Wrap Text
Operational Review for the Half Year Ended 31 December 2020
BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91
NEWS RELEASE LOGO
Release Time IMMEDIATE
Date 20 January 2021
Release Number 01/21
BHP OPERATIONAL REVIEW
FOR THE HALF YEAR ENDED 31 DECEMBER 2020
Note: All guidance is subject to further potential impacts from COVID-19 during
the 2021 financial year.
. We achieved another strong operational performance during the half.
Measures to counter the risk from COVID-19 remain in place.
. Record production was achieved at Western Australia Iron Ore (WAIO) and
record average concentrator throughput was delivered at Escondida.
. Group copper equivalent production was broadly flat in the December 2020
half year. Strong underlying operational performance offset the impacts of
planned maintenance, natural field decline, copper grade decline and adverse
weather.
. Production guidance for the 2021 financial year remains unchanged for
petroleum and metallurgical coal. Iron ore guidance has increased to
between 245 and 255 Mt as a result of the restart of Samarco in December
2020. Copper guidance has been narrowed to between 1,510 and 1,645 kt and
reflects strong performance at Escondida. Energy coal guidance has been
reduced to between 21 and 23 Mt following a 91-day strike at Cerrejon.
. Full year unit cost guidance/(1)/ (based on exchange rates of AUD/USD 0.70
and USD/CLP 769) remains unchanged for the 2021 financial year.
. Our major projects under development are progressing to plan. The Spence
Growth Option achieved first production in December 2020, on schedule and
on budget. The Jansen Stage 1 project remains on track for Final Investment
Decision in the middle of the 2021 calendar year. South Flank is tracking
well and is on schedule for first production in the middle of the 2021
calendar year.
. In petroleum, we completed the acquisition of an additional 28% interest in
Shenzi, a tier one asset with optionality, on 6 November 2020.
. The financial results for the December 2020 half year are expected to
reflect certain items as summarised in the table on page 3 and includes an
impairment charge of between US$1.15 billion and US$1.25 billion post
tax (exceptional item) in relation to New South Wales Energy Coal (NSWEC) and
associated deferred tax assets.
Dec H20 Dec Q20
Production (vs Dec19) (vs Sep Q20) Dec Q20 vs Sep Q20 commentary
---------- -------------- ------------ -----------------------------
Petroleum (MMboe)............. 50.5 23.8 Lower volumes due to Hurricanes Delta and Zeta in the Gulf of Mexico
(12%) (11%) and lower seasonal demand at Bass Strait, partially offset by
additional Shenzi volumes from 6 November 2020, on completion of the
acquisition of an increased working interest.
Copper (kt)................... 841.3 428.1 Higher volumes as a result of quarterly concentrator throughput
(5%) 4% record at Escondida and planned maintenance at Spence that impacted
September 2020 quarter production.
Iron ore (Mt)................. 128.4 62.4 Lower volumes at WAIO reflects planned Mining Area C and South Flank
6% (6%) major tie-in activity, weather impacts and a temporary power
disruption at Yarnima. Samarco re-commenced iron ore pellet
production in December 2020.
Metallurgical coal (Mt)....... 19.2 9.5 Lower volumes at Queensland Coal due to significant wet weather
(5%) (2%) events impacting operations and unplanned maintenance at South
Walker Creek.
Energy coal (Mt).............. 8.2 3.6 Lower volumes at NSWEC in response to reduced export shipping
(30%) (23%) capacity at Newcastle Port and lower volumes at Cerrejon as a result
of a 91-day strike.
Nickel (kt)................... 46.2 24.0 Higher volumes due to planned maintenance undertaken in the prior
31% 8% period.
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BHP Operational Review for 1
the half year ended 31 December 2020
Summary
BHP Chief Executive Officer, Mike Henry:
"BHP delivered strong safety and operational performance in the first half of
the 2021 financial year, including record production at Western Australia Iron
Ore and concentrator throughput at Escondida.
Overall group production for the half was in line with previous strong results.
We achieved a number of milestones, bringing on new production through the
Spence Growth Option in Chile and the safe restart of Samarco in Brazil. In
petroleum, we increased our stake in the high-quality Shenzi asset and Atlantis
Phase 3 began production ahead of schedule. Coal production was impacted by wet
weather in Australia and strike action in Colombia.
Our major development projects in iron ore, petroleum and potash are progressing
well. We continue to build on our strong foundations, increasing future-facing
options in copper and nickel through exploration, partnerships and acquisitions.
We are well positioned to sustainably grow shareholder and social value as the
global economy recovers from the pandemic."
Operational performance
Production and guidance are summarised below.
Note: All guidance is subject to further potential impacts from COVID-19 during
the 2021 financial year.
Dec H20 Dec Q20 Dec Q20 Previous Current
Dec Dec vs vs vs FY21 FY21
Production H20 Q20 Dec H19 Dec Q19 Sep Q20 guidance guidance
---------- ----- ------ ------- ------- ------- ------------- -------------
Petroleum (MMboe)...................... 50.5 23.8 (12%) (16%) (11%) 95 - 102 95 - 102 Upper half of range
Copper (kt)............................ 841.3 428.1 (5%) (6%) 4% 1,480 - 1,645 1,510 - 1,645
Escondida (kt) ..................... 572.2 287.6 (5%) (7%) 1% 940 - 1,030 970 - 1,030 Narrowed range
Pampa Norte (kt).................... 96.8 54.3 (22%) (10%) 28% 240 - 270 240 - 270 Unchanged
Olympic Dam (kt).................... 99.1 47.6 16% (6%) (8%) 180 - 205 180 - 205 Unchanged
Antamina (kt)....................... 73.2 38.6 (1%) 7% 12% 120 - 140 120 - 140 Unchanged
Iron ore/(i)/ (Mt)..................... 128.4 62.4 6% 3% (6%) 244 - 253 245 - 255 Samarco
1 - 2 Mt for FY21
WAIO (100% basis) (Mt).............. 144.6 70.4 5% 3% (5%) 276 - 286 276 - 286 Unchanged
Metallurgical coal (Mt)................ 19.2 9.5 (5%) (13%) (2%) 40 - 44 40 - 44
Queensland Coal (100% basis) (Mt)... 34.1 17.1 (5%) (13%) 0% 71 - 77 71 - 77 Lower half of range
Energy coal (Mt)....................... 8.2 3.6 (30%) (41%) (23%) 22 - 24 21 - 23
NSWEC (Mt).......................... 6.9 3.2 (7%) (14%) (11%) 15 - 17 15 - 17 Unchanged
Cerrejon (Mt)....................... 1.4 0.3 (68%) (85%) (67%) ~7 ~6 Lowered
Nickel (kt)............................ 46.2 24.0 31% 75% 8% 85 - 95 85 - 95 Unchanged
(i) Iron ore comprises WAIO and Samarco (previous FY21 guidance did not include
production for Samarco).
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BHP Operational Review for 2
the half year ended 31 December 2020
Summary of disclosures
BHP expects its December 2020 half year financial results to reflect certain
items as summarised in the table below. The table does not provide a
comprehensive list of all items impacting the period. The financial statements
are the subject of ongoing work that will not be finalised until the release of
the financial results on 16 February 2021. Accordingly the information is
subject to update.
H1 FY21
impact
Description US$M/(i)/ Classification/(ii)/
----------- ---------- -----------------------------------
Gain from optimised settlement outcome for the cancellation of power ~100 (Up arrow) Other income
contracts as part of a shift towards 100 per cent renewable energy at
Escondida and Spence
----------------------------------------------------------------------------------------------------------------------------------
Unit costs are expected to be in line with full year guidance (at -- Operating costs
guidance exchange rates), with Petroleum and Escondida tracking towards
the lower end of guidance and Queensland Coal and NSWEC tracking slightly
above guidance at H1 FY21
Note: stronger Australian dollar and weaker Chilean peso than guidance
rates in the period/(iii)/
-----------------------------------------------------------------------------------------------------------------------------------
Business development and evaluation expense for Petroleum 106 Development and evaluation expense
-----------------------------------------------------------------------------------------------------------------------------------
Exploration expense (including petroleum and minerals exploration 237 Exploration expense
programs)
-----------------------------------------------------------------------------------------------------------------------------------
Premiums paid to acquire multi-currency hybrids following the completion ~400 (Up Arrow) Net finance costs
of value accretive repurchase programs in September 2020 and November 2020
-----------------------------------------------------------------------------------------------------------------------------------
The Group's adjusted effective tax rate for H1 FY21 is expected to be -- Taxation expense
within the guidance range of 32 to 37 per cent
-----------------------------------------------------------------------------------------------------------------------------------
Completion of the transaction to acquire an additional 28 per cent working ~480 (Up Arrow) Investing cash outflow
interest in Shenzi
-----------------------------------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interests ~750 (Up Arrow) Financing cash outflow
-----------------------------------------------------------------------------------------------------------------------------------
Commissioning of the Spence desalination plant and capitalisation of the ~600 (Up Arrow) Net debt
associated lease
-----------------------------------------------------------------------------------------------------------------------------------
The Group's net debt target range is US$12 to US$17 billion, with net debt -- Net debt
expected to be at the bottom of the range reflecting higher prices and
strong operational performance partially offset by a short-term build in
working capital and an adverse foreign exchange impact on expenses and capital
expenditure
----------------------------------------------------------------------------------------------------------------------------------
Impairment charge related to property, plant and equipment at NSWEC, and 1,150 - 1,250 (Up Arrow) Exceptional item charge
recoverability of associated tax losses (after tax)
----------------------------------------------------------------------------------------------------------------------------------
Costs directly attributable to COVID-19 (after tax)/(iv)/ 200 - 250 (Up Arrow) Exceptional item charge
----------------------------------------------------------------------------------------------------------------------------------
Financial impact on BHP Brasil of the Samarco dam failure Refer footnote/(v)/ (Up Arrow) Exceptional item charge
----------------------------------------------------------------------------------------------------------------------------------
(i) Numbers are not tax effected, unless otherwise noted.
(ii) There will be a corresponding balance sheet, cash flow and/or income
statement impact as relevant.
(iii) Average exchange rates for H1 FY21 of AUD/USD 0.72 (guidance rate AUD/USD
0.70) and USD/CLP 771 (guidance rate USD/CLP 769).
(iv) Relates to additional costs incurred at our operated assets for the
increased provision of health and hygiene services and the impacts of
maintaining social distancing requirements. For example, additional
accommodation and cleaning costs at the Spence Growth Option project and
additional port costs at WAIO due to quarantine restrictions.
(v) Financial impact is the subject of ongoing work and is not yet finalised.
Major development projects
In December 2020, the Spence Growth Option achieved first production on schedule
and on budget. Given this, the Spence Growth Option will not be reported in
future Operational Reviews.
At the end of December 2020, BHP had four major projects under development in
petroleum, iron ore and potash, with a combined budget of US$8.5 billion over
the life of the projects. Our major projects under development are tracking to
plan.
On 15 January 2021, the Final Environmental Impact Study (FEIS) was published
for the Resolution Copper Mining (RCM) project, which is a joint venture between
Rio Tinto (55 per cent) and BHP (45 per cent), managed by Rio Tinto. The FEIS
and subsequent Land Exchange are steps in an independent governmental, social
and environmental assessment and licencing process. Any mine construction is expected to
be several years away and will be subject to additional regulatory and government
approvals and stakeholder consultation, including with the relevant Native American
tribes to seek consent.
The Jansen Stage 1 project in Canada is expected to be presented to the BHP
Board for Final Investment Decision in the middle of the 2021 calendar year.
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BHP Operational Review for 3
the half year ended 31 December 2020
Average realised prices
The average realised prices achieved for our major commodities are summarised
below.
Dec H20 Dec H20 Dec H20
vs vs vs
Average realised prices/(i)/ Dec H20 Dec H19 Jun H20 FY20 Dec H19 Jun H20 FY20
---------------------------- ------- ------- ------- ------ ------- ------- -------
Oil (crude and condensate) (US$/bbl)... 41.40 60.64 37.51 49.53 (32%) 10% (16%)
Natural gas (US$/Mscf)/(ii)/........... 3.83 4.26 3.76 4.04 (10%) 2% (5%)
LNG (US$/Mscf)......................... 4.45 7.62 6.87 7.26 (42%) (35%) (39%)
Copper (US$/lb)........................ 3.32 2.60 2.39 2.50 28% 39% 33%
Iron ore (US$/wmt, FOB)................ 103.78 78.30 76.67 77.36 33% 35% 34%
Metallurgical coal (US$/t)............. 97.61 140.94 121.25 130.97 (31%) (19%) (25%)
Hard coking coal (US$/t)/(iii)/..... 106.30 154.01 133.51 143.65 (31%) (20%) (26%)
Weak coking coal (US$/t)/(iii)/..... 73.17 101.06 84.43 92.59 (28%) (13%) (21%)
Thermal coal (US$/t)/(iv)/............. 44.35 58.55 55.91 57.10 (24%) (21%) (22%)
Nickel metal (US$/t)................... 15,140 15,715 12,459 13,860 (4%) 22% 9%
(i) Based on provisional, unaudited estimates. Prices exclude sales from
equity accounted investments, third party product and internal sales, and
represent the weighted average of various sales terms (for example: FOB,
CIF and CFR), unless otherwise noted. Includes the impact of provisional
pricing and finalisation adjustments.
(ii) Includes internal sales.
(iii) Hard coking coal (HCC) refers generally to those metallurgical coals with
a Coke Strength after Reaction (CSR) of 35 and above, which includes coals
across the spectrum from Premium Coking to Semi Hard Coking coals, while
weak coking coal (WCC) refers generally to those metallurgical coals with
a CSR below 35.
(iv) Export sales only; excludes Cerrejon. Includes thermal coal sales from
metallurgical coal mines.
The large majority of oil sales were linked to West Texas intermediate (WTI) or
Brent based indices, with differentials applied for quality, locational and
transportation costs. The large majority of iron ore shipments were linked to
index pricing for the month of shipment, with price differentials predominantly
a reflection of market fundamentals and product quality. Iron ore sales were
based on an average moisture rate of 7.3 per cent. The large majority of
metallurgical coal and energy coal exports were linked to index pricing for the
month of shipment or sold on the spot market at fixed or index-linked prices,
with price differentials reflecting product quality. The majority of copper
cathodes sales were linked to index pricing for quotation periods one month
after month of shipment, and three to four months after month of shipment for
copper concentrates sales with price differentials applied for location and
treatment costs.
At 31 December 2020, the Group had 349 kt of outstanding copper sales that were
revalued at a weighted average price of US$3.52 per pound. The final price of
these sales will be determined over the remainder of the 2021 financial year. In
addition, 304 kt of copper sales from the 2020 financial year were subject to a
finalisation adjustment in the current period. The provisional pricing and
finalisation adjustments will increase Underlying EBITDA/(2)/ by US$323 million
in the 2021 financial year and are included in the average realised copper price
in the above table.
Corporate update
BHP expects to recognise an impairment charge of between US$1.15 billion and
US$1.25 billion post tax in relation to NSWEC and associated deferred tax
assets, resulting in net operating assets of between US$250 million and US$350
million (excluding tax). This reflects current market conditions for Australian
thermal coal, the strengthening Australian dollar, changes to the mine plan and
updated assessment of the likelihood of recovering tax losses. This will be
reported as an exceptional item in the December 2020 half year. The broader
carrying value assessment of the Group's assets is ongoing and will be finalised
in conjunction with the release of the financial results on 16 February 2021.
During the half year, BHP has successfully reduced gross debt by a total of
US$4.1 billion (excluding standard repayments on final maturity). Two
multi-currency hybrid repurchase programs were completed (US$1.7 billion on 17
September 2020 and US$1.1 billion on 23 November 2020). The programs were funded
from surplus cash, and will reduce future interest costs while also reducing the
Group's gross debt balance. The hybrid repurchase programs were strongly value
accretive, with this being higher than the premium paid to acquire the hybrids.
This premium over book value generated an upfront accounting loss of
approximately US$400 million (pre-tax), which will be reported in net finance
costs in the December 2020 half year financial results. BHP also redeemed US$1.0
billion of 6.250 per cent hybrid notes on 19 October 2020 and the remaining
US$0.3 billion of 6.750 per cent hybrid notes on 30 December 2020.
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BHP Operational Review for 4
the half year ended 31 December 2020
Both redemptions were also completed using surplus cash. BHP remains in a strong
liquidity position.
BHP remains committed to supporting the Renova Foundation and its work to
progress the remediation and compensatory programs to restore the environment
and re-establish communities affected by the Samarco tragedy. Good progress
continues to be made with 12th Federal Court of Belo Horizonte in Brazil which
is seeking to expedite the remediation process related to the Fundao dam
failure. The R$155 billion (approximately US$28 billion) Federal Public
Prosecution Office claim remains suspended.
In December 2020, Samarco re-commenced iron ore pellet production as part of a
gradual restart of mining and processing operations. BHP has agreed to fund a
total of US$765 million in further financial support for the Renova Foundation
and Samarco. This comprises US$725 million to fund the Renova Foundation until
31 December 2021, which will be offset against the Group's provision for the
Samarco dam failure, and a short-term facility of up to US$40 million/(3)/ to be
made available to Samarco until 31 December 2021.
We will provide an update to the ongoing potential financial impacts on BHP
Brasil of the Samarco dam failure with the release of the financial results on
16 February 2021. Any financial impacts will continue to be treated as an
exceptional item.
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BHP Operational Review for 5
the half year ended 31 December 2020
Petroleum
Production
Dec H20 Dec Q20 Dec Q20
vs vs vs
Dec H20 Dec Q20 Dec H19 Dec Q19 Sep Q20
------- ------- ------- ------- -------
Crude oil, condensate and natural gas liquids (MMboe)... 22 11 (14%) (20%) (7%)
Natural gas (bcf)....................................... 169 79 (10%) (11%) (14%)
Total petroleum production (MMboe)...................... 50 24 (12%) (16%) (11%)
Petroleum - Total petroleum production decreased by 12 per cent to 50 MMboe.
Guidance for the 2021 financial year remains unchanged at between 95 and 102
MMboe. Volumes are expected to be in the upper half of the guidance range as
additional production from Shenzi, following the acquisition of a further 28 per
cent working interest, is partially offset by the impacts of significant
hurricane activity in the Gulf of Mexico.
Crude oil, condensate and natural gas liquids production decreased by 14 per
cent to 22 MMboe due to lower demand at Bass Strait and North West Shelf, the
impacts of planned tie-in and commissioning activities at Atlantis, and natural
field decline across the portfolio. Production was further impacted by lower
uptime at our Gulf of Mexico assets due to a more active hurricane season. These
impacts were partially offset by the earlier than scheduled achievement of first
production from the Atlantis Phase 3 project.
Natural gas production decreased by 10 per cent to 169 bcf, reflecting the
planned Ruby shutdowns, a decrease in tax barrels at Trinidad and Tobago in
accordance with the terms of our Production Sharing Contract, lower domestic gas
sales at Bass Strait and North West Shelf, and natural field decline across the
portfolio. This decline was partially offset by higher domestic gas sales at
Macedon.
The acquisition of an additional 28 per cent working interest in Shenzi was
completed on 6 November 2020. This transaction is consistent with our strategy
of targeting counter-cyclical acquisitions in high-quality producing or near
producing assets and brings BHP's working interest to 72 per cent. This adds
approximately 11,000 barrels of oil equivalent per day of production (90 per
cent oil) as of the transaction closing date of 6 November 2020.
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- -------------------------------------- ---------------------------------------
Ruby 283 CY21 Five production wells tied back into On schedule and budget.
(Trinidad & Tobago) existing operated processing The overall project is 62% complete.
68.46% (operator) facilities, with capacity to produce
up to 16,000 gross barrels of oil per
day and 80 million gross standard
cubic feet of natural gas per day.
Mad Dog Phase 2 2,154 CY22 New floating production facility with On schedule and budget.
(US Gulf of Mexico) the capacity to produce up to 140,000 The overall project is 86% complete.
23.9% (non-operator) gross barrels of crude oil per day.
------------------------------------------------------------------------------------------------------------------------------
The Bass Strait West Barracouta project is on schedule and budget, and is
expected to achieve first production in the 2021 calendar year.
In December 2020, BHP and the North West Shelf joint venture partners executed
fully-termed Gas Processing Agreements for processing third-party gas from Pluto
and Waitsia projects through the North West Shelf facilities.
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BHP Operational Review for 6
the half year ended 31 December 2020
Petroleum exploration
Exploration and appraisal wells drilled during the December 2020 quarter are
summarised below.
Formation Water Total well
Well Location Target age BHP equity Spud date depth depth Status
---- ----------------- ------- --------- ---------- --------------- ------- ------------ -------------------
Broadside-1...... Trinidad & Tobago Oil Miocene 65% (BHP 20 August 2020 2,019 m 7,064 m Dry hole
Block 3 Operator)
In Trinidad and Tobago, the Broadside-1 exploration well in the Southern Licence
reached the main reservoir on 22 October 2020 and did not encounter
hydrocarbons. The well was a dry hole and was plugged and abandoned on 8
November 2020. The results are under evaluation to determine next steps on the
Southern Licences.
In Mexico, we commenced an Ocean Bottom Node seismic acquisition/(4)/ over the
Trion field on 9 November 2020, as part of our ongoing evaluation and analysis.
The survey was 95 per cent complete as of 31 December 2020 and will be completed
in the March 2021 quarter. The results will be incorporated into the current
evaluation of the Trion opportunity.
Petroleum exploration expenditure for the December 2020 half year was US$195
million, of which US$181 million was expensed. An approximately US$450 million
exploration and appraisal program is being executed for the 2021 financial year.
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BHP Operational Review for 7
the half year ended 31 December 2020
Copper
Production
Dec H20 Dec Q20 Dec Q20
vs vs vs
Dec H20 Dec Q20 Dec H19 Dec Q19 Sep Q20
------- ------- ------- ------- -------
Copper (kt)............ 841 428 (5%) (6%) 4%
Zinc (t)............... 76,307 41,909 78% 86% 22%
Uranium (t)............ 1,819 945 (4%) 0% 8%
Copper - Total copper production decreased by five per cent to 841 kt. Guidance
for the 2021 financial year narrowed to between 1,510 and 1,645 kt from between
1,480 and 1,645 kt.
For the December 2020 half year, our Chilean assets operated with a reduction in
their operational workforces of approximately 30 per cent as a result of the
comprehensive plan we have implemented for COVID-19. The operating environment
across our Chilean assets is expected to remain challenging, with reductions in
our workforce forecast to remain substantial during the March 2021 quarter.
Escondida copper production decreased by five per cent to 572 kt with record
concentrator throughput of 386 ktpd, enabled by improved maintenance practices,
offset by the impact of lower concentrator feed grade and lower cathode
production. As a result of the reduced operational workforce and the need to
balance mine development and production requirements, concentrator throughput
continues to be prioritised over cathode production (approximately 30 kt impact
on cathode volumes in the December 2020 half year). Guidance for the 2021
financial year has been narrowed to between 970 and 1,030 kt from between 940
and 1,030 kt. Production is also likely to be affected in the 2022 financial
year by reduced material movement in the 2021 financial year. Guidance of an
annual average of 1.2 Mt of copper production over the next five years remains
unchanged.
Pampa Norte copper production decreased 22 per cent to 97 kt, largely due to
planned maintenance at Spence and the impact of a reduced operational workforce
due to COVID-19 preventative measures. The Spence Growth Option achieved first
production in December 2020. Guidance for the 2021 financial year remains
unchanged at between 240 and 270 kt, reflecting the reduced operational
workforce, the start-up of the Spence Growth Option and expected grade decline
of approximately five per cent (previously expected to be approximately seven
per cent but updated as a result of mine plan optimisation at Spence).
Olympic Dam copper production increased by 16 per cent to 99 kt, reflecting
improved smelter stability and strong underground mine performance. The physical
replacement and commissioning of the refinery crane remains on track to be
completed in the March 2021 quarter. Guidance for the 2021 financial year
remains unchanged at between 180 and 205 kt. Production in the 2022 financial
year is expected to be lower as a result of the major smelter maintenance
campaign planned for the first half of the year.
Antamina copper production decreased by one per cent to 73 kt and zinc
production increased by 78 per cent to a record 76 kt, reflecting lower copper
head grades and higher zinc head grades. Guidance for the 2021 financial year
remains unchanged with copper production of between 120 and 140 kt, and zinc
production of between 140 and 160 kt.
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- -------------------------------------- ------------------------------------
Spence Growth Option.... 2,460 FY21 New 95 ktpd concentrator is expected First production achieved in
(Chile) to increase payable copper in December 2020, on schedule and on
100% concentrate production by ~185 ktpa in budget.
the first 10 years of operation and
extend the mining operations by more
than 50 years.
The Spence Growth Option achieved first copper production in December 2020, with
first production of molybdenum expected around the middle of the 2021 calendar
year following completion of the molybdenum plant. First copper sales are
expected during the March 2021 quarter, while ramp up to full production
capacity is expected to take approximately 12 months. The commissioning of the
desalination plant and capitalisation of the associated US$600 million lease
(approximate) also occurred in December 2020.
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BHP Operational Review for 8
the half year ended 31 December 2020
Iron Ore
Production
Dec H20 Dec Q20 Dec Q20
vs vs vs
Dec H20 Dec Q20 Dec H19 Dec Q19 Sep Q20
------- ------- ------- ------- -------
Iron ore production (kt)...... 128,434 62,394 6% 3% (6%)
Iron ore - Total iron ore production increased by six per cent to 128 Mt.
Guidance for the 2021 financial year has increased to between 245 and 255 Mt,
reflecting the restart of Samarco in December 2020 (between 1 and 2 Mt).
WAIO production increased by six per cent to a six month record 128 Mt (145 Mt
on a 100 per cent basis), reflecting record production at Jimblebar and strong
performance across the supply chain, with significant improvements in car dumper
productivity and reliability. This was partially offset by weather impacts and
the planned Mining Area C and South Flank major tie-in activity. Production in
the March 2021 quarter is expected to be impacted by planned Ore Handling Plant
maintenance across the mines and continued Mining Area C and South Flank tie-in
activity. Guidance for the 2021 financial year remains unchanged at between 244
and 253 Mt (276 and 286 Mt on a 100 per cent basis).
Samarco re-commenced iron ore pellet production in December 2020 after meeting
the licencing requirements to restart operations at the Germano complex in Minas
Gerais and Ubu complex in Espirito Santo, Brazil. Samarco's operations were
suspended following the failure of the Fundao dam on 5 November 2015. Samarco's
gradual restart of operations incorporates one concentrator at the Germano
complex and a pelletising plant at Ubu, as well as a new system of tailings
disposal combining a confined pit and tailings filtering system for dry
stacking. Production for the 2021 financial year is expected to be between 1 and
2 Mt. Production capacity of approximately 8 Mtpa (100 per cent basis) is expected
once ramped up.
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- -------------------------------------- ------------------------------------
South Flank............ 3,061 Mid-CY21 Sustaining iron ore mine to replace On schedule and budget.
(Australia) production from the 80 Mtpa (100 The overall project is 90% complete.
85% per cent basis) Yandi mine.
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BHP Operational Review for 9
the half year ended 31 December 2020
Coal
Production
Dec H20 Dec Q20 Dec Q20
vs vs vs
Dec H20 Dec Q20 Dec H19 Dec Q19 Sep Q20
------- ------- ------- ------- -------
Metallurgical coal (kt)........ 19,212 9,522 (5%) (13%) (2%)
Energy coal (kt)............... 8,238 3,576 (30%) (41%) (23%)
Metallurgical coal - Metallurgical coal production decreased by five per cent to
19 Mt (34 Mt on a 100 per cent basis). Guidance for the 2021 financial year
remains unchanged at between 40 and 44 Mt (71 and 77 Mt on a 100 per cent basis)
with a stronger second half performance projected in line with our plans.
Volumes are expected to be at the lower half of the guidance range following
significant wet weather impacts during the December 2020 quarter. We continue to
monitor for any potential impacts on volumes from restrictions on coal imports
into China.
At Queensland Coal, volumes were lower as a result of planned wash plant
maintenance at Saraji and Caval Ridge and significant wet weather impacts from
La Nina across most operations. South Walker Creek production decreased largely
due to higher strip ratios and lower yields. Poitrel was also impacted by lower
yields during the period.
Energy coal - Energy coal production decreased by 30 per cent to 8 Mt. Following
a strike at Cerrejon, guidance for the 2021 financial year has been reduced to
between 21 and 23 Mt from between 22 and 24 Mt.
NSWEC production decreased by seven per cent to 6.9 Mt. This decrease reflects
significant weather impacts and higher strip ratios, as well as lower volumes
due to an increased proportion of washed coal in response to reduced port
capacity, following damage to a shiploader at the Newcastle port in November
2020, and widening price quality differentials. Guidance for the 2021 financial
year remains unchanged at between 15 and 17 Mt.
Cerrejon production decreased by 68 per cent to 1.4 Mt due to a 91-day strike
that started on 31 August 2020. During the period, Cerrejon successfully
completed negotiations with Sintracarbon and signed a new Collective Labor
Agreement, effective from 1 July 2020 to 31 December 2023. Operations restarted
in the first week of December 2020 and are continuing to ramp up. The impact of
the strike was 1.5 Mt. Guidance for the 2021 financial year has been reduced to
approximately 6 Mt from 7 Mt.
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BHP Operational Review for 10
the half year ended 31 December 2020
Other
Nickel production
Dec H20 Dec Q20 Dec Q20
vs vs vs
Dec H20 Dec Q20 Dec H19 Dec Q19 Sep Q20
------- ------- ------- ------- -------
Nickel (kt).................... 46.2 24.0 31% 75% 8%
Nickel - Nickel West production increased by 31 per cent to 46 kt reflecting
strong performance from the new mines and improved operational stability
following major quadrennial maintenance shutdowns in the prior period. Guidance
for the 2021 financial year remains unchanged at between 85 and 95 kt.
Potash project
Project and Investment
ownership US$M Scope Progress
----------- ---------- ------------------------------------------------- ------------------------------------------
Jansen Potash......... 2,972 Investment to finish the excavation and lining of The project is 89% complete.
(Canada) the production and service shafts, and to
100% continue the installation of essential surface
infrastructure and utilities.
Minerals exploration
Minerals exploration expenditure for the December 2020 half year was US$86
million, of which US$56 million was expensed. Greenfield minerals exploration is
predominantly focused on advancing copper targets within Chile, Ecuador, Mexico,
Peru, Canada, Australia and the south-west United States.
At Oak Dam in South Australia, following a successful third phase of drilling,
the exploration project has been transferred to the Minerals Australia Planning
and Technical team for assessment, and next stage resource definition drilling
to inform future design is expected to commence around the middle of the 2021
calendar year.
During the half year, we added to our early stage optionality in future facing
commodities with a signed agreement with Midland Exploration to undertake a
nickel exploration alliance in north-eastern Quebec (August 2020), the
completion of the acquisition of the nickel Honeymoon Well tenements and a 50
per cent interest in the Albion Downs North and Jericho exploration joint
ventures (September 2020) and an Option Agreement with Encounter Resources
covering the 4,500 km/2/ prospective Elliott Copper Project in the Northern
Territory (September 2020).
--------------------------------------------------------------------------------
BHP Operational Review for 11
the half year ended 31 December 2020
Variance analysis relates to the relative performance of BHP and/or its
operations during the December 2020 half year compared with the December 2019
half year, unless otherwise noted. Production volumes, sales volumes and capital
and exploration expenditure from subsidiaries are reported on a 100 per cent
basis; production and sales volumes from equity accounted investments and other
operations are reported on a proportionate consolidation basis. Numbers
presented may not add up precisely to the totals provided due to rounding.
Copper equivalent production based on 2020 financial year average realised
prices.
The following footnotes apply to this Operational Review:
(1) 2021 financial year unit cost guidance: Petroleum US$11-12/boe, Escondida
US$1.00-1.25/lb, WAIO US$13-14/t and Queensland Coal US$69-75/t; based on
exchange rates of AUD/USD 0.70 and USD/CLP 769.
(2) Underlying EBITDA is used to help assess current operational profitability
excluding the impacts of sunk costs (i.e. depreciation from initial
investment). Underlying EBITDA is earnings before net finance costs,
depreciation, amortisation and impairments, taxation expense, discontinued
operations and exceptional items. Underlying EBITDA includes BHP's share of
profit/(loss) from investments accounted for using the equity method
including net finance costs, depreciation, amortisation and impairments and
taxation expense/(benefit).
(3) Short-term facility of up to US$40 million includes US$4 million related to
the decommissioning of the Germano dam which will be offset against the
Group's provision.
(4) Permit: EIA - ASEA/UGI/DGGEERNCM/0122/2018, expediente 28TM2018X0042. CNH
Revised Appraisal Plan Approval - Resolucion CNH.14.001/2020.
The following abbreviations may have been used throughout this report: barrels
(bbl); billion cubic feet (bcf); cost and freight (CFR); cost, insurance and
freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per
tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million
barrels of oil equivalent (MMboe); million barrels of oil per day (MMbpd);
million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per
annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent
(Mboe); thousand barrels of oil equivalent per day (Mboe/d); thousand ounces
(koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand
tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet
metric tonnes (wmt).
In this release, the terms 'BHP', the 'Group', 'BHP Group', 'we', 'us', 'our'
and ourselves' are used to refer to BHP Group Limited, BHP Group plc and, except
where the context otherwise requires, their respective subsidiaries as defined
in note 29 'Subsidiaries' in section 5.1 of BHP's 30 June 2020 Annual Report and
Form 20-F. Those terms do not include non-operated assets. Notwithstanding that
this release may include production, financial and other information from
non-operated assets, non-operated assets are not included in the BHP Group and,
as a result, statements regarding our operations, assets and values apply only
to our operated assets unless stated otherwise. Our non-operated assets include
Antamina, Cerrejon, Samarco, Atlantis, Mad Dog, Bass Strait and North West
Shelf. BHP Group cautions against undue reliance on any forward-looking
statement or guidance in this release, particularly in light of the current
economic climate and significant volatility, uncertainty and disruption arising
in connection with COVID-19. These forward looking statements are based on
information available as at the date of this release and are not guarantees or
predictions of future performance and involve known and unknown risks,
uncertainties and other factors, many of which are beyond our control and which
may cause actual results to differ materially from those expressed in the
statements contained in this release.
--------------------------------------------------------------------------------
BHP Operational Review for 12
the half year ended 31 December 2020
Further information on BHP can be found at: bhp.com
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Acting Group Company Secretary
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--------------------------------------------------------------------------------
BHP Operational Review for 13
the half year ended 31 December 2020
Production summary
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2019 2020 2020 2020 2020 2020 2019
interest ------ ------- ------- ------ ------ ------- -------
Petroleum /(1)/
Petroleum
Production
Crude oil, condensate and NGL (Mboe)... 13,412 11,589 11,355 11,507 10,729 22,236 25,919
Natural gas (bcf)...................... 88.7 80.7 89.8 90.9 78.5 169.4 189.1
------ ------- ------- ------ ------ ------- -------
Total (Mboe)........................... 28,195 25,039 26,322 26,657 23,812 50,469 57,436
------ ------- ------- ------ ------ ------- -------
Copper /(2)/
Copper
Payable metal in concentrate (kt)
Escondida /(3)/........................ 57.5% 240.3 220.1 228.5 236.7 236.7 473.4 477.3
Pampa Norte /(4)/...................... 100.0% -- -- -- -- 0.7 0.7 --
Antamina............................... 33.8% 36.2 32.9 17.8 34.6 38.6 73.2 73.8
------ ------- ------- ------ ------ ------- -------
Total.................................. 276.5 253.0 246.3 271.3 276.0 547.3 551.1
------ ------- ------- ------ ------ ------- -------
Cathode (kt)
Escondida /(3)/........................ 57.5% 68.4 69.6 65.5 47.9 50.9 98.8 124.3
Pampa Norte /(4)/...................... 100% 60.0 64.3 54.5 42.5 53.6 96.1 123.9
Olympic Dam............................ 100% 50.5 38.4 47.6 51.5 47.6 99.1 85.6
------ ------- ------- ------ ------ ------- -------
Total.................................. 178.9 172.3 167.6 141.9 152.1 294.0 333.8
------ ------- ------- ------ ------ ------- -------
------ ------- ------- ------ ------ ------- -------
Total copper (kt)......................... 455.4 425.3 413.9 413.2 428.1 841.3 884.9
------ ------- ------- ------ ------ ------- -------
Lead
Payable metal in concentrate (t)
Antamina............................... 33.8% 383 621 262 690 993 1,683 788
------ ------- ------- ------ ------ ------- -------
Total.................................. 383 621 262 690 993 1,683 788
------ ------- ------- ------ ------ ------- -------
Zinc
Payable metal in concentrate (t)
Antamina............................... 33.8% 22,483 31,789 13,736 34,398 41,909 76,307 42,937
------ ------- ------- ------ ------ ------- -------
Total.................................. 22,483 31,789 13,736 34,398 41,909 76,307 42,937
------ ------- ------- ------ ------ ------- -------
Gold
Payable metal in concentrate (troy oz)
Escondida /(3)/........................ 57.5% 49,209 35,990 43,422 42,332 47,789 90,121 98,010
Olympic Dam (refined gold)............. 100% 35,382 33,235 34,150 36,608 23,837 60,445 78,587
------ ------- ------- ------ ------ ------- -------
Total.................................. 84,591 69,225 77,572 78,940 71,626 150,566 176,597
------ ------- ------- ------ ------ ------- -------
Silver
Payable metal in concentrate (troy koz)
Escondida /(3)/........................ 57.5% 1,798 1,390 1,599 1,580 1,627 3,207 3,424
Antamina............................... 33.8% 1,173 1,216 626 1,326 1,767 3,093 2,274
Olympic Dam (refined silver)........... 100% 203 241 295 157 193 350 448
------ ------- ------- ------ ------ ------- -------
Total.................................. 3,174 2,847 2,520 3,063 3,587 6,650 6,146
------ ------- ------- ------ ------ ------- -------
Uranium
Payable metal in concentrate (t)
Olympic Dam............................ 100% 949 776 1,016 874 945 1,819 1,886
------ ------- ------- ------ ------ ------- -------
Total.................................. 949 776 1,016 874 945 1,819 1,886
------ ------- ------- ------ ------ ------- -------
Molybdenum
Payable metal in concentrate (t)
Antamina............................... 33.8% 527 491 243 284 192 476 932
------ ------- ------- ------ ------ ------- -------
Total.................................. 527 491 243 284 192 476 932
------ ------- ------- ------ ------ ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for 14
the half year ended 31 December 2020
Production summary
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2019 2020 2020 2020 2020 2020 2019
interest ------ ------- ------- ------ ------ ------- -------
Iron Ore
Iron Ore
Production (kt) /(5)/
Newman................................. 85% 15,766 16,449 17,110 16,410 17,637 34,047 32,082
Area C Joint Venture................... 85% 12,727 12,179 13,973 11,889 11,567 23,456 25,347
Yandi Joint Venture.................... 85% 14,857 17,491 19,087 17,666 16,413 34,079 32,684
Jimblebar /(6)/........................ 85% 17,045 13,911 16,559 20,075 16,740 36,815 31,284
Wheelarra.............................. 85% -- -- -- -- -- -- 3
Samarco................................ 50% -- -- -- -- 37 37 --
------ ------- ------- ------ ------ ------- -------
Total.................................. 60,395 60,030 66,729 66,040 62,394 128,434 121,400
------ ------- ------- ------ ------ ------- -------
Coal
Metallurgical coal
Production (kt) /(7)/
BMA.................................... 50% 8,723 6,869 9,078 7,365 7,539 14,904 15,628
BHP Mitsui Coal /(8)/.................. 80% 2,201 2,353 2,536 2,325 1,983 4,308 4,654
------ ------- ------- ------ ------ ------- -------
Total.................................. 10,924 9,222 11,614 9,690 9,522 19,212 20,282
------ ------- ------- ------ ------ ------- -------
Energy coal
Production (kt)
NSW Energy Coal........................ 100% 3,763 3,810 4,887 3,624 3,229 6,853 7,355
Cerrejon............................... 33.3% 2,315 1,978 767 1,038 347 1,385 4,370
------ ------- ------- ------ ------ ------- -------
Total.................................. 6,078 5,788 5,654 4,662 3,576 8,238 11,725
------ ------- ------- ------ ------ ------- -------
Other
Nickel
Saleable production (kt)
Nickel West /(9)/...................... 100% 13.7 20.9 23.9 22.2 24.0 46.2 35.3
------ ------- ------- ------ ------ ------- -------
Total.................................. 13.7 20.9 23.9 22.2 24.0 46.2 35.3
------ ------- ------- ------ ------ ------- -------
Cobalt
Saleable production (t)
Nickel West............................ 100% 120 132 312 238 236 474 331
------ ------- ------- ------ ------ ------- -------
Total.................................. 120 132 312 238 236 474 331
------ ------- ------- ------ ------ ------- -------
(1) LPG and ethane are reported as natural gas liquids (NGL). Product-specific
conversions are made and NGL is reported in barrels of oil equivalent (boe).
Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe.
(2) Metal production is reported on the basis of payable metal.
(3) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
(4) Includes Cerro Colorado and Spence.
(5) Iron ore production is reported on a wet tonnes basis.
(6) Shown on a 100% basis. BHP interest in saleable production is 85%.
(7) Metallurgical coal production is reported on the basis of saleable product.
Production figures include some thermal coal.
(8) Shown on a 100% basis. BHP interest in saleable production is 80%.
(9) Production restated to include other nickel by-products.
Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.
--------------------------------------------------------------------------------
BHP Operational Review for 15
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Petroleum /(1)/
Bass Strait
Crude oil and condensate....................... (Mboe) 1,427 926 1,231 1,305 1,003 2,308 2,836
NGL............................................ (Mboe) 1,405 958 1,493 1,660 1,057 2,717 3,215
Natural gas.................................... (bcf) 27.8 18.4 28.1 34.1 23.4 57.5 64.4
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 7,465 4,957 7,408 8,648 5,960 14,608 16,784
------- ------- ------- ------- ------- ------- -------
North West Shelf
Crude oil and condensate....................... (Mboe) 1,376 1,266 1,260 1,215 1,180 2,395 2,713
NGL............................................ (Mboe) 200 191 203 162 165 327 402
Natural gas.................................... (bcf) 32.9 35.0 35.2 29.6 30.4 60.0 65.0
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 7,059 7,287 7,334 6,310 6,412 12,722 13,948
------- ------- ------- ------- ------- ------- -------
Pyrenees
Crude oil and condensate....................... (Mboe) 934 917 971 837 826 1,663 1,913
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 934 917 971 837 826 1,663 1,913
------- ------- ------- ------- ------- ------- -------
Other Australia /(2)/
Crude oil and condensate....................... (Mboe) 1 1 1 1 1 2 9
Natural gas.................................... (bcf) 11.4 11.2 11.9 12.7 12.6 25.3 23.4
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 1,901 1,874 1,987 2,118 2,101 4,219 3,909
------- ------- ------- ------- ------- ------- -------
Atlantis /(3)/
Crude oil and condensate....................... (Mboe) 3,525 2,769 2,223 2,421 2,385 4,806 6,284
NGL............................................ (Mboe) 245 178 54 154 147 301 437
Natural gas.................................... (bcf) 1.8 1.3 1.1 1.2 1.1 2.3 3.2
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 4,070 3,170 2,456 2,775 2,715 5,490 7,254
------- ------- ------- ------- ------- ------- -------
Mad Dog /(3)/
Crude oil and condensate....................... (Mboe) 1,202 1,272 1,297 1,211 930 2,141 2,298
NGL............................................ (Mboe) 52 55 33 48 38 86 101
Natural gas.................................... (bcf) 0.2 0.2 0.3 0.2 0.1 0.3 0.4
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 1,287 1,355 1,374 1,292 985 2,277 2,466
------- ------- ------- ------- ------- ------- -------
Shenzi /(3)/ /(4)/
Crude oil and condensate....................... (Mboe) 1,671 1,645 1,584 1,395 1,764 3,159 3,016
NGL............................................ (Mboe) 94 94 40 71 87 158 164
Natural gas.................................... (bcf) 0.3 0.3 0.4 0.3 0.3 0.6 0.5
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 1,815 1,791 1,686 1,516 1,901 3,417 3,263
------- ------- ------- ------- ------- ------- -------
Trinidad/Tobago
Crude oil and condensate....................... (Mboe) 166 97 72 102 96 198 341
Natural gas.................................... (bcf) 14.2 14.0 12.8 12.8 10.5 23.3 32.1
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 2,533 2,427 2,201 2,235 1,846 4,081 5,691
------- ------- ------- ------- ------- ------- -------
Other Americas /(3)/ /(5)/
Crude oil and condensate....................... (Mboe) 230 344 198 212 190 402 415
NGL............................................ (Mboe) 4 22 5 2 11 13 6
Natural gas.................................... (bcf) 0.1 0.3 -- -- 0.1 0.1 0.1
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 251 412 209 214 218 432 438
------- ------- ------- ------- ------- ------- -------
Algeria
Crude oil and condensate....................... (Mboe) 880 854 690 711 849 1,560 1,769
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 880 854 690 711 849 1,560 1,769
------- ------- ------- ------- ------- ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for 16
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Petroleum /(1)/
Total production
Crude oil and condensate....................... (Mboe) 11,412 10,091 9,527 9,410 9,224 18,634 21,594
NGL............................................ (Mboe) 2,000 1,498 1,828 2,097 1,505 3,602 4,325
Natural gas.................................... (bcf) 88.7 80.7 89.8 90.9 78.5 169.4 189.1
------- ------- ------- ------- ------- ------- -------
Total.......................................... (Mboe) 28,195 25,039 26,322 26,657 23,812 50,469 57,436
------- ------- ------- ------- ------- ------- -------
(1) Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe.
Negative production figures represent finalisation adjustments.
(2) Other Australia includes Minerva and Macedon. Minerva ceased production in
September 2019.
(3) Gulf of Mexico volumes are net of royalties.
(4) BHP completed the acquisition of an additional 28% working interest in
Shenzi on 6 November 2020, taking its total working interest to 78%.
(5) Other Americas includes Neptune, Genesis and Overriding Royalty Interest.
--------------------------------------------------------------------------------
BHP Operational Review for 17
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile /(1)/
Material mined.................................... (kt) 100,057 107,268 75,062 83,357 97,274 180,631 201,083
Sulphide ore milled............................... (kt) 33,659 33,440 34,755 34,733 36,303 71,036 67,615
Average concentrator head grade................... (%) 0.87% 0.82% 0.81% 0.85% 0.83% 0.84% 0.86%
Production ex mill................................ (kt) 246.1 230.0 236.8 243.9 246.1 490.0 491.1
Production
Payable copper.................................... (kt) 240.3 220.1 228.5 236.7 236.7 473.4 477.3
Copper cathode (EW)............................... (kt) 68.4 69.6 65.5 47.9 50.9 98.8 124.3
- Oxide leach.................................... (kt) 28.3 29.3 26.8 15.3 18.0 33.3 50.2
- Sulphide leach................................. (kt) 40.1 40.2 38.7 32.6 32.9 65.5 74.2
------- ------- ------- ------- ------- ------- -------
Total copper...................................... (kt) 308.7 289.7 294.0 284.6 287.6 572.2 601.6
------- ------- ------- ------- ------- ------- -------
Payable gold concentrate.......................... (troy oz) 49,209 35,990 43,422 42,332 47,789 90,121 98,010
Payable silver concentrate........................ (troy koz) 1,798 1,390 1,599 1,580 1,627 3,207 3,424
Sales
Payable copper.................................... (kt) 248.3 212.0 221.0 237.1 244.3 481.4 470.5
Copper cathode (EW)............................... (kt) 70.6 65.9 72.1 46.5 47.7 94.2 122.9
Payable gold concentrate.......................... (troy oz) 49,209 35,990 43,422 42,332 47,789 90,121 98,010
Payable silver concentrate........................ (troy koz) 1,798 1,390 1,599 1,580 1,627 3,207 3,424
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Pampa Norte, Chile
Cerro Colorado
Material mined.................................... (kt) 18,102 18,710 15,734 12,618 6,750 19,368 33,173
Ore milled ....................................... (kt) 5,009 4,574 4,553 4,036 3,562 7,598 9,004
Average copper grade .............................. (%) 0.57% 0.54% 0.60% 0.66% 0.58% 0.62% 0.56%
Production
Copper cathode (EW)............................... (kt) 13.8 20.4 16.9 15.8 15.8 31.6 30.2
Sales
Copper cathode (EW)............................... (kt) 15.8 18.3 18.7 14.6 16.6 31.2 30.3
Spence
Material mined.................................... (kt) 23,132 23,304 24,082 18,260 18,485 36,745 44,172
Ore milled /(1)/.................................. (kt) 5,133 5,191 2,829 4,408 6,809 11,217 10,768
Average copper grade /(2)/.........................(%) 0.90% 0.87% 0.95% 1.10% 0.76% 0.89% 0.93%
Production
Payable copper.................................... (kt) -- -- -- -- 0.7 0.7 --
Copper cathode (EW)............................... (kt) 46.2 43.9 37.6 26.7 37.8 64.5 93.7
Sales
Payable copper.................................... (kt) -- -- -- -- -- -- --
Copper cathode (EW)............................... (kt) 44.3 44.8 41.0 24.1 40.9 65.0 91.0
(1) December 2020 quarter comprised of preliminary concentrator throughput of 1,207 kt and cathode throughput of 5,602 kt.
(2) December 2020 quarter weighted average of preliminary concentrate grade of 0.43% and cathode grade of 0.83%.
--------------------------------------------------------------------------------
BHP Operational Review for 18
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%)............................. (kt) 63,224 52,872 13,975 45,458 57,029 102,487 122,523
Sulphide ore milled (100%)........................ (kt) 13,637 12,906 6,736 13,202 14,083 27,285 26,758
Average head grades
- Copper.......................................... (%) 0.96% 0.88% 0.91% 0.94% 0.97% 0.96% 0.97%
- Zinc............................................ (%) 0.82% 1.09% 1.02% 1.30% 1.30% 1.30% 0.81%
Production
Payable copper.................................... (kt) 36.2 32.9 17.8 34.6 38.6 73.2 73.8
Payable zinc...................................... (t) 22,483 31,789 13,736 34,398 41,909 76,307 42,937
Payable silver.................................... (troy koz) 1,173 1,216 626 1,326 1,767 3,093 2,274
Payable lead...................................... (t) 383 621 262 690 993 1,683 788
Payable molybdenum................................ (t) 527 491 243 284 192 476 932
Sales
Payable copper.................................... (kt) 43.6 30.8 18.2 33.8 40.7 74.5 76.7
Payable zinc...................................... (t) 23,808 31,007 11,680 32,769 45,109 77,878 44,004
Payable silver.................................... (troy koz) 1,396 815 581 1,310 1,728 3,038 2,350
Payable lead...................................... (t) 432 151 188 748 945 1,693 1,276
Payable molybdenum................................ (t) 400 531 223 392 352 744 573
Olympic Dam, Australia
Material mined /(1)/.............................. (kt) 2,347 1,920 1,928 2,203 2,379 4,582 4,824
Ore milled........................................ (kt) 2,153 2,178 2,416 2,443 2,377 4,820 4,353
Average copper grade.............................. (%) 2.36% 2.31% 2.17% 2.03% 2.02% 2.03% 2.33%
Average uranium grade............................. (kg/t) 0.71 0.69 0.60 0.53 0.60 0.56 0.68
Production
Copper cathode (ER and EW)........................ (kt) 50.5 38.4 47.6 51.5 47.6 99.1 85.6
Payable uranium................................... (t) 949 776 1,016 874 945 1,819 1,886
Refined gold...................................... (troy oz) 35,382 33,235 34,150 36,608 23,837 60,445 78,587
Refined silver.................................... (troy koz) 203 241 295 157 193 350 448
Sales
Copper cathode (ER and EW)........................ (kt) 49.0 41.4 48.5 49.5 46.6 96.1 81.1
Payable uranium................................... (t) 638 702 1,293 859 999 1,858 1,416
Refined gold...................................... (troy oz) 36,507 36,956 37,743 36,054 21,390 57,444 76,580
Refined silver.................................... (troy koz) 202 259 270 222 165 387 452
(1) Material mined refers to run of mine ore mined and hoisted.
--------------------------------------------------------------------------------
BHP Operational Review for 19
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.
Western Australia Iron Ore, Australia
Production
Newman............................................ (kt) 15,766 16,449 17,110 16,410 17,637 34,047 32,082
Area C Joint Venture.............................. (kt) 12,727 12,179 13,973 11,889 11,567 23,456 25,347
Yandi Joint Venture............................... (kt) 14,857 17,491 19,087 17,666 16,413 34,079 32,684
Jimblebar /(1)/................................... (kt) 17,045 13,911 16,559 20,075 16,740 36,815 31,284
Wheelarra......................................... (kt) -- -- -- -- -- -- 3
------- ------- ------- ------- ------- ------- -------
Total production.................................. (kt) 60,395 60,030 66,729 66,040 62,357 128,397 121,400
------- ------- ------- ------- ------- ------- -------
Total production (100%)........................... (kt) 68,044 68,168 75,589 74,152 70,407 144,559 137,301
------- ------- ------- ------- ------- ------- -------
Sales
Lump.............................................. (kt) 15,982 15,617 17,252 17,056 16,703 33,759 30,767
Fines............................................. (kt) 45,785 44,764 50,904 48,390 46,124 94,514 91,294
------- ------- ------- ------- ------- ------- -------
Total............................................. (kt) 61,767 60,381 68,156 65,446 62,827 128,273 122,061
------- ------- ------- ------- ------- ------- -------
Total sales (100%)................................ (kt) 69,481 68,439 77,048 73,355 70,772 144,127 137,772
------- ------- ------- ------- ------- ------- -------
(1) Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil /(1)/
Production........................................ (kt) -- -- -- -- 37 37 --
Sales............................................. (kt) -- -- -- -- -- -- --
(1) Samarco commenced iron ore pellet production in December 2020 after meeting
the licencing requirements to restart operations at the Germano complex in
Minas Gerais and Ubu complex in Espirito Santo, Brazil.
--------------------------------------------------------------------------------
BHP Operational Review for 20
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Coal
Coal production is reported on the basis of saleable product.
Queensland Coal, Australia
Production /(1)/
BMA
Blackwater........................................ (kt) 1,734 1,063 1,703 1,184 1,737 2,921 2,779
Goonyella......................................... (kt) 2,662 1,963 2,651 2,312 2,152 4,464 4,151
Peak Downs........................................ (kt) 1,386 1,339 1,635 1,487 1,213 2,700 2,809
Saraji............................................ (kt) 1,325 1,025 1,399 817 1,043 1,860 2,539
Daunia............................................ (kt) 579 447 588 490 464 954 1,135
Caval Ridge....................................... (kt) 1,037 1,032 1,102 1,075 930 2,005 2,215
------- ------- ------- ------- ------- ------- -------
Total BMA......................................... (kt) 8,723 6,869 9,078 7,365 7,539 14,904 15,628
------- ------- ------- ------- ------- ------- -------
Total BMA (100%).................................. (kt) 17,446 13,738 18,156 14,730 15,078 29,808 31,256
------- ------- ------- ------- ------- ------- -------
BHP Mitsui Coal /(2)/
South Walker Creek................................ (kt) 1,196 1,577 1,264 1,238 1,118 2,356 2,574
Poitrel........................................... (kt) 1,005 776 1,272 1,087 865 1,952 2,080
------- ------- ------- ------- ------- ------- -------
Total BHP Mitsui Coal............................. (kt) 2,201 2,353 2,536 2,325 1,983 4,308 4,654
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal............................. (kt) 10,924 9,222 11,614 9,690 9,522 19,212 20,282
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal (100%)...................... (kt) 19,647 16,091 20,692 17,055 17,061 34,116 35,910
------- ------- ------- ------- ------- ------- -------
Sales
BMA
Coking coal....................................... (kt) 7,179 6,417 7,547 6,187 6,531 12,718 13,737
Weak coking coal.................................. (kt) 971 644 1,040 977 936 1,913 1,605
Thermal coal...................................... (kt) 30 224 183 58 3 61 124
------- ------- ------- ------- ------- ------- -------
Total BMA......................................... (kt) 8,180 7,285 8,770 7,222 7,470 14,692 15,466
------- ------- ------- ------- ------- ------- -------
Total BMA (100%).................................. (kt) 16,360 14,570 17,540 14,444 14,940 29,384 30,932
------- ------- ------- ------- ------- ------- -------
BHP Mitsui Coal /(2)/
Coking coal....................................... (kt) 596 667 778 671 604 1,275 1,337
Weak coking coal.................................. (kt) 1,504 1,691 1,756 1,545 1,518 3,063 3,336
------- ------- ------- ------- ------- ------- -------
Total BHP Mitsui Coal............................. (kt) 2,100 2,358 2,534 2,216 2,122 4,338 4,673
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal............................. (kt) 10,280 9,643 11,304 9,438 9,592 19,030 20,139
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal (100%)...................... (kt) 18,460 16,928 20,074 16,660 17,062 33,722 35,605
------- ------- ------- ------- ------- ------- -------
(1) Production figures include some thermal coal.
(2) Shown on a 100% basis. BHP interest in saleable production is 80%.
NSW Energy Coal, Australia
Production........................................ (kt) 3,763 3,810 4,887 3,624 3,229 6,853 7,355
Sales
Export thermal coal............................... (kt) 3,952 3,403 4,871 3,168 3,940 7,108 7,027
Inland thermal coal /(1)/......................... (kt) -- -- -- -- -- -- 567
------- ------- ------- ------- ------- ------- -------
Total............................................. (kt) 3,952 3,403 4,871 3,168 3,940 7,108 7,594
------- ------- ------- ------- ------- ------- -------
(1) The domestic sales contract ended in the September 2019 quarter.
Cerrejon, Colombia
Production........................................ (kt) 2,315 1,978 767 1,038 347 1,385 4,370
Sales thermal coal - export....................... (kt) 2,261 2,028 1,143 994 370 1,364 4,330
--------------------------------------------------------------------------------
BHP Operational Review for 21
the half year ended 31 December 2020
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2019 2020 2020 2020 2020 2020 2019
------- ------- ------- ------- ------- ------- -------
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Mt Keith
Nickel concentrate................................ (kt) 31.5 42.8 60.2 64.4 55.7 120.1 75.2
Average nickel grade.............................. (%) 17.3 15.8 16.5 15.8 14.7 15.3 17.9
Leinster
Nickel concentrate................................ (kt) 56.6 57.8 72.0 66.2 72.8 139.0 123.8
Average nickel grade.............................. (%) 8.6 9.8 10.2 9.0 9.5 9.3 9.4
Saleable production
Refined nickel /(1)//(2)/......................... (kt) 11.1 16.6 20.5 17.3 20.4 37.7 28.5
Intermediates and nickel by-products /(1)//(3)/... (kt) 2.6 4.3 3.4 4.9 3.6 8.5 6.8
------- ------- ------- ------- ------- ------- -------
Total nickel /(1)/................................ (kt) 13.7 20.9 23.9 22.2 24.0 46.2 35.3
------- ------- ------- ------- ------- ------- -------
Cobalt by-products................................ (t) 120 132 312 238 236 474 331
Sales
Refined nickel /(1)//(2)/......................... (kt) 10.6 16.8 19.7 17.1 20.9 38.0 27.6
Intermediates and nickel by-products /(1)//(3)/... (kt) 2.7 2.9 4.2 4.6 2.6 7.2 8.4
------- ------- ------- ------- ------- ------- -------
Total nickel /(1)/................................ (kt) 13.3 19.7 23.9 21.7 23.5 45.2 36.0
------- ------- ------- ------- ------- ------- -------
Cobalt by-products................................ (t) 131 132 312 238 237 475 343
(1) Production and sales restated to include other nickel by-products.
(2) High quality refined nickel metal, including briquettes and powder.
(3) Nickel contained in matte and by-product streams.
--------------------------------------------------------------------------------
BHP Operational Review for 22
the half year ended 31 December 2020
Date: 20-01-2021 07:05:00
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