TIDMBHP

RNS Number : 1944N

BHP Group Limited

19 January 2023

 
Release Time     IMMEDIATE 
Date             19 January 2023 
Release Number   1/23 
 

BHP OPERATIONAL REVIEW

FOR THE HALF YEARED 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 supply 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."

1

 
                            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 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. 
                                   12%             3% 
Iron ore (Mt)                    132.0           66.9  Record production at WAIO in the month of December 2022 due to strong supply chain performance 
                                                        and reduced impacts of labour constraints and wet weather. 
                                    2%             3% 
Metallurgical coal (Mt)           13.6            7.0  Higher volumes due to improved strip ratios and the planned longwall move at Broadmeadow in 
                                                        the prior period, partially offset by continued significant wet weather. 
                                    5%             4% 
Energy coal (Mt)                   5.5            2.9  Higher volumes due to improved operating conditions, including less significant wet weather 
                                                       impacts and reduced labour shortages in the December 2022 quarter, partially offset by planned 
                                                       wash plant maintenance completed in November 2022. 
                                 (24%)             9% 
Nickel (kt)                       38.4           17.7  Lower volumes due to planned maintenance at the smelter and refinery. 
                                  (2%)          (14%) 
 

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.

3

 
                                                                                         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   Operating cash flow 
receivables and payables, 
and other movements 
Settlement of derivative related to the funding of the final FY22 dividend                  210   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                       74   Investing cash flow 
interest in BMC 
Dividends paid to non-controlling interests                                                  527   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.

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. 

4

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.

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.

5

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.

6

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.

7

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.

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 
               expenditure   production 
Project and       US$M         target 
 ownership                      date     Capacity                         Progress 
------------  ------------  -----------  -------------------------------  -------------- 
Jansen Stage         5,723     End-CY26  Design, engineering and          Project is 16% 
 1                                        construction of an underground   complete 
                                          potash mine and surface 
                                          infrastructure, with capacity 
                                          to produce 4.35 Mtpa. 
  (Canada) 
  100% 
 

8

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.

9

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.

10

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

Authorised for lodgement by:

Stefanie Wilkinson

Group Company Secretary

 
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11

Production summary

 
                                                    Quarter ended                    Year to date 
                                     -------------------------------------------  ------------------ 
                             BHP       Dec      Mar      Jun      Sep      Dec       Dec       Dec 
                           interest    2021     2022     2022     2022     2022      2022      2021 
                         ----------  -------  -------  -------  -------  -------  --------  -------- 
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 
 
 

12

Production summary

 
                                                       Quarter ended                    Year to date 
                                        -------------------------------------------  ------------------ 
                                BHP       Dec      Mar      Jun      Sep      Dec       Dec       Dec 
                              interest    2021     2022     2022     2022     2022      2022      2021 
                            ----------  -------  -------  -------  -------  -------  --------  -------- 
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 
 
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.

13

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 
 
                               (troy 
  Payable gold concentrate      oz)      42,937    36,303    45,770    38,236    48,402    86,638    84,899 
                               (troy 
  Payable silver concentrate    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 
                               (troy 
  Payable gold concentrate      oz)      42,937    36,303    45,770    38,236    48,402    86,638    84,899 
                               (troy 
  Payable silver concentrate    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%. 

14

Production and sales report

 
                                                      Quarter ended                   Year to date 
                                       -------------------------------------------  ---------------- 
                                         Dec      Mar      Jun      Sep      Dec      Dec      Dec 
                                         2021     2022     2022     2022     2022     2022     2021 
                                       -------  -------  -------  -------  -------  -------  ------- 
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 
 
                               (troy 
  Payable gold concentrate      oz)      5,776    7,929    8,198    5,521    3,875    9,396   12,743 
                               (troy 
  Payable silver concentrate    koz)       215      261      262      252      245      497      488 
  Payable molybdenum           (t)           -        -       71       34      216      250        - 
  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 
                               (troy 
  Payable gold concentrate      oz)      5,776    7,929    8,198    5,521    3,875    9,396   12,743 
                               (troy 
  Payable silver concentrate    koz)       215      261      262      252      245      497      488 
  Payable molybdenum           (t)           -        -       25       25      216      241        - 
 

15

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 
                            (troy 
  Payable silver             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 
                            (troy 
  Payable silver             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 
                            (troy 
  Refined gold               oz)      37,805   29,355   26,080   47,184   43,280    90,464    64,082 
                            (troy 
  Refined silver             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 
                            (troy 
  Refined gold               oz)      38,768   30,935   24,622   49,542   41,900    91,442    63,422 
                            (troy 
  Refined silver             koz)        290      182       87      320      233       553       416 
 
   1      Material mined refers to underground ore mined, subsequently hoisted or trucked to surface. 

16

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 
 

17

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. 

18

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 
 
 
 
                                         Quarter ended               Year to date 
                                ------------------------------  ---------------------- 
                                  Dec     Mar     Jun     Sep     Dec     Dec     Dec 
                                  2021    2022    2022    2022   2022     2022    2021 
                                ------  ------  ------  ------  ------  ------  ------ 
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. 

19

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