REG - BHP Group Limited - BHP FY2024 Results Announcement
27/08/2024 07:00
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RNS Number : 6954B BHP Group Limited 27 August 2024
Financial results for the year ended 30 June 2024
27 August 2024
Operational excellence underpins strong returns and investment in growth
BHP delivered a strong set of results in FY24 on the back of solid operational
performance. We delivered record volumes at Western Australia Iron Ore, where
we extended our lead as the world's lowest cost iron ore producer. Across our
global copper assets, we grew overall copper volumes by 9% for the second
consecutive year and expect to deliver a further 4% in FY25.
As a result of this strong performance, combined with our healthy balance
sheet, we determined a final dividend of 74 US cents per share, a 53% payout
ratio, continuing our track record of delivering robust shareholder returns
through the cycle.
We have a pipeline of copper projects under development in Chile and
Australia. At Copper SA we have a strategy to deliver up to 650 ktpa of
copper and today we published an Inferred Mineral Resource at Oak Dam for the
first time. In July, we strengthened our copper resource position and our
early-stage options by agreeing to acquire a 50% interest in the promising
Filo del Sol and Josemaria copper projects in Argentina, adding to Resolution
in the US and our greenfield exploration efforts. In iron ore, studies on
further potential expansions at WAIO to increase our output up to 330 Mtpa
will be completed in CY25. Construction of our Jansen potash project in Canada
is ahead of the original schedule with first production now just over two
years away. We have put our Western Australia Nickel operations into temporary
suspension as a result of global oversupply of nickel, while continuing to
support our people and communities impacted by this decision.
In January, tragically a colleague was fatally injured at BMA and we continue
our relentless effort to eliminate fatalities and operate safely. During FY24,
we reached 37% female employee participation across BHP globally, including
over 40% in our Minerals Americas business. We increased Indigenous
procurement spend to over US$600 m. We have reduced operational greenhouse gas
emissions by 32% from our FY20 adjusted baseline and today set out our
decarbonisation plans through to 2050 in our second Climate Transition Action
Plan.
The longer-term fundamentals that drive demand for our products remain
compelling. In the near term, we expect volatility in global commodity
markets, with China experiencing an uneven recovery among its end-use sectors.
The effectiveness of recently announced pro‑growth policies will be an
important contributor for the country to achieve its official 5% growth
target. India is set to continue as the world's fastest growing major economy.
We anticipate developed economies will face gradual relief from the lingering
effects of higher interest rates in coming years.
We are energised to build on the positive momentum achieved this year. Our
tier 1 assets, track record of operational performance and strong balance
sheet allow us to invest in future growth and maintain strong cash returns to
shareholders through the cycle.
Mike Henry
BHP Chief Executive Officer
Safety Operational excellence
Focus on fatality elimination Copper Up 9% Iron ore Up 1%
A colleague was tragically fatally injured at BMA in January. The Record production at WAIO, Spence and Carrapateena and the highest production
investigation outcomes will inform our continuing efforts to eliminate in four years at Escondida. Extended our lead at WAIO as the lowest cost major
fatalities from our business. These efforts are already reducing serious iron ore producer in the world. i (#_edn1)
incidents, with our High Potential Injury frequency declining 36% in FY24.
Copper production increased 9% for the second consecutive year and is expected
to increase a further 4% in FY25. ii (#_edn2)
Financial results Payments to governments
Attributable profit Total payments to governments
US$7.9 bn Down 39% US$11.2 bn
FY23 US$12.9 bn FY23 US$13.8 bn
Underlying attributable profit iii (#_edn3) increased 2% to US$13.7 bn due to BHP was one of the largest corporate taxpayers in Australia in FY24. Our
solid operational performance and higher commodity prices in key commodities. global adjusted effective tax rateiii was 32.5% and increases to 41.7% once
We continued to demonstrate strong cost discipline and achieved final unit revenue and production-based royalties are included.
cost guidance at all assets.
Investing in growth Returns to shareholders
Capital and exploration expenditureiii Fully franked final dividend
US$9.3 bn Up 31% US$0.74 per share
FY23 US$7.1 bn 53% payout ratio
1
BHP | Financial results for the year ended 30 June 2024
We increased capital investment in copper and potash by US$1.5 bn and we We have determined a final dividend of US$3.8 bn.
expect that ~65% of our medium-term capital will be allocated to these
future-facing commodities. This brings total cash returns to shareholders announced for the year to
US$7.4 bn, which is US$1.46 per share fully franked.
In July, we signed an agreement with Lundin Mining to jointly acquire Filo
Corp. and to enter a joint venture with the intent of developing the Filo del
Sol and Josemaria copper projects.
Social value
We progressed towards our 2030 goals and continued to embed social value in
our strategic decision making
Decarbonisation Safe, inclusive and future-ready workforce
Operational GHG emissions iv (#_edn4) Female employee workforce participation vi (#_edn6)
9.2 MtCO(2)-e 37.1% Up 1.9% points
Down 32% since FY20 baseline, adjusted basis FY23 35.2%
Our operational GHG emissions were 1% higher than FY23 due to increased Female employee workforce participation more than doubled from 17.6% in CY16
business activity as expected. We remain on track to achieve our target of and in our Minerals Americas operations it is now over 40%. This is a point of
reducing our operational GHG emissions by at least 30% from FY20 levels by differentiation from our competitors.
FY30, through structural abatement, and we are making good progress with our
value chain GHG emissions (Scope 3) strategy. ~51% of our external hires were female (FY23: 48%). We improved our
representation of women in leadership to 31.7% (FY23: 29.7%).
Today, we published our second Climate Transition Action Plan which updates on
our climate strategy and outlines our decarbonisation plans. Our plans include
up to US$4 bn in spend and commitments over the decade to 2030 to execute our
operational decarbonisation plans. v (#_edn5)
Healthy environment Indigenous partnerships
Area under nature-positive management practices vii (#_edn7) Record Indigenous procurement spend
83 k hectares US$609 m Up 83%
Up 3,295 hectares since FY23 viii (#_edn8) FY23 US$333 m
We have developed a Group-level framework to identify nature‑positive We completed our inaugural assessment of the health of our relationships with
opportunities across our operated assets in Australia, Chile and Canada, a range of Indigenous partners and published the results in our 2024 Annual
supporting our 2030 Healthy environment goal. Report
(https://www.bhp.com/-/media/Documents/Investors/Annual-Reports/2024/240827_bhpannualreport2024)
We achieved the majority of our context-based water target short-term .
milestones for all applicable operated assets. ix (#_edn9)
We have completed all of our FY24 Australian Reconciliation Action Plan
targets, including embedding these into our ongoing operations, and released
our first Canada Indigenous Partnerships Plan.
2
BHP | Financial results for the year ended 30 June 2024
Responsible supply chains Thriving, empowered communities
Responsible Minerals Program Total economic contribution x (#_edn10)
OECD-alignment achieved US$49.2 bn
BHP's Responsible Minerals Program has been independently assessed as fully FY23 US$54.2 bn
meeting all criteria under the Joint Due Diligence Standard which is the most
comprehensive OECD-aligned standard. During the year, we contributed US$41.5 bn to suppliers, contractors,
employees, governments and voluntary investment in social projects across the
communities where we operate. This was 84% of our total economic contribution
with shareholder payments of US$7.7 bn (16%).
Detailed information on social value is included in Appendix 1 (#_Appendix_1)
and OFR 6 in the Annual Report (https://www.bhp.com/AR2024_OFR6)
3
BHP | Financial results for the year ended 30 June 2024
Group financial performance
Earnings and margins
Operational excellence and increased prices in key commodities led to strong
underlying financial results
Revenue BHP's revenue increased US$1.8 bn primarily as a result of higher realised Our adjusted effective tax rate was 32.5% primarily due to:
prices across iron ore and copper, where sales volumes also increased 3% and
US$55.7 bn Up 3% 5% respectively. This was partially offset by lower energy coal and nickel · the impact of the new Chilean mining tax regime applying from
prices, and lower steelmaking coal volumes following the divestment of 1 January 2024; and
FY23 US$53.8 bn Blackwater and Daunia on 2 April 2024.
· dividend withholding taxes related to our Chilean operations.
We experienced a global inflation rate of ~4%, predominantly driven by higher
labour costs. This was somewhat offset by lower commodity linked raw materials Our operating costs include US$3.6 bn of revenue or production-based
Attributable profit such as diesel and acid. Our productivity initiatives and cost discipline royalties. Once these are included, our Group effective tax rate was 41.7%.
allowed us to mitigate these ongoing cost pressures with unit costsiii For further details see OFR 10 - Effective tax rate
US$7.9 bn Down 39% ~2.9% xi (#_edn11) higher across our major assets. (https://www.bhp.com/AR2024_OFR10ETR) .
FY23 US$12.9 bn WAIO extended its lead over competitors as the lowest cost major iron ore The adjusted effective tax rate for FY25 is expected to be in the range of 33%
producer globally.i to 38%, with the increase primarily reflecting the impact of the new Chilean
mining tax regime applying for the full financial year.
Overall, Underlying EBITDA increased 4% and Underlying EBITDA margin remained
Underlying attributable profit at 54%, the eighth consecutive year we have achieved a margin greater than Attributable profit decreased due to an exceptional loss of US$5.8 bn
50%. (post-tax), predominantly comprising:
US$13.7 bn Up 2%
For further details see · a US$2.7 bn impairment of Western Australia Nickel; and
FY23 US$13.4 bn Underlying EBITDA waterfall (#_Underlying_EBITDA_waterfall_7) .
· a US$3.8 bn charge related to the Samarco dam failure.
This was partially offset by a US$0.7 bn (post-tax) gain on disposal of the
Profit from operations Blackwater and Daunia mines.
US$17.5 bn Down 24% For further details see
Note 3 - Exceptional items (https://www.bhp.com/AR2024_Note3) and
FY23 US$22.9 bn N (https://www.bhp.com/AR2024_Note4) ote 4 - Significant events - Samarco dam
failure (https://www.bhp.com/AR2024_Note4) .
Underlying EBITDAiii
US$29.0 bn Up 4%
FY23 US$28.0 bn
Underlying EBITDA marginiii
54%
FY23 54%
Adjusted effective tax rate
32.5%
FY23 30.9%
FY25e 33 - 38%
Detailed financial information is included in Appendix 1 (#_Appendix_1_7) and
OFR 4 in the Annual Report (https://www.bhp.com/AR2024_OFR4)
4
BHP | Financial results for the year ended 30 June 2024
Cash flow and balance sheet
Strong cash flow generation and balance sheet underpinned our investment in
organic growth
Net operating cash flow Our net operating cash flow increased 11%, compared to FY23 when we made BHP's balance sheet remains strong. During FY24, BHP issued US$4.8 bn of new
significant income tax finalisation payments relating to FY22. bonds and repaid US$6.3 bn of debt, of which US$5.0 bn related to the OZL
US$20.7 bn Up 11%
acquisition facility and US$1.3 bn to maturing bonds.
We generated free cash flow of US$11.9 bn after investing US$9.3 bn in line
FY23 US$18.7 bn with our Capital Allocation Framework (CAF). Our investments included: BHP's global credit ratings xv (#_edn15) have remained unchanged during FY24
with Moody's rating A1(stable)/P-1 and S&P Global's rating A-(stable)/A-1
· US$5.9 bn in organic development including ~US$2.7 bn on copper (long-term/short-term respectively).
projects and ~US$1.1 bn at Jansen; plus ~US$0.5 bn of exploration spend
Capital and exploration expenditure primarily at Copper South Australia; and Our net debt decreased by US$2.0 bn in the year largely reflecting:
US$9.3 bn Up 31% · US$3.0 bn of maintenance xii (#_edn12) and decarbonisation · Net operating cash flow of US$20.7 bn; and
expenditure with US$1.2 bn sustaining capital at WAIO to support our
FY23 US$7.1 bn medium-term goal of producing >305 Mtpa. · Proceeds from the divestment of Blackwater and Daunia of US$1.1 bn;
We expect capital and exploration expenditure to be: xiii (#_edn13) Partially offset by:
Free cash flowiii · ~US$10 bn for FY25, including ~US$0.5 bn of exploration; and · Capital and exploration expenditure of US$9.3 bn; and
US$11.9 bn Up 111% · ~US$11 bn for FY26 and per annum on average in the medium term. xiv · Payment of dividends to BHP shareholders of US$7.7 bn, and to
(#_edn14) non‑controlling interests of US$1.4 bn.
FY23 US$5.6 bn
We have flexibility to adjust capital spend and phasing of projects to Our net debt target range of between US$5 and US$15 bn enables us to maintain
accommodate market dynamics and cash flow generation. a resilient balance sheet during periods of change and external uncertainties
while retaining the flexibility to allocate capital within our CAF towards
Net debtiii shareholder returns and growth opportunities. We are comfortable to move above
our net debt target temporarily to execute value accretive opportunities in
US$9.1 bn the portfolio.
FY23 US$11.2 bn For further details see Note 21 - Net debt (https://www.bhp.com/AR2024_Note21)
.
HY24 US$12.6 bn
Gearing ratioiii
15.7%
FY23 18.7%
HY24 21.7%
Detailed financial information is included in Appendix 1 (#_Appendix_1_7) and
OFR 4 in the Annual Report (https://www.bhp.com/AR2024_OFR4)
5
BHP | Financial results for the year ended 30 June 2024
Value and returns
Continuing our track record of balancing investment in the business and cash
returns to shareholders
Full year dividend Earnings per share - basic Our operations continued to generate industry leading Underlying ROCE xvi
(#_edn16) of 27.2%.
US$1.46 per share 155.8 US cps
A final dividend of US$0.74 per share (US$3.8 bn), equivalent to a 53% payout
Fully franked FY23 255.2 US cps ratio will be paid to shareholders on 3 October 2024.
54% payout ratio This brings total cash dividends announced for FY24 to US$1.46 per share
(US$7.4 bn), equivalent to a 54% payout ratio, making this the fourth largest
full year ordinary dividend declared.
Underlying return on capital employed (ROCE)iii Earnings per share - Underlyingiii This extends our track record of strong returns while balancing investment in
growth. Including the determined FY24 final dividend, we will have returned
27.2% 269.5 US cps over US$42 bn cash to shareholders since 1 July 2021.
FY23 28.8% FY23 265.0 US cps
Important dates for shareholders
BHP's Annual General Meeting will be held on Wednesday 30 October 2024.
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 3 September 2024
Last day to trade cum dividend on Johannesburg Stock Exchange (JSE) 10 September 2024
Ex-dividend Date JSE 11 September 2024
Ex-dividend Date Australian Securities Exchange (ASX) and London Stock 12 September 2024
Exchange (LSE)
Ex-dividend Date New York Stock Exchange (NYSE) 13 September 2024
Record Date 13 September 2024
Announcement of currency conversion into AUD, GBP and NZD 16 September 2024
DRP and Currency Election date 16 September 2024(1)
Payment Date 3 October 2024
DRP Allocation Date(2) 17 October 2024
1 5:00 pm AEST.
2 Allocation dates may vary between registers but all allocations
will be completed on or before 17 October 2024.
Shareholders registered on the South African branch register will not be able
to dematerialise or rematerialise their shareholdings between the dates of 10
September 2024 and 13 September 2024 (inclusive), and transfers between the
Australian register and the South African branch register will not be
permitted between the dates of 3 September 2024 and 13 September 2024
(inclusive). American Depositary Shares (ADSs) each represent two fully paid
ordinary shares and receive dividends accordingly.
6
BHP | Financial results for the year ended 30 June 2024
Any eligible shareholder who wishes to participate in the DRP, or to vary a
participation election should do so before 5:00 pm AEST 16 September 2024, 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
xvii (#_edn17)
BHP's external operating environment in FY24 remained relatively volatile. Our
key commodity prices were mixed with significant variation in performance
between individual commodities.
In the near term, we expect steady global growth slightly above 3% for CY24
and CY25. Major economies are expected to diverge in their growth outlooks,
with developed economies facing less of a drag from higher interest rates,
China experiencing an uneven recovery among its end-use sectors, and India
likely to continue as the fastest growing major economy. Geopolitical risks
remain relatively elevated and are likely to remain so in the near term.
Inflation has been easing across our major operating regions, although the
trajectory towards central bank inflation targets will continue to be bumpy.
And while wage growth has largely normalised in Chile and has recently peaked
in Australia, we still expect the lagged impact from inflation and some
lingering labour market tightness to impact our cost base into FY25.
Commodity demand
Demand for commodities in the developed world has been relatively soft over
CY23 and into CY24 as anti-inflationary policies, sluggish industrial activity
and the last of the lagged impacts of the energy crisis were felt. The impact
of higher interest rates is expected to continue to restrain household
consumption in the developed world for the balance of CY24, but we expect
steel, copper and nickel demand to recover across the OECD. China is on track
to meet official CY24 macroeconomic growth targets, but the property sector is
likely to remain a drag. India is expected to continue as a bright spot for
commodity demand.
The Chinese economy has been volatile since CY23, with a steady recovery in a
range of sectors important to copper demand, for example power infrastructure,
transport and consumer durable goods. Weakness however continued in the
steel-intensive real estate sector. Policymakers have acknowledged that more
support is needed to embed a recovery in this sector, and in mid-CY24 a more
decisive policy pivot emerged with the objective to reduce the oversupply in
the market. Against this backdrop, steel production was lower in H1 CY24
compared to the previous year, however annual steel production is still
expected to be more than 1 Bt for the sixth consecutive year.
We believe that China's economic transition could accelerate its demand shift
increasingly towards 'future-facing commodities'.
7
BHP | Financial results for the year ended 30 June 2024
The picture has been more positive in India, where a capital investment
upswing continues to be well entrenched and commodity demand has been robust.
The Indian economy has maintained healthy momentum after the general election,
particularly in relation to demand linked to the steel sector.
Over the long term, the outlook for our key commodities remains positive. We
continue to expect that population growth, urbanisation, rising living
standards, and the infrastructure required for decarbonisation and
electrification will drive demand for steel, non-ferrous metals such as
copper, and fertilisers.
For the review and outlook relating to our individual commodities please refer
to the relevant segment sections from page 7 (#_Segment_and_asset_2) .
Costs and inflation
The negative impact of inflation on our cost base continues to recede, but
some elements remain a concern. Non-energy raw material costs have largely
normalised and returned to regular cyclical variations. Wage growth in Chile
has broadly returned to long-run averages, while Australian wage growth peaked
in H1 FY24. Electricity costs in Australia have been volatile in H2 FY24 due
to weather-related factors.
We continue to expect the lagged effect of inflation to flow into FY25. The
labour market remains a core inflationary concern, although we believe that we
are now past the peak and conditions should continue to ease. However,
regulatory changes underway in Australia will add to our labour costs and
reduce the international competitiveness of the Australian economy.
Overall, the cost of mining production continues to be higher than it was
prior to the pandemic. This implies that price support is also higher and
low-cost operators stand to capture potentially higher relative margins in
certain commodities.
Segment and asset performance
Detailed financial information on all business segments in the Financial
performance summary (#_Financial_performance_summary1_7)
8
BHP | Financial results for the year ended 30 June 2024
Copper
Production Commodity review and outlookxvii
Copper prices rose in H2 FY24, with the LME official cash settlement price
1,865 kt Up 9% hitting a new record high in May on bullish investor sentiment, fuelled by
expectations of lower interest rates in the US, possible copper smelter cuts
FY23 1,717 kt in China, and the LME banning the delivery of Russian metal. However, copper
prices then moderated by the end of FY24 reflecting underlying near-term
FY25e 1,845 - 2,045 kt fundamentals with weak Chinese demand and rising stocks.
In the near term, slowing demand growth in China due to continued weakness in
the real estate sector is expected to be partially offset by more positive
Average realised price trends in power grid spending and consumer durable goods. We anticipate Europe
will be slower to recover from weakness in manufacturing, while the US will
US$3.98/lb Up 9% continue to improve more swiftly due to a more resilient underlying economy.
FY23 US$3.65/lb We now expect CY24 to be in marginal surplus, a reflection of softer demand
expectations for China and higher supply.
In the medium to longer term, traditional demand (such as home building,
Underlying EBITDA electrical equipment and household appliances) is expected to remain solid and
demand from emerging sectors such as artificial intelligence and data centres
US$8.6 bn Up 29% should add to this. The decarbonisation mega-trend is also expected to bolster
demand. We anticipate that the cost curve required to meet that demand is
FY23 US$6.7 bn likely to steepen as challenges to the development of new resources
progressively increase. This implies that should deficits occur in this phase,
29% contribution to the Group's Underlying EBITDA as we expect they will, fly-up pricing may well occur and in turn this could
spur inducement of new, higher cost supply in the long term.
51% Underlying EBITDA margin
Segment outlook
After two consecutive years of 9% growth in copper production, we expect to
deliver a further 4% increase in FY25 as we mine higher grade ore at Escondida
and further lift productivity across all copper-producing assets.
Underlying ROCE
In the longer term, we have built a strong pipeline of attractive options to
13% unlock our significant resource endowment and utilise latent capacity across
our Escondida and Pampa Norte assets. We have narrowed ~20 studies across
FY23 12% Chile to four main pathways across existing and new facilities with Final
Investment Decisions (FIDs) planned in FY26 to FY29. We also have a 45%
Capital and exploration expenditure interest in the Resolution Copper Project in the United States, one of the
largest undeveloped copper projects in the world with the potential to become
US$3.9 bn a significant copper producer in North America.
FY23 US$2.8 bn We are growing at our 100%-owned Copper South Australia asset, with production
up 39% in FY24 and growth projects across all three operations. We are
FY25e US$4.7 bn assessing the pathway to deliver >500 ktpa of copper production in the
early 2030s (>700 ktpa CuEq including by-products), and a strategy to
deliver up to 650 ktpa copper production by the middle of next decade xviii
(#_edn18) . This is supported by the recent exploration success at OD Deeps,
and at Oak Dam where we have declared a first-time Inferred Mineral Resource
of 1,340 Mt at 0.66% copper and 0.33 g/t gold.
9
BHP | Financial results for the year ended 30 June 2024
Escondida
Copper production Unit cost(1,2) Underlying EBITDA
1,125 kt Up 7% US$1.45/lb Up 4% US$5.8 bn Up 17%
FY23 1,055 kt FY23 US$1.40/lb FY23 US$4.9 bn
FY25e 1,180 - 1,300 kt FY25e US$1.30 - US$1.60/lb
Medium-term(3) 900 - 1,000 ktpa Medium-term(3) US$1.50 - US$1.80/lb
1 Based on exchange rates of: FY24 USD/CLP 907 (realised); FY23
USD/CLP 864 (realised); FY25 and medium-term USD/CLP 842 (guidance).
2 Refer to OFR 10 - Non-IFRS information
(https://www.bhp.com/AR2024_OFR10UC) in the Annual Report for detailed unit
cost reconciliation.
3 Medium-term refers to an average for a period from FY27 onwards.
Financial performance
Underlying EBITDA increased 17% primarily as a result of:
· Higher realised copper prices which had a favourable US$0.9 bn
impact; and
· Increased sales volumes in line with higher concentrator feed grade
as planned, partially offset by lower cathode production to prioritise
concentrator feed.
These were partially offset by the impacts of inflation and lower stripping
capitalisation.
Asset outlook
Production for FY25 is expected to increase to between 1,180 and 1,300 kt,
weighted to the second half. Production for FY25 and FY26 are expected to
average between 1,200 and 1,300 ktpa. From FY27 production is expected to
decline to between 900 and 1,000 ktpa on average for a period as a result of
lower concentrator feed grades. Concentrator feed grade for FY25 is expected
to be greater than 0.90% and decline to below 0.80% from FY27.
Over the last 12 months, Escondida advanced a number of strategic studies into
options to offset the impact of this expected decline of concentrator feed
grade. The Escondida growth program targets growth through both existing and
potential new facilities, such as:
· Potential for expansion and debottlenecking at the Laguna Seca
concentrators;
· A new concentrator to replace the ageing Los Colorados facility; and
· The application of one or more leaching technologies to improve
recoveries and unlock primary sulphide resources in the cathode process.
At a program level the current preferred options have expected IRRs of between
14% and 19% at consensus prices with a range of competitive capital
intensities between US$17,000 and 29,000/t CuEq. xix (#_edn19) We expect
operating costs associated with the studies to be ~US$160 m in FY25 (~US$90 m
in FY24).
Full SaL, a BHP designed leaching technology which has already been
successfully deployed at Spence, is on track for first production during FY25.
We expect capital expenditure to implement Full SaL to be ~US$300 m and for it
to produce ~410 kt in copper cathodes at Escondida over a 10 year period once
implemented through improved recoveries and shorter leach cycle times.
Escondida successfully completed negotiations for a new collective agreement
with the Union N°1 of Operators and Maintainers, effective for 36 months from
2 August 2024.
Deployment of autonomous haulage commenced in the Escondida Norte pit in H2
FY24 and will ramp up to ~50 autonomous trucks over the next three years.
Escondida continues to evaluate transitioning its fleet of ~160 conventional
haul trucks to autonomous operations over the next decade.
10
BHP | Financial results for the year ended 30 June 2024
Pampa Norte
Copper production Spence unit cost(1,2,3) Underlying EBITDA
266 kt Down 8% US$2.13/lb Up 1% US$0.9 bn Up 19%
FY23 289 kt FY23 US$2.11/lb FY23 US$0.8 bn
FY25e(1) 240 - 270 kt FY25e(1) US$2.00 - US$2.30/lb
Medium-term(1) ~250 ktpa Medium-term(1) US$2.05 - US$2.35/lb
1 Production and unit cost guidance is provided for Spence only.
2 Refer to OFR 10 - Non-IFRS information
(https://www.bhp.com/AR2024_OFR10UC) in the Annual Report for detailed unit
cost reconciliation.
3 Based on exchange rates of: FY24 USD/CLP 907 (realised); FY23
USD/CLP 864 (realised); FY25 and medium-term USD/CLP 842 (guidance).
Financial performance
Underlying EBITDA increased 19% predominately as a result of higher realised
copper prices, which had a favourable US$0.2 bn impact.
This was partially offset by:
· The impact of sales volumes product mix, with planned lower cathode
sales partially offset by record concentrate production due to improved
operational performance; and
· Increased costs driven by the impact of inflation-linked cost
escalation and one-off labour related costs.
Asset outlook
Production at Spence for FY25 is expected to be between 240 and 270 ktpa and
is expected to average ~250 ktpa over the next five years.
The concentrator plant modifications, which commenced in August 2022, were
completed in June 2024 as planned and are delivering expected improvements in
throughput and recovery. Opportunities to further debottleneck and expand the
concentrator in the future continue to be assessed.
As disclosed in the Q2 FY24 Operational Review, changes to the original Spence
tailings storage facility (TSF) design were approved and are currently in
execution. As we progress execution, we continue to closely monitor the
previously identified anomalies to ensure safe operational conditions, and
studies are ongoing to assess whether further works are required. Production
guidance at Spence remains subject to the remediation of the TSF anomalies.
Cerro Colorado entered temporary care and maintenance in December 2023, after
producing 11 kt in FY24 (FY23: 49kt). Cerro Colorado has 1,700 Mt @ 0.36%
copper of Inferred Resources xx (#_edn20) and we are assessing the
application of novel leaching technologies to utilise latent capacity and
allow for a potential restart of operations early next decade.
11
BHP | Financial results for the year ended 30 June 2024
Copper South Australia
Copper production Unit cost(1,2) Underlying EBITDA
322 kt Up 39% US$1.37/lb US$1.6 bn Up 123%
FY23(3) 232 kt FY23 US$0.7 bn
FY25e 310 - 340 kt FY25e(4) US$1.30 - US$1.80/lb
1 Based on exchange rates of: FY24 AUD/USD 0.66 (realised); FY25
AUD/USD 0.66 (guidance).
2 Refer to OFR 10 - Non-IFRS information
(https://www.bhp.com/AR2024_OFR10UC) in the Annual Report for detailed unit
cost reconciliation.
3 FY23 production includes contribution of 20 kt from Carrapateena
and Prominent Hill from 1 May 2023.
4 FY25 guidance is calculated using the following assumptions for
by-products: gold US$2,000/oz, and uranium US$80/lb.
Financial performance
Underlying EBITDA increased predominantly as a result of:
· Higher sales volumes across the asset, in particular the contribution
of US$0.6 bn from Carrapateena and Prominent Hill which were acquired on 2 May
2023 as part of the acquisition of OZL; and
· Higher average realised prices for copper, uranium, gold and silver,
which had an impact of US$0.4 bn.
This was partially offset by higher labour costs and increased exploration
spend at Oak Dam.
The successful integration of Prominent Hill and Carrapateena has resulted in us exceeding the annualised synergies planned for FY24 at the time of the OZL acquisition.
12
BHP | Financial results for the year ended 30 June 2024
Asset outlook
Production for FY25 is expected to be between 310 and 340 kt, weighted to the
second half.
We are focused on optimising the value chain for incremental production and
productivity in the near-term through debottlenecking initiatives, including
integrating mine plans and development pathways.
We are executing growth and exploration projects, such as:
· At Prominent Hill, the Wira shaft mine expansion project has
progressed with shaft sinking now ~40% complete. The hoisting shaft system is
expected to extend the mine life to at least 2036.
· At Carrapateena, we are investing in processing plant capacity to
enable an uplift in throughput from the sub-level cave to 7 Mtpa. The Block
Cave Expansion project is progressing via underground development of the
access and conveyor decline below the existing sub-level cave. The project is
expected to extend the mine life beyond the existing sub-level cave and
increase throughput at Carrapateena up to 12 Mtpa, ramping up from FY29.
· In exploration, we have published the Inferred Mineral Resource at
Oak Dam of 1,340 Mt at 0.66% copper and 0.33 g/t gold grades, within which is
a bornite-dominant mineralisation area that contains 220 Mt at 1.96% copper
and 0.68 g/t gold (at a 1% copper cut-off). Refer to Appendix 2 (#_Appendix_2)
for further details. Exploration drilling beneath the Olympic Dam ore body, at
OD Deeps, has identified intercepts indicating grades greater than 1% copper.
We are seeking approvals to begin execution activities on underground access
declines at both Olympic Dam and Oak Dam.
We are assessing the optimal pathway for a Smelter and Refinery Expansion
(SRE) at Olympic Dam to enable production to increase to >500 ktpa of
copper by the early 2030s, with a strategy to deliver up to 650 ktpa copper
from the mid-2030s.(xviii) We expect the SRE will proceed in two phases. The
first phase is planned for FID in H1 FY27 and would involve a transition to a
two-stage smelter configuration with 1,100 to 1,400 ktpa concentrate smelting
capacity better suited to asset mineralogy. This would enable us to unlock
~US$1.5 bn of total synergies from the OZL acquisition, including US$0.6bn
from integration which are already in execution. The second phase of the
expansion would increase capacity to align with potential further growth from
Oak Dam and Olympic Dam, including OD Deeps.
13
BHP | Financial results for the year ended 30 June 2024
Iron ore
Production Commodity review and outlookxvii
Iron ore consumption in China was strong in CY23. In contrast, steel output
260 Mt Up 1% continued to contract in developed regions albeit at a slower rate than
previous years. Over the next two years we expect a small improvement in
FY23 257 Mt global steel production with growth led by India and Southeast Asia, with some
additional growth from a recovery in developed regions.
FY25e 255 - 265.5 Mt
After a strong CY23, we expect Chinese blast furnace run‑rates to ease in
CY24, under pressure from subdued steel margins and the potential for
policy-driven production controls. During H2 FY24, iron ore prices first
Average realised price (WAIO) declined and then traded in the range of around US$100 to US$120/t. A widening
surplus has emerged with Chinese port inventories rising to elevated levels.
US$101.04/wmt Up 9% For the balance of CY24 and into CY25, we expect supply from low-cost major
iron ore producers to grow while iron ore consumption is experiencing a modest
FY23 US$92.54/wmt decline. Our estimate of real-time cost support continues to sit in the US$80
- US$100/t range on a 62% Fe CFR basis. Should surpluses persist as we
forecast, we would expect some high-cost suppliers to be driven out of the
market over time. How quickly and effectively the Chinese policies targeted at
Underlying EBITDA the property sector stabilise it, and the government's approach to regulating
steel production, will both be large swing factors for the remainder of CY24
US$18.9 bn Up 13% and into CY25.
FY23 US$16.7 bn In the medium term, China's demand for iron ore is expected to be lower than
it is today as it moves beyond the crude steel production plateau and as the
64% contribution to the Group's Underlying EBITDA ratio of scrap-based steelmaking rises. We maintain our view that China's
steel production has plateaued above 1.0 Bt and this is likely to continue
68% Underlying EBITDA margin across the mid-2020s. However, Chinese pig iron production is expected to
decline during this period with more recycled scrap used in steelmaking. We
expect demand for our products from elsewhere in other developing Asia to
offset this to a degree.
Underlying ROCE (WAIO)
Segment outlook
We are focused on maintaining our industry leading cost position at WAIO.i
61%
We plan to increase production at WAIO to >305 Mtpa over the medium-term
FY23 53% underpinned by the Port Debottlenecking Project 1 (PDP1) and Rail Technology
Programme (RTP1).
We are assessing options to grow our WAIO production up to 330 Mtpa if market
Capital and exploration expenditure (WAIO) conditions warrant, including studying optimal mine and infrastructure
configurations and potentially increasing ore beneficiation. We expect to
US$2.1 bn complete these studies in CY25.
FY23 US$2.1 bn In Brazil, Samarco is set to almost double production through the restart of a
second concentrator in Q3 FY25 helping to support the local community through
FY25e US$2.5 bn jobs, investment and taxes. The Renova Foundation continues to make strong
progress on remediation activity and compensation.
14
BHP | Financial results for the year ended 30 June 2024
Western Australia Iron Ore
Iron ore production Unit cost(1,2) Underlying EBITDA
255 Mt Up 1% US$18.19/t Up 2% US$19.0 bn Up 14%
C1 US$15.84/t(3)
FY23 253 Mt FY23 US$17.79/t FY23 US$16.7 bn
FY25e 282 - 294 Mt (100% basis) FY25e US$18.00 - US$19.50/t
Medium-term >305 Mtpa (100% basis) Medium-term 305 Mtpa and are
focused on reducing unit costs to 1.0%
copper.
We also continued to progress greenfield exploration options in Australia,
Canada, Chile, Peru, Serbia, Sweden and the United States.
BHP's innovative Xplor program continues to be a success. Participants in the
program receive access to internal and external industry experts and funding
of up to US$0.5 m. After completing the first round of the program, we formed
subsequent partnerships with companies undertaking exploration efforts in
Scandinavia, Botswana and Australia. Discussions are currently underway for
follow-on investments with companies from the program's second cohort, which
recently concluded. Applications for the FY25 Xplor program opened in August.
In May 2024, we entered an alliance with Ivanhoe Electric Inc. to explore for
copper and other critical minerals utilising the latest technology in areas of
interest across the southern United States. BHP will provide funding of US$15
m over three years.
In July 2024, BHP and Lundin Mining Corporation (Lundin) entered into a
definitive agreement to jointly acquire Filo Corp. (Filo) for ~US$2.9 bn. Filo
owns 100% of the Filo del Sol copper exploration project located in the
Vicuña district of Argentina and Chile, an emerging copper district with
world-class potential. BHP has also agreed to acquire a 50% interest in the
nearby Josemaria copper project from Lundin, with both projects to be held in
a 50/50 joint venture between BHP and Lundin. The JV would create a long-term
partnership between BHP and Lundin to jointly develop the combined project.
The Filo acquisition and the Josemaria transaction are inter-conditional and
are currently expected to close in Q1 CY25. BHP's total cash payment for the
proposed transaction is expected to be ~US$2.1 bn.
23
BHP | Financial results for the year ended 30 June 2024
Appendix 1
Detailed financial information is included in OFR 4.3 in the Annual Report
(https://www.bhp.com/AR2024_OFR4-3)
Financial performance summary(1)
A summary of performance for FY24 and FY23 is presented below.
Key group metrics
FY24 FY23 Change
US$M US$M %
Revenue 55,658 53,817 3%
Profit from operations 17,537 22,932 (24%)
Attributable profit 7,897 12,921 (39%)
Basic earnings per share (cents) 155.8 255.2 (39%)
Full year dividend determined per share (cents) 146 170 (14%)
Net operating cash flow 20,665 18,701 11%
Capital and exploration expenditure 9,273 7,083 31%
Net debt 9,120 11,166 (18%)
Underlying EBITDA 29,016 27,956 4%
Underlying attributable profit 13,660 13,420 2%
Underlying basic earnings per ordinary share (cents) 269.5 265.0 2%
Key asset metrics
Year ended 30 June 2024 Revenue(2) Underlying Underlying Exceptional Net Capital Exploration Exploration
US$M EBITDA(3) EBIT(3) items(4) operating expenditure gross to profit(5)
assets(3)
Copper
Escondida 10,013 5,759 4,821 13,113 1,806
Pampa Norte(6) 2,375 896 468 4,843 721
Antamina(7) 1,478 968 746 1,498 437
Copper South Australia(8) 4,085 1,568 928 16,498 1,048
Other(7) 72 (176) (228) 416 136
Total Copper from Group production 18,023 9,015 6,735 − 36,368 4,148
Third party products 2,021 74 74 − − −
Total Copper 20,044 9,089 6,809 − 36,368 4,148 216 215
Adjustment for equity accounted investments(7) (1,478) (525) (285) − − (437) (3) (2)
Total Copper statutory result 18,566 8,564 6,524 − 36,368 3,711 213 213
Iron Ore
Western Australia Iron Ore 27,805 18,964 16,902 20,597 2,026
Samarco(9) − − − (6,606) −
Other 122 (48) (74) (179) 7
Total Iron Ore from Group production 27,927 18,916 16,828 (3,066) 13,812 2,033
Third party products 25 (3) (3) − − −
Total Iron Ore 27,952 18,913 16,825 (3,066) 13,812 2,033 86 41
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 27,952 18,913 16,825 (3,066) 13,812 2,033 86 41
Coal
BHP Mitsubishi Alliance(10) 5,873 1,914 1,394 6,725 533
New South Wales Energy Coal(11) 1,945 502 408 (211) 100
Other − (27) (50) (42) 14
Total Coal from Group production 7,818 2,389 1,752 880 6,472 647
Third party products − − − − − −
Total Coal 7,818 2,389 1,752 880 6,472 647 14 3
Adjustment for equity accounted investments(11) (152) (99) (75) − − (1) − −
Total Coal statutory result 7,666 2,290 1,677 880 6,472 646 14 3
Group and unallocated items
Potash − (255) (257) 6,138 1,090 1 1
Western Australia Nickel(12) 1,473 (302) (374) (6) 1,254 50 58
Other(13) 1 (194) (764) (1,421) 82 93 93
Total Group and unallocated items 1,474 (751) (1,395) (3,908) 4,711 2,426 144 152
Inter-segment adjustment − − − − − − − −
Total Group 55,658 29,016 23,631 (6,094) 61,363 8,816 457 409
24
BHP | Financial results for the year ended 30 June 2024
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(6) 2,491 754 244 4,487 647
Antamina(7) 1,468 998 824 1,430 374
Copper South Australia(8) 2,806 703 251 15,782 641
Other(7) 20 (209) (228) 323 59
Total Copper from Group production 15,632 7,180 5,161 − 34,229 3,072
Third party products 1,863 18 18 − − −
Total Copper 17,495 7,198 5,179 − 34,229 3,072 151 148
Adjustment for equity accounted investments(7) (1,468) (545) (369) − − (374) (6) (3)
Total Copper statutory result 16,027 6,653 4,810 − 34,229 2,698 145 145
Iron Ore
Western Australia Iron Ore 24,678 16,660 14,663 20,438 1,956
Samarco(9) − − − (3,382) −
Other 113 33 9 (100) 10
Total Iron Ore from Group production 24,791 16,693 14,672 176 16,956 1,966
Third party products 21 (1) (1) − − −
Total Iron Ore 24,812 16,692 14,671 176 16,956 1,966 96 52
Adjustment for equity accounted investments − − − − − − − −
Total Iron Ore statutory result 24,812 16,692 14,671 176 16,956 1,966 96 52
Coal
BHP Mitsubishi Alliance(10) 7,652 3,197 2,572 7,545 488
New South Wales Energy Coal(11) 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(11) (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
Western Australia Nickel(12) 2,009 162 55 2,255 683 52 48
Other(13) 11 (344) (804) (1,295) 82 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
1 Group profit before taxation comprised Underlying EBITDA of
US$29,016 m (FY23: US$27,956 m), exceptional items, depreciation, amortisation
and impairments of US$11,479 m (FY23: US$5,024 m) and net finance costs of
US$1,489 m (FY23: US$1,531 m).
2 Total revenue from thermal coal sales, including BMA and NSWEC,
was US$1,873 m (FY23: US$3,528 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
(https://www.bhp.com/AR2024_OFR10) in the Annual Report.
4 Excludes exceptional items relating to Net finance costs US$506
m and Income tax benefit US$837 m (FY23: Net finance costs US$452 m and Income
tax expense US$266 m).
5 Includes US$10 m of exploration expenditure previously
capitalised, written off as impaired (included in depreciation and
amortisation) (FY23: US$ nil).
6 Includes Spence and Cerro Colorado. Cerro Colorado entered
temporary care and maintenance in December 2023.
7 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$525 m (FY23: US$545 m) related to equity
accounted investments.
8 Includes Olympic Dam as well as Prominent Hill and Carrapateena
which were acquired on 2 May 2023 as part of the acquisition of OZL.
9 Samarco is an equity accounted investment. With the exception of
net operating assets, the financial information presented 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.
10 On 2 April 2024 BHP and Mitsubishi Development Pty Ltd (MDP)
completed the divestment of the Blackwater and Daunia mines (which were part
of the BHP Mitsubishi Alliance (BMA) to Whitehaven Coal. This resulted in a
net after tax gain of US$674 m that has been recognised as an exceptional
item. BHP continued to report its share of profit and loss within the Coal
Segment and asset tables until that date. Refer Note 3 - Exceptional items
(https://www.bhp.com/AR2024_Note3) of the Financial Statements in the Annual
Report for further information.
11 Includes Newcastle Coal Infrastructure Group (NCIG) which is an
equity accounted investment and its financial information presented above,
with the exception of net operating assets, reflects BHP Group's share. Total
Coal statutory result excludes contribution related to NCIG until future
profits exceed accumulated losses.
12 Western Australia Nickel comprises the Nickel West operations and,
following the OZL acquisition on 2 May 2023, the West Musgrave project.
13 Other includes functions, other unallocated operations including
legacy assets and consolidation adjustments. Revenue not attributable to
reportable segments comprises the sale of freight and fuel to third parties,
as well as revenues from unallocated operations. Exploration and technology
activities are recognised within relevant segments.
25
BHP | Financial results for the year ended 30 June 2024
Underlying EBITDA waterfall
The following table and commentary describes the impact of the principal
factorsiii that affected Underlying EBITDA for FY24 compared with FY23:
US$M Total Group Copper Iron ore Coal Group and unallocated
Year ended 30 June 2023 27,956 6,653 16,692 4,998 (387)
Net price impact 1,584 1,433 2,035 (1,529) (355)
Change in sales prices 1,476 1,475 2,232 (1,711) (520)
Refer to Segment and asset performance (#_Segment_and_asset_2) for average
realised prices
Price-linked costs 108 (42) (197) 182 165
Escondida: Higher royalties regime effective from Jan-24. WAIO: Higher royalties in line with higher prices. NSWEC: Lower royalties in line with lower prices. Western Australia Nickel: Favourable impact of the lower nickel price on third
party volumes.
Change in volumes 10 84 582 (640) (16)
Escondida: Higher volumes due to higher concentrator feed grade (FY24: 0.88% WAIO: Strong supply chain performance with increased capacity unlocked by PDP1 BMA: Lower volumes as a result of increased stripping to improve supply chain
vs FY23: 0.82%) and higher concentrator throughput. Partially offset by and record production at South Flank which contributed to record sales for the stability and restore depleted inventory positions which arose from extended
planned lower cathode production as a result of prioritising concentrator year, combined with increased China portside sales and favourable product mix weather impacts and labour constraints over recent years and an extended
throughput in prior years. at Jimblebar. longwall move and geotechnical faulting at Broadmeadow during H1 FY24.
Spence: Record concentrate production offset by planned lower cathode sales Partially offset by the impacts of the ongoing ramp up of the Central Pilbara Partially offset by:
volumes. hub (South Flank and Mining Area C) and continued tie-in activity for RTP1.
NSWEC: Higher volumes due to strong operating performance across the year as
improved weather and labour availability enabled an uplift in truck
productivity. Favourable change in product mix in response to market
conditions.
Change in controllable cash costs (773) (217) (196) (80) (280)
Operating cash costs (655) (118) (193) (83) (261)
Escondida: Higher maintenance and net inventory drawdowns mainly of oxide ore WAIO: Higher operating costs as we ramped up South Flank and increased NSWEC: Higher stripping and contractor costs in line with higher volumes. Western Australia Nickel: Increased deliveries of third-party nickel
required to maintain oxide leach pad stacking. production. concentrate and ore.
Spence: Labour negotiations payments to Union 1 and Union 2. G&U: Higher costs associated with M&A activities & various
improvement projects.
Partially offset by:
Copper SA: Non-recurrence of the planned drawdown of inventory in the prior
year which had been built during SCM21.
Exploration and business development (118) (99) (3) 3 (19)
Copper South Australia: Higher exploration spend for drilling activities at
Oak Dam.
Change in other costs 69 39 (152) (119) 301
Exchange rates 253 337 (103) (47) 66
Inflation (686) (287) (159) (133) (107)
Inflation rate of 4.1% for Australia and 4.4% for Chile
Fuel, energy, and consumable price 487 292 108 61 26
movements Escondida, Spence & Copper South Australia: Primarily due to lower acid, WAIO: Primarily due to lower diesel and explosives prices. BMA & NSWEC: Primarily due to lower diesel prices. Western Australia Nickel: Primarily due to lower ammonia and diesel prices.
diesel, electricity, and explosives prices.
Non-Cash (301) (303) 2 - -
Escondida & Spence: Lower stripping capitalisation reflecting phase of
mine plan.
One-off items 316 - - - 316
G&U: Impacts of the review of employee allowances and entitlements and OZL
acquisition costs in the prior year.
Change in other 170 572 (48) (340) (14)
Asset sales 38 (1) (1) 8 32
Ceased and sold operations (510) (41) - (335) (134)
Cerro Colorado: Entered temporary care and maintenance in December 2023. BMA: Lower contribution from the Blackwater and Daunia mines related to G&U: Closure provision update for legacy assets due to changes in cost
divestment in April 2024. estimate and discount rate.
New and acquired operations 528 537 - - (9)
Copper South Australia: Contribution from Carrapateena and Prominent Hill
acquired in May 2023.
Other 114 77 (47) (13) 97
Antamina: Higher profit driven by higher copper realised prices.
Year ended 30 June 2024 29,016 8,564 18,913 2,290 (751)
26
BHP | Financial results for the year ended 30 June 2024
Exchange rates
The following exchange rates relative to the US dollar have been applied in
the financial information:
As at As at As at
Average Average 30 June 30 June 30 June
FY24 FY23 2024 2023 2022
Australian dollar(1) 0.66 0.67 0.67 0.66 0.69
Chilean peso 907 864 944 803 920
1 Displayed as US$ to A$1 based on common convention.
Capital and exploration expenditure
Historical capital and exploration expenditure and guidance are summarised
below:
FY25e FY24 FY23
US$bn US$M US$M
Maintenance and decarbonisation(1) 3.0 2,956 2,981
Development - Minerals 6.5 5,860 3,752
Capital expenditure (purchases of property, plant and equipment) 9.5 8,816 6,733
Add: exploration expenditure 0.5 457 350
Capital and exploration expenditure ~10 9,273 7,083
1 Includes capitalised deferred stripping of US$806 m for FY24
(FY23: US$849 m) and US$1.1 bn estimated for FY25.
Major Projects
Commodity Project and ownership Project scope / capacity Capital First Progress
expenditure
production
US$M
target date
Potash Jansen Stage 1 Design, engineering and construction of an underground potash mine and surface 5,723 End-CY26 Project is 52% complete
(Canada) infrastructure, with capacity to produce 4.15 Mtpa.
100%
Potash Jansen Stage 2 Development of additional mining districts, completion of the second shaft 4,859 FY29 Project is 2% complete
(Canada) hoist infrastructure, expansion of processing facilities and addition of rail
100% cars to facilitate production of an incremental 4.36 Mtpa.
Production and unit cost guidance
Historical production and production guidance are summarised below:
Production Medium-term FY25 FY24 FY25e vs FY24
guidance
guidance
Copper (kt) 1,845 - 2,045 1,865.2 (1%) - 10%
Escondida (kt) 900 - 1,000(1) 1,180 - 1,300 1,125.3 5% - 16%
Pampa Norte (kt) ~250(2) 240 - 270(2) 265.6 (6%) - 6%(2)
Copper South Australia (kt) 310 - 340 322.0 (4%) - 6%
Antamina (kt) 115 - 135 143.9 (20%) - (6%)
Carajás (kt) - 8.4 -
Iron ore (Mt) 255 - 265.5 259.7 (2%) - 2%
WAIO (Mt) 250 - 260 254.9 (2%) - 2%
WAIO (100% basis) (Mt) >305 282 - 294 287.0 (2%) - 2%
Samarco (Mt) 5 - 5.5 4.7 5% - 16%
Steelmaking coal - BMA (Mt) 16.5 - 19 22.3 (26%) - (15%)
BMA (100% basis) (Mt) 33 - 38 44.6 (26%) - (15%)
Energy coal - NSWEC (Mt) 13 - 15 15.4 (15%) - (2%)
Nickel (kt) - 81.6 -
1 Production from FY27 onwards. Production for FY25 and FY26 are
expected to average between 1,200 and 1,300 kt.
2 Production guidance is for Spence only and excludes Cerro
Colorado which produced 11 kt in FY24 before entering care and maintenance in
December 2023.
27
BHP | Financial results for the year ended 30 June 2024
Historical costs and cost guidance for our major assets are summarised below:
FY24 at
Medium-term FY25 guidance realised FY24 v
Unit cost(1) guidance(2) guidance(2) exchange rates(3) exchange rates(3) FY23(3) FY23
Escondida (US$/lb)(4) 1.50 - 1.80 1.30 - 1.60 1.54 1.45 1.40 4%
Spence (US$/lb) 2.05 - 2.35 2.00 - 2.30 2.30 2.13 2.11 1%
Copper South Australia (US$/lb) 1.30 - 1.80 1.46 1.37 - -
WAIO (US$/t)(5) <17.50 18.00 - 19.50 18.37 18.19 17.79 2%
BMA (US$/t) <110 112 - 124 120.45 119.54 96.46 24%
1 Refer to OFR 10 - Non-IFRS information
(https://www.bhp.com/AR2024_OFR10) in the Annual Report for detailed unit cost
reconciliations and definitions.
2 FY25 and medium-term unit cost guidance are based on exchange
rates of AUD/USD 0.66 and USD/CLP 842.
3 Based on exchange rates of: FY24 AUD/USD 0.67 and USD/CLP 810
(guidance); FY24 AUD/USD 0.66 and USD/CLP 907 (realised); FY23 AUD/USD 0.67
and USD/CLP 864 (realised).
4 Escondida unit costs for FY24 onwards exclude revenue based
government royalties. Medium-term refers to FY27 onwards.
5 The breakdown of C1 unit costs, excluding third party royalties,
are detailed on page 12 (#_Western_Australia_Iron_4) .
Health, safety and social value(1)
Key safety indicators
Target/Goal FY24 FY23
Fatalities Zero work-related fatalities 1 2
High-potential injury (HPI) frequency(2) Year-on-year improvement in HPI frequency 0.11 0.17(3)
Total recordable injury frequency (TRIF)(2) Year-on-year improvement in TRIF 4.7 4.5
Social value: key indicators scorecard
Target/Goal FY24 FY23
Operational GHG emissions Reduce operational GHG emissions by at least 30% from FY20 levels by FY30 9.2 9.1(5)
(MtCO(2)-e)(4)
Value chain GHG emissions (Scope 3): Steelmaking: 2030 goal to support industry to develop steel production 140 114
technology capable of 30% lower GHG emissions intensity relative to
Committed funding in steelmaking partnerships and ventures to date (US$m) conventional blast furnace steelmaking, with widespread adoption expected
post-CY30.(6)
Value chain GHG emissions: Maritime transportation: 2030 goal to support 40% GHG emissions intensity 42 41
reduction of BHP-chartered shipping of BHP products
Reduction in GHG emissions intensity of BHP-chartered shipping of our products
from CY08 (%)(7)
Social investment (US$m BHP equity share) Voluntary investment focused on the six pillars of our social value framework 136.7 149.6
Indigenous procurement spend (US$m) Key metric for part of our 2030 Indigenous partnerships goal, to support the 609 333
delivery of mutually beneficial outcomes
Female employee participation (%)(8) Aspirational goal for gender balance(9) by the end of CY25 37.1 35.2
Indigenous employee participation (%)(8,)(10) Australia: aim to achieve 9.7% by the end of FY27 8.3 8.6
Chile: aim to achieve 10.0% by the end of FY25 10.1 9.7
Canada: aim to achieve 20.0% by the end of FY26 11.2 7.7
Area under nature-positive management practices(11) (%) 2030 goal of having at least 30% of the land and water we steward under 1.6 1.6(12)
conservation, restoration or regenerative practices
1 FY24 data includes former OZL (except Brazil) and Blackwater and
Daunia mines until 2 April 2024, except where specified otherwise. FY23 data
has not been adjusted and restated, except where specified otherwise.
2 Combined employee and contractor fatalities and frequency per 1
million hours worked. FY24 HPI frequency (HPIF) includes former OZL (except
Brazil). FY24 HPIF excluding former OZL (with the exception of exploration) is
0.10.
3 FY23 High Potential Injury (HPI) frequency restated from
(previously reported) 0.18 to 0.17 following a recalculation of exposure
hours.
4 Our operational GHG emissions are the Scopes 1 and 2 emissions
from our operated assets. Baseline year data and performance data have been
adjusted for divestment of our interest in BMC (completed on 3 May 2022),
divestment of our Petroleum business (merger with Woodside completed on
1 June 2022), BMA's divestment of the Blackwater and Daunia mines (completed
on 2 April 2024), our acquisition of OZ Minerals (completed on 2 May 2023)
and for methodology changes (use of IPCC Assessment Report 5 (AR5) Global
Warming Potentials and the transition to a facility-specific GHG emission
calculation methodology for fugitives at Caval Ridge and Saraji South). This
provides the data most relevant to assessing progress against our operational
GHG emissions medium-term target and differs from annual total operational GHG
emissions inventory (unadjusted for acquisitions, divestments and methodology
changes).
5 FY23 performance data has been restated to reflect the
acquisition, divestment and methodology adjustments described in footnote 4.
6 We have revised the language used in our medium-term goal for
steelmaking to provide greater clarity and to reflect the range of steelmaking
process routes that now form part of our strategy. This is due to technology
advances as well as the evolution of our strategy. For more information, refer
to the BHP Climate Transition Action Plan 2024, available at bhp.com/climate
(https://www.bhp.com/sustainability/climate-change) .
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BHP | Financial results for the year ended 30 June 2024
7 CY08 was selected as the baseline year for this goal to align
with the base year for the International Maritime Organization's CY30 GHG
emissions intensity goal and its corresponding reasoning and strategy.
Baseline year data and performance data have been adjusted to only include
voyages associated with the transportation of commodities currently in BHP's
portfolio due to the data availability challenges of adjusting by asset or
operation for CY08 and subsequent year data. GHG emissions intensity
calculations currently include the transportation of copper, iron ore,
steelmaking coal, energy coal, molybdenum, uranium and nickel. Baseline year
data and performance data have also been adjusted for a methodology change to
use maritime transport emission factors from EU Regulation 2023/1805, after
The British Standards Institution EN 16258 standard (the source of the
emission factors we previously used) was withdrawn in CY23.
8 Based on a 'point in time' snapshot of employees as at the end
of the relevant reporting period.
9 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
Organization.
10 Indigenous employee participation for Australia is at Minerals
Australia operations; for Chile is at Minerals Americas operations in Chile;
and for Canada is at the Jansen Potash project and operations in Canada.
11 Nature-positive management practices refer to an area under
stewardship that has a formal management plan that includes conservation,
restoration or regenerative practices. 'Land and water we steward' excludes
areas we hold under greenfield exploration licenses (or equivalent tenements),
which are outside the area of influence of our existing mine operations.
Following the divestment of the Blackwater and Daunia mines on 2 April 2024,
these areas have been excluded in FY24.
12 Restated from previously reported 1.3%, primarily due to ~1.5 m
hectares of greenfield exploration licenses, located outside the area of
influence of our existing mine operations, being incorrectly assigned to the
"the land and water we steward" component of the Healthy environment goal
calculation.
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BHP | Financial results for the year ended 30 June 2024
Appendix 2
Explanatory Notes and JORC Code Table 1
Oak Dam Mineral Resource
This release reflects the first-time reporting of a Mineral Resource at Oak
Dam, and is based on drilling and assaying completed as at 28 April 2024 and
estimation completed 24 July 2024. Total drilling related to the Oak Dam
Mineral Resource is approximately 158 km, with nominal drillhole spacing that
ranges from 80 m to >200 m, approximately perpendicular to the interpreted
orebody orientation. Resource definition and advanced exploration activities
continue at Oak Dam.
Mineral Resource Statement
Table 1. Oak Dam Mineral Resource
Type Inferred Resource Total Resource BHP interest
Mt Cu % Au g/t Mt Cu % Au g/t
Underground Sulfide(1) 1,340 0.66 0.33 1,340 0.66 0.33 100%
1. Reported as all material within a continuous shape designed
to capture material generally above 0.2% Cu, and assumes non-selective block
caving.
The Oak Dam Inferred Mineral Resource is 1.34 billion tonnes at 0.66% Cu &
0.33 g/t Au (Table 1). This considers a non-selective underground block caving
scenario, reporting all material within a continuous shape designed to capture
material generally above 0.2% Cu, where all material was deemed to have
reasonable prospects of eventual economic extraction. As such, zero grade
waste material was included as internal dilution to account for the
non-selective nature of block caving.
This constraint, and therefore the reported Oak Dam Mineral Resource, will
vary in the future as mining studies progress. For additional context, within
this Mineral Resource is a bornite-dominant mineralisation domain, that at a
1% Cu cut-off, contains 220 million tonnes at 1.96% Cu and 0.68 g/t Au.
At this early stage of assessment, a timeframe for possible development of Oak
Dam underground mine is unknown. Further resource development and mining
studies must be completed.
Mineral Resource Estimation
The first-time reporting of the Mineral Resource at Oak Dam is presented in
Table 1.
The Oak Dam Mineral Resource was based on:
· 158 diamond drillholes (parent and wedge drilling) comprising a total
of 236,328 m of drilling (inclusive of use of parent holes). Of this, 158,173
m of the drilling is sampled. A total of 29,933 m of the sampled drilling
occurs within bornite- and chalcopyrite-dominant domains.
· Sampling was either 1 m (96%) or 2 m lengths, with half core samples
collected.
· Nominal drillhole spacing ranges from 80 m to approximately 180 m.
The verification of input data included, but was not limited to:
· The use of matrix matched (Olympic Dam IOCG) certified reference
material and blanks (company and laboratory).
· Field duplicates (i.e. the other half core) and coarse and pulp
duplicates.
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BHP | Financial results for the year ended 30 June 2024
The Mineral Resource estimation process included:
· Raw assay data was composited to 2 m lengths with the relevant
domains flagged after compositing.
· Statistical analysis of the composites was performed within key
mineralisation domains
· Variography and top-cut analysis was performed on appropriate
mineralisation, sulfide and orientation domains.
· Top-cuts were applied to the composites, determined by geostatistical
domain analysis.
· For domains being reported, the grade and density model was estimated
via ordinary kriging within estimation domains constrained by mineralisation
through sulfide domains and orientation domains.
Appropriate portions of the model are classified as an Inferred Mineral
Resource. A range of criteria was considered in determining the Mineral
Resource classification, including:
· Drillhole and data density (i.e. informing samples);
· Sample and assay confidence;
· Geological interpretation confidence and, similarly, geological
continuity;
· Grade continuity within mineralisation;
· Estimation performance through validation;
· Reasonable prospects for eventual economic extraction; and
· Mining method.
Further drilling and exploration will provide both changes to the Mineral
Resource and confidence at Oak Dam.
Location
Oak Dam is located 65 km to the southeast of BHP's operations at Olympic Dam
in South Australia and 500 km north of Adelaide (Figure 1) and is on Kokatha
country. It is accessible from Olympic Dam via the Olympic Dam Highway, and
then via unsealed road (Figure 2).
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BHP | Financial results for the year ended 30 June 2024
Figure 1. Location of the Oak Dam project.
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BHP | Financial results for the year ended 30 June 2024
Figure 2. Local context of the Oak Dam project within EL 5941.
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BHP | Financial results for the year ended 30 June 2024
Deposit Geology
The mineralisation system at Oak Dam sits within a granitic basement, below an
unconformable contact with post mineralisation sedimentary cover. A simplified
geology level plan is provided in Figure 3 (and Figure 5 with drill traces),
and a representative cross-section in Figure 4.
Figure 3. Level plan of the Oak Dam basement geology (-900 mRL).
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BHP | Financial results for the year ended 30 June 2024
Figure 4. Representative cross-sections (6,570,980 mN)
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BHP | Financial results for the year ended 30 June 2024
Figure 5. Location of drilling used in the Oak Dam mineral resource in context
of interpreted geology. (Hole traces projected on -900 mRL; GDA2020, MGA Z53)
Overburden
The following summary of the over burden is provided due to the significant
depth to mineralisation and the role it may play in future mining studies.
The cover sequence is composed of Neoproterozoic and Mesoproterozoic (Pandurra
Formation) sedimentary rocks to recent sediments, varying in thickness from
approximately 650 m (over the centre of the deposit) to approximately 850 m at
the lateral margins. A simplified stratigraphic column (Figure 6) provides
indications of approximate depths. The cover sequence unconformably overlies
Paleo-Mesoproterozoic basement.
The Arcoona quartzite and Corraberra members are flat lying and maintain a
constant thickness over the whole drilled area, the Tregolana Shale member
show a variation in thickness from approximately 70 m to 100 m in the northern
extension, to approximately 130 m to 150 m the central-southern drilled area.
This suggests that the post-mineral faults interpreted in Oak Dam (such as the
Arcoona fault) were reactivated during deposition of Tregolana, affecting the
underlying Pandurra Formation. The contact between Tregolana Shale and
Pandurra Formation is unconformable with top of Pandurra.
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BHP | Financial results for the year ended 30 June 2024
Figure 6. Simplified stratigraphic column for Oak Dam overburden.
Basement lithology - Pre-mineralisation lithology
Donington Suite Granite (DGR)
Oak Dam is mainly hosted by the igneous rocks from the Donington Suite,
texturally heterogeneous, varying from megacrystic granite with distinctive
K-feldspar phenocrysts (1.5 cm to 4 cm) to fine-coarse equigranular granite.
It is common to observe deformation features, such as foliation and crystal
orientation, as well as mineral selective sericite-chlorite alteration
interpreted to be caused by regional metamorphism due to the low values of
IOCG pathfinder elements. The classification of Donington Suite Granites is
supported by geochronology ages (Pb-Pb and U-Pb) between 1868 ±19 Ma and 1854
±18 Ma (source, BHP).
Basement lithology - Syn- and post-mineralisation lithology
Mafic dykes (DOL)
Although the mafic dykes appear as late- and post-mineral units, there is a
great amount of mafic dykes that are pre- to syn-mineral incorporated as
clasts into the hydrothermal breccias (as described above and logged as
volcanic breccias).
Most of the late- and post-mineral mafic dykes are dark-pale green
fine-grained weakly altered basalt dykes, ranging from 5 cm to 10 m. These
dykes occur in isolation or in dyke 'swarms' with sharp contacts and chilled
margins or as brecciated clasts within brecciated granites and brecciated
volcanics. Post mineral dykes are generally massive in texture and not
affected by hematite veins.
Post-mineral dykes are important as they represent, or run parallel to
bounding post-mineral faults, marking sharp geological and geochemical
contacts.
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BHP | Financial results for the year ended 30 June 2024
Felsic (rhyolite) dykes
Felsic dykes/sills occur with distinctive pink/red fine-grained
k-feldspar-quartz groundmass, euhedral plagioclase phenocrysts, hornblende and
quartz fragments. Chlorite to sericite-clay alteration is common.
Geochronology dates the age of these dykes approximately 1.6 Ga, synchronous
with the Gawler Range Volcanics (GRV) (1.6-1.5 Ga).
Spatially these dykes intrude syn-mineral hydrothermal breccias on the
western, eastern and northern sides of the deposit, commonly over rheological
weaker zones (pre-existing geological/mineralisation contacts), contributing
to the dilution of mineralised breccias.
Mineralisation and alteration
Mineralisation sits below an uniformity as well as un-mineralised cap
(approximately 10 m to 100 m in thickness). It is typical of iron oxide copper
gold (IOCG) style alteration and sulfide mineralisation, with higher-grade
chalcocite and bornite mineralisation surrounding a highly-altered core of
barren hematite-quartz breccias. Faulting, such as the NW-trending Arcoona
Fault and the NE-trending Hardy Hill Fault, appears to influence the
deportment of mineralisation.
Highly-altered core of barren hematite-quartz breccias (HEMQ)
The HEMQ unit defines a group of hematite-altered breccias forming the
copper-barren core of the hydrothermal system. There is significant
litho-geochemical variation within the various units that are categorised
within this group.
Spatially, the HEMQ body forms a north-south elongated pipe-like unit
narrowing with depth at the centre of mineralised breccias. The centre of the
HEMQ forms a topographic basement high unconformably overlain by cover
sequence sediments from the Pandurra Formation.
The main geochemical signature of the HEMQ is Al <2.5%, as >100 ppm and
consistent Cu <0.3%. It is highly altered to red/brown hematite matrix with
steel-grey hematite clasts. The hematite alteration may vary between 10% to
over 90% and alters a variety of protoliths.
Although the HEMQ is being used to classify a barren hydrothermal breccia as a
different lithology type, geochemical, mineralogical and textural observations
suggest this domain was affected by highly acidic hydrothermal fluids not
observed in other lithological domains. This alteration might have played an
important role on remobilising copper mineralisation within the system. Minor
gold mineralisation can be present and is associated to the Ba-rich domains of
HEMQ (where barite veins are observed).
Sulfide mineralisation
Sulfide minerals are the dominant mineralisation domain at Oak Dam. Generally,
a bornite-dominant higher grade mineralisation decreases outwards from the
contact with the barren hematite-quartz breccia (HEMQ), to chalcopyrite and
then pyrite-dominant sulfides. These sharp to gradational sulfide domains are
utilised in the resource estimation process.
There is no evidence of oxide copper mineralisation at Oak Dam.
Bornite-dominant mineralisation (SBN)
The bornite dominant (+chalcocite) mineralisation are narrow zones, ranging
from approximately 15 m to 75 m true thickness. The bornite dominant zone is
usually in contact with the HEMQ and is present in hematite breccias with
intense hematite +/- fluorite alteration. These zones are responsible for the
highest copper grades in the project. Chalcocite commonly occurs as fine
dissemination and/or infill within the hematite matrix. Bornite can occur as
disseminations, vesicular accumulations and/or thin veins also in the hematite
matrix. Both sulfide minerals can also be observed less commonly in hematite
altered clasts.
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BHP | Financial results for the year ended 30 June 2024
Chalcopyrite-dominant mineralisation (SCP)
The chalcopyrite-dominant (+bornite) mineralisation occurs as disseminated
sulfides in the matrix of fluorite- to sericite-altered, hematite rich
breccias and in sericite altered granite breccias. The granite breccias have a
hematite matrix that can also contain fluorite.
Pyrite-dominant mineralisation (SPY)
The pyrite-dominant (+chalcopyrite) mineralisation is the lowest copper-grade
sulfide mineralisation. The low-grade mineralisation is most expansive on the
eastern and south-eastern side of the deposit south-west of the Arcoona Fault,
where a bigger extension of the periphery of Oak Dam is still preserved. The
mineralisation is hosted within sericite altered granite breccia in the east
and also by siderite altered breccias towards the south-east and south.
Faulting
Oak Dam records a complex history of multi-generational deformation with a
challenging chronological reconstruction due to the irregular nature of the
breccia complex and rarely observed lithological offsets, as such faults can
be grouped into pre- / syn-mineralisation and post-mineralisation faults.
Pre- / syn-mineralisation structures are inferred to have been active and
vital during the evolution of the breccia complex and are interpreted to
control the sub-vertically dipping north-south to north-north-west trend. The
brecciation process occurred through hydraulic fracturing. Chemical corrosion
and hydrothermal reworking of breccias obliterated and exploited many
pre-existing structures and textures.
Post-mineralisation structures are interpreted to overprint and/or reactivate
earlier structures and have resulted in a cross‑cutting and interconnected
system of brittle faults, joints and veins that formed post-brecciation.
JORC Table 1
Section 1 Sampling Techniques and Data
Sampling techniques
All drilling was oriented diamond drilling from surface.
Diamond core was sampled at 1 m or 2 m intervals using sawn half-core samples.
Remnant half core is retained for reference. Logging is critical to
determining when and how samples were collected from the core. The
mineralisation is quite visual - both through alteration, brecciated textures,
and presence of sulfides. 1 m samples were taken in mineralised or
unmineralised but altered formations. 2 m interval sampling was undertaken
where drilling intersected unaltered formations. The sampling, assay and
quality control methodologies is the same for all sample intervals.
Drilling techniques
Parent holes were collared in HWT diameter (101.6 mm) to a depth of 6 m and
continued in PQ (85 mm) until the Tregolana Shale unit in the post mineral
cover. From the Tregolana Shale, drilling continued in HQ (63.5 mm) to the
depth chosen to begin navigational drilling. Navigational drilling was
completed on the parent hole and subsequent wedges.
All drilling below the post mineral cover was completed in NQ2 diameter (50.6
mm) and all down hole surveys used a north-seeking gyroscope to end of hole.
The majority of drilling was oriented, with all drilling below the
unconformity oriented for logging.
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BHP | Financial results for the year ended 30 June 2024
Drill sample recovery
Sample recovery was estimated during logging through reconciliation of
cumulative reconstructed core length within core drilling runs.
All logging and sampling data is record in an SQL server hosted database.
Sample recoveries were high with recoveries estimated to be >97%. A review
of half-core sample weights showed that there were no samples of less than 3
kg.
Fresh core is relatively competent. Mineralisation is relatively pervasive
throughout the broader mineralised zones and sulfide minerals are generally
not friable. It is considered unlikely that sample loss would contribute to
any material difference in reported grades due to the style of mineralisation
and the nature of drilling employed.
Logging
Drillholes were qualitatively logged in detail below the unconformity marked
by the transition from the overlying post-mineralisation Pandurra Formation
and the underlying Donington Suite Granite. Logging included, but was not
limited to, lithology composition and texture, alteration minerals, sulfide
distribution and geotechnical logging for rock-mass qualification. Structural
measurements were recorded from oriented core.
The logging has been completed to a level appropriate to support Mineral
Resource estimation, preliminary mining studies, and preliminary metallurgical
studies.
Core was photographed both wet and dry to support the geological and
geotechnical logging.
Sub-sampling techniques and sample preparation
Diamond core was split by an automatic core saw, with half core submitted for
assay and the other half stored in trays at Olympic Dam. Samples were
submitted as 1 m or 2 m intervals.
Approximately 4 kg to 8 kg samples were submitted to an analytical laboratory
for final drying, staged crushing to 2 mm, then splitting to approximately 2
kg to 3 kg portions, followed by pulverisation to 90% passing 75 micron
particle size pulp. Two 200 g to 250 g pulps were created, from which,
dependant on analytical method, 0.2 g to 25 g, of material was used for final
analysis.
Duplicate samples were collected at each preparation stage where a reduction
in sample mass occurred.
Bulk dry density measurements were collected on all assayed samples using
water immersion method.
Quality of assay data and laboratory tests
All samples were submitted to Intertek Group Plc, Adelaide Laboratory, South
Australia.
Drillhole results reported here were analysed for an expanded multi-element
suite including Cu (4-acid digest, measured by ICP-OES), Ag (4-acid digest,
measured by ICP-MS), U (lithium borate fusion, measured by ICP-MS), Au (25 g
fire assay, measured by ICP-OES) and S (induction furnace combustion, measured
by infrared analyser). Assay methods are considered total.
Quality assurance sample data consisted of field and sample preparation
duplicates (1% coarse, 3% pulp duplicate), analytical blanks (2%) and a
variety of matrix-matched certified reference material "CRM" (approximately
4%) and assay repeats.
For quality control, quality assurance sample results were reviewed upon
receipt and before final acceptance into the database. BHP has procedures that
are in place to manage any deviations in results, with any rectifications
applied prior to approval and acceptance in the company's database. For data
accepted into the database, quality control tests indicate performance within
acceptable accuracy and precision limits.
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BHP | Financial results for the year ended 30 June 2024
Verification of sampling and assaying
BHP has robust QAQC standards and procedures relating to sampling and assay
quality control. These include the use of field duplicates (half core, 1%), as
well as matrix-matched certified reference material "CRM", coarse and pulp
duplicates.
BHP has robust standards and procedures relating to data transfers (from
laboratory to company database, and from database to user), with strictly
monitored permission controls relating to reviewers (limited), approvers
(limited) and user of exported data. There were limited adjustments to the
assay data; copper values were converted from parts per million (ppm) to
percent (%), and values that returned lower than detection level were set to
0.005% for Cu, 0.0025 ppm for Au, 0.25 ppm for U(3)O(8) and 0.025 ppm for Ag.
Data were electronically uploaded to the database from the external
laboratory. All drillhole data is managed internally via a SQL server hosted
database with strict validation rules.
No dedicated twinned holes have been drilled. Wedge drilling close to existing
mineralisation shows some short-scale variations to tenor of mineralisation.
However the close-spaced drilling from wedge holes provides correlation and
general support for the geological and grade modelling.
A full pulp library, as well as all unsampled reference half core, is retained
and located at the Olympic Dam mine site. These samples are available for
verification sampling if required. This is supplemented by core photography of
all drilling.
Location of data points
All drillhole collar locations (historic and recent) have been surveyed with
Trimble R8s and manually entered into acQuire database and all coordinates are
provided as Geocentric Datum of Australia 2020 and its projection according to
the Map Grid of Australia (specifically GDA2020 MGA zone 53).
Downhole surveying of diamond drilling was carried out at 18 m intervals using
a REFLEX GYRO SPRINT-IQ™ tool using GYRO North Seeking (NS) single shot
mode. At the completion of each hole a continuous survey was taken from the
collar to end of hole for comparison and quality control. Sample location is
considered to be very good.
The topography at Oak Dam is relatively flat, but has been accurately surveyed
using flown LIDAR survey in a region having minimal vegetation and cover.
Data spacing and distribution
Drilling from surface used parent and wedge-styled drilling with a nominal
drill space ranging from 80 m to >200 m across the deposit. Drilling is
nominally perpendicular to the interpreted orebody orientation.
While drilling at Oak Dam is at an early stage, the data spacing and
distribution is sufficient to understand the geological and grade continuity
appropriate for an Inferred Mineral Resource in an underground bulk-mining
scenario. Additional drilling will continue to contribute to understanding of
the geology and continuity of the mineralisation. Changes to the Mineral
Resource are anticipated.
No sample compositing has been used for the samples submitted for assays.
Orientation of data in relation to geological structure
Drilling at Oak Dam is designed to intersect mineralisation at a high angle to
the strike and dip.
Drillholes were generally angled approximately northwest-southeast to
east-west and were designed to drill from outside the hydrothermal system,
inwards towards mineralisation and their contract with the barren
hematite-quartz breccias. Drilling was designed to test both the eastern and
western contacts with the host granite.
Given the large scale of the mineralised system, the drilling orientation is
unlikely to have caused material sampling bias.
Drilling results are not being reported here as part of the Mineral Resource
estimate.
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BHP | Financial results for the year ended 30 June 2024
Sample security
Core trays were transported by BHP contractors from the Oak Dam project to the
core processing facility at Olympic Dam, Roxby Downs. Samples in calico bags
were transported from Olympic Dam via road on trucks to Intertek laboratory,
Adelaide.
Calico bag numbers were automatically generated. Intertek was informed of the
sample number ranges for each pending shipment and were recorded in their
management system. Intertek use these to create barcode labels for
wet-strength geochemical bags used for storing the pulverised samples. On
sample receipt, Intertek manually checked the submitted sample list against
all samples in the shipment. Once the samples were pulverised, all further
steps were tracked using the bar codes. BHP was informed of any discrepancies.
BHP has internal governance and standards related to sample security and data
management. BHP undertakes routine verification of these practices.
Audits or reviews
Dr Francis Pitard has visited Olympic Dam core processing facilities, and
sampling stations, multiple times, and last visited Intertek Laboratory in
2023. Dr Pitard also reviewed the Oak Dam assay performance data and no fatal
flaws were noted.
BHP routinely reviews standards, procedures and results from external
laboratories.
Section 2 Reporting of Exploration Results
Mineral tenement and land tenure status
The project is located within Exploration Licence 5941 (EL5941), which is 100%
owned by BHP.
EL5941 is in 'good standing' with minimum expenditure met and exceeded, the
tenement will expire 22 February 2028. In December 2023 BHP applied for a
Retention Lease (RL) over that part of EL5941 that is associated with the Oak
Dam Project. The RL application is proceeding through the assessment processes
led by the Department of Energy and Mining (DEM) and BHP has reasonable
expectation that the RL will be granted. It is expected that the grant of the
RL will be finalised during Q2 / Q3 FY25.
BHP is not aware of any known impediments to obtaining a licence to operate in
the area.
Exploration done by other parties
The project has a long exploration history, dating back to 1976 by Western
Mining Corporation (prior to their acquisition by BHP) and BHP.
All drilling used in the Mineral Resource estimate has been completed since
1981. Of that drilling, 98% has been completed by BHP since 2018 (Table 2).
Key data generated by previous companies is minimal for this Mineral Resource
estimate.
Table 2. Oak Dam drilling by year.
Year Count diamond drillholes Total EOH depths (m)
1981 3 3,102
1984 1 955
2018 4 5,346
2019 13 22,693
2020 10 20,274
2021 7 10,459
2022 48 67,563
2023 64 91,939
2024 9 13,998
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BHP | Financial results for the year ended 30 June 2024
Geology
Mineralisation sits below a sedimentary cover sequence composed of
Neoproterozoic and Mesoproterozoic (Pandurra Formation) sedimentary rocks. The
cover sequence varies in thickness from approximately 650 m (over the centre
of the deposit) to approximately 850 m at the lateral margins. The cover
sequence has an unconformable contact with basement igneous rocks from the
Donington Suite. The mineralisation also sits below an un-mineralised cap
(approximately 10 m to 100 m in thickness) in brecciated and altered granite.
The style of mineralisation is typical of iron oxide copper gold (IOCG) style
alteration and sulfide mineralisation, with higher-grade chalcocite and
bornite (copper sulfide) mineralisation surrounding a highly-altered core of
barren hematite-quartz breccias. Faulting, such as the NW-trending Arcoona
Fault and the NE-trending Hardy Hill Fault, appears to influence the
deportment of mineralisation.
Drillhole information and diagrams
Figures 3 to 5 in this report provide the context of drillhole locations and
orientations relative to the interpreted geology at Oak Dam. This report does
not include reporting any new material exploration drilling results.
Data aggregation methods, or Relationship between mineralisation widths and intercept lengths
This report does not include any new exploration drilling results.
No metal equivalents are reported.
Balanced reporting
This report does not include any new exploration drilling results.
Other substantive exploration data
Magnetic susceptibility measurements were recorded for all drilling. A single
representative measurement was taken for every metre. Each measurement was
taken from a piece of core from the first 20 cm of each metre and measured at
least 20 cm away from core tray to ensure there was no interference in the
measurement.
Pseudo 3D seismic data acquisition was undertaken in late 2022, processing and
interpretation is being considered in future work.
Further work
BHP plans to continue drilling with on-going resource development and scoping
studies. BHP will continue to engage externally with key stakeholders
including Traditional Owners, landholders, government and the community.
Section 3 Estimation Techniques and Reporting of Mineral Resources
Database Integrity
Drilling data (geological logging, geotechnical logging) are collected via
company digital logging tablets and subsequently loaded to the company's
acQuire geological database. Sampling intervals are directly requested via
company customised acQuire user interfaces.
Entry of assay data was through the direct loading of laboratory assay files
into the acQuire geological database.
Data validation steps included, but were not limited to the following:
· QA/QC vetting of data from Intertek laboratory prior to transmission
to BHP, followed by further QA/QC vetting by BHP prior acceptance into company
database.
43
BHP | Financial results for the year ended 30 June 2024
· Additional validation through constraints and libraries set in the
database by the Database Manager (e.g. overlapping/missing intervals,
intervals exceeding maximum depth, valid geology codes, missing assays,
prioritised assay protocol).
· Post data-entry validation included secondary system checks and
visualisation in 3D software to check for collar, survey or assay import
errors.
Site visits
J. Lachlan Macdonald was last at the Oak Dam exploration site in October 2021,
and last at core processing site (Olympic Dam mine) in April 2024. Site visits
included a review of drilling practices, drilling results and geology, and
sampling and logging practices. While in field at Oak Dam, site checks
included validation of selected collar locations via handheld GPS. While at
core processing site, site checks included validation of sampling, density
data collection, and sample and pulp storage.
Geological interpretation
The confidence of the geological interpretation of the Oak Dam mineral deposit
is supported by diamond drilling, geological logging, assay results, and
geological interpretation. Confidence in the declared mineralised model is
sufficient in areas declared as Inferred Mineral Resource, as mineralisation
orientations are sufficiently constrained by spacing and are supported by
lithological, alteration and structural modelling. Areas outside the Inferred
Resource have a lower confidence due to wider spaced drilling, leading to a
lower confidence on geological modelling and mineral continuity.
The use of typical Olympic Dam-style IOCG sulfide domain deportment model at
Oak Dam (specifically, transition of chalcocite > bornite > chalcopyrite
> pyrite sulfide mineralisation) appears to be supported by spatial and
statistical analysis. These appear sufficient for modelling copper and sulfur.
The current assessment and assumption are these models also provide sufficient
constraint for gold, uranium and silver. Future drilling and studies may
refine this.
Dimensions
The declared breccia-hosted mineral resource at Oak Dam currently extends
approximately 1,600 m along strike, with a maximum across-strike extent of 900
m (including a barren HEMQ core). It has a vertical extent of approximately
1km, which, at shallowest, begins 760 m below the surface. The mineralisation
at Oak Dam is open at depth, and to the north of the classified resource.
Faults truncate some facets of the deposit and potential exists for offset
mineralisation in other locations. Work is on-going to define the full scale
of the system.
Estimation and modelling Techniques
The Mineral Resource was estimated using Ordinary Kriging (OK) interpolation
in Vulcan mining software (version 2023.1).
Outlier high grade values that materially deviated from main domain
populations were top cut based on statistical analysis of the 2 m composites,
within each major orientation domain. Search ranges were based on geological
domain orientations and relative anisotropy of the variography. Search
neighbourhoods were constructed to suit the estimation method for relatively
local panel estimates based on widely spaced drilling data for multi-element
data.
The parent cell size of 20 m X by 40 m Y by 40 m Z considered the general
drillhole spacing (approximately half of the nominal drillhole spacing in the
YZ plane), the large scale and anisotropy of the mineralisation at Oak Dam,
and large scale of the proposed underground mining method (block caving).
Subcelling was permitted to allow accurate volume definition of the geological
domains.
Selective mining units were not defined or corrected for in the Mineral
Resource estimate.
44
BHP | Financial results for the year ended 30 June 2024
Classified material in the resource model had to be within 140 m
anisotropic-scaled distance from the nearest data within the continuous key
bornite and chalcopyrite copper domains. The limit forms a boundary to
extrapolation of data. Classification was then further manually modified and
tightened. The classification applies to the copper and gold mineralisation.
A large number of other unclassified elements are estimated in various ways
for use in assessment of economic elements, gangue elements, and gangue
minerals that may impact processing.
Estimation of the potentially economic elements other than copper (gold,
uranium, and silver) generally demonstrated some level of positive correlation
with the copper mineralisation. Uranium and silver grades are currently
considered to be sub-economic and are therefore not reported as part of the
Mineral Resource.
The geologically defined Oak Dam granite-hosted breccia system and alteration
zones within it (barren hematitic-quartz altered material at core grading
through bornite-dominant sulfides to chalcopyrite-domanint sulfides and then
to pyrite-dominant sulfides) is a core component of the domaining used to
construct the Mineral Resource model. Contact analyses were assessed to
demonstrate that the domains were appropriate.
Grade capping was used as appropriate for specific domains and potentially
economic element variables. Grade capping was generally light and affected
less than 1% of the composite data in the selected domains.
Validation of the Mineral Resource estimate has been conducted in several
ways, but not limited to visual drillhole section and plan data comparison
with the block model and various statistical comparisons by domain and
element. Validation for selected domains was completed using Discrete Gaussian
global models with comparable tonnage, grade, and metal estimates obtained for
copper.
No mining has occurred at Oak Dam, and therefore no reconciliation with
production data is possible.
Moisture
Tonnages are estimated on a dry basis using estimated dry bulk density from
data collected for every sampled interval of drillholes and domained in
accordance with the copper mineralisation.
Cut-off parameters
Reporting cut-off grades were chosen to reflect reasonable prospects for
economic extraction at an appropriate grade cut-off population assuming a bulk
underground mining method such as block caving. For the Oak Dam mineral
resource, this was a nominal cut-off greater than or equal to 0.2% Cu, which
was based on internal benchmarking studies combined with potential economic
modelling. This cut-off was used to generate a continuous shape designed to
capture material generally above 0.2% Cu, where all material within the shape
was deemed to have reasonable prospects of eventual economic extraction. As
such, zero grade waste material was included as internal dilution to account
for the non-selective nature of block caving.
Mining factors or assumptions
The Oak Dam mineral resource assumes a bulk underground mining method such as
block caving. There was consideration for minimum mining widths, and minimum
minable heights. Internal dilution (generally barren dykes and small blocks of
barren hematitic-quartz altered breccia) was considered and included for the
reporting of the Mineral Resource. There were no assumptions made for other
modifying factors. In this case, for the assumed mining scenario and
reasonable prospects for eventual economic extraction, mining studies have not
yet commenced, as is normal for a project at this early stage of resource
development. Therefore, the assumptions regarding mining and the reported
Mineral Resource will change with future work on the project as concepts are
refined.
45
BHP | Financial results for the year ended 30 June 2024
Metallurgical factors of assumptions
The declared Mineral Resource reports on a 100% basis and does not account for
metallurgical recovery.
No assumptions have been made regarding recovery of by products other than
those reported, and no deleterious elements have been factored into the
reported Mineral Resource.
Environmental factors or assumptions made
The Oak Dam project is at an early resource development stage. The declared
Mineral Resource assumes that there would be sufficient data and studies on
appropriate waste, water and material disposal and management options at time
of mining. It assumes there is reasonable prospect for gaining all necessary
permits and approvals prior to commencement of mining.
Bulk density
Bulk dry density measurements were collected on all assayed samples using
water immersion method. The estimation of density was undertaken within all
mineralised domains via Ordinary Kriging (OK) using similar search parameters
to the copper and gold data.
Classification
Appropriate portions of the model are classified as an Inferred Mineral
Resource. A range of criteria was considered in determining the Mineral
Resource classification, including drillhole and data density, sample and
assay confidence, geological interpretation confidence, geological continuity,
grade continuity within mineralisation, estimation performance through
validation, reasonable prospects for eventual economic extraction, and mining
method.
The classification is considered appropriate by the Competent Person.
Audits or reviews
A review of the Mineral Resource estimate was undertaken by Mr Ingvar Kirchner
of AMC Consultants. The review was completed at key milestones throughout the
estimation process. There are no material outstanding issues arising from this
review that are not being addressed within the Mineral Resource report's
recommendations.
Discussion of relative accuracy / confidence
There is no production data available for comparison purposes at Oak Dam.
Relative accuracy and confidence have been assessed through validation of the
model outlined above.
The Mineral Resource estimate comprised material categorised as Inferred
Mineral Resource. The Mineral Resource category reflects the assumed accuracy
and confidence as a global estimate.
Competent Person statement
The information in the report to which this statement is attached that relates
to Mineral Resources is based on information compiled by Mr J Lachlan
Macdonald, a Competent Person who is a Member of The Australasian Institute of
Mining and Metallurgy (MAusIMM) and the Australian Institute of Geoscientists
(MAIG). Mr Macdonald is a full-time employee of BHP. Mr Macdonald has
sufficient experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being undertaken to qualify
as a Competent Person as defined in the 2012 Edition of the 'Australasian Code
for Reporting of Exploration Results, Mineral Resources and Ore Reserves'.
Mr Macdonald consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
46
BHP | Financial results for the year ended 30 June 2024
The Financial Information for the year ended 30 June 2024 (FY24) is derived
from the audited Consolidated Financial statements included in the 2024 Annual
Report
(https://www.bhp.com/-/media/Documents/Investors/Annual-Reports/2024/240827_bhpannualreport2024.pdf)
and has been prepared on the basis of accounting policies and methods of
computation consistent with those applied in the 30 June 2023 financial
statements of the Group in the 2023 Annual Report, with the exception of new
accounting standards and interpretations which became effective from 1 July
2023 and other changes in accounting policies applied with effect from 1 July
2023. This release includes Financial Information that is unaudited. Users are
advised to read this News Release document together with the 2024 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 FY24 compared with FY23, unless otherwise noted. Medium
term refers to a five-year horizon, unless otherwise noted. Numbers presented
may not add up precisely to the totals provided due to rounding.
The following abbreviations may have been used throughout this release: silver
(Ag); gold (Au); billion tonnes (Bt); cost and freight (CFR); cost, insurance
and freight (CIF); carbon dioxide equivalent (CO2-e); copper (Cu); 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); OZ
Minerals Ltd (OZL); pounds (lb); thousand ounces (koz); thousand ounces per
annum (kozpa); thousand tonnes (kt); thousand tonnes per annum (ktpa);
thousand tonnes per day (ktpd); sulphur (S); tonnes (t); total recordable
injury frequency (TRIF); uranium (U); uranium oxide (U(3)O(8)); and wet metric
tonnes (wmt).
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, reserves and resources estimates;
development and production forecasts; guidance; expectations, plans,
strategies and objectives of management; climate scenarios; approval of
projects and consummation of transactions; closure, divestment, acquisition or
integration of certain assets, operations or facilities (including associated
costs or benefits); anticipated production or construction commencement dates;
capital costs and scheduling; operating costs and availability of materials
and skilled employees; anticipated productive lives of projects, mines and
facilities; the availability, implementation and adoption of new technologies,
including artificial intelligence; 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, 'aim', 'ambition', 'anticipate', 'aspiration',
'believe', 'commit', 'continue', 'could', 'estimate', 'expect', 'forecast',
'goal', 'guidance', 'intend', 'likely', 'may', 'milestone', 'must', 'need',
'objective', 'outlook', 'pathway', 'plan', 'project', 'schedule', 'seek',
'should', 'strategy', 'target', 'trend', 'will', 'would', or similar words.
These statements discuss future expectations or performance, or provide other
forward-looking information.
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. These statements do not represent 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, on the market price of the commodities
produced, which may vary significantly from current levels or those reflected
in our reserves and resources estimates. 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.
Other factors that may affect our future operations and performance, including
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
(https://www.bhp.com/AR2024_OFR8-1) 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 (https://www.bhp.com/AR2024_Note30) 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 operations
that are closed or in the closure phase) that have been wholly owned and
operated by BHP or that have been owned as a BHP-operated joint venture(1)
(referred to in this release as 'operated assets' or 'operations') during the
period from 1 July 2023 to 30 June 2024 unless otherwise stated.
Certain sections of this release include data in relation to the Daunia and
Blackwater mines, which were divested during the year. Data in relation to the
Daunia and Blackwater mines is shown for the period up to completion on 2
April 2024, unless stated otherwise. Some of the land and tenements related to
the Daunia and Blackwater mines are pending transfer following completion,
however, given that the assets are no longer under BMA's control or operated
for BMA's benefit (except for periods prior to completion or where
specifically stated) data related to the land and tenements has been excluded
from this release.
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' or 'JV' 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.
47
BHP | Financial results for the year ended 30 June 2024
The following footnotes apply to this Results Announcement:
i BHP internal analysis based on WAIO C1 reported unit
costs compared to publicly available unit costs reported by major competitors,
including Fortescue, Rio Tinto and Vale. 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.
ii (#_ednref2) Calculated at the midpoint of total copper
production guidance for FY25 of 1,845 to 2,045 kt, compared to actual
production in FY24 of 1,865 kt.
iii (#_ednref3) 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 OFR 10 in the Annual Report
(https://www.bhp.com/AR2024_OFR10) ): Underlying attributable profit,
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 (https://www.bhp.com/AR2024_OFR10-1) are included in the
Annual Report document for the year ended 30 June 2024 and comparative
periods. Non-IFRS financial information is unaudited.
iv (#_ednref4) Our operational GHG emissions are the Scopes 1
and 2 emissions from our operated assets. Baseline year data and performance
data have been adjusted for divestment of our interest in BMC (completed on 3
May 2022), divestment of our Petroleum business (merger with Woodside
completed on 1 June 2022), BMA's divestment of the Blackwater and Daunia mines
(completed on 2 April 2024), our acquisition of OZ Minerals (completed on 2
May 2023) and for methodology changes (use of (IPCC Assessment Report 5 (AR5)
Global Warming Potentials and the transition to a facility-specific GHG
emission calculation methodology for fugitives at Caval Ridge and Saraji
South). This provides the data most relevant to assessing progress against our
operational GHG emissions medium-term target and differs from our annual total
operational GHG emissions inventory (unadjusted for acquisitions, divestments
and methodology changes).
v (#_ednref5) Incorporates capex and lease commitments
previously expected to be classified as capex.
vi (#_ednref6) Based on a 'point in time' snapshot of employees
as at 30 June 2024, including employees on extended absence, as used in
internal management reporting for the purposes of monitoring progress against
our goals. Excludes former OZL Brazil. 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 Organization. 'People leaders' are defined as
employees with one or more direct reports.
vii (#_ednref7) Nature-positive is defined by the TNFD Glossary
version 1.0 as 'A high-level goal and concept describing a future state of
nature (e.g. biodiversity, ecosystem services and natural capital) which is
greater than the current state'. We understand it includes land and water
management practices that halt and reverse nature loss - that is, supporting
healthy, functioning ecosystems. Nature-positive management practices refer to
an area under stewardship that has a formal management plan that includes
conservation, restoration or regenerative practices.
viii (#_ednref8) Increase for FY24 reflects (i) inclusion of areas
under nature-positive management practice at Carrapateena and the West
Musgrave project (not in our FY23 reporting) and an additional regulatory
conservation area at BMA; and (ii) BMA's divestment of Blackwater and Daunia
on 2 April 2024
(https://www.bhp.com/news/media-centre/releases/2024/04/bhp-completes-the-divestment-of-daunia-and-blackwater)
, resulting in exclusion of these areas, including some areas reported in
FY23, from the land and water we steward.
ix (#_ednref9) The Nickel West milestone was to facilitate
establishment of a Northern Goldfields catchment regional water working group.
While activities have been undertaken in line with the intent of this
milestone, it has not yet been achieved.
x (#_ednref10) This includes contribution to suppliers, wages
and benefits for employees, dividends, taxes, royalties and voluntary social
investment. For more information refer to the BHP Economic Contribution Report
2024
(https://www.bhp.com/-/media/Documents/Investors/Annual-Reports/2024/240827_bhpeconomiccontributionreport2024)
.
xi (#_ednref11) Calculated on a copper equivalent production
weighted average basis.
xii (#_ednref12) Maintenance capital includes non-discretionary
spend for the following purposes: deferred development and production
stripping; risk reduction; compliance and asset integrity.
xiii (#_ednref13) Subject to movements in exchange rates.
xiv (#_ednref14) With respect to Group capital and exploration
expenditure, medium term refers to the average for FY27-FY29.
xv (#_ednref15) Credit ratings are forward-looking opinions on
credit risk. Moody's and S&P Global's credit ratings express the opinion
of each agency on the ability and willingness of BHP to meet its financial
obligations in full and on time. A credit rating is not a recommendation to
buy, sell or hold securities and may be subject to suspension, reduction or
withdrawal at any time by an assigning rating agency. Any credit rating should
be evaluated independently of any other information.
xvi (#_ednref16) BHP internal analysis. Competitor data compiled
from publicly available information (e.g. company reports). Competitors
include: Anglo American, Glencore (exc. Marketing), Rio Tinto and Vale. There
may be differences in the manner that third parties calculate or report this
information compared to BHP, which means third-party data may not be
comparable to our data. For further information, refer to OFR 10 in the Annual
Report (https://www.bhp.com/AR2024_OFR10) .
xvii (#_ednref17) The information in this section is based on BHP data,
analysis and desk top research on public data sources.
xviii (#_ednref18) The pathway to increase potential production at Copper
South Australia is subject to the development of an integrated asset plan,
regulatory approvals, market capacity and, in certain cases, the development
of exploration assets, which factors are uncertain. The pathway represents our
current aspiration for Copper South Australia, and is not intended to be a
projection, forecast or production target. Copper equivalent production
includes potential increases in production rates and contribution from
co-products, as well as potential impacts from our exploration program. Copper
equivalent production is calculated using 2024 long term (real) consensus
prices as at June 2024 of US$4.50/lb for copper, US$1,819/oz for gold,
US$23/oz for silver and US$64/lb for uranium.
xix (#_ednref19) IRR based on low and high potential capital
expenditure ranges at US$4.50/lb copper consensus price (real 2024) based on
the median of long-term forecasts from Bank of America, Barrenjoey, Citi,
Deutsche Bank, Goldman Sachs, JPMorgan and UBS. Expected capital intensity,
US$/product tonne (real 2024). Range outcomes are calculated at an aggregate
program level.
xx (#_ednref20) Refer to the BHP 2024 Annual Report.
xxi (#_ednref21) FY25 and medium-term unit cost guidance is based on
an exchange rate of AUD/USD 0.66.
xxii (#_ednref22) Subject to movements in exchange rates; +/- 50% in
any given year.
xxiii (#_ednref23) Resettlement cases completed includes completed
construction (families either moved in or handover to families in progress) or
cash payment solutions.
xxiv (#_ednref24) BHP internal analysis based on published forward
looking unit costs guidance of major steelmaking coal producers as reported
for period ending 30 June 2024. There may be differences in the manner that
third parties calculate or report unit costs data compared to BHP, which means
third-party data may not be comparable with our data.
xxv (#_ednref25) Relates to refined nickel metal only. Excludes
intermediate products and nickel sulphate.
Authorised for lodgement by:
The Board of BHP Group Limited
48
BHP | Financial results for the year ended 30 June 2024
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