TIDMBHP

RNS Number : 2353M

BHP Group PLC

19 January 2021

 
Release Time     IMMEDIATE 
                 20 January 
Date              2021 
Release Number   01/21 
 

BHP OPERATIONAL REVIEW

FOR THE HALF YEARED 31 DECEMBER 2020

Note: All guidance is subject to further potential impacts from COVID-19 during the 2021 financial year.

-- We achieved another strong operational performance during the half. Measures to counter the risk from COVID-19 remain in place.

-- Record production was achieved at Western Australia Iron Ore (WAIO) and record average concentrator throughput was delivered at Escondida.

-- Group copper equivalent production was broadly flat in the December 2020 half year. Strong underlying operational performance offset the impacts of planned maintenance, natural field decline, copper grade decline and adverse weather.

-- Production guidance for the 2021 financial year remains unchanged for petroleum and metallurgical coal. Iron ore guidance has increased to between 245 and 255 Mt as a result of the restart of Samarco in December 2020. Copper guidance has been narrowed to between 1,510 and 1,645 kt and reflects strong performance at Escondida. Energy coal guidance has been reduced to between 21 and 23 Mt following a 91-day strike at Cerrejón.

-- Full year unit cost guidance(1) (based on exchange rates of AUD/USD 0.70 and USD/CLP 769) remains unchanged for the 2021 financial year.

-- Our major projects under development are progressing to plan. The Spence Growth Option achieved first production in December 2020, on schedule and on budget. The Jansen Stage 1 project remains on track for Final Investment Decision in the middle of the 2021 calendar year. South Flank is tracking well and is on schedule for first production in the middle of the 2021 calendar year.

-- In petroleum, we completed the acquisition of an additional 28% interest in Shenzi, a tier one asset with optionality, on 6 November 2020.

-- The financial results for the December 2020 half year are expected to reflect certain items as summarised in the table on page 3 and includes an impairment charge of between US$1.15 billion and US$1.25 billion post tax (exceptional item) in relation to New South Wales Energy Coal (NSWEC) and associated deferred tax assets .

 
                           Dec H20       Dec Q20 
Production                (vs Dec19)   (vs Sep Q20)  Dec Q20 vs Sep Q20 commentary 
-----------------------  -----------  -------------  ----------------------------------------------------------------------------------------------- 
Petroleum (MMboe)               50.5           23.8  Lower volumes due to Hurricanes Delta and Zeta in the Gulf of Mexico and lower seasonal demand 
                                                     at Bass Strait, partially offset by additional Shenzi volumes from 6 November 2020, on completi 
                                                     on 
                                                     of the acquisition of an increased working interest. 
                               (12%)          (11%) 
Copper (kt)                    841.3          428.1  Higher volumes as a result of quarterly concentrator throughput record at Escondida and planned 
                                                      maintenance at Spence that impacted September 2020 quarter production. 
                                (5%)             4% 
Iron ore (Mt)                  128.4           62.4  Lower volumes at WAIO reflects planned Mining Area C and South Flank major tie-in activity, 
                                                      weather impacts and a temporary power disruption at Yarnima. Samarco 
                                  6%           (6%)    re-commenced iron ore pellet production in December 2020. 
Metallurgical coal (Mt)         19.2            9.5  Lower volumes at Queensland Coal due to significant wet weather events impacting operations 
                                                      and unplanned maintenance at South Walker Creek. 
                                (5%)           (2%) 
Energy coal (Mt)                 8.2            3.6  Lower volumes at NSWEC in response to reduced export shipping capacity at Newcastle Port and 
                                                      lower volumes at Cerrejón as a result of a 91-day strike. 
                               (30%)          (23%) 
Nickel (kt)                     46.2           24.0  Higher volumes due to planned maintenance undertaken in the prior period. 
                                 31%             8% 
 

1

Summary

BHP Chief Executive Officer, Mike Henry:

"BHP delivered strong safety and operational performance in the first half of the 2021 financial year, including record production at Western Australia Iron Ore and concentrator throughput at Escondida.

Overall group production for the half was in line with previous strong results. We achieved a number of milestones, bringing on new production through the Spence Growth Option in Chile and the safe restart of Samarco in Brazil. In petroleum, we increased our stake in the high-quality Shenzi asset and Atlantis Phase 3 began production ahead of schedule. Coal production was impacted by wet weather in Australia and strike action in Colombia.

Our major development projects in iron ore, petroleum and potash are progressing well. We continue to build on our strong foundations, increasing future-facing options in copper and nickel through exploration, partnerships and acquisitions.

We are well positioned to sustainably grow shareholder and social value as the global economy recovers from the pandemic."

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.

 
                                        Dec H20   Dec Q20   Dec Q20       Previous        Current 
                          Dec     Dec        vs        vs        vs           FY21           FY21 
Production                H20     Q20   Dec H19   Dec Q19   Sep Q20       guidance       guidance 
---------------------  ------  ------  --------  --------  --------  -------------  ------------- 
Petroleum (MMboe)        50.5    23.8     (12%)     (16%)     (11%)       95 - 102       95 - 102  Upper half of range 
Copper (kt)             841.3   428.1      (5%)      (6%)        4%  1,480 - 1,645  1,510 - 1,645 
Escondida (kt)          572.2   287.6      (5%)      (7%)        1%    940 - 1,030    970 - 1,030       Narrowed range 
Pampa Norte (kt)         96.8    54.3     (22%)     (10%)       28%      240 - 270      240 - 270            Unchanged 
Olympic Dam (kt)         99.1    47.6       16%      (6%)      (8%)      180 - 205      180 - 205            Unchanged 
Antamina (kt)            73.2    38.6      (1%)        7%       12%      120 - 140      120 - 140            Unchanged 
                                                                                                               Samarco 
Iron ore(i) (Mt)        128.4    62.4        6%        3%      (6%)      244 - 253      245 - 255    1 - 2 Mt for FY21 
WAIO (100% basis) 
 (Mt)                   144.6    70.4        5%        3%      (5%)      276 - 286      276 - 286            Unchanged 
Metallurgical coal 
 (Mt)                    19.2     9.5      (5%)     (13%)      (2%)        40 - 44        40 - 44 
Queensland Coal (100% 
 basis) (Mt)             34.1    17.1      (5%)     (13%)        0%        71 - 77        71 - 77  Lower half of range 
Energy coal (Mt)          8.2     3.6     (30%)     (41%)     (23%)        22 - 24        21 - 23 
NSWEC (Mt)                6.9     3.2      (7%)     (14%)     (11%)        15 - 17        15 - 17            Unchanged 
Cerrejón (Mt)        1.4     0.3     (68%)     (85%)     (67%)             7             6              Lowered 
Nickel (kt)              46.2    24.0       31%       75%        8%        85 - 95        85 - 95            Unchanged 
 

(i) Iron ore comprises WAIO and Samarco (previous FY21 guidance did not include production for Samarco).

2

Summary of disclosures

BHP expects its December 2020 half year financial results 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 16 February 2021. Accordingly the information is subject to update.

 
                                                                          H1 FY21 
                                                                           impact 
Description                                                               US$M(i)                   Classification(ii) 
--------------------------------------------------------------  -----------------  ----------------------------------- 
Gain from optimised settlement outcome for the cancellation of               100                         Other income 
power contracts as part of 
a shift towards 100 per cent renewable energy at Escondida and 
Spence 
Unit costs are expected to be in line with full year guidance                   -                      Operating costs 
(at guidance exchange rates), 
with Petroleum and Escondida tracking towards the lower end of 
guidance and Queensland Coal 
and NSWEC tracking slightly above guidance at H1 FY21 
Note: stronger Australian dollar and weaker Chilean peso than 
guidance rates in the period(iii) 
Business development and evaluation expense for Petroleum                     106   Development and evaluation expense 
Exploration expense (including petroleum and minerals                         237                  Exploration expense 
exploration programs) 
Premiums paid to acquire multi-currency hybrids following the                400                   Net f inance costs 
completion of value accretive 
repurchase programs in September 2020 and November 2020 
The Group's adjusted effective tax rate for H1 FY21 is                          -                     Taxation expense 
expected to be within the guidance 
range of 32 to 37 per cent 
Completion of the transaction to acquire an additional 28 per                480               Investing cash outflow 
cent working interest in Shenzi 
Dividends paid to non-controlling interests                                  750               Financing cash outflow 
Commissioning of the Spence desalination plant and                           600                             Net debt 
capitalisation of the associated lease 
The Group's net debt target range is US$12 to US$17 billion,                    -                             Net debt 
with net debt expected to be 
at the bottom of the range reflecting higher prices and strong 
operational performance partially 
offset by a short-term build in working capital and an adverse 
foreign exchange impact on 
expenses and capital expenditure 
Impairment charge related to property, plant and equipment at       1,150 - 1,250              Exceptional item charge 
NSWEC, and recoverability of 
associated tax losses (after tax) 
Costs directly attributable to COVID-19 (after tax)(iv)                 200 - 250              Exceptional item charge 
Financial impact on BHP Brasil of the Samarco dam failure       Refer footnote(v)              Exceptional item charge 
 
   (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) Average exchange rates for H1 FY21 of AUD/USD 0.72 (guidance rate AUD/USD 0.70) and USD/CLP 771 (guidance rate USD/CLP 769).

(iv) Relates to additional costs incurred at our operated assets for the increased provision of health and hygiene services and the impacts of maintaining social distancing requirements. For example, additional accommodation and cleaning costs at the Spence Growth Option project and additional port costs at WAIO due to quarantine restrictions.

   (v)    Financial impact is the subject of ongoing work and is not yet finalised. 

3

Major development projects

In December 2020, the Spence Growth Option achieved first production on schedule and on budget. Given this, the Spence Growth Option will not be reported in future Operational Reviews.

At the end of December 2020, BHP had four major projects under development in petroleum, iron ore and potash, with a combined budget of US$8.5 billion over the life of the projects. Our major projects under development are tracking to plan.

On 15 January 2021, the Final Environmental Impact Study (FEIS) was published for the Resolution Copper Mining (RCM) project, which is a joint venture between Rio Tinto (55 per cent) and BHP (45 per cent), managed by Rio Tinto. The FEIS and subsequent Land Exchange are steps in an independent governmental, social and environmental assessment and licencing process. Any mine construction is expected to be several years away and will be subject to additional regulatory and government approvals and stakeholder consultation, including with the relevant Native American tribes to seek consent.

The Jansen Stage 1 project in Canada is expected to be presented to the BHP Board for Final Investment Decision in the middle of the 2021 calendar year.

Average realised prices

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

 
                                                                               Dec H20    Dec H20   Dec H20 
                                                                                    vs         vs        vs 
Average realised prices(i)              Dec H20   Dec H19   Jun H20    FY20    Dec H19    Jun H20      FY20 
-------------------------------------  --------  --------  --------  ------  ---------  ---------  -------- 
Oil (crude and condensate) (US$/bbl)      41.40     60.64     37.51   49.53      (32%)        10%     (16%) 
Natural gas (US$/Mscf)(ii)                 3.83      4.26      3.76    4.04      (10%)         2%      (5%) 
LNG (US$/Mscf)                             4.45      7.62      6.87    7.26      (42%)      (35%)     (39%) 
Copper (US$/lb)                            3.32      2.60      2.39    2.50        28%        39%       33% 
Iron ore (US$/wmt, FOB)                  103.78     78.30     76.67   77.36        33%        35%       34% 
Metallurgical coal (US$/t)                97.61    140.94    121.25  130.97      (31%)      (19%)     (25%) 
    Hard coking coal (US$/t)(iii)        106.30    154.01    133.51  143.65      (31%)      (20%)     (26%) 
    Weak coking coal (US$/t)(iii)         73.17    101.06     84.43   92.59      (28%)      (13%)     (21%) 
Thermal coal (US$/t)(iv)                  44.35     58.55     55.91   57.10      (24%)      (21%)     (22%) 
Nickel metal (US$/t)                     15,140    15,715    12,459  13,860       (4%)        22%        9% 
 

(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 7.3 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 pricing 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.

4

At 31 December 2020, the Group had 349 kt of outstanding copper sales that were revalued at a weighted average price of US$3.52 per pound. The final price of these sales will be determined over the remainder of the 2021 financial year. In addition, 304 kt of copper sales from the 2020 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will increase Underlying EBITDA(2) by US$323 million in the 2021 financial year and are included in the average realised copper price in the above table.

Corporate update

BHP expects to recognise an impairment charge of between US$1.15 billion and US$1.25 billion post tax in relation to NSWEC and associated deferred tax assets, resulting in net operating assets of between US$250 million and US$350 million (excluding tax). This reflects current market conditions for Australian thermal coal, the strengthening Australian dollar, changes to the mine plan and updated assessment of the likelihood of recovering tax losses. This will be reported as an exceptional item in the December 2020 half year. The broader carrying value assessment of the Group's assets is ongoing and will be finalised in conjunction with the release of the financial results on 16 February 2021.

During the half year, BHP has successfully reduced gross debt by a total of US$4.1 billion (excluding standard repayments on final maturity). Two multi-currency hybrid repurchase programs were completed (US$1.7 billion on 17 September 2020 and US$1.1 billion on 23 November 2020). The programs were funded from surplus cash, and will reduce future interest costs while also reducing the Group's gross debt balance. The hybrid repurchase programs were strongly value accretive, with this being higher than the premium paid to acquire the hybrids. This premium over book value generated an upfront accounting loss of approximately US$400 million (pre-tax), which will be reported in net finance costs in the December 2020 half year financial results. BHP also redeemed US$1.0 billion of 6.250 per cent hybrid notes on 19 October 2020 and the remaining US$0.3 billion of 6.750 per cent hybrid notes on 30 December 2020. Both redemptions were also completed using surplus cash. BHP remains in a strong liquidity position.

BHP remains committed to supporting the Renova Foundation and its work to progress the remediation and compensatory programs to restore the environment and re-establish communities affected by the Samarco tragedy. Good progress continues to be made with 12th Federal Court of Belo Horizonte in Brazil which is seeking to expedite the remediation process related to the Fundão dam failure. The R$155 billion (approximately US$28 billion) Federal Public Prosecution Office claim remains suspended.

In December 2020, Samarco re-commenced iron ore pellet production as part of a gradual restart of mining and processing operations. BHP has agreed to fund a total of US$765 million in further financial support for the Renova Foundation and Samarco. This comprises US$725 million to fund the Renova Foundation until 31 December 2021, which will be offset against the Group's provision for the Samarco dam failure, and a short-term facility of up to US$40 million(3) to be made available to Samarco until 31 December 2021.

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 16 February 2021. Any financial impacts will continue to be treated as an exceptional item.

5

Petroleum

Production

 
                                                                             Dec H20    Dec Q20    Dec Q20 
                                                                                vs         vs         vs 
                                                         Dec H20   Dec Q20    Dec H19    Dec Q19    Sep Q20 
                                                        --------  --------  ---------  ---------  --------- 
Crude oil, condensate and natural gas liquids (MMboe)         22        11      (14%)      (20%)       (7%) 
Natural gas (bcf)                                            169        79      (10%)      (11%)      (14%) 
Total petroleum production (MMboe)                            50        24      (12%)      (16%)      (11%) 
 

Petroleum - Total petroleum production decreased by 12 per cent to 50 MMboe. Guidance for the 2021 financial year remains unchanged at between 95 and 102 MMboe. Volumes are expected to be in the upper half of the guidance range as additional production from Shenzi, following the acquisition of a further 28 per cent working interest, is partially offset by the impacts of significant hurricane activity in the Gulf of Mexico.

Crude oil, condensate and natural gas liquids production decreased by 14 per cent to 22 MMboe due to lower demand at Bass Strait and North West Shelf, the impacts of planned tie-in and commissioning activities at Atlantis, and natural field decline across the portfolio. Production was further impacted by lower uptime at our Gulf of Mexico assets due to a more active hurricane season. These impacts were partially offset by the earlier than scheduled achievement of first production from the Atlantis Phase 3 project.

Natural gas production decreased by 10 per cent to 169 bcf, reflecting the planned Ruby shutdowns, a decrease in tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract, lower domestic gas sales at Bass Strait and North West Shelf, and natural field decline across the portfolio. This decline was partially offset by higher domestic gas sales at Macedon.

The acquisition of an additional 28 per cent working interest in Shenzi was completed on 6 November 2020. This transaction is consistent with our strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets and brings BHP's working interest to 72 per cent. This adds approximately 11,000 barrels of oil equivalent per day of production (90 per cent oil) as of the transaction closing date of 6 November 2020.

Projects

 
                         Capital       Initial 
                        expenditure   production 
Project and                US$M         target 
 ownership                               date     Capacity                     Progress 
---------------------  ------------  -----------  ---------------------------  ----------------------- 
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 62% 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 86% 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 expected to achieve first production in the 2021 calendar year.

In December 2020, BHP and the North West Shelf joint venture partners executed fully-termed Gas Processing Agreements for processing third-party gas from Pluto and Waitsia projects through the North West Shelf facilities.

6

Petroleum exploration

Exploration and appraisal wells drilled during the December 2020 quarter are summarised below.

 
                                    Formation                                                   Total well 
Well          Location     Target   age          BHP equity           Spud date    Water depth  depth       Status 
------------  -----------  -------  -----------  -------------------  -----------  -----------  ----------  -------- 
              Trinidad & 
               Tobago                                                 20 August 
Broadside-1    Block 3     Oil      Miocene      65% (BHP Operator)    2020        2,019 m      7,064 m     Dry hole 
 
 

In Trinidad and Tobago, the Broadside-1 exploration well in the Southern Licence reached the main reservoir on 22 October 2020 and did not encounter hydrocarbons. The well was a dry hole and was plugged and abandoned on 8 November 2020. The results are under evaluation to determine next steps on the Southern Licences.

In Mexico, we commenced an Ocean Bottom Node seismic acquisition(4) over the Trion field on 9 November 2020, as part of our ongoing evaluation and analysis. The survey was 95 per cent complete as of 31 December 2020 and will be completed in the March 2021 quarter. The results will be incorporated into the current evaluation of the Trion opportunity.

Petroleum exploration expenditure for the December 2020 half year was US$195 million, of which US$181 million was expensed. An approximately US$450 million exploration and appraisal program is being executed for the 2021 financial year.

Copper

Production

 
                                Dec H20   Dec Q20   Dec Q20 
                                   vs        vs        vs 
              Dec H20  Dec Q20   Dec H19   Dec Q19   Sep Q20 
              -------  -------  --------  --------  -------- 
Copper (kt)       841      428      (5%)      (6%)        4% 
Zinc (t)       76,307   41,909       78%       86%       22% 
Uranium (t)     1,819      945      (4%)        0%        8% 
 

Copper - Total copper production decreased by five per cent to 841 kt. Guidance for the 2021 financial year narrowed to between 1,510 and 1,645 kt from between 1,480 and 1,645 kt.

For the December 2020 half year, our Chilean assets operated with a reduction in their operational workforces of approximately 30 per cent as a result of the comprehensive plan we have implemented for COVID-19. The operating environment across our Chilean assets is expected to remain challenging, with reductions in our workforce forecast to remain substantial during the March 2021 quarter.

Escondida copper production decreased by five per cent to 572 kt with record concentrator throughput of 386 ktpd, enabled by improved maintenance practices, offset by the impact of lower concentrator feed grade and lower cathode production. As a result of the reduced operational workforce and the need to balance mine development and production requirements, concentrator throughput continues to be prioritised over cathode production (approximately 30 kt impact on cathode volumes in the December 2020 half year). Guidance for the 2021 financial year has been narrowed to between 970 and 1,030 kt from between 940 and 1,030 kt. Production is also likely to be affected in the 2022 financial year by reduced material movement in the 2021 financial year. Guidance of an annual average of 1.2 Mt of copper production over the next five years remains unchanged.

7

Pampa Norte copper production decreased 22 per cent to 97 kt, largely due to planned maintenance at Spence and the impact of a reduced operational workforce due to COVID-19 preventative measures. The Spence Growth Option achieved first production in December 2020. Guidance for the 2021 financial year remains unchanged at between 240 and 270 kt, reflecting the reduced operational workforce, the start-up of the Spence Growth Option and expected grade decline of approximately five per cent (previously expected to be approximately seven per cent but updated as a result of mine plan optimisation at Spence).

Olympic Dam copper production increased by 16 per cent to 99 kt, reflecting improved smelter stability and strong underground mine performance. The physical replacement and commissioning of the refinery crane remains on track to be completed in the March 2021 quarter. Guidance for the 2021 financial year remains unchanged at between 180 and 205 kt. Production in 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 one per cent to 73 kt and zinc production increased by 78 per cent to a record 76 kt, reflecting lower copper head grades and higher zinc head grades. Guidance for the 2021 financial year remains unchanged with copper production of between 120 and 140 kt, and zinc production of between 140 and 160 kt.

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      First production achieved in December 2020, on schedule and on budget. 
                                               by 185 ktpa in the first 10 years of operation and extend the mining operations by more than 
                                               50 years. 
  (Chile) 
  100% 
 

The Spence Growth Option achieved first copper production in December 2020, with first production of molybdenum expected around the middle of the 2021 calendar year following completion of the molybdenum plant. First copper sales are expected during the March 2021 quarter, while ramp up to full production capacity is expected to take approximately 12 months. The commissioning of the desalination plant and capitalisation of the associated US$600 million lease (approximate) also occurred in December 2020.

Iron Ore

Production

 
                                             Dec H20   Dec Q20   Dec Q20 
                                                vs        vs        vs 
                           Dec H20  Dec Q20   Dec H19   Dec Q19   Sep Q20 
                           -------  -------  --------  --------  -------- 
Iron ore production (kt)   128,434   62,394        6%        3%      (6%) 
 

Iron ore - Total iron ore production increased by six per cent to 128 Mt. Guidance for the 2021 financial year has increased to between 245 and 255 Mt, reflecting the restart of Samarco in December 2020 (between 1 and 2 Mt).

WAIO production increased by six per cent to a six month record 128 Mt (145 Mt on a 100 per cent basis), reflecting record production at Jimblebar and s trong performance across the supply chain, with significant improvements in car dumper productivity and reliability. This was partially offset by weather impacts and the planned Mining Area C and South Flank major tie-in activity . Production in the March 2021 quarter is expected to be impacted by planned Ore Handling Plant maintenance across the mines and continued Mining Area C and South Flank tie-in activity. Guidance for the 2021 financial year remains unchanged at between 244 and 253 Mt (276 and 286 Mt on a 100 per cent basis).

8

Samarco re-commenced iron ore pellet production in December 2020 after meeting the licencing requirements to restart operations at the Germano complex in Minas Gerais and Ubu complex in Espírito Santo, Brazil. Samarco's operations were suspended following the failure of the Fundão dam on 5 November 2015. Samarco's gradual restart of operations incorporates one concentrator at the Germano complex and a pelletising plant at Ubu, as well as a new system of tailings disposal combining a confined pit and tailings filtering system for dry stacking. Production for the 2021 financial year is expected to be between 1 and 2 Mt. Production capacity of approximately 8 Mtpa (100 per cent basis) is expected once ramped up.

Projects

 
                               Initial 
                   Capital  production 
Project and    expenditure      target 
 ownership            US$M        date  Capacity                                                                                    Progress 
-------------  -----------  ----------  ------------------------------------------------------------------------------------------  -------------------------------------- 
South Flank          3,061    Mid-CY21  Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi  On schedule and budget. 
                                         mine. 
  (Australia)                                                                                                                         The overall project is 90% complete. 
  85% 
 

Coal

Production

 
                                            Dec H20   Dec Q20   Dec Q20 
                                               vs        vs        vs 
                          Dec H20  Dec Q20   Dec H19   Dec Q19   Sep Q20 
                          -------  -------  --------  --------  -------- 
Metallurgical coal (kt)    19,212    9,522      (5%)     (13%)      (2%) 
Energy coal (kt)            8,238    3,576     (30%)     (41%)     (23%) 
 

Metallurgical coal - Metallurgical coal production decreased by five per cent to 19 Mt (34 Mt on a 100 per cent basis). G uidance for the 2021 financial year remains unchanged at between 40 and 44 Mt (71 and 77 Mt on a 100 per cent basis) with a stronger second half performance projected in line with our plans. Volumes are expected to be at the lower half of the guidance range following significant wet weather impacts during the December 2020 quarter. We continue to monitor for any potential impacts on volumes from restrictions on coal imports into China.

At Queensland Coal, volumes were lower as a result of planned wash plant maintenance at Saraji and Caval Ridge and significant wet weather impacts from La Niña across most operations. South Walker Creek production decreased largely due to higher strip ratios and lower yields. Poitrel was also impacted by lower yields during the period.

Energy coal - Energy coal production decreased by 30 per cent to 8 Mt. Following a strike at Cerrejón, guidance for the 2021 financial year has been reduced to between 21 and 23 Mt from between 22 and 24 Mt .

NSWEC production decreased by seven per cent to 6.9 Mt. This decrease reflects significant weather impacts and higher strip ratios, as well as lower volumes due to an increased proportion of washed coal in response to reduced port capacity, following damage to a shiploader at the Newcastle port in November 2020, and widening price quality differentials. Guidance for the 2021 financial year remains unchanged at between 15 and 17 Mt.

Cerrejón production decreased by 68 per cent to 1.4 Mt due to a 91-day strike that started on 31 August 2020. During the period, Cerrejón successfully completed negotiations with Sintracarbón and signed a new Collective Labor Agreement, effective from 1 July 2020 to 31 December 2023. Operations restarted in the first week of December 2020 and are continuing to ramp up. The impact of the strike was 1.5 Mt. Guidance for the 2021 financial year has been reduced to approximately 6 Mt from 7 Mt.

9

Other

Nickel production

 
                                Dec H20   Dec Q20   Dec Q20 
                                   vs        vs        vs 
              Dec H20  Dec Q20   Dec H19   Dec Q19   Sep Q20 
              -------  -------  --------  --------  -------- 
Nickel (kt)      46.2     24.0       31%       75%        8% 
 

Nickel - Nickel West production increased by 31 per cent to 46 kt reflecting strong performance from the new mines and improved operational stability following major quadrennial maintenance shutdowns in the prior period. Guidance for the 2021 financial year remains unchanged at between 85 and 95 kt.

Potash project

 
Project and    Investment 
 ownership           US$M  Scope                                                                                 Progress 
-------------  ----------  ------------------------------------------------------------------------------------  ---------------------------- 
Jansen Potash       2,972  Investment to finish the excavation and lining of the production and service shafts,  The project is 89% complete. 
                            and to 
                           continue the installation of essential surface infrastructure and utilities. 
  (Canada) 
  100% 
 

Minerals exploration

Minerals exploration expenditure for the December 2020 half year was US$86 million, of which US$56 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Mexico, Peru, Canada, Australia and the south-west United States.

At Oak Dam in South Australia, following a successful third phase of drilling, the exploration project has been transferred to the Minerals Australia Planning and Technical team for assessment, and next stage resource definition drilling to inform future design is expected to commence around the middle of the 2021 calendar year.

During the half year, we added to our early stage optionality in future facing commodities with a signed agreement with Midland Exploration to undertake a nickel exploration alliance in north-eastern Quebec (August 2020), the completion of the acquisition of the nickel Honeymoon Well tenements and a 50 per cent interest in the Albion Downs North and Jericho exploration joint ventures (September 2020) and an Option Agreement with Encounter Resources covering the 4,500 km(2) prospective Elliott Copper Project in the Northern Territory (September 2020).

10

Variance analysis relates to the relative performance of BHP and/or its operations during the December 2020 half year compared with the December 2019 half year, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis. Numbers presented may not add up precisely to the totals provided due to rounding. Copper equivalent production based on 2020 financial year average realised prices.

The following footnotes apply to this Operational Review:

(1) 2021 financial year unit cost guidance: Petroleum US$11-12/boe, Escondida US$1.00-1.25/lb, WAIO US$13-14/t and Queensland Coal US$69-75/t; based on exchange rates of AUD/USD 0.70 and USD/CLP 769.

(2) 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).

(3) Short-term facility of up to US$40 million includes US$4 million related to the decommissioning of the Germano dam which will be offset against the Group's provision.

(4) Permit: EIA - ASEA/UGI/DGGEERNCM/0122/2018, expediente 28TM2018X0042. CNH Revised Appraisal Plan Approval - Resolucion CNH.14.001/2020.

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', the '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 29 'Subsidiaries' in section 5.1 of BHP's 30 June 2020 Annual Report and Form 20-F. 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, Cerrejón, Samarco, Atlantis, Mad Dog, Bass Strait and North West Shelf. 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.

11

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

Authorised for lodgement by:

Geof Stapledon

Acting Group Company Secretary

 
Media Relations                    Investor Relations 
 
 Email: media.relations@bhp.com     Email: investor.relations@bhp.com 
 
Australia and Asia                 Australia and Asia 
 
 Gabrielle Notley                   Tara Dines 
 Tel: +61 3 9609 3830 Mobile:       Tel: +61 3 9609 2222 Mobile: 
 +61 411 071 715                    +61 499 249 005 
 
 Europe, Middle East and Africa     Europe, Middle East and Africa 
 
 Neil Burrows                       James Bell 
 Tel: +44 20 7802 7484 Mobile:      Tel: +44 20 7802 7144 Mobile: 
 +44 7786 661 683                   +44 7961 636 432 
 
 Americas                           Americas 
 
 Judy Dane                          Brian Massey 
 Tel: +1 713 961 8283 Mobile:       Tel: +1 713 296 7919 Mobile: 
 +1 713 299 5342                    +1 832 870 7677 
 
 
BHP Group Limited ABN 49 004          BHP Group plc Registration 
 028 077                               number 3196209 
 LEI WZE1WSENV6JSZFK0JC28              LEI 549300C116EOWV835768 
 Registered in Australia               Registered in England and Wales 
 Registered Office: Level 18,          Registered Office: Nova South, 
 171 Collins Street                    160 Victoria Street 
 Melbourne Victoria 3000 Australia     London SW1E 5LB United Kingdom 
 Tel +61 1300 55 4757 Fax +61          Tel +44 20 7802 4000 Fax +44 
 3 9609 3015                           20 7802 4111 
 

Members of the BHP Group which is

headquartered in Australia

Follow us on social media

12

Production summary

 
                                                                                              Year to 
                                                           Quarter ended                        date 
                                            -------------------------------------------  ---------------- 
                                    BHP       Dec      Mar      Jun      Sep      Dec      Dec      Dec 
                                  interest    2019     2020     2020     2020     2020     2020     2019 
                                ----------  -------  -------  -------  -------  -------  -------  ------- 
 Petroleum (1) 
 Petroleum 
 Production 
  Crude oil, condensate 
   and NGL (Mboe)                            13,412   11,589   11,355   11,507   10,729   22,236   25,919 
  Natural gas (bcf)                            88.7     80.7     89.8     90.9     78.5    169.4    189.1 
 
  Total (Mboe)                               28,195   25,039   26,322   26,657   23,812   50,469   57,436 
 
 
 Copper (2) 
 Copper 
 Payable metal in concentrate 
  (kt) 
  Escondida (3)                    57.5%      240.3    220.1    228.5    236.7    236.7    473.4    477.3 
  Pampa Norte (4)                 100.0%          -        -        -        -      0.7      0.7        - 
  Antamina                         33.8%       36.2     32.9     17.8     34.6     38.6     73.2     73.8 
 
  Total                                       276.5    253.0    246.3    271.3    276.0    547.3    551.1 
 
 
 Cathode (kt) 
  Escondida (3)                    57.5%       68.4     69.6     65.5     47.9     50.9     98.8    124.3 
  Pampa Norte (4)                  100%        60.0     64.3     54.5     42.5     53.6     96.1    123.9 
  Olympic Dam                      100%        50.5     38.4     47.6     51.5     47.6     99.1     85.6 
 
  Total                                       178.9    172.3    167.6    141.9    152.1    294.0    333.8 
 
 Total copper (kt)                            455.4    425.3    413.9    413.2    428.1    841.3    884.9 
 
 
 Lead 
 Payable metal in concentrate 
  (t) 
  Antamina                         33.8%        383      621      262      690      993    1,683      788 
 
  Total                                         383      621      262      690      993    1,683      788 
 
 
 Zinc 
 Payable metal in concentrate 
  (t) 
  Antamina                         33.8%     22,483   31,789   13,736   34,398   41,909   76,307   42,937 
 
  Total                                      22,483   31,789   13,736   34,398   41,909   76,307   42,937 
 
 

13

Production summary

 
                                                    Quarter ended                    Year to date 
                                     -------------------------------------------  ------------------ 
                             BHP       Dec      Mar      Jun      Sep      Dec       Dec       Dec 
                           interest    2019     2020     2020     2020     2020      2020      2019 
                         ----------  -------  -------  -------  -------  -------  --------  -------- 
 Gold 
 Payable metal in concentrate 
  (troy oz) 
  Escondida (3)             57.5%     49,209   35,990   43,422   42,332   47,789    90,121    98,010 
  Olympic Dam (refined 
   gold)                    100%      35,382   33,235   34,150   36,608   23,837    60,445    78,587 
 
  Total                               84,591   69,225   77,572   78,940   71,626   150,566   176,597 
 
 
 Silver 
 Payable metal in concentrate 
  (troy koz) 
  Escondida (3)             57.5%      1,798    1,390    1,599    1,580    1,627     3,207     3,424 
  Antamina                  33.8%      1,173    1,216      626    1,326    1,767     3,093     2,274 
  Olympic Dam (refined 
   silver)                  100%         203      241      295      157      193       350       448 
 
  Total                                3,174    2,847    2,520    3,063    3,587     6,650     6,146 
 
 
 Uranium 
 Payable metal in 
  concentrate (t) 
  Olympic Dam               100%         949      776    1,016      874      945     1,819     1,886 
 
  Total                                  949      776    1,016      874      945     1,819     1,886 
 
 
 Molybdenum 
 Payable metal in 
  concentrate (t) 
  Antamina                  33.8%        527      491      243      284      192       476       932 
 
  Total                                  527      491      243      284      192       476       932 
 
 
 Iron Ore 
 Iron Ore 
 Production (kt) 
  (5) 
  Newman                     85%      15,766   16,449   17,110   16,410   17,637    34,047    32,082 
  Area C Joint Venture       85%      12,727   12,179   13,973   11,889   11,567    23,456    25,347 
  Yandi Joint Venture        85%      14,857   17,491   19,087   17,666   16,413    34,079    32,684 
  Jimblebar (6)              85%      17,045   13,911   16,559   20,075   16,740    36,815    31,284 
  Wheelarra                  85%           -        -        -        -        -         -         3 
  Samarco                    50%           -        -        -        -       37        37         - 
 
  Total                               60,395   60,030   66,729   66,040   62,394   128,434   121,400 
 
 

14

Production summary

 
                                                  Quarter ended                 Year to date 
                                    ----------------------------------------  ---------------- 
                            BHP       Dec      Mar     Jun      Sep     Dec     Dec      Dec 
                          interest    2019     2020    2020     2020    2020    2020     2019 
                        ----------  -------  ------  -------  ------  ------  -------  ------- 
 Coal 
 Metallurgical coal 
 Production (kt) 
  (7) 
  BMA                       50%       8,723   6,869    9,078   7,365   7,539   14,904   15,628 
  BHP Mitsui Coal (8)       80%       2,201   2,353    2,536   2,325   1,983    4,308    4,654 
 
  Total                              10,924   9,222   11,614   9,690   9,522   19,212   20,282 
 
 
 Energy coal 
 Production (kt) 
  NSW Energy Coal          100%       3,763   3,810    4,887   3,624   3,229    6,853    7,355 
  Cerrejón            33.3%      2,315   1,978      767   1,038     347    1,385    4,370 
 
  Total                               6,078   5,788    5,654   4,662   3,576    8,238   11,725 
 
 
 Other 
 Nickel 
 Saleable production 
  (kt) 
  Nickel West (9)          100%        13.7    20.9     23.9    22.2    24.0     46.2     35.3 
 
  Total                                13.7    20.9     23.9    22.2    24.0     46.2     35.3 
 
 
 Cobalt 
 Saleable production 
  (t) 
  Nickel West              100%         120     132      312     238     236      474      331 
 
  Total                                 120     132      312     238     236      474      331 
 
 

(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.

15

Production and sales report

 
                                                    Quarter ended                Year to date 
                                       --------------------------------------  ---------------- 
                                         Dec     Mar     Jun     Sep     Dec     Dec      Dec 
                                         2019    2020    2020    2020    2020    2020     2019 
                                       ------  ------  ------  ------  ------  -------  ------- 
 Petroleum (1) 
 Bass Strait 
  Crude oil and condensate    (Mboe)    1,427     926   1,231   1,305   1,003    2,308    2,836 
  NGL                         (Mboe)    1,405     958   1,493   1,660   1,057    2,717    3,215 
  Natural gas                 (bcf)      27.8    18.4    28.1    34.1    23.4     57.5     64.4 
 
  Total petroleum 
   products                   (Mboe)    7,465   4,957   7,408   8,648   5,960   14,608   16,784 
 
 
 North West Shelf 
  Crude oil and condensate    (Mboe)    1,376   1,266   1,260   1,215   1,180    2,395    2,713 
  NGL                         (Mboe)      200     191     203     162     165      327      402 
  Natural gas                 (bcf)      32.9    35.0    35.2    29.6    30.4     60.0     65.0 
 
  Total petroleum 
   products                   (Mboe)    7,059   7,287   7,334   6,310   6,412   12,722   13,948 
 
 
 Pyrenees 
  Crude oil and condensate    (Mboe)      934     917     971     837     826    1,663    1,913 
 
  Total petroleum 
   products                   (Mboe)      934     917     971     837     826    1,663    1,913 
 
 
 Other Australia 
  (2) 
  Crude oil and condensate    (Mboe)        1       1       1       1       1        2        9 
  Natural gas                 (bcf)      11.4    11.2    11.9    12.7    12.6     25.3     23.4 
 
  Total petroleum 
   products                   (Mboe)    1,901   1,874   1,987   2,118   2,101    4,219    3,909 
 
 
 Atlantis (3) 
  Crude oil and condensate    (Mboe)    3,525   2,769   2,223   2,421   2,385    4,806    6,284 
  NGL                         (Mboe)      245     178      54     154     147      301      437 
  Natural gas                 (bcf)       1.8     1.3     1.1     1.2     1.1      2.3      3.2 
 
  Total petroleum 
   products                   (Mboe)    4,070   3,170   2,456   2,775   2,715    5,490    7,254 
 
 
 Mad Dog (3) 
  Crude oil and condensate    (Mboe)    1,202   1,272   1,297   1,211     930    2,141    2,298 
  NGL                         (Mboe)       52      55      33      48      38       86      101 
  Natural gas                 (bcf)       0.2     0.2     0.3     0.2     0.1      0.3      0.4 
 
  Total petroleum 
   products                   (Mboe)    1,287   1,355   1,374   1,292     985    2,277    2,466 
 
 
 Shenzi (3) (4) 
  Crude oil and condensate    (Mboe)    1,671   1,645   1,584   1,395   1,764    3,159    3,016 
  NGL                         (Mboe)       94      94      40      71      87      158      164 
  Natural gas                 (bcf)       0.3     0.3     0.4     0.3     0.3      0.6      0.5 
 
  Total petroleum 
   products                   (Mboe)    1,815   1,791   1,686   1,516   1,901    3,417    3,263 
 
 
 Trinidad/Tobago 
  Crude oil and condensate    (Mboe)      166      97      72     102      96      198      341 
  Natural gas                 (bcf)      14.2    14.0    12.8    12.8    10.5     23.3     32.1 
 
  Total petroleum 
   products                   (Mboe)    2,533   2,427   2,201   2,235   1,846    4,081    5,691 
 
 
 Other Americas 
  (3) (5) 
  Crude oil and condensate    (Mboe)      230     344     198     212     190      402      415 
  NGL                         (Mboe)        4      22       5       2      11       13        6 
  Natural gas                 (bcf)       0.1     0.3       -       -     0.1      0.1      0.1 
 
  Total petroleum 
   products                   (Mboe)      251     412     209     214     218      432      438 
 
 

16

Production and sales report

 
                                                           Quarter ended                      Year to date 
                                       ----------------------------------------------------  ------------- 
                                         Dec      Mar      Jun      Sep      Dec      Dec         Dec 
                                         2019     2020     2020     2020     2020     2020        2019 
                                       -------  -------  -------  -------  -------  -------  ------------- 
 Algeria 
  Crude oil and condensate    (Mboe)       880      854      690      711      849    1,560          1,769 
 
  Total petroleum 
   products                   (Mboe)       880      854      690      711      849    1,560          1,769 
 
 
 Petroleum (1) 
 
 Total production 
  Crude oil and condensate    (Mboe)    11,412   10,091    9,527    9,410    9,224   18,634         21,594 
  NGL                         (Mboe)     2,000    1,498    1,828    2,097    1,505    3,602          4,325 
  Natural gas                 (bcf)       88.7     80.7     89.8     90.9     78.5    169.4          189.1 
 
  Total                       (Mboe)    28,195   25,039   26,322   26,657   23,812   50,469         57,436 
 
 
 

(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. Minerva ceased production in September 2019. 
   (3)    Gulf of Mexico volumes are net of royalties. 

(4) BHP completed the acquisition of an additional 28% working interest in Shenzi on 6 November 2020, taking its total working interest to 78%.

   (5)    Other Americas includes Neptune, Genesis and Overriding Royalty Interest. 
 
 Copper 
 Metals production is payable metal unless 
  otherwise stated. 
 
 Escondida, Chile (1) 
  Material mined                (kt)     100,057   107,268   75,062   83,357   97,274   180,631   201,083 
  Sulphide ore milled           (kt)      33,659    33,440   34,755   34,733   36,303    71,036    67,615 
  Average concentrator 
   head grade                   (%)        0.87%     0.82%    0.81%    0.85%    0.83%     0.84%     0.86% 
  Production ex mill            (kt)       246.1     230.0    236.8    243.9    246.1     490.0     491.1 
 
 Production 
  Payable copper                (kt)       240.3     220.1    228.5    236.7    236.7     473.4     477.3 
  Copper cathode (EW)           (kt)        68.4      69.6     65.5     47.9     50.9      98.8     124.3 
   - Oxide leach                (kt)        28.3      29.3     26.8     15.3     18.0      33.3      50.2 
   - Sulphide leach             (kt)        40.1      40.2     38.7     32.6     32.9      65.5      74.2 
 
  Total copper                  (kt)       308.7     289.7    294.0    284.6    287.6     572.2     601.6 
 
 
                                (troy 
  Payable gold concentrate       oz)      49,209    35,990   43,422   42,332   47,789    90,121    98,010 
                                (troy 
  Payable silver concentrate     koz)      1,798     1,390    1,599    1,580    1,627     3,207     3,424 
 
 Sales 
  Payable copper                (kt)       248.3     212.0    221.0    237.1    244.3     481.4     470.5 
  Copper cathode (EW)           (kt)        70.6      65.9     72.1     46.5     47.7      94.2     122.9 
                                (troy 
  Payable gold concentrate       oz)      49,209    35,990   43,422   42,332   47,789    90,121    98,010 
                                (troy 
  Payable silver concentrate     koz)      1,798     1,390    1,599    1,580    1,627     3,207     3,424 
 
 
 
   (1)      Shown on a 100% basis. BHP interest in saleable production is 57.5%. 

17

Production and sales report

 
                                                Quarter ended                    Year to date 
                                 -------------------------------------------  ------------------ 
                                   Dec      Mar      Jun      Sep      Dec       Dec       Dec 
                                   2019     2020     2020     2020     2020      2020      2019 
                                 -------  -------  -------  -------  -------  --------  -------- 
 Pampa Norte, Chile 
  Cerro Colorado 
  Material mined         (kt)     18,102   18,710   15,734   12,618    6,750    19,368    33,173 
  Ore milled             (kt)      5,009    4,574    4,553    4,036    3,562     7,598     9,004 
  Average copper 
   grade                 (%)       0.57%    0.54%    0.60%    0.66%    0.58%     0.62%     0.56% 
 
 Production 
  Copper cathode 
   (EW)                  (kt)       13.8     20.4     16.9     15.8     15.8      31.6      30.2 
 
 Sales 
  Copper cathode 
   (EW)                  (kt)       15.8     18.3     18.7     14.6     16.6      31.2      30.3 
 
  Spence 
  Material mined         (kt)     23,132   23,304   24,082   18,260   18,485    36,745    44,172 
  Ore milled (1)         (kt)      5,133    5,191    2,829    4,408    6,809    11,217    10,768 
  Average copper 
   grade (2)             (%)       0.90%    0.87%    0.95%    1.10%    0.76%     0.89%     0.93% 
 
 Production 
  Payable copper         (kt)          -        -        -        -      0.7       0.7         - 
  Copper cathode 
   (EW)                  (kt)       46.2     43.9     37.6     26.7     37.8      64.5      93.7 
 
 Sales 
  Payable copper         (kt)          -        -        -        -        -         -         - 
  Copper cathode 
   (EW)                  (kt)       44.3     44.8     41.0     24.1     40.9      65.0      91.0 
 
                                 (1) December 2020 quarter comprised of preliminary concentrator 
                                      throughput of 1,207 kt and cathode throughput of 5,602 kt. 
                                       (2) December 2020 quarter weighted average of preliminary 
                                          concentrate grade of 0.43% and cathode grade of 0.83%. 
 Copper (continued) 
 Metals production is payable metal unless 
  otherwise stated. 
 
 Antamina, Peru 
  Material mined 
   (100%)                (kt)     63,224   52,872   13,975   45,458   57,029   102,487   122,523 
  Sulphide ore milled 
   (100%)                (kt)     13,637   12,906    6,736   13,202   14,083    27,285    26,758 
  Average head grades 
   - Copper              (%)       0.96%    0.88%    0.91%    0.94%    0.97%     0.96%     0.97% 
   - Zinc                (%)       0.82%    1.09%    1.02%    1.30%    1.30%     1.30%     0.81% 
 
 Production 
  Payable copper         (kt)       36.2     32.9     17.8     34.6     38.6      73.2      73.8 
  Payable zinc           (t)      22,483   31,789   13,736   34,398   41,909    76,307    42,937 
                         (troy 
  Payable silver          koz)     1,173    1,216      626    1,326    1,767     3,093     2,274 
  Payable lead           (t)         383      621      262      690      993     1,683       788 
  Payable molybdenum     (t)         527      491      243      284      192       476       932 
 
 Sales 
  Payable copper         (kt)       43.6     30.8     18.2     33.8     40.7      74.5      76.7 
  Payable zinc           (t)      23,808   31,007   11,680   32,769   45,109    77,878    44,004 
                         (troy 
  Payable silver          koz)     1,396      815      581    1,310    1,728     3,038     2,350 
  Payable lead           (t)         432      151      188      748      945     1,693     1,276 
  Payable molybdenum     (t)         400      531      223      392      352       744       573 
 

18

Production and sales report

 
                                                        Quarter ended                      Year to date 
                                    ----------------------------------------------------  ------------- 
                                      Dec      Mar      Jun      Sep      Dec      Dec         Dec 
                                      2019     2020     2020     2020     2020     2020        2019 
                                    -------  -------  -------  -------  -------  -------  ------------- 
 Olympic Dam, Australia 
  Material mined 
   (1)                     (kt)       2,347    1,920    1,928    2,203    2,379    4,582          4,824 
  Ore milled               (kt)       2,153    2,178    2,416    2,443    2,377    4,820          4,353 
  Average copper 
   grade                   (%)        2.36%    2.31%    2.17%    2.03%    2.02%    2.03%          2.33% 
  Average uranium 
   grade                   (kg/t)      0.71     0.69     0.60     0.53     0.60     0.56           0.68 
 
 Production 
  Copper cathode 
   (ER and EW)             (kt)        50.5     38.4     47.6     51.5     47.6     99.1           85.6 
  Payable uranium          (t)          949      776    1,016      874      945    1,819          1,886 
                           (troy 
  Refined gold              oz)      35,382   33,235   34,150   36,608   23,837   60,445         78,587 
                           (troy 
  Refined silver            koz)        203      241      295      157      193      350            448 
 
 Sales 
  Copper cathode 
   (ER and EW)             (kt)        49.0     41.4     48.5     49.5     46.6     96.1           81.1 
  Payable uranium          (t)          638      702    1,293      859      999    1,858          1,416 
                           (troy 
  Refined gold              oz)      36,507   36,956   37,743   36,054   21,390   57,444         76,580 
                           (troy 
  Refined silver            koz)        202      259      270      222      165      387            452 
 
   (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. 
 
 Western Australia Iron Ore, Australia 
 Production 
  Newman              (kt)     15,766         16,449   17,110   16,410   17,637    34,047       32,082 
  Area C Joint 
   Venture            (kt)     12,727         12,179   13,973   11,889   11,567    23,456       25,347 
  Yandi Joint 
   Venture            (kt)     14,857         17,491   19,087   17,666   16,413    34,079       32,684 
  Jimblebar (1)       (kt)     17,045         13,911   16,559   20,075   16,740    36,815       31,284 
  Wheelarra           (kt)          -              -        -        -        -         -            3 
 
  Total production    (kt)     60,395         60,030   66,729   66,040   62,357   128,397      121,400 
 
  Total production 
   (100%)             (kt)     68,044         68,168   75,589   74,152   70,407   144,559      137,301 
 
 
 Sales 
  Lump                (kt)     15,982         15,617   17,252   17,056   16,703    33,759       30,767 
  Fines               (kt)     45,785         44,764   50,904   48,390   46,124    94,514       91,294 
 
  Total               (kt)     61,767         60,381   68,156   65,446   62,827   128,273      122,061 
 
  Total sales 
   (100%)             (kt)     69,481         68,439   77,048   73,355   70,772   144,127      137,772 
 
 
 
   (1)      Shown on a 100% basis. BHP interest in saleable production is 85%. 
 
 Samarco, Brazil 
  (1) 
 Production         (kt)     -    -    -    -   37   37   - 
 
 Sales              (kt)     -    -    -    -    -    -   - 
 
 

(1) Samarco commenced iron ore pellet production in December 2020 after meeting the licencing requirements to restart operations at the Germano complex in Minas Gerais and Ubu complex in Espírito Santo, Brazil.

19

Production and sales report

 
                                                 Quarter ended                   Year to date 
                                  -------------------------------------------  ---------------- 
                                    Dec      Mar      Jun      Sep      Dec      Dec      Dec 
                                    2019     2020     2020     2020     2020     2020     2019 
                                  -------  -------  -------  -------  -------  -------  ------- 
 Coal 
 Coal production is reported on the basis 
  of saleable product. 
 
 Queensland Coal, 
  Australia 
 Production (1) 
 BMA 
  Blackwater              (kt)      1,734    1,063    1,703    1,184    1,737    2,921    2,779 
  Goonyella               (kt)      2,662    1,963    2,651    2,312    2,152    4,464    4,151 
  Peak Downs              (kt)      1,386    1,339    1,635    1,487    1,213    2,700    2,809 
  Saraji                  (kt)      1,325    1,025    1,399      817    1,043    1,860    2,539 
  Daunia                  (kt)        579      447      588      490      464      954    1,135 
  Caval Ridge             (kt)      1,037    1,032    1,102    1,075      930    2,005    2,215 
 
  Total BMA               (kt)      8,723    6,869    9,078    7,365    7,539   14,904   15,628 
 
  Total BMA (100%)        (kt)     17,446   13,738   18,156   14,730   15,078   29,808   31,256 
 
 
 BHP Mitsui Coal (2) 
  South Walker Creek      (kt)      1,196    1,577    1,264    1,238    1,118    2,356    2,574 
  Poitrel                 (kt)      1,005      776    1,272    1,087      865    1,952    2,080 
 
  Total BHP Mitsui 
   Coal                   (kt)      2,201    2,353    2,536    2,325    1,983    4,308    4,654 
 
  Total Queensland 
   Coal                   (kt)     10,924    9,222   11,614    9,690    9,522   19,212   20,282 
 
  Total Queensland 
   Coal (100%)            (kt)     19,647   16,091   20,692   17,055   17,061   34,116   35,910 
 
 
 Sales 
 BMA 
  Coking coal             (kt)      7,179    6,417    7,547    6,187    6,531   12,718   13,737 
  Weak coking coal        (kt)        971      644    1,040      977      936    1,913    1,605 
  Thermal coal            (kt)         30      224      183       58        3       61      124 
 
  Total BMA               (kt)      8,180    7,285    8,770    7,222    7,470   14,692   15,466 
 
  Total BMA (100%)        (kt)     16,360   14,570   17,540   14,444   14,940   29,384   30,932 
 
 
 BHP Mitsui Coal (2) 
  Coking coal             (kt)        596      667      778      671      604    1,275    1,337 
  Weak coking coal        (kt)      1,504    1,691    1,756    1,545    1,518    3,063    3,336 
 
  Total BHP Mitsui 
   Coal                   (kt)      2,100    2,358    2,534    2,216    2,122    4,338    4,673 
 
  Total Queensland 
   Coal                   (kt)     10,280    9,643   11,304    9,438    9,592   19,030   20,139 
 
  Total Queensland 
   Coal (100%)            (kt)     18,460   16,928   20,074   16,660   17,062   33,722   35,605 
 
 
 
   (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)    3,763   3,810   4,887   3,624   3,229   6,853   7,355 
 
 Sales 
  Export thermal coal          (kt)    3,952   3,403   4,871   3,168   3,940   7,108   7,027 
  Inland thermal coal 
   (1)                         (kt)        -       -       -       -       -       -     567 
 
  Total                        (kt)    3,952   3,403   4,871   3,168   3,940   7,108   7,594 
 
 
   (1)   The domestic sales contract ended in the September 2019 quarter. 
 
 Cerrejón, Colombia 
 Production                 (kt)    2,315   1,978     767   1,038   347   1,385   4,370 
 
 Sales thermal coal 
  - export                  (kt)    2,261   2,028   1,143     994   370   1,364   4,330 
 

20

Production and sales report

 
                                                     Quarter ended                        Year to date 
                                  --------------------------------------------------  -------------------- 
                                    Dec      Mar     Jun     Sep     Dec      Dec              Dec 
                                    2019     2020    2020    2020    2020     2020             2019 
                                  -------  ------  ------  ------  ------  ---------  -------------------- 
 Other 
 Nickel production is reported on the basis of saleable product 
 
 Nickel West, Australia 
 Mt Keith 
  Nickel concentrate              (kt)      31.5    42.8    60.2    64.4      55.7      120.1       75.2 
  Average nickel 
   grade                          (%)       17.3    15.8    16.5    15.8      14.7       15.3       17.9 
 
 Leinster 
  Nickel concentrate              (kt)      56.6    57.8    72.0    66.2      72.8      139.0      123.8 
  Average nickel 
   grade                          (%)        8.6     9.8    10.2     9.0      9.5        9.3        9.4 
 
 Saleable production 
  Refined nickel 
   (1) (2)                        (kt)      11.1    16.6    20.5    17.3      20.4       37.7       28.5 
  Intermediates and 
   nickel by-products 
   (1) (3)                        (kt)       2.6     4.3     3.4     4.9      3.6        8.5        6.8 
 
  Total nickel (1)                (kt)      13.7    20.9    23.9    22.2      24.0       46.2       35.3 
 
 
  Cobalt by-products              (t)        120     132     312     238      236        474        331 
 
 Sales 
  Refined nickel 
   (1) (2)                        (kt)      10.6    16.8    19.7    17.1      20.9       38.0       27.6 
  Intermediates and 
   nickel by-products 
   (1) (3)                        (kt)       2.7     2.9     4.2     4.6      2.6        7.2        8.4 
 
  Total nickel (1)                (kt)      13.3    19.7    23.9    21.7      23.5       45.2       36.0 
 
  Cobalt by-products              (t)        131     132     312     238      237        475        343 
 
 
   (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. 

21

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

DRLEAFFNFFPFEAA

(END) Dow Jones Newswires

January 20, 2021 02:00 ET (07:00 GMT)