TIDMBHP
RNS Number : 9945J
BHP Group Limited
21 August 2023
22 August 2023
Financial results for the year ended 30 June 2023 News release 14/23
Strong financial performance underpinned by reliable operations
and disciplined cost control.
The tragic deaths of two of our colleagues during the year have
been deeply felt. Our absolute priority remains eliminating
fatalities and serious injuries at BHP.
Our financial results for the year were strong, underpinned by
reliable production together with capital and cost discipline as we
managed lower commodity prices and inflationary pressures. Our
balance sheet is robust and deliberately positioned to support
portfolio growth in commodities the world needs for population
growth, urbanisation and decarbonisation.
In Canada, our investment in potash is progressing at pace with
first production at Jansen on track for the latter half of 2026,
and we are creating a new copper province in South Australia
following the acquisition of OZ Minerals. We are investing
strategically in new ideas, technologies and countries through
exploration and early-stage copper and nickel prospects to capture
future growth opportunities.
We continue to build an inclusive, high-performance culture and
a more sustainable business, which are key to our future
competitiveness and ability to deliver sector-leading returns.
Today, more than 35% of our employees are female and we have
increased Indigenous employee representation globally. We are
taking action to reduce our operational GHG emissions through
renewable electricity supplies and supporting the development of
electric trucks, trains and light vehicles. As of today, BHP has
among the lowest absolute operational GHG emissions of the major
miners.
Commodity demand has remained relatively robust in China and
India even as developed world economies have slowed substantially.
In the near term, China's trajectory is contingent on the
effectiveness of recent policy measures. We expect buoyant growth
in India with strong construction activity underpinning an
expansion in steelmaking capacity. More broadly, there is increased
recognition of the importance of critical minerals and strategies
across the globe to incentivise investment in supply and demand,
which provides opportunities and challenges.
Mike Henry
BHP Chief Executive Officer
Safety Operational performance
Two fatalities Iron ore Up 1% Copper Up 9% Nickel Up 4%
We continue to improve our systems, processes and We achieved production records at Western Australia Iron
engineered controls, and emphasise the safety Ore (WAIO), Olympic Dam and Spence.
culture that must be present every day to eliminate Full year production guidance was achieved for copper,
fatalities and serious injuries at BHP. iron ore, metallurgical coal, energy
coal and nickel.
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Financial results Payments to governments
Attributable profit - total operations Total payments to governments
US$12.9 bn Down 58% US$13.8 bn
FY22 US$30.9 bn FY22 US$17.3(i) bn
Revenue decreased US$11.3 bn due to significantly lower Tax, royalty and other payments to governments(i) made
prices in key commodities. We managed during FY23 resulted in a global adjusted
the impact of inflation on costs well relative to our effective tax rate(ii) of 30.9%, and 41.3% with revenue
competitors. Underlying attributable and production based royalties included.
profit(ii) (which adjusts FY22 for discontinued operations
of US$10.7 bn) reduced by 37% to
US$13.4 bn.
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Capital management
Capital and exploration expenditure(ii) Fully franked final dividend
US$7.1 bn Up 16% US$0.80 per share
FY22 US$6.1 bn Up $0.13 per share above the minimum 50% payout (59%
payout)
1
BHP | Financial results for the year ended 30 June 2023
We increased our exposure to future-facing commodities and We have determined a final dividend of US$4.1bn. This
70% of our medium term capital brings total cash returns to shareholders
spend is expected to be focused in these commodities. announced for the year of US$1.70 per share, fully
franked.
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Note: All results are presented on a continuing operations
basis, except as noted.
Social value(iii)
In FY23, we made progress against all six pillars of our social
value framework, while continuing to embed social value assessments
into our decision making.
Decarbonisation Safe, inclusive, and future-ready
workforce
Operational GHG emissions Female employee representation
9.8 Mt CO(2) -e Down 11% 35.2% Up 2.9% pts
FY22 11.0 Mt CO(2) -e FY22 32.3%
In June 2023, we shared an update on our plan to achieve our operational Doubled from 17.6% in CY16, and a
decarbonisation target point of differentiation to our
and goal, and we are on track to meet our FY30 target to reduce Scope 1 and competitors.
Scope 2 emissions Approximately 48% of our external
from our operated assets by at least 30% from FY20 levels. hires in FY23 were female. We improved
We now have seven collaborative partnerships with steelmakers responsible for our representation
19% of reported of women in leadership to 29.7%, which
global steel production(iv) to support our Scope 3 goals. is also well ahead of our competitors.
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Healthy environment Responsible supply chains
Natural capital accounting BHP Responsible Minerals
pilot completed Program commenced
A mining industry first at Beenup . We also completed important biodiversity A fit for purpose due diligence
and/or ecosystems program for our minerals and metals
baseline mapping for all land and water areas at our operated assets supply chain aligned with
(excluding legacy assets(v) OECD guidance. For further
) and released Context Based Water Targets that apply until FY30. information, refer to BHP Responsible
Minerals Program .
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Indigenous partnerships Thriving, empowered communities
Indigenous procurement spend Indigenous employee representation Total economic contribution(vi)
US$333 m Up 122% 8.6% Australia US$54.2 bn
FY22 US$150 m 9.7% Chile FY22 US$82.5 bn
7.7% Canada
During FY23, we released our sixth Reconciliation Action Plan , which was We contributed US$40.8 bn to
recognised with suppliers, community and social
'Elevate' status by Reconciliation Australia , and our updated Indigenous investments, employees and governments
Peoples Policy Statement during the year. This was 75% of our
. Both considered Indigenous voices in the process. total economic contribution with
shareholder payments
being US$13.4bn (25%).
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2
BHP | Financial results for the year ended 30 June 2023
In FY23, social investment of US$150 m consisted of funding such as direct community development,
environmental projects and to the BHP Foundation to address some of the most critical sustainable
development challenges facing society that are directly relevant to the resources sector.
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Detailed information on social value is included in
Appendix 1 and OFR 6 in the Annual Report
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3
BHP | Financial results for the year ended 30 June 2023
Group financial performance
Earnings and margins
Continued reliable operational performance with disciplined cost
control led to strong financials.
Revenue BHP's revenue decreased We experienced an effective
US$53.8 bn Down 17% by US$11.3 bn primarily inflation rate of 10%
FY22 US$65.1 bn as a result of significantly in the financial year
lower prices across iron and expect the lagged
Attributable profit - ore, metallurgical coal, impact of inflation to
total operations and copper. continue into FY24, particularly
US$12.9 bn Down 58% Attributable profit for in labour costs.
FY22 US$30.9 bn the year reflects our Our adjusted effective
disciplined cost and tax rate was above the
Underlying attributable reliable operational 30% Australian corporate
profit(ii) performance amid the tax rate primarily due
US$13.4 bn Down 37% lower price environment, to:
FY22 US$21.3 bn and includes an exceptional * dividend withholding taxes related to our Chilean
loss of US$0.5 bn. For operations; and
Profit from operations further details see Note
US$22.9 bn Down 33% 3 - Exceptional items
FY22 US$34.1 bn . * current year tax losses not expected to be
Adjusted for the US$10.7 recoverable.
Underlying EBITDA(ii) bn profit related to
US$28.0 bn Down 31% discontinued operations
FY22 US$40.6 bn as well as exceptional Our operating costs include
losses of US$1.1 bn in US$3.8 bn of revenue
Underlying EBITDA margin(ii) FY22, Underlying attributable or production based royalties.
54% profit decreased by US$7.9 This includes US$1.7
FY22 65% bn. bn of royalties incurred
While we increased copper, by BHP in respect of
Adjusted effective tax iron ore and nickel sales our Queensland operations,
rate volumes, and exchange which combined with income
30.9% rates were favourable, taxes equates to an adjusted
FY22 31.2% profit from operations effective tax rate including
FY24e 30 - 35% and Underlying EBITDA royalties of 55%. The
decreased primarily as introduction of the new
a result of the lower royalty regime resulted
prices across major in an additional US$0.7
commodities, bn in royalties paid
and the impacts of inflation to the Queensland Government
on our underlying cost by BHP in relation to
base, particularly on FY23.
labour, diesel and electricity Once the US$3.8 bn of
prices. revenue and production
Our focus on cost discipline based royalties are included,
has allowed us to mitigate our Group effective tax
the effects of the current rate was 41.3%.
inflationary environment. The adjusted effective
Unit costs(ii) were 9%(vii) tax rate for FY24 is
higher across our major expected to be in the
assets, however WAIO range of 30 to 35%.
extended its lead as
the lowest cost major
iron ore producer globally.
For further details see
Underlying EBITDA waterfall
.
Detailed financial information is included in Appendix
1 and O FR 4 in the Annual Report
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4
BHP | Financial results for the year ended 30 June 2023
Cash flow and balance sheet
Strong capital discipline underpinned US$13.1 bn of investments
in the period.
Net Our net operating cash BHP's balance sheet remains
operating flow reduced as a result strong. During FY23,
cash flow of the lower profit from Moody's upgraded BHP's
US$18.7 bn operations, which was credit rating to A1 while
Down 36% partially offset by the S&P Global's rating has
FY22 resultant reduced income remained at A-. BHP retired
US$29.3 bn tax and royalty-related US$2.3 bn of debt and
taxation payments. Despite raised US$7.7 bn of which
Capital and lower prices and sales US$5 bn relates to the
exploration volumes, revenue-based OZL acquisition facility.
expenditure royalties at BHP Mitsubishi Our net debt increased
US$7.1 bn Alliance (BMA) increased by US$10.8 bn in the
Up 16% following the introduction year (or US$4.3 bn from
FY22 US$6.1 of the new Queensland December 2022) largely
bn royalty regime in July reflecting the:
2022. * Purchase of OZL and assumption of US$1.1 bn of its
Free cash In line with our Capital interest bearing liabilities; and
flow(ii) Allocation Framework
US$5.6 bn (CAF), we generated free
Down 77% cash flow of US$5.6 bn * Dividends paid to BHP shareholders of US$13.3 bn,
FY22 after investing US$13.1 and
US$24.3 bn bn in the following: US$1.2 bn to non--controlling interests.
* US$5.9 bn acquisition of OZ Minerals Ltd (OZL) in May
Net 2023;
debt(ii) These were partially
US$11.2 bn offset by cash flow generated
FY22 US$0.3 * US$4.1 bn in organic development including US$2.3 bn by the operations.
bn on improvement, US$1.2 bn on future--facing Our net debt target range
H1 FY23 commodities, and US$350 m of exploration spend. of between US$5 and US$15
US$6.9 bn bn enables us to maintain
a resilient balance sheet
Gearing * US$3.0 bn of maintenance and decarbonisation during periods of change
ratio(ii) expenditure(viii) . and external uncertainties
18.7% while retaining the flexibility
FY22 0.7% to allocate capital within
H1 FY23 We expect capital and our CAF towards shareholder
12.9% exploration expenditure returns and growth opportunities.
(with flexibility to In the near term, we
adjust and subject to expect to remain towards
exchange rate movements) the upper end of the
to be: net debt target range.
* For FY24 and FY25, US$10 bn per annum, including For further details see
US$0.4 bn of exploration in FY24; Note 21 - Net debt.
* In the medium term, US$11 bn per annum on
average(ix) .
These amounts include
around US$4 bn in aggregate
until FY30 for operational
decarbonisation.
Detailed financial information is included in Appendix
1 and O FR 4 in the Annual Report
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5
BHP | Financial results for the year ended 30 June 2023
Value and returns
Continuing to balance investing in the business and cash returns
to shareholders.
Full year dividend Our operations continued This brings total cash
US$1.70 per share to generate strong Underlying dividends announced for
Fully franked ROCE of 28.8%. FY23 to US$1.70 per share,
64% payout ratio A final dividend of US$0.80 including an additional
per share (US$4.1 bn), amount of US$1.9 bn above
Earnings per share - equivalent to a 59% payout the minimum payout policy,
basic ratio and inclusive of and making this the third
255 US cps an additional amount largest full year ordinary
FY22 611 US cps of US$0.64 bn above the dividend declared.
Earnings per share - minimum 50% payout policy, Over the past three years,
underlying(ii) will be paid to shareholders this amounts to more
265 US cps on 28 September 2023. than US$40 bn cash returned
FY22 421 US cps to shareholders.
Underlying return on
capital employed (ROCE)(ii)
28.8%
FY22 48.1%
Important dates for shareholders
BHP's Dividend Reinvestment Plan (DRP) will operate in respect
of the final dividend. Full terms and conditions of the DRP and
details about how to participate can be found at: bhp.com
Events in respect of the final dividend Date
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Announcement of currency conversion into RAND 29 August 2023
Last day to trade cum dividend on Johannesburg Stock Exchange Limited (JSE) 5 September 2023
Ex-dividend Date JSE 6 September 2023
Ex-dividend Date Australian Securities Exchange (ASX), London Stock Exchange (LSE) and New 7 September 2023
York Stock Exchange (NYSE)
Record Date 8 September 2023
Announcement of currency conversion into AUD, GBP and NZD 11 September 2023
DRP and Currency Election date 11 September 2023
Payment Date 28 September 2023
DRP Allocation Date 12 October 2023
6
BHP | Financial results for the year ended 30 June 2023
Shareholders registered on the South African branch register
will not be able to dematerialise or rematerialise their
shareholdings between the dates of 5 September 2023 and 8 September
2023 (inclusive), and transfers between the Australian register and
the South African branch register will not be permitted between the
dates of 28 August 2023 and 11 September 2023 (inclusive). American
Depositary Shares (ADSs) each represent two fully paid ordinary
shares and receive dividends accordingly.
Any eligible shareholder who wishes to participate in the DRP,
or to vary a participation election should do so before 11
September 2023, or, in the case of shareholdings on the South
African branch register of BHP Group Limited, in accordance with
the instructions of your CSDP or broker. The DRP Allocation Price
will be calculated in each jurisdiction as an average of the price
paid for all shares actually purchased to satisfy DRP elections.
The DRP Allocation Price applicable to each exchange will be made
available at: bhp.com/DRP
Economic outlook(x)
As was the case in prior years, BHP's external operating
environment in FY23 was volatile. Our key commodity prices were
materially weaker leading to lower revenue generation, while we
also managed significant cost inflation across the business.
In the long run, we expect that population growth, rising living
standards, and the infrastructure required for decarbonisation will
drive demand for steel, non-ferrous metals and fertilisers.
In the near term, while the outlook for the developed world is
uncertain, we expect China and India to remain relative sources of
stability for commodity demand. We anticipate that these competing
forces may have a variable impact on commodity prices in the
period. On the cost front, we expect that the lag effect of the
inflation peaks observed in FY23 and continued labour market
tightness will continue to impact our cost base throughout
FY24.
Commodity demand
The demand for commodities in the developed world has slowed
substantially due to the impact of anti-inflationary policies and
the energy crisis itself. While the energy crisis has faded, the
lag effect of higher interest rates will suppress economic growth
in the developed world in FY24. Demand though has remained
relatively robust in China and India.
The Chinese economy has been volatile since the zero-Covid
policy was eased in December 2022. The March quarter saw a
better-than-expected recovery in a range of sectors important to
commodity demand, raising hopes of a strong year overall. However,
that momentum did not carry over fully to the June quarter. That
was especially the case in the steel-intensive real estate sector,
whereas copper-intensive sectors like automobiles, power machinery,
consumer durables (e.g. air-conditioners) and the electricity grid
have seen solid growth. The authorities have acknowledged that more
policy support is needed to fully embed the recovery. For FY24, the
key question is how effective this latest policy push will be.
The demand picture has been more balanced in India, where an
investment upswing is in place and commodity demand has been
accordingly robust. The Indian economy has healthy momentum as the
country moves towards a general election, which is expected to be
held in the first half of CY24.
For the review and outlook relating to our individual
commodities please refer to the relevant segment sections from page
7 .
7
BHP | Financial results for the year ended 30 June 2023
Costs and inflation
At our half year results in February 2023, we noted that the
negative impact of inflation on our cost base was narrowing.
Pressures had eased in non-energy raw materials, logistics and
manufacturing supply chains, energy risks had become balanced,
while labour costs remained the key forward-looking inflationary
risk. However, even as the pulse in "prompt" input costs faded, we
indicated that the lagged effect of inflation would continue to be
felt through the business, and that is broadly how the second half
of FY23 played out.
Broad-based inflation has eased noticeably, and additional
pressure has come out of industry-specific supply chains. The
lagged effect of non-labour inflation (including pricing in
contracts that reset periodically based on historical outcomes) is
expected to impact the business into FY24. The labour market
remains a core inflationary concern. This concern is amplified by
the proposed regulatory reform in Australia , which has the
potential to add significantly to our labour costs.
Overall, the cost of mining production is now estimated to be
higher than it was prior to the pandemic. This implies that price
support is also expected to be higher than in previous cycles and
low-cost operators stand to capture potentially higher relative
margins in certain commodities.
For more detail, please refer to the Prospects blog which can be
found on our website.
Segment and asset performance
Detailed financial information on all business segments in the
Financial performance summary
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8
BHP | Financial results for the year ended 30 June 2023
Copper
Production Commodity review and outlook(x)
1,717 kt Up 9% Copper prices were volatile over the second half of FY23, with
FY22 1,574 kt two-way fluctuations based
FY24e 1,720 - 1,910 Mt on expectations of China's recovery, and mounting demand risks in
the OECD, with indicators
Average realised price of manufacturing weakness widespread. Historically extremely low
US$3.65/lb Down 12% global copper inventories
FY22 US$4.16/lb and the sector's ongoing operational performance challenges have
helped prices hold up relatively
Underlying EBITDA well - though our realised price was 12% lower compared to FY22.
US$6.7 bn Down 22% In the near term, we expect demand to be met by a combination of
FY22 US$8.6 bn rising primary and scrap
23% contribution to the Group's Underlying EBITDA supply. A small surplus or a balanced market is the most likely
47% Underlying EBITDA margin outcome for the current year,
with operational disruptions being a key swing factor.
Underlying ROCE In the medium and longer term, traditional demand (such as home
12% building, electrical equipment
FY22 16% and household appliances) is expected to remain solid while the
decarbonisation mega-trend
Capital and exploration expenditure is expected to bolster demand. In terms of meeting that demand, we
US$2.7 bn anticipate that the cost
FY22 US$2.5 bn curve is likely to steepen as challenges to the development of new
FY24e US$4.2 bn resources (such as societal
expectations, decarbonisation and water challenges) progressively
increase. We anticipate
that the industry is likely to enter the final third of this
decade with a low inventory buffer,
and therefore elevated prices may endure throughout this period.
Segment outlook
Following the completion of the acquisition of OZL on 2 May 2023,
we have established the
Copper South Australia province. The addition of the Prominent
Hill and Carrapateena operations,
combined with Olympic Dam and the potential Oak Dam development,
is expected to unlock a pathway
to increase volumes and value from the province. We are
integrating a team with a strong culture,
excellence in project delivery and strong relationships with local
communities and partners.
OZL assets are included within the FY23 Underlying ROCE for
Copper.
In Chile we have a range of studies underway to unlock our
significant resource endowment
and utilise latent capacity across our Escondida, Spence and Cerro
Colorado operations. These
include studying options for a new concentrator at Escondida and
the evaluation of multiple
leaching technologies which could be applied across all three
operations. We expect to provide
further information on preferred development pathways during CY24.
In Peru, Antamina has applied for environmental approval for a
life extension until 2036,
from 2028.
9
BHP | Financial results for the year ended 30 June 2023
Escondida
Copper production Unit cost(1,2) Underlying EBITDA
1,055 kt Up 5% US$1.40/lb Up 17% US$4.9 bn Down 20%
FY22 1,004 kt FY22 US$1.20/lb FY22 US$6.2 bn
FY24e 1,080 - 1,180 kt FY24e US$1.40 - $1.70/lb
FY25 and FY26e 1,200 - FY25 and FY26e US$1.30
1,300 ktpa - US$1.60/lb
1 Based on exchange rates of: FY22 USD/CLP 811 (realised); FY23
USD/CLP 864 (realised); FY24 - FY26 USD/CLP 810 (guidance).
2 Refer to OFR 10 - Non-IFRS information in the Annual Report
for detailed unit cost reconciliation.
Financial performance
Underlying EBITDA decreased by 20% primarily as a result of:
* Lower copper prices which had an unfavourable US$1.2
bn impact; and
* Unit costs increasing 17% to US$1.40/lb, primarily
driven by inflationary cost pressures, including
higher contractor costs.
These were partially offset by productivity improvements and
higher sales volumes in line with improved grade.
Asset outlook
Over the next 18 months, Escondida will complete a number of
strategic studies into options to offset the impact in the decline
of concentrator feed grade which is expected from FY27. These
options include the potential for a new concentrator to replace
the current Los Colorados facility and the application of one
or more leaching technologies to improve recoveries and unlock
primary sulphide resources in the cathode process. We expect
costs associated with the studies, which are captured as operating
costs, to increase to US$140 m per year in both FY24 and FY25,
from US$60 m in FY23.
Full SaL, a BHP designed leaching technology, is on track to
become the first of these options to be implemented. This technology,
which has already been successfully deployed at Spence, is expected
to produce 410 kt in copper cathodes at Escondida over a 10
year period once implemented, through improved recoveries and
shorter leach cycle times. We expect capital expenditure to
implement Full SaL to be approximately US$300 m, and for first
production to be during FY25.
Escondida production is expected to increase in FY24 to between
1,080 and 1,180 kt, then to between 1.2 and 1.3 Mt per year
in FY25 and FY26, after which production is expected to decline
for a period as a result of lower grades.
10
BHP | Financial results for the year ended 30 June 2023
Pampa Norte
Copper production Spence unit cost(1,2,3) Underlying EBITDA
289 kt Up 3% US$2.11/lb US$0.75 bn Down 45%
FY22 281 kt FY24e US$2.00 - US$2.30/lb FY22 US$1.4 bn
FY24e 210 - 250 kt(1)
Medium-term 250 kt
1 Production and unit cost guidance for FY24 is provided for
Spence only. Cerro Colorado is expected to produce 9 kt as
it transitions to closure by 31 December 2023.
2 Refer to OFR 10 - Non-IFRS information in the Annual Report
for detailed unit cost reconciliation.
3 Based on exchange rates of: FY22 USD/CLP 811 (realised); FY23
USD/CLP 864 (realised); FY24 USD/CLP 810 (guidance).
Financial performance
Underlying EBITDA decreased by 45% predominately as a result
of:
* Increased costs primarily driven by inflationary cost
pressures, and the planned drawdown in mined ore
inventories following commissioning of the Spence
concentrator and as Cerro Colorado transitions to
closure; and
* Lower copper prices, which had an unfavourable
US$0.36 bn impact.
These were partially offset by increased sales volumes at Spence
in line with record production.
Asset outlook
During FY23 we applied for environmental approval to extend
the life of the Spence leaching facilities to 2039. If approved,
this would involve the implementation of a novel approach to
re-processing previously leached ores followed by a planned
medium-term transition to chalcopyrite ore leaching.
The concentrator plant modifications, which commenced in August
2022, remain on track to be completed in CY23. Expected capital
expenditure for the concentrator modification works remains
unchanged at approximately US$100 m. We are also studying options
to further debottleneck and expand concentrator throughput in
the future.
Production at Spence is now expected to average 250 ktpa over
the next five years.
We continue to closely monitor previously identified anomalies
in the Spence Tailings Storage Facility (TSF) and are aiming
to ensure safe operational conditions. In order to remediate
the anomalies, changes to the original TSF design will be required
and further study is being undertaken. In collaboration with
the Engineer of Record, Independent Tailings Review Board and
expert consultants, work is ongoing to finalise the schedule,
scope and cost of the TSF design, including through studies,
site characterisation and modelling. Production guidance at
Spence remains subject to the remediation of the TSF anomalies.
Cerro Colorado is transitioning to closure by December 2023.
Operating costs at Cerro Colorado are expected to be approximately
US$70 m and US$45 m for the December 2023 and June 2024 half
years, respectively. We are exploring options to extend the
life of Cerro Colorado, including through the use of leaching
technologies and desalinated water, which could see the operation
restart in approximately 2030, subject to environmental approvals.
11
BHP | Financial results for the year ended 30 June 2023
Copper South Australia
Copper production Underlying EBITDA
232 kt(1) Up 68% US$0.70 bn Up 72%
FY22 138 kt FY22 US$0.41 bn
FY24e 310 - 340 kt
1 Includes contribution of 20 kt from Carrapateena and Prominent
Hill.
Financial performance
The combination of Olympic Dam with Prominent Hill and Carrapateena
following the acquisition of OZL, has allowed us to create
a new province, Copper South Australia. When compared to FY22
(when it was only Olympic Dam), underlying EBITDA increased
72% as a result of:
* Higher sales volumes at Olympic Dam supported by BHP
record copper production following the planned major
smelter maintenance campaign (SCM21) in the prior
year, and record gold production following
debottlenecking activities in FY22, as well as the
contribution of sales from Prominent Hill and
Carrapateena in the period post-acquisition.
This was partially offset by:
* Higher operating costs at Olympic Dam primarily due
to the planned drawdown of inventory built during
SCM21 in the prior year to support record
concentrator and smelter performance, the impacts of
inflation on the cost base and higher exploration
spend in relation to drilling at Oak Dam and Olympic
Dam; and
* Lower average realised prices.
Asset outlook
Following the acquisition of OZL, we are focused on building
scale and optionality across the new Copper South Australia
province.
Initial integration activity is now complete, where the focus
was on safety, people and culture, operational productivity
and stability. We expect to realise a range of synergies in
the short term, by integrating supply chains and reducing corporate
overheads and compliance costs, and in the long term by optimising
growth projects.
In FY24, we expect production at Copper South Australia to
be between 310 and 340 kt, and will include the transfer of
small volumes of copper concentrate from Prominent Hill to
Olympic Dam for processing.
We are assessing options for a new two-stage smelter which
could produce >500 ktpa. In addition to productivity improvements
at the existing operations, we expect to source ore for the
expanded smelter from growth and exploration projects, such
as:
* At Prominent Hill, the Wira shaft mine expansion
project is under construction. The hoisting shaft is
expected to extend the mine life to at least 2036 and
may provide access to potential mineralisation
outside the current mine plan;
* At Carrapateena, the Block Cave Expansion project is
progressing and is expected to (i) extend the mine
life beyond the existing sub-level cave and (ii)
increase production at Carrapateena from FY29.
Crusher 2 is expected to come online in the March
2024 quarter and provide an uplift in mine
productivity; and
* At Oak Dam, where we continue exploration activity.
We are also exploring beneath the Olympic Dam ore
body. Refer to the Minerals exploration and
early-stage entry section for more details.
12
BHP | Financial results for the year ended 30 June 2023
Iron ore
Production Commodity review and outlook(x)
257 Mt Up 1% In terms of steel production, in CY23 China
FY22 253 Mt and India are anticipated to lead a 2% recovery
FY24e 254 - 264.5 Mt in global steel production, following a 4% decline
in CY22 (8% decline if you exclude China and
Average realised price India).
US$92.54/wmt Down 18% In China, steel production was running at 1,080
FY22 US$113.10/wmt Mtpa in the first half of CY23, with solid demand
from infrastructure, power machinery, autos
Underlying EBITDA and shipping, offsetting weakness in new housing
US$16.7 bn Down 23% starts and construction machinery. As we have
FY22 US$21.7 bn seen in prior years, it is possible that we
59% contribution to the will see policies limiting steel production
Group's Underlying EBITDA in China in the second half of CY23. However,
67% Underlying EBITDA at this stage it appears that China is on the
margin way to producing more than 1 Bt of steel for
the 5(th) consecutive year. That is consistent
Underlying ROCE with our long-held view that China's steel production
67% would sit at a plateau in the 1.0 to 1.1 Bt
FY22 91% range in the first half of the 2020s.
Further growth is expected in India, which we
Capital and exploration forecast will produce around 135 Mt in CY23,
expenditure a 35% increase since the beginning of the decade.
US$2.0 bn The Indian government is targeting 300 Mtpa
FY22 US$1.8 bn of steel-making capacity by 2030.
FY24e US$2.0 bn In the iron ore market, conditions were better
in the second half of FY23 than in the first
half, but there are two key uncertainties for
the coming six months. The first is how effectively
China's stimulus policy is implemented, especially
with regards to real estate. The second revolves
around the breadth, timing and severity of any
mandated steel production cuts. Our estimate
of real-time cost support sits in the US$80-US$100/t
range on a 62% Fe CFR basis. That is unchanged
from our previous reporting period.
In the medium term, China's demand for iron
ore is expected to be lower than it is today
as it moves beyond its crude steel production
plateau and the scrap-to-steel ratio rises,
though we expect demand for our products from
elsewhere in developing Asia will offset this
to a degree.
Segment outlook
At WAIO, we are focused on increasing annual
production to greater than 305 Mt over the medium
term. We are also studying growth of the WAIO
business to 330 Mtpa and we expect to complete
these studies in CY25. Options under consideration
include developing new mines and leveraging
existing infrastructure, including at Yandi,
increasing ore beneficiation or building a new
hub.
Samarco is expected to continue to make strong
progress on remediation activity, as it ramps
up production and continues to support the local
community through jobs, investment and taxes.
13
BHP | Financial results for the year ended 30 June 2023
Western Australia Iron Ore
Iron ore production Unit cost(1,2) Underlying EBITDA
253 Mt Up 1% US$17.79/t Up 6% US$16.7 bn Down 24%
C1(xi) US$15.86/t(3)
FY22 249 Mt FY22 US$16.81/t FY22 US$21.8 bn
FY24e 282 - 294 Mt (100% FY24e US$17.40 - US$18.90/t
basis) Medium-term <US$17/t
Medium-term >305 Mt (100%
basis)
1 Based on exchange rates of: FY22 AUD/USD 0.73 (realised);
FY23 AUD/USD 0.67 (realised); FY24 AUD/USD 0.67 (guidance).
2 Refer to OFR 10 - Non-IFRS information in the Annual Report
for detailed unit cost reconciliation.
3 C1 unit costs for FY22 were US$15.05/t. WAIO C1 unit cost
excludes third party royalties of US$1.69 per tonne (FY22: US$1.93
per tonne), net inventory movements US$(0.22) per tonne (FY22:
US$(0.48) per tonne), depletion of production stripping US$0.81
per tonne (FY22: US$0.69 per tonne), exploration expenses, marketing
purchases, demurrage, exchange rate gains/losses, and other
income US$(0.34) per tonne (FY22: US$(0.39) per tonne).
Financial performance
Underlying EBITDA decreased by 24%, despite WAIO achieving record
production, shipped volumes and lump sales. This is the result
of the compounding effect of:
* Lower average realised prices for iron ore, which
decreased 18%, and had an unfavourable impact of
US$5.4 bn;
* Increased unit costs, predominantly due to the
effects of inflation, particularly higher diesel
prices, increased labour and contractor costs, net
drawdown of inventory to support the supply chain,
and spend associated with the ramp up of South Flank,
which were partially offset by favourable exchange
rate movements; and
* Lower overall sales volumes, as a result of building
inventory in China for portside sales.
During FY23, WAIO extended its lead as the lowest cost major
iron ore producer globally with a C1 unit cost of US$15.86/t.
Asset outlook
South Flank remains on track to ramp up to full production capacity
of 80 Mtpa (100% basis) by the end of FY24. Once ramp up is
complete, South Flank's high quality ore is expected to maintain
WAIO's average iron ore grade of at least 61% (excluding Yandi)
and increase the overall proportion of lump to between 30% and
33%.
As part of our incremental pathway to >305 Mtpa in the medium
term we are undertaking the following projects:
* The Port Debottlenecking Project (PDP1) which remains
on track to be completed in CY24 and is expected to
deliver an initial uplift in port throughput; and
* The Rail Technology Programme (RTP) which will be
rolled out over the next few years and is expected to
improve communications and signalling, operational
safety and reduce variability on our WAIO rail
network.
Our portside distribution channel in China, which allows for
an expanded customer base and increases our flexibility, had
6 Mt port side sales in FY23. Inventory for portside sales
in China will vary over time (4 Mt at 30 June 2023) as we respond
to demand in the seaborne and portside markets, and this may
drive differences between production and sales volumes.
Average annual sustaining capital expenditure guidance over
the medium term, excluding costs associated with operational
decarbonisation and our automation programs, is expected to
increase to US$5.50/t to support the incremental volume required
to achieve medium-term guidance, asset integrity and end of
life fleet replacement.
14
BHP | Financial results for the year ended 30 June 2023
Samarco
Iron ore production Total Renova Foundation spend
4.5 Mt Up 11% US$6.4 bn (1) Up 31%
FY22 4.1 Mt FY22 US$4.9 bn(1)
FY24e 4 - 4.5 Mt
1 Refers to total Renova spend since 2016 (100% basis).
Performance
Samarco continues to operate safely and efficiently since re-starting
operations in December 2020. The restart of the second concentrator,
which will increase pellet production capacity to approximately
16 Mtpa (100% basis) through a filtration and dry stack tailings
solution, is expected to deliver first production in the March
2025 quarter.
BHP Brasil remains committed to Samarco supporting the Renova
Foundation and its work to progress the remediation and compensatory
programs to restore the environment and re-establish communities
affected by the Samarco dam failure. Renova made strong progress
during FY23, and since March 2016, compensation and financial
assistance has been paid to approximately 427,000 people and
approximately 75% of resettlement cases(xii) have now been completed.
On 28 July 2023, Samarco and one of its financial creditors
jointly filed a restructure plan with the Judicial Reorganisation
Court that outlined the proposed restructure of Samarco's debts
subject to the Judicial Reorganisation process. Subject to the
plan being ratified by the Court, Samarco and its creditors
will now work towards completing the process, including agreeing
documentation and seeking final court approvals.
Financials
Cost estimates for the Samarco dam failure provision remain
unchanged from the December 2022 half. The Group's provision
related to the Samarco dam failure has increased however to
US$3.7 bn as at 30 June 2023, primarily as a result of movements
in the exchange rate and amortisation of discounting.
BHP's expected cash outlay for CY23 in relation to the provision
is now US$1.05 bn (down from a previous estimate of $1.95 bn)
with the decrease largely as a result of timing of spend. BHP
Brasil has approved US$915 m of funding for the Renova Foundation,
with additional amounts subject to further approval. This funding
will be offset against the Group's provision for the Samarco
dam failure.
For further information, please see note 4 - 'Significant events
- Samarco dam failure' for the Samarco dam failure provision.
15
BHP | Financial results for the year ended 30 June 2023
Coal
Production Commodity review and outlook - Metallurgical
Metallurgical coal coal(x)
29 Mt 0% Metallurgical coal prices moved lower in FY23
FY22 29 Mt as the global energy shock receded, steel production
Energy coal in OECD importing regions declined, and supply
14.2 Mt Up 3% conditions improved across multiple jurisdictions.
FY22 13.7 Mt Against this backdrop the re-opening of the
Chinese import market for Australian coals has
Average realised price had little discernible impact on trade flows
Metallurgical coal or pricing.
US$271.05/t Down 22% As has been the case in other commodities, India
FY22 US$347.10/t has been a bright spot in metallurgical coal,
Thermal coal - export with imports expected to grow around 4.5% in
US$236.51/t Up 9% CY23, against a 2% decline for the remainder
FY22 US$216.78/t of the seaborne trade.
In the near term, we expect a modest improvement
Underlying EBITDA in seaborne demand from OECD importing regions
US$5.0 bn Down 47% as they see a gradual pickup in their steel
FY22 US$9.5 bn industries, while India is expected to continue
18% contribution to the with its current momentum. The availability
Group's Underlying EBITDA of landborne imports, and the operational performance
46% Underlying EBITDA of Chinese domestic mines, are key uncertainties
margin for assessing what China's call on the seaborne
trade might be in CY24.
Underlying ROCE Over the longer term, we believe that higher
47% quality metallurgical coals (such as those produced
FY22 91% by our BMA assets) will continue to be required
in blast furnace steel making for decades, driven
Capital and exploration by the growth of the steel industry in hard
expenditure coking coal importing countries such as India.
US$0.7 bn In particular, such higher quality coking coals
FY22 US$0.6 bn are expected to be valued for their role in
FY24e US$0.7 bn reducing the greenhouse gas emissions intensity
of blast furnaces. A nd with the major seaborne
supply region of Queensland having become less
conducive to long-life capital investment as
a result of changes to the royalty regime, the
scarcity value of higher quality coking coals
may well increase over time.
Segment outlook
Aligned with our strategic objective to focus
on producing higher quality metallurgical coal,
in February 2023, BHP announced that together
with Mitsubishi Development Pty Ltd (our 50:50
joint venture partner in BMA) we have initiated
a process to divest the Daunia and Blackwater
mines.
Following an extensive review of available options,
in June 2022, BHP made the decision to retain
New South Wales Energy Coal (NSWEC) in our portfolio,
seek the relevant approvals to continue mining
beyond the current consent that expires at the
end of FY26 and proceed with a managed process
to cease mining at the asset by the end of FY30.
16
BHP | Financial results for the year ended 30 June 2023
BMA
Metallurgical coal production Unit cost(1,2) Underlying EBITDA
29.0 Mt 0% US$96.46/t Up 8% US$3.2 bn Down 50%
FY22 29.1 Mt FY22 US$89.06/t FY22 US$6.3 bn
FY24e 56 - 62 Mt (100% FY24e $US95 - US$105/t
basis)
1 Ba sed on exchange rates of: FY22 AUD/USD 0.73 (realised);
FY23 AUD/USD 0.67 (realised); FY24 AUD/USD 0.67 (guidance).
2 Refer to OFR 10 - Non-IFRS information in the Annual Report
for detailed unit cost reconciliation.
Financial performance
Underlying EBITDA decreased by 50% predominately driven by:
* Lower average realised prices which had an
unfavourable impact of US$2.5 bn;
* Higher royalties, despite the lower price environment
and lower volumes, as a result of the Queensland
Government's decision to raise coal royalties to the
highest maximum royalty rate in the world. The
introduction of the new royalty regime resulted in an
additional US$0.7 bn in royalties paid to the
Queensland Government by BHP in relation to FY23.
Combined with income taxes, this equates to an
adjusted effective tax rate including royalties of
55%;
* Higher unit costs, increasing 8% primarily due to the
impact of inflation, particularly higher diesel
prices, higher maintenance activity, and the drawdown
of mine inventories, which were partially offset by
favourable exchange rate movements; and
* Lower sales volumes, despite stable production, as a
result of timing of sales.
Asset outlook
During FY24, we plan to rebuild BMA's mine inventories which
have been drawn down over the past three years to balance the
supply chain and maximise value amidst the significant weather
disruptions.
Given the negative impact on investment economics of the Queensland
Government's decision to raise coal royalty rates and the increase
in sovereign risk as a result of this decision, we will not
be investing in any further growth in Queensland, however we
will sustain and optimise our existing operations.
We continue to progress our planned process to divest the Blackwater
and Daunia mines for value, and updates (including any adjustment
required to guidance as a result of a sale) will be provided
to the market where appropriate.
17
BHP | Financial results for the year ended 30 June 2023
New South Wales Energy Coal
Energy coal production Unit cost(1,2) Underlying EBITDA
14.2 Mt Up 3% US$82.37/t Up 16% US$1.8 bn Up 2%
FY22 13.7 Mt FY22 US$70.80/t FY22 US$1.8 bn
FY24e 13 - 15 Mt
1 Ba sed on exchange rates of: FY22 AUD/USD 0.73 (realised);
FY23 AUD/USD 0.67 (realised); FY24 AUD/USD 0.67 (guidance).
2 Refer to Section 10 - Non-IFRS information of the Annual Report
for detailed unit cost reconciliation.
Financial performance
Underlying EBITDA increased marginally as a result of:
* Higher average realised prices for thermal coal,
which had a favourable impact of US$0.4 bn. The
market for our products changed dramatically within
the year with the impact of the Ukraine/Russia
conflict on global energy markets, and the
introduction of the NSW Government Coal Price
Emergency Directions.
This was partially offset by:
* Unit costs increasing 16% as the effects of inflation
and the higher price environment increased key input
costs, particularly diesel, explosives and labour.
Additionally, we saw higher freight costs at the
Newcastle Coal Infrastructure Group (NCIG) coal
export terminal; and
* Slightly lower sales volumes, despite higher
production, as we rebuilt product coal stocks. We
also sold a lower portion of higher quality coal
types due to the changing market conditions.
Asset outlook
As announced in June 2022, we made the decision to retain NSWEC
in our portfolio and proceed with a managed process to cease
mining by the end of FY30.
We are now seeking the relevant approvals to continue mining
beyond the current consent that expires at the end of FY26.
Extending this consent is intended to provide the time to work
with our people and the local community on an equitable change
and transition approach and the detailed plan for mine closure.
Work continues on the modification application, which is intended
to be submitted in the second half of CY23.
Subject to receiving the necessary approvals , a s we look ahead
to 2030 we will not be allocating any growth capital to NSWEC.
We expect to optimise our costs for value, with absolute costs
expected to be stable in the medium term after a period of higher
inflation and input prices.
18
BHP | Financial results for the year ended 30 June 2023
Group & Unallocated
Nickel
Production Commodity review and outlook(x)
80 kt Up 4% The nickel industry moved further into surplus
FY22 77 kt over the course of FY23 as Indonesian supply
FY24e 77 - 87 kt continued to grow apace at a time of slowing
economic growth. Battery demand is expected
Average realised price(xiii) to record healthy growth across CY23, but a
US$24,021/t Up 3% de-stocking episode across the EV value chain
FY22 US$23,275/t early in the year made its presence felt across
all the battery raw materials.
Underlying EBITDA Relatively tight fundamentals in Class-I exchange
US$0.2 bn Down 61% traded metal have continued to co-exist with
FY22 US$0.4 bn considerable over-supply of intermediates and
1% contribution to the Class-II products.
Group's Underlying EBITDA Longer term, we believe nickel will be a core
beneficiary of the electrification mega-trend
Capital and exploration and that nickel sulphides will be particularly
expenditure attractive.
US$0.6 bn
FY22 US$0.4 bn Business outlook
FY24e US$0.8 bn To support growing demand for nickel in the
battery market, Nickel West is assessing options
for a major smelter renewal project, which could
potentially process more nickel from our northern
mining operations, sustain our integrated supply
chain and create a pathway for additional feed
sources. At the mines, we are assessing options
to expand Mt Keith operations and have completed
approximately 100 km of development and exploration
drilling in FY23.
The West Musgrave nickel project in Western
Australia is in early stages of execution following
the final investment decision by OZL in September
2022 (prior to the acquisition by BHP). The
additional drilling and the addition of West
Musgrave has led to a 36% increase in nickel
resource.
Nickel West
Financial performance
Underlying EBITDA decreased by 61%, despite higher sales
volumes, predominantly as a result of:
-- Inventory drawdowns to support the supply chain and to
mitigate the operational impact of third party ore delivery issues
and a rain event at Mt Keith;
-- The unfavourable impact of inflation on the cost base
including increased labour and contractor costs and higher prices
for consumables and reagents, diesel, ammonia and explosives;
and
-- Lower realised prices for intermediate products more than
offsetting higher realised prices for nickel metal.
19
BHP | Financial results for the year ended 30 June 2023
During the year, we experienced ongoing issues with the quality
and volume of ore deliveries from Mincor Resources containing high
levels of arsenic, and in March advised that we would no longer
accept off-specification product. We purchased more third-party
volumes than in FY22, including high cost third party concentrate
to offset the impact of the ore supply issues. During FY23, costs
associated with purchasing third party products accounted for
approximately 30% of the operating cost base and we expect this to
continue into FY24.
Potash
Capital expenditure Commodity review and outlook(x)
US$0.65 bn Up 72% Potash prices declined across the second half
FY22 US$0.4 bn of FY23 as prices reverted to more normal ranges,
FY24e US$1.2 bn following expectations of scarcity in the early
months of the Ukraine-Russia conflict.
Medium-term, the major uncertainty is the status
of the projects in the areas formerly comprising
the Soviet Union.
Longer term, we believe that potash stands to
benefit from the intersection of global megatrends:
rising population, changing diets and the need
for the more sustainable intensification of
agriculture on finite arable land. We consider
this compelling demand picture, rising geopolitical
uncertainty and the maturity of the existing
asset base to be an attractive entry opportunity
in a lower-risk supply jurisdiction such as
Saskatchewan, Canada.
For further information, please see Potash:
the fourth wave .
Jansen
Progress - Stage 1 completion Production target date Capital estimate
26% End-CY26 US$5.7 bn
Project update
At the end of FY23 Jansen Stage 1, which will have a capacity
of 4.35 Mtpa, was 26% complete and on track to achieve first
production by the end of CY26. Capital expenditure for FY23
was US$647 m. We expect this to increase to US$1.0 bn in FY24,
as we advance steel and equipment procurement and installation
on the surface and underground.
Jansen Stage 2 is expected to deliver 4 Mtpa of potash production
at a lower capital intensity than Stage 1 (between US$1,000
and US$1,200/t), through leveraging the substantial infrastructure
investment already being constructed for Stage 1. In line with
our favourable view on the long-term outlook for potash, we
have accelerated the feasibility study for Jansen Stage 2, and
this remains on track for completion during FY24. The earliest
potential final investment decision is within FY24, and if a
decision is taken, first production could be achieved as early
as FY29. Pre-commitment spend in FY24 for Jansen Stage 2 is
expected to be US$125 m.
20
BHP | Financial results for the year ended 30 June 2023
Minerals exploration and early-stage entry
Exploration expenditure BHP continued to strengthen its portfolio of options in future-facing commodities, via high
US$350 m Up 37% potential exploration projects, equity investments, joint ventures and farm-in agreements.
FY22 $256 m We also leveraged technology to look deeper in mature exploration jurisdictions and identify
new high potential search spaces.
Greenfield minerals exploration was undertaken during the year to advance copper targets in
Chile, Ecuador, Serbia, Peru, Canada, Australia and the United States. Nickel targets were
advanced in Canada and Australia. We continued to progress activity at Ocelot , BHP's
recently
identified copper porphyry mineralised system in the Miami-Globe copper district of the
United
States.
BHP also signed a Sales and Purchase agreement for Ragnar Metals' Sweden operations, gaining
access to drill-ready programs for nickel. These will be further advanced during FY24.
BHP also continued its strategy of partnering with mining companies focused on early-stage
copper and nickel projects, with additional investments made during the year in Brixton
Metals,
Midland Exploration, Filo Mining and Kabanga Nickel.
At Copper South Australia, we published an Exploration Target at Oak Dam(xiv) and have
commenced
the next phase of drilling as we work towards defining a first Mineral Resource(xv) . We plan
to increase the number of drilling rigs (from nine to eleven) and to establish core
processing
facilities and an accommodation camp by the end of CY23. We are continuing community and
stakeholder
engagement in preparation for submission of our application to convert the Oak Dam tenement
from an exploration licence to a retention lease, enabling progression of an early access
decline. We have also commenced exploratory drilling beneath the Olympic Dam mine, at depths
between 900 and 1,500 metres, with nine surface exploration rigs.
In the past year, we established BHP Xplor, an innovative accelerator program which supports
early-stage mineral exploration companies. The inaugural program was a success, with several
companies selected for additional investment. Applications for the 2024 process opened in
August.
21
BHP | Financial results for the year ended 30 June 2023
Appendix 1
Detailed financial information is included in Section 4.3 of the
Annual Report
-----------------------------------------------------------------
Financial performance summary(1)
A summary of performance for the 2023 and 2022 financial years
is presented below.
Year ended 30 Net
June 2023 Underlying Underlying Exceptional operating Capital Exploration Exploration
US$M Revenue(2) EBITDA(3) EBIT(3) items(4) assets(3) expenditure gross to profit
----------------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- -----------
Copper
Escondida 8,847 4,934 4,070 12,207 1,351
Pampa Norte(5) 2,491 754 244 4,487 647
Antamina(6) 1,468 998 824 1,430 374
Copper South
Australia(7) 2,806 703 251 15,782 641
Other(6) 20 (209) (228) 636 59
Total Copper from
Group production 15,632 7,180 5,161 471 34,542 3,072
Third party
products 1,863 18 18 - - -
Total Copper 17,495 7,198 5,179 471 34,542 3,072 151 148
Adjustment for
equity
accounted
investments(6) (1,468) (545) (369) - - (374) (6) (3)
Total Copper
statutory result 16,027 6,653 4,810 471 34,542 2,698 145 145
Iron Ore
Western
Australia Iron
Ore 24,678 16,660 14,663 20,438 1,956
Samarco(8) - - - (3,695) -
Other 113 33 9 (100) 10
Total Iron Ore
from Group
production 24,791 16,693 14,672 (295) 16,643 1,966
Third party
products 21 (1) (1) - - -
Total Iron Ore 24,812 16,692 14,671 (295) 16,643 1,966 96 52
Adjustment for - - - - - - - -
equity accounted
investments
Total Iron Ore
statutory result 24,812 16,692 14,671 (295) 16,643 1,966 96 52
Coal
BHP Mitsubishi
Alliance 7,652 3,197 2,572 7,545 488
New South Wales
Energy Coal(9) 3,455 1,953 1,868 (243) 156
Other - (39) (57) (36) 13
Total Coal from
Group production 11,107 5,111 4,383 - 7,266 657
Third party - - - - - -
products
Total Coal 11,107 5,111 4,383 - 7,266 657 13 6
Adjustment for
equity
accounted
investments(9) (149) (113) (88) - - - - -
Total Coal
statutory result 10,958 4,998 4,295 - 7,266 657 13 6
Group and
unallocated items
Potash - (205) (207) 4,469 647 1 1
Nickel West 2,009 164 57 1,189 637 52 48
Other(10) 11 (346) (806) (229) 128 43 42
Total Group and
unallocated
items 2,020 (387) (956) (64) 5,429 1,412 96 91
Inter-segment - - - - - - - -
adjustment
Total Group 53,817 27,956 22,820 112 63,880 6,733 350 294
22
Year ended 30 Net
June 2022 Underlying Underlying Exceptional operating Capital Exploration Exploration
US$M Revenue(2) EBITDA(3) EBIT(3) items(4) assets(3) expenditure gross to profit
----------------- ---------- ---------- ---------- ----------- ---------- ------------ ----------- -----------
Copper
Escondida 9,500 6,198 5,291 11,703 860
Pampa Norte(5) 2,670 1,363 470 4,543 673
Antamina(6) 1,777 1,289 1,143 1,306 323
Copper South
Australia(7) 1,776 409 (12) 9,877 966
Other(6) - (157) (173) (9) 29
Total Copper from
Group production 15,723 9,102 6,719 (81) 27,420 2,851
Third party
products 2,903 36 36 - - -
Total Copper 18,626 9,138 6,755 (81) 27,420 2,851 96 92
Adjustment for
equity
accounted
investments(6) (1,777) (573) (425) - - (323) (11) (7)
Total Copper
statutory result 16,849 8,565 6,330 (81) 27,420 2,528 85 85
Iron Ore
Western
Australia Iron
Ore 30,632 21,788 19,669 20,376 1,847
Samarco(8) - - - (3,433) -
Other 116 (81) (198) (120) 1
Total Iron Ore
from Group
production 30,748 21,707 19,471 (648) 16,823 1,848
Third party 19 - - - - -
products
Total Iron Ore 30,767 21,707 19,471 (648) 16,823 1,848 95 54
Adjustment for - - - - - - - -
equity accounted
investments
Total Iron Ore
statutory result 30,767 21,707 19,471 (648) 16,823 1,848 95 54
Coal
BHP Mitsubishi
Alliance 10,254 6,335 5,708 7,802 491
New South Wales
Energy Coal(9) 3,122 1,868 1,777 (121) 73
Other(11) 2,260 1,363 1,283 (31) 57
Total Coal from
Group production 15,636 9,566 8,768 849 7,650 621
Third party - - - - - -
products
Total Coal 15,636 9,566 8,768 849 7,650 621 17 6
Adjustment for
equity
accounted
investments(9) (87) (62) (35) - - - - -
Total Coal
statutory result 15,549 9,504 8,733 849 7,650 621 17 6
Group and
unallocated items
Potash - (147) (149) 3,570 376 - -
Nickel West 1,926 420 327 721 362 42 37
Other(10) 7 585 (276) (1,746) 120 17 17
Total Group and
unallocated
items 1,933 858 (98) (450) 2,545 858 59 54
Inter-segment - - - - - - - -
adjustment
Total Group 65,098 40,634 34,436 (330) 54,438 5,855 256 199
1 Group profit before taxation comprised Underlying EBITDA,
exceptional items, depreciation, amortisation and impairments
(D&A) of US$5,024 m (FY22: US$6,528 m) and net finance costs of
US$1,531 m (FY22: US$969 m).
2 Total revenue from thermal coal sales, including BMA and
NSWEC, was US$3,528 m (FY22: US$3,559 m).
3 For more information on the reconciliation of non-IFRS
financial information to our statutory measures, reasons for
usefulness and calculation methodology, please refer OFR 10
'Non-IFRS financial information' in the Annual Report.
4 Excludes exceptional items relating to Net finance costs
US$452 m and Income tax expense US$266 m (FY22: Net finance costs
US$290 m and Income tax expense US$454 m).
5 Includes Spence and Cerro Colorado.
6 Antamina, SolGold and Resolution (the latter two included in
Other) are equity accounted investments and their financial
information presented above with the exception of net operating
assets reflects BHP Group's share. Group and Copper level
information is reported on a statutory basis which reflects the
application of the equity accounting method in preparing the Group
financial statements - in accordance with IFRS. Underlying EBITDA
of the Group and the Copper segment, includes D&A, net finance
costs and taxation expense of US$545 m (FY22: US$573 m) related to
equity accounted investments.
7 Includes Olympic Dam as well as Prominent Hill and
Carrapateena which were acquired on 2 May 2023 as part of the
acquisition of OZL. Results of assets acquired as part of the
acquisition of OZL are for the period from the date of
acquisition.
8 Samarco is an equity accounted investment and its financial
information presented above, with the exception of net operating
assets, reflects BHP Billiton Brasil Ltda's share. All financial
impacts following the Samarco dam failure have been reported as
exceptional items in both reporting periods.
9 Includes NCIG which is an equity accounted investment and its
financial information presented above, with the exception of net
operating assets, reflects BHP Group's share. Total Coal statutory
result excludes contribution related to NCIG until future profits
exceed accumulated losses.
10 Other includes functions, other unallocated operations
including legacy assets, West Musgrave (acquired on 2 May 2023 as
part of the acquisition of OZL) and consolidation adjustments.
Revenue not attributable to reportable segments comprises the sale
of freight and fuel to third parties, as well as revenues from
unallocated operations. Exploration and technology activities are
recognised within relevant segments. Results of assets acquired as
part of the acquisition of OZL are for the period from the date of
acquisition.
11 The divestment of BHP's 80% interest in BHP Mitsui Coal (BMC)
was completed on 3 May 2022. The Group's share of BMC revenue,
Underlying EBITDA, D&A, Underlying EBIT and Capital expenditure
has been presented within 'Other'.
23
BHP | Financial results for the year ended 30 June 2023
Underlying EBITDA waterfall
The following table and commentary describes the impact of the
principal factors(ii) that affected Underlying EBITDA for the 2023
financial year compared with the 2022 financial year:
US$M Total Copper Iron ore Coal Group and unallocated
Group
------------- ------- ------------------------------------------------------- ----------------------------------------------------------- -------------- ---------------------------------------------------------
Year ended 30
June 2022 40,634 8,565 21,707 9,504 858
Net price
impact
Change in
sales prices (9,182) (1,656) (5,359) (2,123) (44)
Refer to Segment and asset performance for average realised prices
Price-linked
costs (83) 28 390 (507) 6
WAIO: Lower royalties in line with lower prices. BMA: Higher
royalties as a
result of new
government
royalty regime
(despite lower
prices).
NSWEC: Higher
royalties in
line with
higher prices.
Change in
volumes 1,545 1,409 162 (158) 132
Copper South Australia: Increased volumes following: WAIO: Positive impact due to: NSWEC: Nickel West: Higher sales volumes primarily due to:
* the planned major smelter maintenance campaign * ramp up of South Flank having a favourable impact on Slightly lower * increased concentrate and matte product sales; and
(SCM21) in the prior period at Olympic Dam; and product mix, with lump sales increasing from 29% to volumes
31%; and despite higher
production as * timing of shipments.
* higher gold production following debottlenecking a result of
activities in the prior period at Olympic Dam. * strong operational performance resulting in record rebuilding
production. product Partially offset by lower refined nickel sales as a
coal result of issues with third party ore
Escondida: Higher volumes due to higher concentrator inventories deliveries and a rain event at Mt Keith.
feed grade and prior period COVID-19 Partially offset by an inventory build of almost 4 Mt in following a
impacts. Partially offset by lower concentrator China for portside sales. prior period
throughput. drawdown.
Spence: Higher concentrator throughput at the Spence
Growth Option (SGO), partially offset BMA: While
by lower grade and recoveries. production was
in line with
prior period,
sales volumes
were lower due
to timing
of shipments.
Change in
controllable
cash costs (1,426) (766) 6 (212) (454)
Operating
cash costs (1,318) (667) 3 (211) (4 43)
24
BHP | Financial results for the year ended 30 June 2023
Copper South Australia: Increased costs at Olympic Dam WAIO: Cost improvements due to: BMA: Higher Nickel West:
primarily due to the drawdown of inventory * savings secured through the global procurement model; costs Higher costs
built during SCM21 in the prior period. and primarily driven by
Pampa Norte: Increased costs primarily relate to planned due to inventory
unfavourable inventory movements, increased drawdowns to
to ensure consistent feed to SGO (Spence) and in * easing of Western Australia's COVID-19 restrictions maintenance mitigate
preparation for closure (Cerro Colorado). and prior period compliance costs; activity, disruption
Escondida: Higher costs due to: increased caused by
* higher contractor costs and unfavourable inventory labour costs heavy
movements due to stock builds in FY22 from record Partially offset by: and rain at Mt
material mined; * increased labour costs; inventory Keith and
drawdowns third party
due to the ore quality
* partially offset by prior period COVID-19 cost * inventory drawdown to mitigate the disruption of impacts of and delivery
impacts and workforce bonus payments for renewal of a operational impacts. significant issues.
collective bargaining agreement in FY22. wet weather
and mining Group and
in higher Unallocated
strip ratio also includes
areas. increased
NSWEC: overhead
Higher costs expenses due
primarily to
due to construction
increased at Jansen
freight Stage 1.
costs at the
NCIG coal
export
terminal
and the cost
associated
with
deploying
additional
stripping
capacity.
Exploration
and
business
development (108) (99) 3 (1) (11)
Copper South Australia: Higher exploration spend for
drilling activities at Oak Dam and Olympic
Dam.
Change in
other costs
Exchange
rates 667 (3) 211 282 177
Inflation (1,412) (701) (244) (262) (205)
Fuel,
energy, and
consumable
price (272) 38 (112) (118) (80)
movements Escondida and Spence: WAIO: Primarily due to higher diesel prices. BMA & NSWEC: Nickel West:
* lower power prices due to the renewables transition; Primarily Higher prices
and due to for
higher consumables
diesel and and reagents,
* lower acid prices. explosives diesel,
prices. ammonia and
explosives.
Partially offset by:
* higher diesel and consumable prices.
Non-Cash 7 (53) 60 - -
Escondida: Lower capitalised stripping costs reflecting WAIO: Write-off of dormant stockpiles in prior period,
lower waste material moved. partially offset by higher depletion
Spence: Higher capitalised stripping costs reflecting of production stripping.
increased waste material moved.
One-off
items (411) - - - (411)
G&U: Includes
the review of
employee
allowances
and
entitlements,
and OZL
acquisition
costs.
Asset sales - 1 5 (6) -
Ceased and
sold
operations (1,434) - - (1,383) (51)
BMC: Unwind
of the
contribution
of BHP's 80%
interest in
BMC, prior
to
divestment
in May 2022.
25
BHP | Financial results for the year ended 30 June 2023
New and acquired
operations 57 72 - - (15)
OZL: Contribution from
recently acquired
assets.
Other (734) (281) (134) (19) (300)
Antamina: Decreased WAIO: Other includes Marketing: Includes
profit driven by lower higher freight and US$414 m lower recovery
copper realised prices. distribution costs. of freight costs caused
by movements in the
freight
index on continuous
voyage charter (CVC)
voyages.
Year ended 30 June 2023 27,956 6,653 16,692 4,998 (387)
26
BHP | Financial results for the year ended 30 June 2023
Exchange rates
The following exchange rates relative to the US dollar have been
applied in the financial information:
Average Average
Year ended Year ended As at As at As at
30 June 30 June 30 June 30 June 30 June
2023 2022 2023 2022 2021
--------------------- ---------- ---------- ------- ------- -------
Australian dollar(1) 0.67 0.73 0.66 0.69 0.75
Chilean peso 864 811 803 920 735
1 Displayed as US$ to A$1 based on common convention.
Capital and exploration expenditure
Historical capital and exploration expenditure and guidance are
summarised below:
FY24e FY23 FY22
US$bn US$M US$M
----------------------------------------------------------------- ----- ----- -----
Maintenance and decarbonisation(1) 3.1 2,981 2,765
Development - Minerals 6.5 3,752 3,090
Capital expenditure (purchases of property, plant and equipment) 9.6 6,733 5,855
Add: exploration expenditure 0.4 350 256
Capital and exploration expenditure - Continuing operations 10.0 7,083 6,111
1 Includes capitalised deferred stripping of US$849 m for FY23
(FY22: US$790 m) and US$1.0 bn estimated for FY24.
Major Projects
Initial
Capital production
Project and expenditure target
Commodity ownership Project scope / capacity US$M date Progress
--------- -------------- --------------------------------------------------------------------------------------- ----------- ---------- ------------------------
Potash Jansen Stage 1 Design, engineering and construction of an underground potash mine and surface infrastr 5,723 End-CY26 Project is 26% complete.
ucture,
with capacity to produce 4.35 Mtpa.
(Canada)
100%
Production and unit cost guidance
Historical production and production guidance are summarised
below:
Medium-term FY24
Production guidance guidance FY23 FY24e vs FY23
-------------------------------- ---------------- ------------- ----- -------------
Copper (kt)(1) 1,720 - 1,910 1,717 0% - 11%
Escondida (kt) 1,200 - 1,300(2) 1,080 - 1,180 1,055 2% - 12%
Pampa Norte (kt) 250(3) 210 - 250(3) 289 (27%) - (13%)
Copper South Australia (kt)(4) 310 - 340 232 33% - 46%
Antamina (kt) 120 - 140 138 (13%) - 1%
Carajás (kt) - 1.6 -
Iron ore (Mt) 254 - 264.5 257 (1%) - 3%
WAIO (Mt) 250 - 260 253 (1%) - 3%
WAIO (100% basis) (Mt) >305 282 - 294 285 (1%) - 3%
Samarco (Mt) 4 - 4.5 4.5 (11%) - 0%
Metallurgical coal - BMA (Mt) 28 - 31 29 (4%) - 7%
BMA (100% basis) (Mt) 56 - 62 58 (4%) - 7%
Energy coal - NSWEC (Mt) 13 - 15 14 (8%) - 6%
Nickel (kt) 77 - 87 80 (4%) - 9%
1 FY23 i ncludes contribution of 21.5 kt from operations acquired from OZL.
2 Medium term refers to FY25 and FY26.
3 Production guidance is provided for Spence only. Average of
250 ktpa over five years on the basis that remediation of the
previously identified TSF anomalies does not impact operations.
Cerro Colorado is expected to produce 9 kt as it transitions to
closure by 31 December 2023.
4 Comprised of Olympic Dam, Prominent Hill and Carrapateena.
27
BHP | Financial results for the year ended 30 June 2023
Historical costs(1) and cost guidance for our major assets are
summarised below:
FY23 at
Medium-term FY24 guidance realised
guidance(2) guidance(2) exchange rates(3) exchange rates(3)
----------------------------- ------------------ -------------- ----------------- -----------------
Escondida unit cost (US$/lb) 1.30 - 1.60 (4,5) 1.40 - 1.70(4) 1.40 1.40
Spence unit cost (US$/lb) 2.00 - 2.30 2.09 2.11
WAIO unit cost (US$/t)(5) <17 17.40 - 18.90 18.91 17.79
BMA unit cost (US$/t) 95 - 105 105.21 96.46
1 Refer to OFR 10 - Non-IFRS information in the Annual Report
for detailed unit cost reconciliations and definitions.
2 FY2 4 and medium-term unit cost guidance are based on exchange
rates of AUD/USD 0.67 and USD/CLP 810.
3 Based on exchange rates of: FY23 AUD/USD 0.72 USD/CLP 830
(guidance); FY23 AUD/USD 0.67 USD/CLP 864 ( realised).
4 Escondida unit costs for FY24 onwards exclude revenue based government royalties.
5 Medium term refers to FY25 and FY26.
6 The breakdown of C1 unit costs, excluding third party royalties, are detailed on page 12 .
Health, safety and social value
Key safety indicators(1)
Target/Goal FY23 FY22
-------------------------------------------- ------------------------------------------ ---- ----
Fatalities Zero work-related fatalities 2 0
High-potential injury (HPI) frequency(2) Year-on-year improvement in HPI frequency 0.18 0.14
Total recordable injury frequency (TRIF)(2) Year-on-year improvement in TRIF 4.5 4.0
1 All data points are presented on a total operations basis,
unless otherwise noted. Excludes OZL operations and functions.
Social value: key indicators scorecard(1,3)
Target/Goal FY23 FY22
--------------------------------------------------- --------------------------------------------------- ----- -----
Operational greenhouse gas (GHG) emissions Reduce operational GHG emissions by at least 30 per
(Mt CO(2) -e) cent from FY20 levels(4) by FY30 9.8 11.0
Steelmaking: 2030 goal to support industry to
develop technologies and pathways capable of
Value chain emissions: 30 per cent G HG emissions intensity reduction in
Financial value committed in steelmaking integrated steelmaking, with widespread
partnerships and ventures to date (US$ m) adoption expected post-2030 114 90
Value chain emissions: Maritime transportation: 2030 goal to support 40
Reduction(5) in emissions intensity of per cent G HG emissions intensity reduction
BHP-chartered shipping of our products (%) of BHP-chartered shipping of BHP products 41
Voluntary investment focussed on the six pillars of
Social investment (US$M) our social value framework 149.6 186.4
Purchases from Indigenous vendors of US$269 million
Indigenous procurement spend (US$M) in FY23 332.6 149.9
Aspirational goal for gender balance(6) by the end
Female employee participation (%) of FY25 35.2 32.3
Australia(7) : aim to achieve 9.7 per cent by the
Indigenous employee representation (%) end of FY27 8.6 8.3
Chile(8) : aim to achieve 10.0 per cent by the end of FY25 9.7 8.7
Canada(9) : aim to achieve 20.0 per cent by the end of FY26 7.7 7.2
2030 goal of having at least 30 per cent of the
Area under nature-positive management practices(10) land and water we steward(11) under conservation,
(%) restoration or regenerative practices 1.3 1.0
1 All data points are presented on a total operations basis,
unless otherwise noted. Excludes OZL operations and functions.
2 Combined employee and contractor frequency per 1 million hours worked.
3 Includes selection of key social value framework metrics.
Additional metrics are included in OFR 6 in the Annual Report.
4 For our baseline year of FY20, our operational GHG emissions
were 14.5 Mt CO2-e. FY20 baseline has been adjusted for divestment
of our Petroleum business (merger with Woodside completed on 1 June
2022) and our interest in BMC (completed on 3 May 2022), and for
methodological changes (use of Intergovernmental Panel on Climate
Change (IPCC) Assessment Report 5 (AR5) Global Warming Potentials
and the transition to a facility-specific GHG emission calculation
methodology for fugitives at Caval Ridge).
5 Against CY08. CY08 was selected as the baseline year for this
goal to align with the base year for the International Maritime
Organisation's 2030 emissions intensity goal and its corresponding
reasoning and strategy.
6 Employees only, as at 30 June. We define gender balance as a
minimum 40% women and 40% men in line with the definitions used by
entities such as the International Labour Organisation.
7 Indigenous employee representation at Minerals Australia
operations. Total Indigenous employee representation in Australia,
including non-operational roles (2.7%), was 7.7% at 30 June 2023.
While for FY23 this does not include employees of OZL who joined
BHP via acquisition on 2 May 2023, former OZL operations in
Australia had 3.8% Indigenous employee representation at 30 June
2023.
8 Indigenous employee representation at Minerals Americas operations in Chile.
9 Indigenous employee representation at the Jansen Potash
project and operations in Canada. Total Indigenous workforce
representation at the Jansen Potash project and operations,
including contractors (21.4%), was 20.8% at 30 June 2023.
10 Area under our stewardship that which has a formal management
plan including conservation, restoration or regenerative practices.
1.3% is calculated based on areas of land and water that we
stewarded at 30 June 2023. Refer to the BHP ESG Standards and
Databook 2023, available at https://www.bhp.com/sustainability ,
for more information.
28
BHP | Financial results for the year ended 30 June 2023
11 Excluding greenfield exploration licences (or equivalent
tenements), which are outside the area of influence of our existing
mine operations. 30% will be calculated based on the areas of land
and water that we steward at the end of FY30.
The Financial Information for the year ended 30 June 202 3 is
derived from the audited Consolidated Financial statements included
in the Annual Report and has been prepared on the basis of
accounting policies and methods of computation consistent with
those applied in the 30 June 2022 financial statements of the Group
in the Annual Report, with the exception of new accounting
standards and interpretations which became effective from 1 July
2022 and other changes in accounting policies applied with effect
from 1 July 2022. This news release includes Financial Information
that is unaudited. Users are advised to read this News Release
document together with the Annual Report (simultaneously released
to respective stock exchanges). Analysis relates to the relative
financial and/or production performance of BHP and/or its
operations during the 2023 financial year compared with the 2022
financial year, unless otherwise noted. Operations includes
operated and non-operated assets, unless otherwise noted. Medium
term refers to a five-year horizon, unless otherwise noted.
Production volumes and financials for the operations acquired from
OZL are for the period of 1 May to 30 June 2023, whilst the
acquisition completion date was 2 May 2023. Numbers presented may
not add up precisely to the totals provided due to rounding.
The following abbreviations may have be en used throughout this
report: billion tonnes (Bt); cost and freight (CFR); cost,
insurance and freight (CIF), carbon dioxide equivalent (CO2-e), dry
metric tonne unit (dmtu); free on board (FOB); giga litres (GL);
greenhouse gas (GHG); grams per tonne (g/t); high-potential injury
(HPI); kilograms per tonne (kg/t); kilometre (km); million ounces
per annum (Mozpa); million pounds (Mlb); million tonnes (Mt);
million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand
ounces (koz); thousand ounces per annum (kozpa); thousand tonnes
(kt); thousand tonnes per annum (ktpa); thousand tonnes per day
(ktpd); tonnes (t); total recordable injury frequency (TRIF); and
wet metric tonnes (wmt).
The following footnotes apply to this Results Announcement:
i Presented on a total operations basis. The equivalent number
for continuing operations in FY22 is US$15.2 bn. For more
information refer to the BHP Economic Contribution Report 2023.
ii We use vari ous 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 Consol idated Financial
Statements prepared in accordance with IFRS. Non-IFRS financial
information includes some of the following items (for a complete
list of Non-IFRS financial information and their respective
definitions and calculation methodology, please refer to section 10
of the Operating and Financial Review in the Annual Report):
Underlying EBIT, Underlying EBITDA, Underlying EBITDA margin,
capital and exploration expenditure, adjusted effective tax rate,
ROCE, underlying return on capital employed, unit costs, free cash
flow, net debt, gearing ratio, and underlying earnings per share.
Non-IFRS financial information and relevant reconciliations are
included in the Annual Report document for the year ended 30 June
2023 and comparative periods. Non-IFRS financial information is
unaudited.
iii Social value metrics exclude OZL operations and functions, unless otherwise noted.
iv World Steel in Figures 2023, World Steel Association.
v Legacy assets refer to those BHP-operated assets, or part
thereof, located in the Americas that are in the closure phase.
vi This includes contribution to suppliers, wages and benefits
for employees, dividends, taxes, royalties and voluntary social
investment. FY22 has been restated to conform to the FY23 basis of
preparation that includes payments to suppliers for operating costs
on an accruals basis and payments to suppliers for capital
expenditure on a cash basis. FY22 includes the US$19.6 b n in
specie dividend in connection with the merger of BHP Petroleum with
Woodside. For more information refer to the Economic Contribution
Report 2023.
vii Calculated on a copper equivalent production weighted average basis.
viii Maintenance capital includes non-discretionary spend for
the following purposes: deferred development and production
stripping; risk reduction, compliance and asset integrity.
ix Average for FY26-FY28; +/- 50% in any given year .
x The information in this section is based on BHP data, analysis
and desk top research on public data sources.
xi There may be differences in the manner that third parties
calculate or report unit costs data compared to BHP, which means
that third-party data may not be comparable to our data. WAIO C1
unit costs exclude third party royalties, net inventory movements,
depletion of production stripping, exploration expenses, marketing
purchases, demurrage, exchange rate gains/losses, and other
income.
xii Resettlement cases completed includes completed construction
(families either moved in or handover to families in progress) or
cash payment solutions.
xiii Relates to refined nickel metal only. Excludes intermediate products and nickel sulphate.
xiv An Exploration Target is a statement or estimate of the
exploration potential of a mineral deposit in a defined geological
setting where the statement or estimate, quoted as a range of
tonnes and a range of grade (or quality), relates to mineralisation
for which there has been insufficient exploration to estimate a
Mineral Resource.
xv The potential quantity and grade of an Exploration Target is
conceptual in nature and as such there has been insufficient
exploration to estimate a Mineral Resource, and it is uncertain if
further exploration or analysis will result in the estimation of a
Mineral Resource.
Forward-looking statements
This release contains forward-looking statements, which involve
risks and uncertainties. Forward-looking statements include all
statements other than statements of historical or present facts,
including: statements regarding: trends in commodity prices and
currency exchange rates; demand for commodities; global market
conditions, guidance; reserves and resources and production
forecasts; expectations, plans, strategies and objectives of
management; climate scenarios; approval of certain projects and
consummation of certain transactions; closure, divestment,
acquisition or integration of certain assets, operations or
facilities (including associated costs or benefits); anticipated
production or construction commencement dates; capital expenditure
or costs and scheduling; operating costs, and supply of materials
and skilled employees; anticipated productive lives of projects,
mines and facilities; the availability, implementation and adoption
of new technologies; provisions and contingent liabilities; and
tax, legal and other regulatory developments.
Forward-looking statements may be identified by the use of
terminology, including, but not limited to, 'intend', 'aim',
'ambition', 'aspiration', 'goal', 'target', 'prospect', 'project',
'see', 'anticipate', 'estimate', 'plan', 'objective', 'believe',
'expect', 'commit', 'may', 'should', 'need', 'must', 'will',
'would', 'continue', 'forecast', 'guidance', 'outlook', 'trend' or
similar words. These statements discuss future expectations
concerning the results of assets or financial conditions, or
provide other forward-looking information.
These forward-looking statements are based on management's
expectations and reflect judgements, assumptions, estimates and
other information available as at the date of this release and are
not guarantees or predictions of future financial or operational
performance, and involve known and unknown risks, uncertainties and
other factors, many of which are beyond our control, and which may
cause actual results to differ materially from those expressed in
the statements contained in this release. BHP cautions against
reliance on any forward-looking statements.
For example, our future revenues from our assets, projects or
mines described in this release will be based, in part, upon the
market price of the commodities produced, which may vary
significantly from current levels. These variations, if materially
adverse, may affect the timing or the feasibility of the
development of a particular project, the expansion of certain
facilities or mines, or the continuation of existing assets.
29
BHP | Financial results for the year ended 30 June 2023
Other factors that may affect the actual construction or
production commencement dates, revenues, costs or production output
and anticipated lives of assets, mines or facilities include our
ability to profitably produce and deliver the products extracted to
applicable markets; the impact of economic and geopolitical
factors, including foreign currency exchange rates on the market
prices of the commodities we produce and competition in the markets
in which we operate; activities of government authorities in the
countries where we sell our products and in the countries where we
are exploring or developing projects, facilities or mines,
including increases in taxes and royalties or implementation of
trade or export restrictions; changes in environmental and other
regulations, political or geopolitical uncertainty; labour unrest;
weather, climate variability or other manifestations of climate
change; and other factors identified in the risk factors discussed
in OFR 8.1 in the Annual Report and BHP's filings with the U.S.
Securities and Exchange Commission (the 'SEC') (including in Annual
Reports on Form 20-F) which are available on the SEC's website at
www.sec.gov .
Except as required by applicable regulations or by law, BHP does
not undertake to publicly update or review any forward-looking
statements, whether as a result of new information or future
events.
Past performance cannot be relied on as a guide to future
performance.
No offer of securities
Nothing in this release should be construed as either an offer,
or a solicitation of an offer, to buy or sell BHP securities in any
jurisdiction, or be treated or relied upon as a recommendation or
advice by BHP.
Reliance on third party information
The views expressed in this release contain information that has
been derived from publicly available sources that have not been
independently verified. No representation or warranty is made as to
the accuracy, completeness or reliability of the information. This
release should not be relied upon as a recommendation or forecast
by BHP.
No financial or investment advice - South Africa
BHP does not provide any financial or investment 'advice' as
that term is defined in the South African Financial Advisory and
Intermediary Services Act, 37 of 2002, and we strongly recommend
that you seek professional advice.
BHP and its subsidiaries
In this release, the terms 'BHP', the 'Company, the 'Group',
'BHP Group', 'our business', 'organisation', 'we', 'us', 'our' and
ourselves' refer to BHP Group Limited and, except where the context
otherwise requires, our subsidiaries. Refer to note 30
'Subsidiaries' of the Financial Statements in the Annual Report for
a list of our significant subsidiaries. Those terms do not include
non-operated assets.
This release covers BHP's functions and assets (including those
under exploration, projects in development or execution phases,
sites and closed operations) that have been wholly owned and/or
operated by BHP or that have been owned as a joint venture1
operated by BHP (referred to in this release as 'operated assets'
or 'operations') during the period from 1 July 2022 to 30 June
2023.
BHP also holds interests in assets that are owned as a joint
venture but not operated by BHP (referred to in this release as
'non-operated joint ventures' or 'non-operated assets').
Notwithstanding that this release may include production, financial
and other information from non-operated assets, non-operated assets
are not included in the BHP Group and, as a result, statements
regarding our operations, assets and values apply only to our
operated assets unless stated otherwise.
1 References in this release to a 'joint venture' are used for
convenience to collectively describe assets that are not wholly
owned by BHP. Such references are not intended to characterise the
legal relationship between the owners of the asset.
30
BHP | Financial results for the year ended 30 June 2023
Further information on BHP can be found at bhp.com
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Grafico Azioni Bhp Billiton (LSE:0HN3)
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