1,272 1,297 4,867 4,932
NGL (Mboe) 23 49 52 55 33 189 196
Natural gas (bcf) 0.2 0.2 0.2 0.2 0.3 0.9 0.8
Total petroleum
products (Mboe) 1,302 1,178 1,287 1,355 1,374 5,195 5,261
Shenzi (3)
Crude oil and condensate (Mboe) 1,725 1,345 1,671 1,645 1,584 6,245 7,646
NGL (Mboe) (2) 70 94 94 40 298 353
Natural gas (bcf) 0.4 0.2 0.3 0.3 0.4 1.2 1.6
Total petroleum
products (Mboe) 1,790 1,448 1,815 1,791 1,686 6,740 8,266
Trinidad/Tobago
Crude oil and condensate (Mboe) 235 175 166 97 72 510 1,166
Natural gas (bcf) 17.3 17.9 14.2 14.0 12.8 58.9 74.8
Total petroleum
products (Mboe) 3,118 3,158 2,533 2,427 2,201 10,319 13,633
Production and sales report
Quarter ended Year to date
Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
Other Americas
(3) (4)
Crude oil and condensate (Mboe) 272 185 230 344 198 957 981
NGL (Mboe) 3 2 4 22 5 33 28
Natural gas (bcf) 0.1 - 0.1 0.3 - 0.4 0.4
Total petroleum
products (Mboe) 292 187 251 412 209 1,059 1,076
UK (5)
Crude oil and condensate (Mboe) - - - - - - 72
NGL (Mboe) - - - - - - 42
Natural gas (bcf) - - - - - - 1.4
Total petroleum
products (Mboe) - - - - - - 347
Algeria
Crude oil and condensate (Mboe) 910 889 880 854 690 3,313 3,645
Total petroleum
products (Mboe) 910 889 880 854 690 3,313 3,645
Petroleum (1)
Total production
Crude oil and condensate (Mboe) 11,606 10,182 11,412 10,091 9,527 41,212 47,296
NGL (Mboe) 1,760 2,325 2,000 1,498 1,828 7,651 7,890
Natural gas (bcf) 97.8 100.4 88.7 80.7 89.8 359.6 396.9
Total (Mboe) 29,666 29,240 28,195 25,039 26,322 108,796 121,336
(1) Total boe conversions are based on 6 bcf of natural gas
equals 1,000 Mboe. 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.
Production and sales report
Quarter ended Year to date
----------------------------------------------- ------------------
Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
-------- -------- -------- -------- ------- -------- --------
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile
(1)
Material mined (kt) 100,693 101,026 100,057 107,268 75,062 383,413 417,469
Sulphide ore milled (kt) 32,519 33,956 33,659 33,440 34,755 135,810 125,566
Average concentrator
head grade (%) 0.86% 0.86% 0.87% 0.82% 0.81% 0.84% 0.87%
Production ex
mill (kt) 230.9 245.0 246.1 230.0 236.8 957.9 909.6
Production
Payable copper (kt) 224.1 237.0 240.3 220.1 228.5 925.9 882.1
Copper cathode
(EW) (kt) 63.5 55.9 68.4 69.6 65.5 259.4 253.2
- Oxide leach (kt) 23.4 21.9 28.3 29.3 26.8 106.3 87.2
- Sulphide leach (kt) 40.1 34.1 40.1 40.2 38.7 153.1 165.9
Total copper (kt) 287.6 292.9 308.7 289.7 294.0 1,185.3 1,135.3
(troy
Payable gold concentrate oz) 74,704 48,801 49,209 35,990 43,422 177,422 286,006
Payable silver (troy
concentrate koz) 2,074 1,626 1,798 1,390 1,599 6,413 8,830
Sales
Payable copper (kt) 223.4 222.2 248.3 212.0 221.0 903.5 881.1
Copper cathode
(EW) (kt) 67.5 52.3 70.6 65.9 72.1 260.9 249.6
(troy
Payable gold concentrate oz) 74,704 48,801 49,209 35,990 43,422 177,422 286,007
Payable silver (troy
concentrate koz) 2,074 1,626 1,798 1,390 1,599 6,413 8,830
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Production and sales report
Quarter ended Year to date
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Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
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Pampa Norte, Chile
Cerro Colorado
Material mined (kt) 13,534 15,071 18,102 18,710 15,734 67,617 67,458
Ore milled (kt) 4,740 3,995 5,009 4,574 4,553 18,131 18,888
Average copper
grade (%) 0.64% 0.54% 0.57% 0.54% 0.60% 0.56% 0.60%
Production
Copper cathode
(EW) (kt) 23.4 16.4 13.8 20.4 16.9 67.5 75.2
Sales
Copper cathode
(EW) (kt) 26.8 14.5 15.8 18.3 18.7 67.3 75.1
Spence
Material mined (kt) 19,213 21,040 23,132 23,304 24,082 91,558 82,513
Ore milled (kt) 5,224 5,635 5,133 5,191 2,829 18,788 20,670
Average copper
grade (%) 1.02% 0.95% 0.90% 0.87% 0.95% 0.91% 1.09%
Production
Copper cathode
(EW) (kt) 50.7 47.5 46.2 43.9 37.6 175.2 171.3
Sales
Copper cathode
(EW) (kt) 55.0 46.7 44.3 44.8 41.0 176.8 169.9
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined
(100%) (kt) 58,994 59,299 63,224 52,872 13,975 189,370 242,214
Sulphide ore milled
(100%) (kt) 12,864 13,121 13,637 12,906 6,736 46,400 50,439
Average head grades
- Copper (%) 1.02% 0.99% 0.96% 0.88% 0.91% 0.94% 1.01%
- Zinc (%) 0.86% 0.80% 0.82% 1.09% 1.02% 0.92% 0.92%
Production
Payable copper (kt) 37.4 37.6 36.2 32.9 17.8 124.5 147.2
Payable zinc (t) 22,469 20,454 22,483 31,789 13,736 88,462 98,112
(troy
Payable silver koz) 1,209 1,101 1,173 1,216 626 4,116 4,758
Payable lead (t) 770 405 383 621 262 1,671 2,389
Payable molybdenum (t) 178 405 527 491 243 1,666 1,141
Sales
Payable copper (kt) 36.0 33.1 43.6 30.8 18.2 125.7 143.6
Payable zinc (t) 21,750 20,196 23,808 31,007 11,680 86,691 100,239
(troy
Payable silver koz) 937 954 1,396 815 581 3,746 4,393
Payable lead (t) 296 844 432 151 188 1,615 2,306
Payable molybdenum (t) 127 173 400 531 223 1,327 1,126
Production and sales report
Quarter ended Year to date
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Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
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Olympic Dam,
Australia
Material mined
(1) (kt) 2,425 2,477 2,347 1,920 1,928 8,672 9,094
Ore milled (kt) 2,195 2,200 2,153 2,178 2,416 8,947 7,965
Average copper
grade (%) 2.30% 2.31% 2.36% 2.31% 2.17% 2.28% 2.18%
Average uranium
grade (kg/t) 0.65 0.65 0.71 0.69 0.60 0.66 0.64
Production
Copper cathode
(ER and EW) (kt) 45.2 35.1 50.5 38.4 47.6 171.6 160.3
Payable uranium (t) 975 937 949 776 1,016 3,678 3,565
(troy
Refined gold oz) 37,032 43,205 35,382 33,235 34,150 145,972 106,968
(troy
Refined silver koz) 268 245 203 241 295 984 923
Sales
Copper cathode
(ER and EW) (kt) 50.5 32.1 49.0 41.4 48.5 171.0 158.4
Payable uranium (t) 1,427 778 638 702 1,293 3,411 3,570
(troy
Refined gold oz) 36,133 40,073 36,507 36,956 37,743 151,279 102,664
(troy
Refined silver koz) 257 250 202 259 270 981 891
(1) Material mined refers to run of mine ore mined and hoisted.
Iron Ore
Iron ore production and sales are reported on a wet tonnes
basis.
Pilbara, Australia
Production
Newman (kt) 17,058 16,316 15,766 16,449 17,110 65,641 66,622
Area C Joint
Venture (kt) 13,837 12,620 12,727 12,179 13,973 51,499 47,440
Yandi Joint Venture (kt) 17,486 17,827 14,857 17,491 19,087 69,262 65,197
Jimblebar (1) (kt) 14,209 14,239 17,045 13,911 16,559 61,754 58,546
Wheelarra (kt) 5 3 - - - 3 159
Total production (kt) 62,595 61,005 60,395 60,030 66,729 248,159 237,964
Total production
(100%) (kt) 71,133 69,257 68,044 68,168 75,589 281,058 269,599
Sales
Lump (kt) 15,568 14,785 15,982 15,617 17,252 63,636 58,205
Fines (kt) 48,064 45,509 45,785 44,764 50,904 186,962 180,631
Total (kt) 63,632 60,294 61,767 60,381 68,156 250,598 238,836
Total sales (100%) (kt) 72,173 68,291 69,481 68,439 77,048 283,259 270,205
(1) Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil
(1)
Production (kt) - - - - - - -
Sales (kt) - - - - - - 10
(1) Mining and processing operations remain suspended following
the failure of the Fundão tailings dam and Santarém water dam on 5
November 2015.
Production and sales report
Quarter ended Year to date
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Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
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Coal
Coal production is reported on the
basis of saleable product.
Queensland Coal
Production (1)
BMA
Blackwater (kt) 1,735 1,045 1,734 1,063 1,703 5,545 6,603
Goonyella (kt) 2,620 1,489 2,662 1,963 2,651 8,765 8,563
Peak Downs (kt) 1,649 1,423 1,386 1,339 1,635 5,783 5,933
Saraji (kt) 1,243 1,214 1,325 1,025 1,399 4,963 4,892
Daunia (kt) 669 556 579 447 588 2,170 2,178
Caval Ridge (kt) 1,174 1,178 1,037 1,032 1,102 4,349 3,967
Total BMA (kt) 9,090 6,905 8,723 6,869 9,078 31,575 32,136
Total BMA (100%) (kt) 18,180 13,810 17,446 13,738 18,156 63,150 64,272
BHP Mitsui Coal
(2)
South Walker Creek (kt) 1,624 1,378 1,196 1,577 1,264 5,415 6,194
Poitrel (kt) 1,180 1,075 1,005 776 1,272 4,128 4,071
Total BHP Mitsui
Coal (kt) 2,804 2,453 2,201 2,353 2,536 9,543 10,265
Total Queensland
Coal (kt) 11,894 9,358 10,924 9,222 11,614 41,118 42,401
Total Queensland
Coal (100%) (kt) 20,984 16,263 19,647 16,091 20,692 72,693 74,537
Sales
Coking coal (kt) 7,932 7,299 7,775 7,084 8,325 30,483 30,023
Weak coking coal (kt) 2,942 2,466 2,475 2,335 2,796 10,072 12,095
Thermal coal (kt) 350 94 30 224 183 531 1,027
Total (kt) 11,224 9,859 10,280 9,643 11,304 41,086 43,145
Total (100%) (kt) 19,789 17,145 18,459 16,928 20,074 72,606 75,885
(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) 5,412 3,592 3,763 3,810 4,887 16,052 18,257
Sales
Export thermal coal (kt) 5,181 3,075 3,952 3,403 4,871 15,301 17,068
Inland thermal coal (kt) 975 567 - - - 567 2,002
Total (kt) 6,156 3,642 3,952 3,403 4,871 15,868 19,070
Cerrejón, Colombia
Production (kt) 2,017 2,055 2,315 1,978 767 7,115 9,230
Sales thermal coal
- export (kt) 2,245 2,069 2,261 2,028 1,143 7,501 9,331
Production and sales report
Quarter ended Year to date
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Jun Sep Dec Mar Jun Jun Jun
2019 2019 2019 2020 2020 2020 2019
------ ------ ------ ------ ------ ------- ------
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Mt Keith
Nickel concentrate (kt) 52.8 43.7 31.5 42.8 60.2 178.2 200.4
Average nickel grade (%) 19.5 18.3 17.3 15.8 16.5 16.9 19.3
Leinster
Nickel concentrate (kt) 48.3 67.2 56.6 57.8 72.0 253.6 244.2
Average nickel grade (%) 10.8 10.0 8.6 9.8 10.2 9.7 9.1
Saleable production
Refined nickel (1)
(2) (kt) 19.9 17.4 11.1 16.6 20.5 65.6 73.6
Intermediates and
nickel by-products
(1) (3) (kt) 8.8 4.2 2.6 4.3 3.4 14.5 13.8
Total nickel (1) (kt) 28.7 21.6 13.7 20.9 23.9 80.1 87.4
Cobalt by-products (t) 302 211 120 132 312 775 899
Sales
Refined nickel (1)
(2) (kt) 19.9 17.0 10.6 16.8 19.7 64.1 74.4
Intermediates and
nickel by-products
(1) (3) (kt) 8.4 5.7 2.7 2.9 4.2 15.5 12.8
Total nickel (1) (kt) 28.3 22.7 13.3 19.7 23.9 79.6 87.2
Cobalt by-products (t) 302 212 131 132 312 787 899
(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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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