REG - BHP Group Limited - BHP FY2023 Results Announcement
22/08/2023 07:00
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RNS Number : 9945J BHP Group Limited 21 August 2023
Financial results for the year ended 30 June 2023 22 August 2023
News release 14/23
Strong financial performance underpinned by reliable operations and
disciplined cost control.
The tragic deaths of two of our colleagues during the year have been deeply
felt. Our absolute priority remains eliminating fatalities and serious
injuries at BHP.
Our financial results for the year were strong, underpinned by reliable
production together with capital and cost discipline as we managed lower
commodity prices and inflationary pressures. Our balance sheet is robust and
deliberately positioned to support portfolio growth in commodities the world
needs for population growth, urbanisation and decarbonisation.
In Canada, our investment in potash is progressing at pace with first
production at Jansen on track for the latter half of 2026, and we are creating
a new copper province in South Australia following the acquisition of OZ
Minerals. We are investing strategically in new ideas, technologies and
countries through exploration and early-stage copper and nickel prospects to
capture future growth opportunities.
We continue to build an inclusive, high-performance culture and a more
sustainable business, which are key to our future competitiveness and ability
to deliver sector-leading returns. Today, more than 35% of our employees are
female and we have increased Indigenous employee representation globally. We
are taking action to reduce our operational GHG emissions through renewable
electricity supplies and supporting the development of electric trucks, trains
and light vehicles. As of today, BHP has among the lowest absolute operational
GHG emissions of the major miners.
Commodity demand has remained relatively robust in China and India even as
developed world economies have slowed substantially. In the near term, China's
trajectory is contingent on the effectiveness of recent policy measures. We
expect buoyant growth in India with strong construction activity underpinning
an expansion in steelmaking capacity. More broadly, there is increased
recognition of the importance of critical minerals and strategies across the
globe to incentivise investment in supply and demand, which provides
opportunities and challenges.
Mike Henry
BHP Chief Executive Officer
Safety Operational performance
Two fatalities Iron ore Up 1% Copper Up 9% Nickel Up 4%
We continue to improve our systems, processes and engineered controls, and We achieved production records at Western Australia Iron Ore (WAIO), Olympic
emphasise the safety culture that must be present every day to eliminate Dam and Spence. Full year production guidance was achieved for copper, iron
fatalities and serious injuries at BHP. ore, metallurgical coal, energy coal and nickel.
Financial results Payments to governments
Attributable profit - total operations Total payments to governments
US$12.9 bn Down 58% US$13.8 bn
FY22 US$30.9 bn FY22 US$17.3(i) bn
Revenue decreased US$11.3 bn due to significantly lower prices in key Tax, royalty and other payments to governments(i) made during FY23 resulted in
commodities. We managed the impact of inflation on costs well relative to our a global adjusted effective tax rate(ii) of 30.9%, and 41.3% with revenue and
competitors. Underlying attributable profit(ii) (which adjusts FY22 for production based royalties included.
discontinued operations of US$10.7 bn) reduced by 37% to US$13.4 bn.
Capital management
Capital and exploration expenditure(ii) Fully franked final dividend
US$7.1 bn Up 16% US$0.80 per share
FY22 US$6.1 bn Up $0.13 per share above the minimum 50% payout (59% payout)
1
BHP | Financial results for the year ended 30 June 2023
We increased our exposure to future-facing commodities and ~70% of our medium We have determined a final dividend of US$4.1bn. This brings total cash
term capital spend is expected to be focused in these commodities. returns to shareholders announced for the year of US$1.70 per share, fully
franked.
Note: All results are presented on a continuing operations basis, except as
noted.
Social value(iii)
In FY23, we made progress against all six pillars of our social value
framework, while continuing to embed social value assessments into our
decision making.
Decarbonisation Safe, inclusive, and future-ready workforce
Operational GHG emissions Female employee representation
9.8 Mt CO(2)-e Down 11% 35.2% Up 2.9% pts
FY22 11.0 Mt CO(2)-e FY22 32.3%
In June 2023, we shared an update on our plan to achieve our operational Doubled from 17.6% in CY16, and a point of differentiation to our competitors.
decarbonisation
(https://www.bhp.com/news/media-centre/reports-presentations/2023/06/operational-decarbonisation-investor-presentation) Approximately 48% of our external hires in FY23 were female. We improved our
target and goal, and we are on track to meet our FY30 target to reduce Scope 1 representation of women in leadership to 29.7%, which is also well ahead of
and Scope 2 emissions from our operated assets by at least 30% from FY20 our competitors.
levels.
We now have seven collaborative partnerships with steelmakers responsible for
~19% of reported global steel production(iv) to support our Scope 3 goals.
Healthy environment Responsible supply chains
Natural capital accounting BHP Responsible Minerals
pilot completed
Program commenced
A mining industry first at Beenup A fit for purpose due diligence program for our minerals and metals supply
(https://www.bhp.com/news/media-centre/releases/2023/05/bhp-case-study-a-first-for-natural-capital-accounting-in-mining) chain aligned with OECD guidance. For further information, refer to BHP
. We also completed important biodiversity and/or ecosystems baseline mapping Responsible Minerals Program
for all land and water areas at our operated assets (excluding legacy (https://www.bhp.com/-/media/documents/environment/2022/220916_1a_responsiblemineralspolicy.pdf)
assets(v)) and released Context Based Water Targets that apply until FY30. .
Indigenous partnerships Thriving, empowered communities
Indigenous procurement spend Indigenous employee representation Total economic contribution(vi)
US$333 m Up 122% 8.6% Australia US$54.2 bn
FY22 US$150 m 9.7% Chile FY22 US$82.5 bn
7.7% Canada
During FY23, we released our sixth Reconciliation Action Plan We contributed US$40.8 bn to suppliers, community and social investments,
(https://www.bhp.com/news/media-centre/releases/2023/06/bhp-releases-reconciliation-action-plan) employees and governments during the year. This was 75% of our total economic
, which was recognised with 'Elevate' status by Reconciliation Australia, and contribution with shareholder payments being US$13.4bn (25%).
our updated Indigenous Peoples Policy Statement
(https://www.bhp.com/-/media/documents/ourapproach/operatingwithintegrity/indigenouspeoples/221110_indigenouspeoplespolicystatement_2022)
. Both considered Indigenous voices in the process.
2
BHP | Financial results for the year ended 30 June 2023
In FY23, social investment of ~US$150 m consisted of funding such as direct
community development, environmental projects and to the BHP Foundation to
address some of the most critical sustainable development challenges facing
society that are directly relevant to the resources sector.
Detailed information on social value is included in Appendix 1 (#_Appendix_1)
and OFR 6 in the Annual Report
3
BHP | Financial results for the year ended 30 June 2023
Group financial performance
Earnings and margins
Continued reliable operational performance with disciplined cost control led to strong financials.
Revenue BHP's revenue decreased by US$11.3 bn primarily as a result of significantly We experienced an effective inflation rate of ~10% in the financial year and
lower prices across iron ore, metallurgical coal, and copper. expect the lagged impact of inflation to continue into FY24, particularly in
US$53.8 bn Down 17%
labour costs.
Attributable profit for the year reflects our disciplined cost and reliable
FY22 US$65.1 bn operational performance amid the lower price environment, and includes an Our adjusted effective tax rate was above the 30% Australian corporate tax
exceptional loss of US$0.5 bn. For further details see Note 3 - Exceptional rate primarily due to:
items.
· dividend withholding taxes related to our Chilean operations; and
Attributable profit - total operations Adjusted for the US$10.7 bn profit related to discontinued operations as well
as exceptional losses of US$1.1 bn in FY22, Underlying attributable profit · current year tax losses not expected to be recoverable.
US$12.9 bn Down 58% decreased by US$7.9 bn.
Our operating costs include US$3.8 bn of revenue or production based
FY22 US$30.9 bn While we increased copper, iron ore and nickel sales volumes, and exchange royalties. This includes US$1.7 bn of royalties incurred by BHP in respect of
rates were favourable, profit from operations and Underlying EBITDA decreased our Queensland operations, which combined with income taxes equates to an
primarily as a result of the lower prices across major commodities, and the adjusted effective tax rate including royalties of 55%. The introduction of
impacts of inflation on our underlying cost base, particularly on labour, the new royalty regime resulted in an additional US$0.7 bn in royalties paid
Underlying attributable profit(ii) diesel and electricity prices. to the Queensland Government by BHP in relation to FY23.
US$13.4 bn Down 37% Our focus on cost discipline has allowed us to mitigate the effects of the Once the US$3.8 bn of revenue and production based royalties are included, our
current inflationary environment. Unit costs(ii) were ~9%(vii) higher across Group effective tax rate was 41.3%.
FY22 US$21.3 bn our major assets, however WAIO extended its lead as the lowest cost major iron
ore producer globally. The adjusted effective tax rate for FY24 is expected to be in the range of 30
to 35%.
For further details see
Profit from operations Underlying EBITDA waterfall (#_Underlying_EBITDA_waterfall) .
US$22.9 bn Down 33%
FY22 US$34.1 bn
Underlying EBITDA(ii)
US$28.0 bn Down 31%
FY22 US$40.6 bn
Underlying EBITDA margin(ii)
54%
FY22 65%
Adjusted effective tax rate
30.9%
FY22 31.2%
FY24e 30 - 35%
Detailed financial information is included in Appendix 1 (#_Appendix_1) and
OFR 4 in the Annual Report
4
BHP | Financial results for the year ended 30 June 2023
Cash flow and balance sheet
Strong capital discipline underpinned US$13.1 bn of investments in the period.
Net operating cash flow Our net operating cash flow reduced as a result of the lower profit from BHP's balance sheet remains strong. During FY23, Moody's upgraded BHP's credit
operations, which was partially offset by the resultant reduced income tax and rating to A1 while S&P Global's rating has remained at A-. BHP retired
US$18.7 bn Down 36% royalty-related taxation payments. Despite lower prices and sales volumes, US$2.3 bn of debt and raised US$7.7 bn of which US$5 bn relates to the OZL
revenue-based royalties at BHP Mitsubishi Alliance (BMA) increased following acquisition facility.
FY22 US$29.3 bn the introduction of the new Queensland royalty regime in July 2022.
Our net debt increased by US$10.8 bn in the year (or US$4.3 bn from December
In line with our Capital Allocation Framework (CAF), we generated free cash 2022) largely reflecting the:
flow of US$5.6 bn after investing US$13.1 bn in the following:
Capital and exploration expenditure
· Purchase of OZL and assumption of US$1.1 bn of its interest bearing
· US$5.9 bn acquisition of OZ Minerals Ltd (OZL) in May 2023; liabilities; and
US$7.1 bn Up 16%
· US$4.1 bn in organic development including US$2.3 bn on improvement, · Dividends paid to BHP shareholders of US$13.3 bn, and US$1.2 bn to
FY22 US$6.1 bn US$1.2 bn on future‑facing commodities, and US$350 m of exploration spend. non‑controlling interests.
· US$3.0 bn of maintenance and decarbonisation expenditure(viii). These were partially offset by cash flow generated by the operations.
Free cash flow(ii) We expect capital and exploration expenditure (with flexibility to adjust and Our net debt target range of between US$5 and US$15 bn enables us to maintain
subject to exchange rate movements) to be: a resilient balance sheet during periods of change and external uncertainties
US$5.6 bn Down 77%
while retaining the flexibility to allocate capital within our CAF towards
· For FY24 and FY25, ~US$10 bn per annum, including US$0.4 bn of shareholder returns and growth opportunities. In the near term, we expect to
FY22 US$24.3 bn exploration in FY24; remain towards the upper end of the net debt target range.
· In the medium term, ~US$11 bn per annum on average(ix). For further details see Note 21 - Net debt.
Net debt(ii) These amounts include around US$4 bn in aggregate until FY30 for operational
decarbonisation.
US$11.2 bn
FY22 US$0.3 bn
H1 FY23 US$6.9 bn
Gearing ratio(ii)
18.7%
FY22 0.7%
H1 FY23 12.9%
Detailed financial information is included in Appendix 1 (#_Appendix_1) and
OFR 4 in the Annual Report
5
BHP | Financial results for the year ended 30 June 2023
Value and returns
Continuing to balance investing in the business and cash returns to
shareholders.
Full year dividend Our operations continued to generate strong Underlying ROCE of 28.8%. This brings total cash dividends announced for FY23 to US$1.70 per share,
including an additional amount of US$1.9 bn above the minimum payout policy,
US$1.70 per share A final dividend of US$0.80 per share (US$4.1 bn), equivalent to a 59% payout and making this the third largest full year ordinary dividend declared.
ratio and inclusive of an additional amount of US$0.64 bn above the minimum
Fully franked 50% payout policy, will be paid to shareholders on 28 September 2023. Over the past three years, this amounts to more than US$40 bn cash returned to
shareholders.
64% payout ratio
Earnings per share - basic
255 US cps
FY22 611 US cps
Earnings per share - underlying(ii)
265 US cps
FY22 421 US cps
Underlying return on capital employed (ROCE)(ii)
28.8%
FY22 48.1%
Important dates for shareholders
BHP's Dividend Reinvestment Plan (DRP) will operate in respect of the final
dividend. Full terms and conditions of the DRP and details about how to
participate can be found at: bhp.com (http://www.bhp.com)
Events in respect of the final dividend Date
Announcement of currency conversion into RAND 29 August 2023
Last day to trade cum dividend on Johannesburg Stock Exchange Limited (JSE) 5 September 2023
Ex-dividend Date JSE 6 September 2023
Ex-dividend Date Australian Securities Exchange (ASX), London Stock Exchange 7 September 2023
(LSE) and New York Stock Exchange (NYSE)
Record Date 8 September 2023
Announcement of currency conversion into AUD, GBP and NZD 11 September 2023
DRP and Currency Election date 11 September 2023
Payment Date 28 September 2023
DRP Allocation Date 12 October 2023
6
BHP | Financial results for the year ended 30 June 2023
Shareholders registered on the South African branch register will not be able
to dematerialise or rematerialise their shareholdings between the dates of 5
September 2023 and 8 September 2023 (inclusive), and transfers between the
Australian register and the South African branch register will not be
permitted between the dates of 28 August 2023 and 11 September 2023
(inclusive). American Depositary Shares (ADSs) each represent two fully paid
ordinary shares and receive dividends accordingly.
Any eligible shareholder who wishes to participate in the DRP, or to vary a
participation election should do so before 11 September 2023, or, in the case
of shareholdings on the South African branch register of BHP Group Limited, in
accordance with the instructions of your CSDP or broker. The DRP Allocation
Price will be calculated in each jurisdiction as an average of the price paid
for all shares actually purchased to satisfy DRP elections. The DRP Allocation
Price applicable to each exchange will be made available at: bhp.com/DRP
(https://www.bhp.com/drp/)
Economic outlook(x)
As was the case in prior years, BHP's external operating environment in FY23
was volatile. Our key commodity prices were materially weaker leading to lower
revenue generation, while we also managed significant cost inflation across
the business.
In the long run, we expect that population growth, rising living standards,
and the infrastructure required for decarbonisation will drive demand for
steel, non-ferrous metals and fertilisers.
In the near term, while the outlook for the developed world is uncertain, we
expect China and India to remain relative sources of stability for commodity
demand. We anticipate that these competing forces may have a variable impact
on commodity prices in the period. On the cost front, we expect that the lag
effect of the inflation peaks observed in FY23 and continued labour market
tightness will continue to impact our cost base throughout FY24.
Commodity demand
The demand for commodities in the developed world has slowed substantially due
to the impact of anti-inflationary policies and the energy crisis itself.
While the energy crisis has faded, the lag effect of higher interest rates
will suppress economic growth in the developed world in FY24. Demand though
has remained relatively robust in China and India.
The Chinese economy has been volatile since the zero-Covid policy was eased in
December 2022. The March quarter saw a better-than-expected recovery in a
range of sectors important to commodity demand, raising hopes of a strong year
overall. However, that momentum did not carry over fully to the June quarter.
That was especially the case in the steel-intensive real estate sector,
whereas copper-intensive sectors like automobiles, power machinery, consumer
durables (e.g. air-conditioners) and the electricity grid have seen solid
growth. The authorities have acknowledged that more policy support is needed
to fully embed the recovery. For FY24, the key question is how effective this
latest policy push will be.
The demand picture has been more balanced in India, where an investment
upswing is in place and commodity demand has been accordingly robust. The
Indian economy has healthy momentum as the country moves towards a general
election, which is expected to be held in the first half of CY24.
For the review and outlook relating to our individual commodities please refer
to the relevant segment sections from page 7 (#_Segment_and_asset) .
7
BHP | Financial results for the year ended 30 June 2023
Costs and inflation
At our half year results in February 2023, we noted that the negative impact
of inflation on our cost base was narrowing. Pressures had eased in non-energy
raw materials, logistics and manufacturing supply chains, energy risks had
become balanced, while labour costs remained the key forward-looking
inflationary risk. However, even as the pulse in "prompt" input costs faded,
we indicated that the lagged effect of inflation would continue to be felt
through the business, and that is broadly how the second half of FY23 played
out.
Broad-based inflation has eased noticeably, and additional pressure has come
out of industry-specific supply chains. The lagged effect of non-labour
inflation (including pricing in contracts that reset periodically based on
historical outcomes) is expected to impact the business into FY24. The labour
market remains a core inflationary concern. This concern is amplified by the
proposed regulatory reform in Australia, which has the potential to add
significantly to our labour costs.
Overall, the cost of mining production is now estimated to be higher than it
was prior to the pandemic. This implies that price support is also expected to
be higher than in previous cycles and low-cost operators stand to capture
potentially higher relative margins in certain commodities.
For more detail, please refer to the Prospects blog
(https://www.bhp.com/news/prospects) which can be found on our website.
Segment and asset performance
Detailed financial information on all business segments in the Financial
performance summary (#_Financial_performance_summary1)
8
BHP | Financial results for the year ended 30 June 2023
Copper
Production Commodity review and outlook(x)
Copper prices were volatile over the second half of FY23, with two-way
1,717 kt Up 9% fluctuations based on expectations of China's recovery, and mounting demand
risks in the OECD, with indicators of manufacturing weakness widespread.
FY22 1,574 kt Historically extremely low global copper inventories and the sector's ongoing
operational performance challenges have helped prices hold up relatively well
FY24e 1,720 - 1,910 Mt - though our realised price was 12% lower compared to FY22.
In the near term, we expect demand to be met by a combination of rising
primary and scrap supply. A small surplus or a balanced market is the most
Average realised price likely outcome for the current year, with operational disruptions being a key
swing factor.
US$3.65/lb Down 12%
In the medium and longer term, traditional demand (such as home building,
FY22 US$4.16/lb electrical equipment and household appliances) is expected to remain solid
while the decarbonisation mega-trend is expected to bolster demand. In terms
of meeting that demand, we anticipate that the cost curve is likely to steepen
as challenges to the development of new resources (such as societal
Underlying EBITDA expectations, decarbonisation and water challenges) progressively increase. We
anticipate that the industry is likely to enter the final third of this decade
US$6.7 bn Down 22% with a low inventory buffer, and therefore elevated prices may endure
throughout this period.
FY22 US$8.6 bn
23% contribution to the Group's Underlying EBITDA
Segment outlook
Following the completion of the acquisition of OZL on 2 May 2023, we have
47% Underlying EBITDA margin established the Copper South Australia province. The addition of the Prominent
Hill and Carrapateena operations, combined with Olympic Dam and the potential
Oak Dam development, is expected to unlock a pathway to increase volumes and
value from the province. We are integrating a team with a strong culture,
Underlying ROCE excellence in project delivery and strong relationships with local communities
and partners. OZL assets are included within the FY23 Underlying ROCE for
12% Copper.
FY22 16% In Chile we have a range of studies underway to unlock our significant
resource endowment and utilise latent capacity across our Escondida, Spence
and Cerro Colorado operations. These include studying options for a new
concentrator at Escondida and the evaluation of multiple leaching technologies
Capital and exploration expenditure which could be applied across all three operations. We expect to provide
further information on preferred development pathways during CY24.
US$2.7 bn
In Peru, Antamina has applied for environmental approval for a life extension
FY22 US$2.5 bn until 2036, from 2028.
FY24e US$4.2 bn
9
BHP | Financial results for the year ended 30 June 2023
Escondida
Copper production Unit cost(1,2) Underlying EBITDA
1,055 kt Up 5% US$1.40/lb Up 17% US$4.9 bn Down 20%
FY22 1,004 kt FY22 US$1.20/lb FY22 US$6.2 bn
FY24e 1,080 - 1,180 kt FY24e US$1.40 - $1.70/lb
FY25 and FY26e 1,200 - 1,300 ktpa FY25 and FY26e US$1.30 - US$1.60/lb
1 Based on exchange rates of: FY22 USD/CLP 811 (realised); FY23
USD/CLP 864 (realised); FY24 - FY26 USD/CLP 810 (guidance).
2 Refer to OFR 10 - Non-IFRS information in the Annual Report for
detailed unit cost reconciliation.
Financial performance
Underlying EBITDA decreased by 20% primarily as a result of:
· Lower copper prices which had an unfavourable US$1.2 bn impact; and
· Unit costs increasing 17% to US$1.40/lb, primarily driven by inflationary
cost pressures, including higher contractor costs.
These were partially offset by productivity improvements and higher sales
volumes in line with improved grade.
Asset outlook
Over the next 18 months, Escondida will complete a number of strategic studies
into options to offset the impact in the decline of concentrator feed grade
which is expected from FY27. These options include the potential for a new
concentrator to replace the current Los Colorados facility and the application
of one or more leaching technologies to improve recoveries and unlock primary
sulphide resources in the cathode process. We expect costs associated with the
studies, which are captured as operating costs, to increase to ~US$140 m per
year in both FY24 and FY25, from ~US$60 m in FY23.
Full SaL, a BHP designed leaching technology, is on track to become the first
of these options to be implemented. This technology, which has already been
successfully deployed at Spence, is expected to produce ~410 kt in copper
cathodes at Escondida over a 10 year period once implemented, through improved
recoveries and shorter leach cycle times. We expect capital expenditure to
implement Full SaL to be approximately US$300 m, and for first production to
be during FY25.
Escondida production is expected to increase in FY24 to between 1,080 and
1,180 kt, then to between 1.2 and 1.3 Mt per year in FY25 and FY26, after
which production is expected to decline for a period as a result of lower
grades.
10
BHP | Financial results for the year ended 30 June 2023
Pampa Norte
Copper production Spence unit cost(1,2,3) Underlying EBITDA
289 kt Up 3% US$2.11/lb US$0.75 bn Down 45%
FY22 281 kt FY24e US$2.00 - US$2.30/lb FY22 US$1.4 bn
FY24e 210 - 250 kt(1)
Medium-term ~250 kt
1 Production and unit cost guidance for FY24 is provided for
Spence only. Cerro Colorado is expected to produce ~9 kt as it transitions to
closure by 31 December 2023.
2 Refer to OFR 10 - Non-IFRS information in the Annual Report for
detailed unit cost reconciliation.
3 Based on exchange rates of: FY22 USD/CLP 811 (realised); FY23
USD/CLP 864 (realised); FY24 USD/CLP 810 (guidance).
Financial performance
Underlying EBITDA decreased by 45% predominately as a result of:
· Increased costs primarily driven by inflationary cost pressures, and the
planned drawdown in mined ore inventories following commissioning of the
Spence concentrator and as Cerro Colorado transitions to closure; and
· Lower copper prices, which had an unfavourable US$0.36 bn impact.
These were partially offset by increased sales volumes at Spence in line with
record production.
Asset outlook
During FY23 we applied for environmental approval to extend the life of the
Spence leaching facilities to 2039. If approved, this would involve the
implementation of a novel approach to re-processing previously leached ores
followed by a planned medium-term transition to chalcopyrite ore leaching.
The concentrator plant modifications, which commenced in August 2022, remain
on track to be completed in CY23. Expected capital expenditure for the
concentrator modification works remains unchanged at approximately US$100 m.
We are also studying options to further debottleneck and expand concentrator
throughput in the future.
Production at Spence is now expected to average 250 ktpa over the next five
years.
We continue to closely monitor previously identified anomalies in the Spence
Tailings Storage Facility (TSF) and are aiming to ensure safe operational
conditions. In order to remediate the anomalies, changes to the original TSF
design will be required and further study is being undertaken. In
collaboration with the Engineer of Record, Independent Tailings Review Board
and expert consultants, work is ongoing to finalise the schedule, scope and
cost of the TSF design, including through studies, site characterisation and
modelling. Production guidance at Spence remains subject to the remediation of
the TSF anomalies.
Cerro Colorado is transitioning to closure by December 2023. Operating costs
at Cerro Colorado are expected to be approximately US$70 m and US$45 m for the
December 2023 and June 2024 half years, respectively. We are exploring options
to extend the life of Cerro Colorado, including through the use of leaching
technologies and desalinated water, which could see the operation restart in
approximately 2030, subject to environmental approvals.
11
BHP | Financial results for the year ended 30 June 2023
Copper South Australia
Copper production Underlying EBITDA
232 kt(1) Up 68% US$0.70 bn Up 72%
FY22 138 kt FY22 US$0.41 bn
FY24e 310 - 340 kt
1 Includes contribution of 20 kt from Carrapateena and Prominent
Hill.
Financial performance
The combination of Olympic Dam with Prominent Hill and Carrapateena following
the acquisition of OZL, has allowed us to create a new province, Copper South
Australia. When compared to FY22 (when it was only Olympic Dam), underlying
EBITDA increased 72% as a result of:
· Higher sales volumes at Olympic Dam supported by BHP record copper
production following the planned major smelter maintenance campaign (SCM21) in
the prior year, and record gold production following debottlenecking
activities in FY22, as well as the contribution of sales from Prominent Hill
and Carrapateena in the period post-acquisition.
This was partially offset by:
· Higher operating costs at Olympic Dam primarily due to the planned
drawdown of inventory built during SCM21 in the prior year to support record
concentrator and smelter performance, the impacts of inflation on the cost
base and higher exploration spend in relation to drilling at Oak Dam and
Olympic Dam; and
· Lower average realised prices.
Asset outlook
Following the acquisition of OZL, we are focused on building scale and
optionality across the new Copper South Australia province.
Initial integration activity is now complete, where the focus was on safety,
people and culture, operational productivity and stability. We expect to
realise a range of synergies in the short term, by integrating supply chains
and reducing corporate overheads and compliance costs, and in the long term by
optimising growth projects.
In FY24, we expect production at Copper South Australia to be between 310 and
340 kt, and will include the transfer of small volumes of copper concentrate
from Prominent Hill to Olympic Dam for processing.
We are assessing options for a new two-stage smelter which could produce
>500 ktpa. In addition to productivity improvements at the existing
operations, we expect to source ore for the expanded smelter from growth and
exploration projects, such as:
· At Prominent Hill, the Wira shaft mine expansion project is under
construction. The hoisting shaft is expected to extend the mine life to at
least 2036 and may provide access to potential mineralisation outside the
current mine plan;
· At Carrapateena, the Block Cave Expansion project is progressing and is
expected to (i) extend the mine life beyond the existing sub-level cave and
(ii) increase production at Carrapateena from FY29. Crusher 2 is expected to
come online in the March 2024 quarter and provide an uplift in mine
productivity; and
· At Oak Dam, where we continue exploration activity. We are also exploring
beneath the Olympic Dam ore body. Refer to the Minerals exploration and
early-stage entry (#_Minerals_exploration_and) section for more details.
12
BHP | Financial results for the year ended 30 June 2023
Iron ore
Production Commodity review and outlook(x)
In terms of steel production, in CY23 China and India are anticipated to lead
257 Mt Up 1% a 2% recovery in global steel production, following a 4% decline in CY22 (8%
decline if you exclude China and India).
FY22 253 Mt
In China, steel production was running at ~1,080 Mtpa in the first half of
FY24e 254 - 264.5 Mt CY23, with solid demand from infrastructure, power machinery, autos and
shipping, offsetting weakness in new housing starts and construction
machinery. As we have seen in prior years, it is possible that we will see
policies limiting steel production in China in the second half of CY23.
Average realised price However, at this stage it appears that China is on the way to producing more
than 1 Bt of steel for the 5(th) consecutive year. That is consistent with our
US$92.54/wmt Down 18% long-held view that China's steel production would sit at a plateau in the 1.0
to 1.1 Bt range in the first half of the 2020s.
FY22 US$113.10/wmt
Further growth is expected in India, which we forecast will produce around
135 Mt in CY23, a 35% increase since the beginning of the decade. The Indian
government is targeting 300 Mtpa of steel-making capacity by 2030.
Underlying EBITDA
In the iron ore market, conditions were better in the second half of FY23 than
US$16.7 bn Down 23% in the first half, but there are two key uncertainties for the coming six
months. The first is how effectively China's stimulus policy is implemented,
FY22 US$21.7 bn especially with regards to real estate. The second revolves around the
breadth, timing and severity of any mandated steel production cuts. Our
59% contribution to the Group's Underlying EBITDA estimate of real-time cost support sits in the US$80-US$100/t range on a 62%
Fe CFR basis. That is unchanged from our previous reporting period.
67% Underlying EBITDA margin
In the medium term, China's demand for iron ore is expected to be lower than
it is today as it moves beyond its crude steel production plateau and the
scrap-to-steel ratio rises, though we expect demand for our products from
Underlying ROCE elsewhere in developing Asia will offset this to a degree.
Segment outlook
67%
At WAIO, we are focused on increasing annual production to greater than
305 Mt over the medium term. We are also studying growth of the WAIO business
FY22 91% to 330 Mtpa and we expect to complete these studies in CY25. Options under
consideration include developing new mines and leveraging existing
infrastructure, including at Yandi, increasing ore beneficiation or building a
new hub.
Capital and exploration expenditure
Samarco is expected to continue to make strong progress on remediation
US$2.0 bn activity, as it ramps up production and continues to support the local
community through jobs, investment and taxes.
FY22 US$1.8 bn
FY24e US$2.0 bn
13
BHP | Financial results for the year ended 30 June 2023
Western Australia Iron Ore
Iron ore production Unit cost(1,2) Underlying EBITDA
253 Mt Up 1% US$17.79/t Up 6% US$16.7 bn Down 24%
C1(xi) US$15.86/t(3)
FY22 249 Mt FY22 US$16.81/t FY22 US$21.8 bn
FY24e 282 - 294 Mt (100% basis) FY24e US$17.40 - US$18.90/t
Medium-term >305 Mt (100% basis) Medium-term 305 Mtpa in the medium term we are
undertaking the following projects:
· The Port Debottlenecking Project (PDP1) which remains on track to be
completed in CY24 and is expected to deliver an initial uplift in port
throughput; and
· The Rail Technology Programme (RTP) which will be rolled out over the
next few years and is expected to improve communications and signalling,
operational safety and reduce variability on our WAIO rail network.
Our portside distribution channel in China, which allows for an expanded
customer base and increases our flexibility, had ~6 Mt port side sales in
FY23. Inventory for portside sales in China will vary over time (~4 Mt at 30
June 2023) as we respond to demand in the seaborne and portside markets, and
this may drive differences between production and sales volumes.
Average annual sustaining capital expenditure guidance over the medium term,
excluding costs associated with operational decarbonisation and our automation
programs, is expected to increase to ~US$5.50/t to support the incremental
volume required to achieve medium-term guidance, asset integrity and end of
life fleet replacement.
14
BHP | Financial results for the year ended 30 June 2023
Samarco
Iron ore production Total Renova Foundation spend
4.5 Mt Up 11% US$6.4 bn(1) Up 31%
FY22 4.1 Mt FY22 US$4.9 bn(1)
FY24e 4 - 4.5 Mt
1 Refers to total Renova spend since 2016 (100% basis).
Performance
Samarco continues to operate safely and efficiently since re-starting
operations in December 2020. The restart of the second concentrator, which
will increase pellet production capacity to approximately 16 Mtpa (100% basis)
through a filtration and dry stack tailings solution, is expected to deliver
first production in the March 2025 quarter.
BHP Brasil remains committed to Samarco 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 dam failure.
Renova made strong progress during FY23, and since March 2016, compensation
and financial assistance has been paid to approximately 427,000 people and
approximately 75% of resettlement cases(xii) have now been completed.
On 28 July 2023, Samarco and one of its financial creditors jointly filed a
restructure plan with the Judicial Reorganisation Court that outlined the
proposed restructure of Samarco's debts subject to the Judicial Reorganisation
process. Subject to the plan being ratified by the Court, Samarco and its
creditors will now work towards completing the process, including agreeing
documentation and seeking final court approvals.
Financials
Cost estimates for the Samarco dam failure provision remain unchanged from the
December 2022 half. The Group's provision related to the Samarco dam failure
has increased however to US$3.7 bn as at 30 June 2023, primarily as a result
of movements in the exchange rate and amortisation of discounting.
BHP's expected cash outlay for CY23 in relation to the provision is now
US$1.05 bn (down from a previous estimate of $1.95 bn) with the decrease
largely as a result of timing of spend. BHP Brasil has approved US$915 m of
funding for the Renova Foundation, with additional amounts subject to further
approval. This funding will be offset against the Group's provision for the
Samarco dam failure.
For further information, please see note 4 - 'Significant events - Samarco dam
failure' for the Samarco dam failure provision.
15
BHP | Financial results for the year ended 30 June 2023
Coal
Production Commodity review and outlook - Metallurgical coal(x)
Metallurgical coal prices moved lower in FY23 as the global energy shock
Metallurgical coal receded, steel production in OECD importing regions declined, and supply
conditions improved across multiple jurisdictions. Against this backdrop the
29 Mt 0% re-opening of the Chinese import market for Australian coals has had little
discernible impact on trade flows or pricing.
FY22 29 Mt
As has been the case in other commodities, India has been a bright spot in
Energy coal metallurgical coal, with imports expected to grow around 4.5% in CY23, against
a 2% decline for the remainder of the seaborne trade.
14.2 Mt Up 3%
In the near term, we expect a modest improvement in seaborne demand from OECD
FY22 13.7 Mt importing regions as they see a gradual pickup in their steel industries,
while India is expected to continue with its current momentum. The
availability of landborne imports, and the operational performance of Chinese
domestic mines, are key uncertainties for assessing what China's call on the
Average realised price seaborne trade might be in CY24.
Metallurgical coal Over the longer term, we believe that higher quality metallurgical coals (such
as those produced by our BMA assets) will continue to be required in blast
US$271.05/t Down 22% furnace steel making for decades, driven by the growth of the steel industry
in hard coking coal importing countries such as India. In particular, such
FY22 US$347.10/t higher quality coking coals are expected to be valued for their role in
reducing the greenhouse gas emissions intensity of blast furnaces. And with
Thermal coal - export the major seaborne supply region of Queensland having become less conducive to
long-life capital investment as a result of changes to the royalty regime, the
US$236.51/t Up 9% scarcity value of higher quality coking coals may well increase over time.
FY22 US$216.78/t
Segment outlook
Aligned with our strategic objective to focus on producing higher quality
metallurgical coal, in February 2023, BHP announced that together with
Underlying EBITDA Mitsubishi Development Pty Ltd (our 50:50 joint venture partner in BMA) we
have initiated a process to divest the Daunia and Blackwater mines.
US$5.0 bn Down 47%
Following an extensive review of available options, in June 2022, BHP made the
FY22 US$9.5 bn decision to retain New South Wales Energy Coal (NSWEC) in our portfolio, seek
the relevant approvals to continue mining beyond the current consent that
18% contribution to the Group's Underlying EBITDA expires at the end of FY26 and proceed with a managed process to cease mining
at the asset by the end of FY30.
46% Underlying EBITDA margin
Underlying ROCE
47%
FY22 91%
Capital and exploration expenditure
US$0.7 bn
FY22 US$0.6 bn
FY24e US$0.7 bn
16
BHP | Financial results for the year ended 30 June 2023
BMA
Metallurgical coal production Unit cost(1,2) Underlying EBITDA
29.0 Mt 0% US$96.46/t Up 8% US$3.2 bn Down 50%
FY22 29.1 Mt FY22 US$89.06/t FY22 US$6.3 bn
FY24e 56 - 62 Mt (100% basis) FY24e $US95 - US$105/t
1 Based on exchange rates of: FY22 AUD/USD 0.73 (realised); FY23
AUD/USD 0.67 (realised); FY24 AUD/USD 0.67 (guidance).
2 Refer to OFR 10 - Non-IFRS information in the Annual Report for
detailed unit cost reconciliation.
Financial performance
Underlying EBITDA decreased by 50% predominately driven by:
· Lower average realised prices which had an unfavourable impact of US$2.5
bn;
· Higher royalties, despite the lower price environment and lower volumes,
as a result of the Queensland Government's decision to raise coal royalties to
the highest maximum royalty rate in the world. The introduction of the new
royalty regime resulted in an additional US$0.7 bn in royalties paid to the
Queensland Government by BHP in relation to FY23. Combined with income taxes,
this equates to an adjusted effective tax rate including royalties of 55%;
· Higher unit costs, increasing 8% primarily due to the impact of
inflation, particularly higher diesel prices, higher maintenance activity, and
the drawdown of mine inventories, which were partially offset by favourable
exchange rate movements; and
· Lower sales volumes, despite stable production, as a result of timing of
sales.
Asset outlook
During FY24, we plan to rebuild BMA's mine inventories which have been drawn
down over the past three years to balance the supply chain and maximise value
amidst the significant weather disruptions.
Given the negative impact on investment economics of the Queensland
Government's decision to raise coal royalty rates and the increase in
sovereign risk as a result of this decision, we will not be investing in any
further growth in Queensland, however we will sustain and optimise our
existing operations.
We continue to progress our planned process to divest the Blackwater and
Daunia mines for value, and updates (including any adjustment required to
guidance as a result of a sale) will be provided to the market where
appropriate.
17
BHP | Financial results for the year ended 30 June 2023
New South Wales Energy Coal
Energy coal production Unit cost(1,2) Underlying EBITDA
14.2 Mt Up 3% US$82.37/t Up 16% US$1.8 bn Up 2%
FY22 13.7 Mt FY22 US$70.80/t FY22 US$1.8 bn
FY24e 13 - 15 Mt
1 Based on exchange rates of: FY22 AUD/USD 0.73 (realised); FY23
AUD/USD 0.67 (realised); FY24 AUD/USD 0.67 (guidance).
2 Refer to Section 10 - Non-IFRS information of the Annual Report
for detailed unit cost reconciliation.
Financial performance
Underlying EBITDA increased marginally as a result of:
· Higher average realised prices for thermal coal, which had a favourable
impact of US$0.4 bn. The market for our products changed dramatically within
the year with the impact of the Ukraine/Russia conflict on global energy
markets, and the introduction of the NSW Government Coal Price Emergency
Directions.
This was partially offset by:
· Unit costs increasing 16% as the effects of inflation and the higher
price environment increased key input costs, particularly diesel, explosives
and labour. Additionally, we saw higher freight costs at the Newcastle Coal
Infrastructure Group (NCIG) coal export terminal; and
· Slightly lower sales volumes, despite higher production, as we rebuilt
product coal stocks. We also sold a lower portion of higher quality coal types
due to the changing market conditions.
Asset outlook
As announced in June 2022, we made the decision to retain NSWEC in our
portfolio and proceed with a managed process to cease mining by the end of
FY30.
We are now seeking the relevant approvals to continue mining beyond the
current consent that expires at the end of FY26. Extending this consent is
intended to provide the time to work with our people and the local community
on an equitable change and transition approach and the detailed plan for mine
closure. Work continues on the modification application, which is intended to
be submitted in the second half of CY23.
Subject to receiving the necessary approvals, as we look ahead to 2030 we will
not be allocating any growth capital to NSWEC. We expect to optimise our costs
for value, with absolute costs expected to be stable in the medium term after
a period of higher inflation and input prices.
18
BHP | Financial results for the year ended 30 June 2023
Group & Unallocated
Nickel
Production Commodity review and outlook(x)
The nickel industry moved further into surplus over the course of FY23 as
80 kt Up 4% Indonesian supply continued to grow apace at a time of slowing economic
growth. Battery demand is expected to record healthy growth across CY23, but a
FY22 77 kt de-stocking episode across the EV value chain early in the year made its
presence felt across all the battery raw materials.
FY24e 77 - 87 kt
Relatively tight fundamentals in Class-I exchange traded metal have continued
to co-exist with considerable over-supply of intermediates and Class-II
products.
Average realised price(xiii)
Longer term, we believe nickel will be a core beneficiary of the
US$24,021/t Up 3% electrification mega-trend and that nickel sulphides will be particularly
attractive.
FY22 US$23,275/t
Business outlook
To support growing demand for nickel in the battery market, Nickel West is
Underlying EBITDA assessing options for a major smelter renewal project, which could potentially
process more nickel from our northern mining operations, sustain our
US$0.2 bn Down 61% integrated supply chain and create a pathway for additional feed sources. At
the mines, we are assessing options to expand Mt Keith operations and have
FY22 US$0.4 bn completed approximately 100 km of development and exploration drilling in
FY23.
~1% contribution to the Group's Underlying EBITDA
The West Musgrave nickel project in Western Australia is in early stages of
execution following the final investment decision by OZL in September 2022
(prior to the acquisition by BHP). The additional drilling and the addition of
Capital and exploration expenditure West Musgrave has led to a 36% increase in nickel resource.
US$0.6 bn
FY22 US$0.4 bn
FY24e US$0.8 bn
Nickel West
Financial performance
Underlying EBITDA decreased by 61%, despite higher sales volumes,
predominantly as a result of:
· Inventory drawdowns to support the supply chain and to mitigate the
operational impact of third party ore delivery issues and a rain event at Mt
Keith;
· The unfavourable impact of inflation on the cost base including increased
labour and contractor costs and higher prices for consumables and reagents,
diesel, ammonia and explosives; and
· Lower realised prices for intermediate products more than offsetting
higher realised prices for nickel metal.
19
BHP | Financial results for the year ended 30 June 2023
During the year, we experienced ongoing issues with the quality and volume of
ore deliveries from Mincor Resources containing high levels of arsenic, and in
March advised that we would no longer accept off-specification product. We
purchased more third-party volumes than in FY22, including high cost third
party concentrate to offset the impact of the ore supply issues. During FY23,
costs associated with purchasing third party products accounted for
approximately 30% of the operating cost base and we expect this to continue
into FY24.
Potash
Capital expenditure Commodity review and outlook(x)
Potash prices declined across the second half of FY23 as prices reverted to
US$0.65 bn Up 72% more normal ranges, following expectations of scarcity in the early months of
the Ukraine-Russia conflict.
FY22 US$0.4 bn
Medium-term, the major uncertainty is the status of the projects in the areas
FY24e US$1.2 bn formerly comprising the Soviet Union.
Longer term, we believe that potash stands to benefit from the intersection of
global megatrends: rising population, changing diets and the need for the more
sustainable intensification of agriculture on finite arable land. We consider
this compelling demand picture, rising geopolitical uncertainty and the
maturity of the existing asset base to be an attractive entry opportunity in a
lower-risk supply jurisdiction such as Saskatchewan, Canada.
For further information, please see Potash: the fourth wave
(https://www.bhp.com/news/prospects/2023/05/the-potash-industrys-fourth-wave)
.
Jansen
Progress - Stage 1 completion Production target date Capital estimate
26% End-CY26 US$5.7 bn
Project update
At the end of FY23 Jansen Stage 1, which will have a capacity of ~4.35 Mtpa,
was 26% complete and on track to achieve first production by the end of CY26.
Capital expenditure for FY23 was US$647 m. We expect this to increase to
~US$1.0 bn in FY24, as we advance steel and equipment procurement and
installation on the surface and underground.
Jansen Stage 2 is expected to deliver ~4 Mtpa of potash production at a lower
capital intensity than Stage 1 (between ~US$1,000 and US$1,200/t), through
leveraging the substantial infrastructure investment already being constructed
for Stage 1. In line with our favourable view on the long-term outlook for
potash, we have accelerated the feasibility study for Jansen Stage 2, and this
remains on track for completion during FY24. The earliest potential final
investment decision is within FY24, and if a decision is taken, first
production could be achieved as early as FY29. Pre-commitment spend in FY24
for Jansen Stage 2 is expected to be ~US$125 m.
20
BHP | Financial results for the year ended 30 June 2023
Minerals exploration and early-stage entry
Exploration expenditure BHP continued to strengthen its portfolio of options in future-facing
commodities, via high potential exploration projects, equity investments,
US$350 m Up 37% joint ventures and farm-in agreements. We also leveraged technology to look
deeper in mature exploration jurisdictions and identify new high potential
FY22 $256 m search spaces.
Greenfield minerals exploration was undertaken during the year to advance
copper targets in Chile, Ecuador, Serbia, Peru, Canada, Australia and the
United States. Nickel targets were advanced in Canada and Australia. We
continued to progress activity at Ocelot
(https://www.bhp.com/-/media/documents/media/reports-and-presentations/2023/230421_bhpoperationalreviewfortheninemonthsended31march2023.pdf)
, BHP's recently identified copper porphyry mineralised system in the
Miami-Globe copper district of the United States.
BHP also signed a Sales and Purchase agreement for Ragnar Metals' Sweden
operations, gaining access to drill-ready programs for nickel. These will be
further advanced during FY24.
BHP also continued its strategy of partnering with mining companies focused on
early-stage copper and nickel projects, with additional investments made
during the year in Brixton Metals, Midland Exploration, Filo Mining and
Kabanga Nickel.
At Copper South Australia, we published an Exploration Target at Oak Dam(xiv)
and have commenced the next phase of drilling as we work towards defining a
first Mineral Resource(xv). We plan to increase the number of drilling rigs
(from nine to eleven) and to establish core processing facilities and an
accommodation camp by the end of CY23. We are continuing community and
stakeholder engagement in preparation for submission of our application to
convert the Oak Dam tenement from an exploration licence to a retention lease,
enabling progression of an early access decline. We have also commenced
exploratory drilling beneath the Olympic Dam mine, at depths between 900 and
1,500 metres, with nine surface exploration rigs.
In the past year, we established BHP Xplor, an innovative accelerator program
which supports early-stage mineral exploration companies. The inaugural
program was a success, with several companies selected for additional
investment. Applications for the 2024 process opened in August.
21
BHP | Financial results for the year ended 30 June 2023
Appendix 1
Detailed financial information is included in Section 4.3 of the Annual Report
(https://www.bhp.com/-/media/documents/investors/annual-reports/2022/220906_bhpannualreport2022.pdf#page=21)
Financial performance summary(1)
A summary of performance for the 2023 and 2022 financial years is presented
below.
Year ended 30 June 2023 Revenue(2) Underlying Underlying Exceptional Net Capital Exploration Exploration
US$M EBITDA(3) EBIT(3) items(4) operating expenditure gross to profit
assets(3)
Copper
Escondida 8,847 4,934 4,070 12,207 1,351
Pampa Norte(5) 2,491 754 244 4,487 647
Antamina(6) 1,468 998 824 1,430 374
Copper South Australia(7) 2,806 703 251 15,782 641
Other(6) 20 (209) (228) 636 59
Total Copper from Group production 15,632 7,180 5,161 471 34,542 3,072
Third party products 1,863 18 18 − − −
Total Copper 17,495 7,198 5,179 471 34,542 3,072 151 148
Adjustment for equity accounted investments(6) (1,468) (545) (369) − − (374) (6) (3)
Total Copper statutory result 16,027 6,653 4,810 471 34,542 2,698 145 145
Iron Ore
Western Australia Iron Ore 24,678 16,660 14,663 20,438 1,956
Samarco(8) − − − (3,695) −
Other 113 33 9 (100) 10
Total Iron Ore from Group production 24,791 16,693 14,672 (295) 16,643 1,966
Third party products 21 (1) (1) − − −
Total Iron Ore 24,812 16,692 14,671 (295) 16,643 1,966 96 52
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 24,812 16,692 14,671 (295) 16,643 1,966 96 52
Coal
BHP Mitsubishi Alliance 7,652 3,197 2,572 7,545 488
New South Wales Energy Coal(9) 3,455 1,953 1,868 (243) 156
Other − (39) (57) (36) 13
Total Coal from Group production 11,107 5,111 4,383 − 7,266 657
Third party products − − − − − −
Total Coal 11,107 5,111 4,383 − 7,266 657 13 6
Adjustment for equity accounted investments(9) (149) (113) (88) − − − − −
Total Coal statutory result 10,958 4,998 4,295 − 7,266 657 13 6
Group and unallocated items
Potash − (205) (207) 4,469 647 1 1
Nickel West 2,009 164 57 1,189 637 52 48
Other(10) 11 (346) (806) (229) 128 43 42
Total Group and unallocated items 2,020 (387) (956) (64) 5,429 1,412 96 91
Inter-segment adjustment − − − − − − − −
Total Group 53,817 27,956 22,820 112 63,880 6,733 350 294
22
Year ended 30 June 2022 Revenue(2) Underlying Underlying Exceptional Net Capital Exploration Exploration
US$M EBITDA(3) EBIT(3) items(4) operating expenditure gross to profit
assets(3)
Copper
Escondida 9,500 6,198 5,291 11,703 860
Pampa Norte(5) 2,670 1,363 470 4,543 673
Antamina(6) 1,777 1,289 1,143 1,306 323
Copper South Australia(7) 1,776 409 (12) 9,877 966
Other(6) − (157) (173) (9) 29
Total Copper from Group production 15,723 9,102 6,719 (81) 27,420 2,851
Third party products 2,903 36 36 − − −
Total Copper 18,626 9,138 6,755 (81) 27,420 2,851 96 92
Adjustment for equity accounted investments(6) (1,777) (573) (425) − − (323) (11) (7)
Total Copper statutory result 16,849 8,565 6,330 (81) 27,420 2,528 85 85
Iron Ore
Western Australia Iron Ore 30,632 21,788 19,669 20,376 1,847
Samarco(8) − − − (3,433) −
Other 116 (81) (198) (120) 1
Total Iron Ore from Group production 30,748 21,707 19,471 (648) 16,823 1,848
Third party products 19 − − − − −
Total Iron Ore 30,767 21,707 19,471 (648) 16,823 1,848 95 54
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 30,767 21,707 19,471 (648) 16,823 1,848 95 54
Coal
BHP Mitsubishi Alliance 10,254 6,335 5,708 7,802 491
New South Wales Energy Coal(9) 3,122 1,868 1,777 (121) 73
Other(11) 2,260 1,363 1,283 (31) 57
Total Coal from Group production 15,636 9,566 8,768 849 7,650 621
Third party products − − − − − −
Total Coal 15,636 9,566 8,768 849 7,650 621 17 6
Adjustment for equity accounted investments(9) (87) (62) (35) − − − − −
Total Coal statutory result 15,549 9,504 8,733 849 7,650 621 17 6
Group and unallocated items
Potash − (147) (149) 3,570 376 − −
Nickel West 1,926 420 327 721 362 42 37
Other(10) 7 585 (276) (1,746) 120 17 17
Total Group and unallocated items 1,933 858 (98) (450) 2,545 858 59 54
Inter-segment adjustment − − − − − − − −
Total Group 65,098 40,634 34,436 (330) 54,438 5,855 256 199
1 Group profit before taxation comprised Underlying EBITDA,
exceptional items, depreciation, amortisation and impairments (D&A) of
US$5,024 m (FY22: US$6,528 m) and net finance costs of US$1,531 m (FY22:
US$969 m).
2 Total revenue from thermal coal sales, including BMA and NSWEC,
was US$3,528 m (FY22: US$3,559 m).
3 For more information on the reconciliation of non-IFRS financial
information to our statutory measures, reasons for usefulness and calculation
methodology, please refer OFR 10 'Non-IFRS financial information' in the
Annual Report.
4 Excludes exceptional items relating to Net finance costs US$452
m and Income tax expense US$266 m (FY22: Net finance costs US$290 m and Income
tax expense US$454 m).
5 Includes Spence and Cerro Colorado.
6 Antamina, SolGold and Resolution (the latter two included in
Other) are equity accounted investments and their financial information
presented above with the exception of net operating assets reflects BHP
Group's share. Group and Copper level information is reported on a statutory
basis which reflects the application of the equity accounting method in
preparing the Group financial statements - in accordance with IFRS. Underlying
EBITDA of the Group and the Copper segment, includes D&A, net finance
costs and taxation expense of US$545 m (FY22: US$573 m) related to equity
accounted investments.
7 Includes Olympic Dam as well as Prominent Hill and Carrapateena
which were acquired on 2 May 2023 as part of the acquisition of OZL. Results
of assets acquired as part of the acquisition of OZL are for the period from
the date of acquisition.
8 Samarco is an equity accounted investment and its financial
information presented above, with the exception of net operating assets,
reflects BHP Billiton Brasil Ltda's share. All financial impacts following the
Samarco dam failure have been reported as exceptional items in both reporting
periods.
9 Includes NCIG which is an equity accounted investment and its
financial information presented above, with the exception of net operating
assets, reflects BHP Group's share. Total Coal statutory result excludes
contribution related to NCIG until future profits exceed accumulated losses.
10 Other includes functions, other unallocated operations including
legacy assets, West Musgrave (acquired on 2 May 2023 as part of the
acquisition of OZL) and consolidation adjustments. Revenue not attributable to
reportable segments comprises the sale of freight and fuel to third parties,
as well as revenues from unallocated operations. Exploration and technology
activities are recognised within relevant segments. Results of assets acquired
as part of the acquisition of OZL are for the period from the date of
acquisition.
11 The divestment of BHP's 80% interest in BHP Mitsui Coal (BMC) was
completed on 3 May 2022. The Group's share of BMC revenue, Underlying EBITDA,
D&A, Underlying EBIT and Capital expenditure has been presented within
'Other'.
23
BHP | Financial results for the year ended 30 June 2023
Underlying EBITDA waterfall
The following table and commentary describes the impact of the principal
factors(ii) that affected Underlying EBITDA for the 2023 financial year
compared with the 2022 financial year:
US$M Total Group Copper Iron ore Coal Group and unallocated
Year ended 30 June 2022 40,634 8,565 21,707 9,504 858
Net price impact
Change in sales prices (9,182) (1,656) (5,359) (2,123) (44)
Refer to Segment and asset performance (#_Segment_and_asset) for average
realised prices
Price-linked costs (83) 28 390 (507) 6
WAIO: Lower royalties in line with lower prices. BMA: Higher royalties as a result of new government royalty regime (despite
lower prices).
NSWEC: Higher royalties in line with higher prices.
Change in volumes 1,545 1,409 162 (158) 132
Copper South Australia: Increased volumes following: WAIO: Positive impact due to: NSWEC: Slightly lower volumes despite higher production as a result of Nickel West: Higher sales volumes primarily due to:
rebuilding product coal inventories following a prior period drawdown.
· the planned major smelter maintenance campaign (SCM21) in the prior period · ramp up of South Flank having a favourable impact on product mix, with lump
· increased concentrate and matte product sales; and
at Olympic Dam; and sales increasing from 29% to 31%; and
· timing of shipments.
· higher gold production following debottlenecking activities in the prior · strong operational performance resulting in record production. BMA: While production was in line with prior period, sales volumes were lower
period at Olympic Dam.
due to timing of shipments. Partially offset by lower refined nickel sales as a result of issues with
Partially offset by an inventory build of almost 4 Mt in China for portside
third party ore deliveries and a rain event at Mt Keith.
Escondida: Higher volumes due to higher concentrator feed grade and prior sales.
period COVID-19 impacts. Partially offset by lower concentrator throughput.
Spence: Higher concentrator throughput at the Spence Growth Option (SGO),
partially offset by lower grade and recoveries.
Change in controllable cash costs (1,426) (766) 6 (212) (454)
Operating cash costs (1,318) (667) 3 (211) (443)
24
BHP | Financial results for the year ended 30 June 2023
Copper South Australia: Increased costs at Olympic Dam primarily due to the WAIO: Cost improvements due to: BMA: Higher costs primarily due to increased maintenance activity, increased Nickel West: Higher costs driven by inventory drawdowns to mitigate disruption
drawdown of inventory built during SCM21 in the prior period.
labour costs and inventory drawdowns due to the impacts of significant wet caused by heavy rain at Mt Keith and third party ore quality and delivery
· savings secured through the global procurement model; and weather and mining in higher strip ratio areas. issues.
Pampa Norte: Increased costs primarily relate to planned unfavourable
inventory movements, to ensure consistent feed to SGO (Spence) and in · easing of Western Australia's COVID-19 restrictions and prior period NSWEC: Higher costs primarily due to increased freight costs at the NCIG coal
preparation for closure (Cerro Colorado). compliance costs; export terminal and the cost associated with deploying additional stripping
capacity. Group and Unallocated also includes increased overhead expenses due to
Escondida: Higher costs due to: Partially offset by: construction at Jansen Stage 1.
· higher contractor costs and unfavourable inventory movements due to stock · increased labour costs;
builds in FY22 from record material mined;
· inventory drawdown to mitigate the disruption of operational impacts.
· partially offset by prior period COVID-19 cost impacts and workforce bonus
payments for renewal of a collective bargaining agreement in FY22.
Exploration and business development (108) (99) 3 (1) (11)
Copper South Australia: Higher exploration spend for drilling activities at
Oak Dam and Olympic Dam.
Change in other costs
Exchange rates 667 (3) 211 282 177
Inflation (1,412) (701) (244) (262) (205)
Fuel, energy, and consumable price (272) 38 (112) (118) (80)
movements Escondida and Spence: WAIO: Primarily due to higher diesel prices. BMA & NSWEC: Primarily due to higher diesel and explosives prices. Nickel West: Higher prices for consumables and reagents, diesel, ammonia and
explosives.
· lower power prices due to the renewables transition; and
· lower acid prices.
Partially offset by:
· higher diesel and consumable prices.
Non-Cash 7 (53) 60 − −
Escondida: Lower capitalised stripping costs reflecting lower waste material WAIO: Write-off of dormant stockpiles in prior period, partially offset by
moved. higher depletion of production stripping.
Spence: Higher capitalised stripping costs reflecting increased waste material
moved.
One-off items (411) − − − (411)
G&U: Includes the review of employee allowances and entitlements, and OZL
acquisition costs.
Asset sales − 1 5 (6) −
Ceased and sold operations (1,434) − − (1,383) (51)
BMC: Unwind of the contribution of BHP's 80% interest in BMC, prior to
divestment in May 2022.
25
BHP | Financial results for the year ended 30 June 2023
New and acquired operations 57 72 − − (15)
OZL: Contribution from recently acquired assets.
Other (734) (281) (134) (19) (300)
Antamina: Decreased profit driven by lower copper realised prices. WAIO: Other includes higher freight and distribution costs. Marketing: Includes US$414 m lower recovery of freight costs caused by
movements in the freight index on continuous voyage charter (CVC) voyages.
Year ended 30 June 2023 27,956 6,653 16,692 4,998 (387)
26
BHP | Financial results for the year ended 30 June 2023
Exchange rates
The following exchange rates relative to the US dollar have been applied in
the financial information:
Average Average
Year ended Year ended As at As at As at
30 June 30 June 30 June 30 June 30 June
2023 2022 2023 2022 2021
Australian dollar(1) 0.67 0.73 0.66 0.69 0.75
Chilean peso 864 811 803 920 735
1 Displayed as US$ to A$1 based on common convention.
Capital and exploration expenditure
Historical capital and exploration expenditure and guidance are summarised
below:
FY24e FY23 FY22
US$bn US$M US$M
Maintenance and decarbonisation(1) 3.1 2,981 2,765
Development - Minerals 6.5 3,752 3,090
Capital expenditure (purchases of property, plant and equipment) 9.6 6,733 5,855
Add: exploration expenditure 0.4 350 256
Capital and exploration expenditure - Continuing operations ~10.0 7,083 6,111
1 Includes capitalised deferred stripping of US$849 m for FY23
(FY22: US$790 m) and US$1.0 bn estimated for FY24.
Major Projects
Commodity Project and ownership Project scope / capacity Capital expenditure Initial production target date Progress
US$M
Potash Jansen Stage 1 Design, engineering and construction of an underground potash mine and surface 5,723 End-CY26 Project is 26% complete.
infrastructure, with capacity to produce 4.35 Mtpa.
(Canada)
100%
Production and unit cost guidance
Historical production and production guidance are summarised below:
Production Medium-term FY24 FY23 FY24e vs FY23
guidance
guidance
Copper (kt)(1) 1,720 - 1,910 1,717 0% - 11%
Escondida (kt) 1,200 - 1,300(2) 1,080 - 1,180 1,055 2% - 12%
Pampa Norte (kt) ~250(3) 210 - 250(3) 289 (27%) - (13%)
Copper South Australia (kt)(4) 310 - 340 232 33% - 46%
Antamina (kt) 120 - 140 138 (13%) - 1%
Carajás (kt) - 1.6 -
Iron ore (Mt) 254 - 264.5 257 (1%) - 3%
WAIO (Mt) 250 - 260 253 (1%) - 3%
WAIO (100% basis) (Mt) >305 282 - 294 285 (1%) - 3%
Samarco (Mt) 4 - 4.5 4.5 (11%) - 0%
Metallurgical coal - BMA (Mt) 28 - 31 29 (4%) - 7%
BMA (100% basis) (Mt) 56 - 62 58 (4%) - 7%
Energy coal - NSWEC (Mt) 13 - 15 14 (8%) - 6%
Nickel (kt) 77 - 87 80 (4%) - 9%
1 FY23 includes contribution of 21.5 kt from operations acquired
from OZL.
2 Medium term refers to FY25 and FY26.
3 Production guidance is provided for Spence only. Average of 250
ktpa over five years on the basis that remediation of the previously
identified TSF anomalies does not impact operations. Cerro Colorado is
expected to produce ~9 kt as it transitions to closure by 31 December 2023.
4 Comprised of Olympic Dam, Prominent Hill and Carrapateena.
27
BHP | Financial results for the year ended 30 June 2023
Historical costs(1) and cost guidance for our major assets are summarised
below:
FY23 at
Medium-term FY24 guidance realised
guidance(2) guidance(2) exchange rates(3) exchange rates(3)
Escondida unit cost (US$/lb) 1.30 - 1.60 (4,5) 1.40 - 1.70(4) 1.40 1.40
Spence unit cost (US$/lb) 2.00 - 2.30 2.09 2.11
WAIO unit cost (US$/t)(5) <17 17.40 - 18.90 18.91 17.79
BMA unit cost (US$/t) 95 - 105 105.21 96.46
1 Refer to OFR 10 - Non-IFRS information in the Annual Report for
detailed unit cost reconciliations and definitions.
2 FY24 and medium-term unit cost guidance are based on exchange
rates of AUD/USD 0.67 and USD/CLP 810.
3 Based on exchange rates of: FY23 AUD/USD 0.72 USD/CLP 830
(guidance); FY23 AUD/USD 0.67 USD/CLP 864 (realised).
4 Escondida unit costs for FY24 onwards exclude revenue based
government royalties.
5 Medium term refers to FY25 and FY26.
6 The breakdown of C1 unit costs, excluding third party royalties,
are detailed on page 12 (#_Western_Australia_Iron) .
Health, safety and social value
Key safety indicators(1)
Target/Goal FY23 FY22
Fatalities Zero work-related fatalities 2 0
High-potential injury (HPI) frequency(2) Year-on-year improvement in HPI frequency 0.18 0.14
Total recordable injury frequency (TRIF)(2) Year-on-year improvement in TRIF 4.5 4.0
1 All data points are presented on a total operations basis,
unless otherwise noted. Excludes OZL operations and functions.
Social value: key indicators scorecard(1,3)
Target/Goal FY23 FY22
Operational greenhouse gas (GHG) emissions Reduce operational GHG emissions by at least 30 per cent from FY20 levels(4) 9.8 11.0
(Mt CO(2)-e) by FY30
Value chain emissions: Steelmaking: 2030 goal to support industry to develop technologies and 114 90
pathways capable of 30 per cent GHG emissions intensity reduction in
Financial value committed in steelmaking partnerships and ventures to date integrated steelmaking, with widespread adoption expected post-2030
(US$ m)
Value chain emissions: Maritime transportation: 2030 goal to support 40 per cent GHG emissions 41
intensity reduction of BHP-chartered shipping of BHP products
Reduction(5) in emissions intensity of BHP-chartered shipping of our products
(%)
Social investment (US$M) Voluntary investment focussed on the six pillars of our social value framework 149.6 186.4
Indigenous procurement spend (US$M) Purchases from Indigenous vendors of US$269 million in FY23 332.6 149.9
Female employee participation (%) Aspirational goal for gender balance(6) by the end of FY25 35.2 32.3
Indigenous employee representation (%) Australia(7): aim to achieve 9.7 per cent by the end of FY27 8.6 8.3
Chile(8): aim to achieve 10.0 per cent by the end of FY25 9.7 8.7
Canada(9): aim to achieve 20.0 per cent by the end of FY26 7.7 7.2
Area under nature-positive management practices(10) (%) 2030 goal of having at least 30 per cent of the land and water we steward(11) 1.3 1.0
under conservation, restoration or regenerative practices
1 All data points are presented on a total operations basis,
unless otherwise noted. Excludes OZL operations and functions.
2 Combined employee and contractor frequency per 1 million hours
worked.
3 Includes selection of key social value framework metrics.
Additional metrics are included in OFR 6 in the Annual Report.
4 For our baseline year of FY20, our operational GHG emissions
were 14.5 Mt CO2-e. FY20 baseline has been adjusted for divestment of our
Petroleum business (merger with Woodside completed on 1 June 2022) and our
interest in BMC (completed on 3 May 2022), and for methodological changes (use
of Intergovernmental Panel on Climate Change (IPCC) Assessment Report 5 (AR5)
Global Warming Potentials and the transition to a facility-specific GHG
emission calculation methodology for fugitives at Caval Ridge).
5 Against CY08. CY08 was selected as the baseline year for this
goal to align with the base year for the International Maritime Organisation's
2030 emissions intensity goal and its corresponding reasoning and strategy.
6 Employees only, as at 30 June. We define gender balance as a
minimum 40% women and 40% men in line with the definitions used by entities
such as the International Labour Organisation.
7 Indigenous employee representation at Minerals Australia
operations. Total Indigenous employee representation in Australia, including
non-operational roles (2.7%), was 7.7% at 30 June 2023. While for FY23 this
does not include employees of OZL who joined BHP via acquisition on 2 May
2023, former OZL operations in Australia had 3.8% Indigenous employee
representation at 30 June 2023.
8 Indigenous employee representation at Minerals Americas
operations in Chile.
9 Indigenous employee representation at the Jansen Potash project
and operations in Canada. Total Indigenous workforce representation at the
Jansen Potash project and operations, including contractors (21.4%), was 20.8%
at 30 June 2023.
10 Area under our stewardship that which has a formal management plan
including conservation, restoration or regenerative practices. 1.3% is
calculated based on areas of land and water that we stewarded at 30 June 2023.
Refer to the BHP ESG Standards and Databook 2023, available at
https://www.bhp.com/sustainability (https://www.bhp.com/sustainability) , for
more information.
28
BHP | Financial results for the year ended 30 June 2023
11 Excluding greenfield exploration licences (or equivalent
tenements), which are outside the area of influence of our existing mine
operations. 30% will be calculated based on the areas of land and water that
we steward at the end of FY30.
The Financial Information for the year ended 30 June 2023 is derived from the
audited Consolidated Financial statements included in the Annual Report and
has been prepared on the basis of accounting policies and methods of
computation consistent with those applied in the 30 June 2022 financial
statements of the Group in the Annual Report, with the exception of new
accounting standards and interpretations which became effective from 1 July
2022 and other changes in accounting policies applied with effect from 1 July
2022. This news release includes Financial Information that is unaudited.
Users are advised to read this News Release document together with the Annual
Report (simultaneously released to respective stock exchanges). Analysis
relates to the relative financial and/or production performance of BHP and/or
its operations during the 2023 financial year compared with the 2022 financial
year, unless otherwise noted. Operations includes operated and non-operated
assets, unless otherwise noted. Medium term refers to a five-year horizon,
unless otherwise noted. Production volumes and financials for the operations
acquired from OZL are for the period of 1 May to 30 June 2023, whilst the
acquisition completion date was 2 May 2023. Numbers presented may not add up
precisely to the totals provided due to rounding.
The following abbreviations may have been used throughout this report: billion
tonnes (Bt); cost and freight (CFR); cost, insurance and freight (CIF), carbon
dioxide equivalent (CO2-e), dry metric tonne unit (dmtu); free on board (FOB);
giga litres (GL); greenhouse gas (GHG); grams per tonne (g/t); high-potential
injury (HPI); kilograms per tonne (kg/t); kilometre (km); million ounces per
annum (Mozpa); million pounds (Mlb); million tonnes (Mt); million tonnes per
annum (Mtpa); ounces (oz); pounds (lb); thousand ounces (koz); thousand ounces
per annum (kozpa); thousand tonnes (kt); thousand tonnes per annum (ktpa);
thousand tonnes per day (ktpd); tonnes (t); total recordable injury frequency
(TRIF); and wet metric tonnes (wmt).
The following footnotes apply to this Results Announcement:
i Presented on a total operations basis. The equivalent number
for continuing operations in FY22 is US$15.2 bn. For more information refer to
the BHP Economic Contribution Report 2023.
ii We use various non-IFRS financial information to reflect our
underlying financial performance.
Non-IFRS financial information (as outlined in ASIC
Regulatory Guide 230) is not defined or specified under the requirements of
IFRS, but is derived from the Group's Consolidated Financial Statements
prepared in accordance with IFRS. Non-IFRS financial information includes some
of the following items (for a complete list of Non-IFRS financial information
and their respective definitions and calculation methodology, please refer to
section 10 of the Operating and Financial Review in the Annual Report):
Underlying EBIT, Underlying EBITDA, Underlying EBITDA margin, capital and
exploration expenditure, adjusted effective tax rate, ROCE, underlying return
on capital employed, unit costs, free cash flow, net debt, gearing ratio, and
underlying earnings per share. Non-IFRS financial information and relevant
reconciliations are included in the Annual Report document for the year ended
30 June 2023 and comparative periods. Non-IFRS financial information is
unaudited.
iii Social value metrics exclude OZL operations and functions, unless
otherwise noted.
iv World Steel in Figures 2023, World Steel Association.
v Legacy assets refer to those BHP-operated assets, or part
thereof, located in the Americas that are in the closure phase.
vi This includes contribution to suppliers, wages and benefits for
employees, dividends, taxes, royalties and voluntary social investment. FY22
has been restated to conform to the FY23 basis of preparation that includes
payments to suppliers for operating costs on an accruals basis and payments to
suppliers for capital expenditure on a cash basis. FY22 includes the US$19.6
bn in specie dividend in connection with the merger of BHP Petroleum with
Woodside. For more information refer to the Economic Contribution Report 2023.
vii Calculated on a copper equivalent production weighted average basis.
viii Maintenance capital includes non-discretionary spend for the
following purposes: deferred development and production stripping; risk
reduction, compliance and asset integrity.
ix Average for FY26-FY28; +/- 50% in any given year.
x The information in this section is based on BHP data, analysis
and desk top research on public data sources.
xi There may be differences in the manner that third parties
calculate or report unit costs data compared to BHP, which means that
third-party data may not be comparable to our data. WAIO C1 unit costs exclude
third party royalties, net inventory movements, depletion of production
stripping, exploration expenses, marketing purchases, demurrage, exchange rate
gains/losses, and other income.
xii Resettlement cases completed includes completed construction
(families either moved in or handover to families in progress) or cash payment
solutions.
xiii Relates to refined nickel metal only. Excludes intermediate products
and nickel sulphate.
xiv An Exploration Target is a statement or estimate of the exploration
potential of a mineral deposit in a defined geological setting where the
statement or estimate, quoted as a range of tonnes and a range of grade (or
quality), relates to mineralisation for which there has been insufficient
exploration to estimate a Mineral Resource.
xv The potential quantity and grade of an Exploration Target is
conceptual in nature and as such there has been insufficient exploration to
estimate a Mineral Resource, and it is uncertain if further exploration or
analysis will result in the estimation of a Mineral Resource.
Forward-looking statements
This release contains forward-looking statements, which involve risks and
uncertainties. Forward-looking statements include all statements other than
statements of historical or present facts, including: statements regarding:
trends in commodity prices and currency exchange rates; demand for
commodities; global market conditions, guidance; reserves and resources and
production forecasts; expectations, plans, strategies and objectives of
management; climate scenarios; approval of certain projects and consummation
of certain transactions; closure, divestment, acquisition or integration of
certain assets, operations or facilities (including associated costs or
benefits); anticipated production or construction commencement dates; capital
expenditure or costs and scheduling; operating costs, and supply of materials
and skilled employees; anticipated productive lives of projects, mines and
facilities; the availability, implementation and adoption of new technologies;
provisions and contingent liabilities; and tax, legal and other regulatory
developments.
Forward-looking statements may be identified by the use of terminology,
including, but not limited to, 'intend', 'aim', 'ambition', 'aspiration',
'goal', 'target', 'prospect', 'project', 'see', 'anticipate', 'estimate',
'plan', 'objective', 'believe', 'expect', 'commit', 'may', 'should', 'need',
'must', 'will', 'would', 'continue', 'forecast', 'guidance', 'outlook',
'trend' or similar words. These statements discuss future expectations
concerning the results of assets or financial conditions, or provide other
forward-looking information.
These forward-looking statements are based on management's expectations and
reflect judgements, assumptions, estimates and other information available as
at the date of this release and are not guarantees or predictions of future
financial or operational performance, and involve known and unknown risks,
uncertainties and other factors, many of which are beyond our control, and
which may cause actual results to differ materially from those expressed in
the statements contained in this release. BHP cautions against reliance on any
forward-looking statements.
For example, our future revenues from our assets, projects or mines described
in this release will be based, in part, upon the market price of the
commodities produced, which may vary significantly from current levels. These
variations, if materially adverse, may affect the timing or the feasibility of
the development of a particular project, the expansion of certain facilities
or mines, or the continuation of existing assets.
29
BHP | Financial results for the year ended 30 June 2023
Other factors that may affect the actual construction or production
commencement dates, revenues, costs or production output and anticipated lives
of assets, mines or facilities include our ability to profitably produce and
deliver the products extracted to applicable markets; the impact of economic
and geopolitical factors, including foreign currency exchange rates on the
market prices of the commodities we produce and competition in the markets in
which we operate; activities of government authorities in the countries where
we sell our products and in the countries where we are exploring or developing
projects, facilities or mines, including increases in taxes and royalties or
implementation of trade or export restrictions; changes in environmental and
other regulations, political or geopolitical uncertainty; labour unrest;
weather, climate variability or other manifestations of climate change; and
other factors identified in the risk factors discussed in OFR 8.1 in the
Annual Report and BHP's filings with the U.S. Securities and Exchange
Commission (the 'SEC') (including in Annual Reports on Form 20-F) which are
available on the SEC's website at www.sec.gov (http://www.sec.gov) .
Except as required by applicable regulations or by law, BHP does not undertake
to publicly update or review any forward-looking statements, whether as a
result of new information or future events.
Past performance cannot be relied on as a guide to future performance.
No offer of securities
Nothing in this release should be construed as either an offer, or a
solicitation of an offer, to buy or sell BHP securities in any jurisdiction,
or be treated or relied upon as a recommendation or advice by BHP.
Reliance on third party information
The views expressed in this release contain information that has been derived
from publicly available sources that have not been independently verified. No
representation or warranty is made as to the accuracy, completeness or
reliability of the information. This release should not be relied upon as a
recommendation or forecast by BHP.
No financial or investment advice - South Africa
BHP does not provide any financial or investment 'advice' as that term is
defined in the South African Financial Advisory and Intermediary Services Act,
37 of 2002, and we strongly recommend that you seek professional advice.
BHP and its subsidiaries
In this release, the terms 'BHP', the 'Company, the 'Group', 'BHP Group', 'our
business', 'organisation', 'we', 'us', 'our' and ourselves' refer to BHP Group
Limited and, except where the context otherwise requires, our subsidiaries.
Refer to note 30 'Subsidiaries' of the Financial Statements in the Annual
Report for a list of our significant subsidiaries. Those terms do not include
non-operated assets.
This release covers BHP's functions and assets (including those under
exploration, projects in development or execution phases, sites and closed
operations) that have been wholly owned and/or operated by BHP or that have
been owned as a joint venture1 operated by BHP (referred to in this release as
'operated assets' or 'operations') during the period from 1 July 2022 to 30
June 2023.
BHP also holds interests in assets that are owned as a joint venture but not
operated by BHP (referred to in this release as 'non-operated joint ventures'
or '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.
1 References in this release to a 'joint venture' are used for
convenience to collectively describe assets that are not wholly owned by BHP.
Such references are not intended to characterise the legal relationship
between the owners of the asset.
30
BHP | Financial results for the year ended 30 June 2023
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