Wrap Text
Operational Review for Half Year Ended 31 Dec 2021
BHP Group Plc
Registration number 3196209
Registered in England and Wales
Share code: BHP
ISIN: GB00BH0P3Z91
NEWS RELEASE
Release Time IMMEDIATE
Date 19 January 2022
Release Number 02/22
BHP OPERATIONAL REVIEW
FOR THE HALF YEAR ENDED 31 DECEMBER 2021
Note: All guidance is subject to further potential impacts from COVID-19 during
the 2022 financial year.
. We remained fatality free at our operated assets for the third consecutive
year.
. WAIO achieved near record production for the half year and Escondida
achieved record material mined, notwithstanding the impacts of significant
wet weather and the COVID-19 Omicron variant on some operations.
. Production guidance for the 2022 financial year remains unchanged for iron
ore, energy coal and nickel. Full year total copper production is trending
towards the low end of the guidance range, reflecting lower production
guidance for Pampa Norte. Metallurgical coal guidance has been reduced as a
result of significant wet weather impacts and COVID-19 related labour
constraints.
. Full year unit cost guidance/(1)/ for WAIO, Escondida and NSWEC remains
unchanged. Unit cost guidance for Queensland Coal has been increased,
reflecting lower expected volumes for the full year.
. Progress on the review of our lower grade metallurgical coal and thermal
coal assets continues. The Cerrejon divestment to Glencore completed in
January 2022 and the announced share sale agreement to divest BHP Mitsui
Coal (BMC) is expected to complete in the middle of the 2022 calendar year.
. Our potash major projects under development are tracking to plan. The
Jansen shaft project is 98% complete and the Jansen Stage 1 project has
commenced contract awards.
. BHP announced a final decision to unify BHP's corporate structure under its
existing Australian parent company, BHP Group Limited. Shareholder meetings
to vote on unification will be held on 20 January 2022. Subject to
shareholder approval and UK Court sanction, unification is expected to
complete by 31 January 2022.
. Completion of the proposed merger of our Petroleum business with Woodside
is expected in the June 2022 quarter subject to satisfaction of conditions
precedent including approval by Woodside shareholders. The half year
financial results are being prepared on the basis that the Petroleum
business is a discontinued operation and restated financial information for
the year ended 30 June 2021 and the half year ended 31 December 2020 is
provided in Attachment 1.
Dec H21 Dec Q21
Production (vs Dec H20) (vs Sep Q21) Dec Q21 vs Sep Q21 commentary
---------- ------------ ------------ -----------------------------
Copper (kt)..................... 742.0 365.5 Lower volumes at Olympic Dam due to the planned smelter maintenance
(12%) (3%) campaign, completed in January 2022. This was partially offset by
higher volumes at Antamina.
Iron ore (Mt)................... 129.4 66.1 Higher volumes reflecting strong supply chain performance, increased
1% 4% ore car availability and the continued ramp up of South Flank. This
was partially offset by the impact of temporary rail labour shortages
due to COVID-19 related border restrictions.
Metallurgical coal (Mt)/(2)/.... 17.7 8.8 Volumes flat due to double the amount of rainfall recorded in this
(8%) 0% quarter impacting most operations and planned maintenance in the
previous quarter.
Energy coal (Mt)/(3)/........... 7.2 3.0 Lower volumes due to three times the amount of rainfall in this
5% (30%) quarter impacting stripping and mine productivity, partially offset
by mining in lower strip ratio areas.
Nickel (kt)..................... 39.3 21.5 Higher volumes due to planned maintenance across the supply chain in
(15%) 21% the previous quarter.
Discontinued operations
Petroleum (MMboe)............. 53.2 25.7 Lower volumes due to reduced seasonal gas demand at Bass Strait. This
5% (7%) was partially offset by a Shenzi infill well brought online and higher
production at North West Shelf.
Group copper equivalent production decreased by 4%(4) in the December 2021 half
year largely due to lower copper and metallurgical coal volumes.
--------------------------------------------------------------------------------
BHP Operational Review for the 1
half year ended 31 December 2021
Summary
BHP Chief Executive Officer, Mike Henry:
"BHP was fatality free at our operated assets for the third consecutive year.
Our continuing focus on people and on operational reliability enabled us to
achieve near record production in iron ore and to reduce the impacts of adverse
weather and COVID-19 related labour constraints in our operations. Cost control
remained strong across the business, in the face of a more inflationary
environment. Unit cost guidance remains intact bar a change to metallurgical
coal which is a function of the lowering of production guidance as a result of
significant wet weather and in anticipation of Omicron headwinds in the early
part of the second half of the financial year.
We completed major planned maintenance programs in our Iron Ore, Nickel West and
Olympic Dam assets. In Nickel West, we achieved first saleable production of
nickel sulphate crystals from the Kwinana plant, an exciting new addition to our
product suite that will further enhance our offering into the battery electric
vehicle market. The ramp-up of South Flank continues to progress well. The
Spence Growth project is realising lower than expected recoveries and we are
studying plant design modifications in order to lift recoveries to planned
levels.
We continued to progress a number of actions related to our portfolio and
corporate structure. We progressed the merger of our petroleum assets with
Woodside and prepared for a shareholder vote on a unified corporate
structure. We advanced the Jansen potash project and announced a share sale
agreement of our interest in the BHP Mitsui Coal metallurgical coal joint
venture. We bolstered options in future facing commodities investing in
prospective copper assets in the Northern Territory and South Australia and we
secured an early stage entry into a world-scale nickel sulphide resource in
Tanzania.
Overall we made good progress in positioning our portfolio and performance to
deliver returns for shareholders now and into the future."
Operational performance
Production and guidance are summarised below.
Note: All guidance is subject to further potential impacts from COVID-19 during
the 2022 financial year.
Dec H21 Dec Q21 Dec Q21 Previous Current
vs vs vs FY22 FY22
Production Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21 guidance guidance
---------- ------- ------- ------- ------- ------- ------------- -------------
Copper (kt)............................ 742.0 365.5 (12%) (15%) (3%) 1,590 - 1,760 1,590 - 1,760 Low end
Escondida (kt)...................... 488.3 244.6 (15%) (15%) 0% 1,000 - 1,080 1,020 - 1,080 Narrowed range
Pampa Norte (kt).................... 135.8 68.3 40% 26% 1% 330 - 370 260 - 300 Lowered
Olympic Dam (kt).................... 43.7 14.2 (56%) (70%) (52%) 140 - 170 140 - 150 Narrowed range
Antamina (kt)....................... 74.2 38.4 1% (1%) 7% 120 - 140 120 - 140 Unchanged
Iron ore (Mt).......................... 129.4 66.1 1% 6% 4% 249 - 259 249 - 259
WAIO (Mt)........................... 127.3 65.1 (1%) 4% 5% 246 - 255 246 - 255 Unchanged
WAIO (100% basis) (Mt).............. 144.4 73.9 0% 5% 5% 278 - 288 278 - 288 Unchanged
Samarco (Mt)......................... 2.1 1.0 >100% >100% (2%) 3 - 4 3 - 4 Unchanged
Metallurgical coal (Mt)/(i)/........... 17.7 8.8 (8%) (7%) 0% 39 - 44 38 - 41
Queensland Coal (100% basis) (Mt)... 30.7 15.1 (10%) (11%) (3%) 70 - 78 68 - 72 Lowered
Energy coal - NSWEC (Mt)............... 7.2 3.0 5% (8%) (30%) 13 - 15 13 - 15 Unchanged
Energy coal - Cerrejon (Mt)/(ii)/...... 4.2 2.2 >100% >100% 6% n/a n/a
Nickel (kt)............................ 39.3 21.5 (15%) (10%) 21% 85 - 95 85 - 95 Unchanged
Discontinued operations
Petroleum (MMboe)/(iii)/............... 53.2 25.7 5% 8% (7%) 99 - 106 n/a
(i) We announced the share sale agreement to divest our interest in BHP Mitsui
Coal (BMC) in November 2021, however will continue to report BMC as part
of Queensland Coal. We maintain economic and operating control of BMC
until the sale has completed.
(ii) We have ceased providing Cerrejon production guidance due to the
completion of the divestment of our interest. The transaction has an
effective economic date of 31 December 2020 and volumes have been reported
separately.
(iii) Given our announcement of a binding share sale agreement for the merger of
BHP's oil and gas portfolio with Woodside in November 2021, no further
annual production guidance for FY22 for Petroleum will be provided.
However, until merger completion, we expect a production run rate broadly
consistent with the original FY22 production guidance of between 99 and
106 MMboe.
--------------------------------------------------------------------------------
BHP Operational Review for the 2
half year ended 31 December 2021
Summary of disclosures
BHP expects its December 2021 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 15 February 2022. Accordingly the information in the
table below contains preliminary information that is subject to update and
finalisation.
H1 FY22
Description impact US$M/(i)/ Classification/(ii)/
----------- ------------------- -----------------------------------
Unit costs for WAIO, Escondida and NSWEC are expected to be in line with -- Operating costs
full year guidance (at guidance exchange rates), with WAIO tracking towards
the bottom end of guidance
Note: weaker Australian dollar and Chilean peso than guidance rates in the
period/(iii)/
-----------------------------------------------------------------------------------------------------------------------------------
Unit cost guidance for Queensland Coal has been increased to between US$85 -- (Up Arrow) Operating costs
and US$94 per tonne (at guidance exchange rates), reflecting lower expected
volumes for the full year
-----------------------------------------------------------------------------------------------------------------------------------
Exploration expense (minerals exploration programs) 80 Exploration expense
-----------------------------------------------------------------------------------------------------------------------------------
Higher depreciation and amortisation mainly at WAIO following South Flank 425 - 475 (Up Arrow) Depreciation,
commissioning and prior period update of closure provision at Yandi. amortisation and impairments
-----------------------------------------------------------------------------------------------------------------------------------
The Group's adjusted effective tax rate for H1 FY22 is expected to be -- Taxation expense
slightly below the full year guidance range of 32 to 37 per cent given
Petroleum will be presented as a discontinued operation. An updated
guidance range will be provided in the half year financial results
-----------------------------------------------------------------------------------------------------------------------------------
Working capital movements relating to royalties, inventory builds, net 2,000 - 2,500 (Down Arrow) Operating cash inflow
price impacts on receivables and other movements.
-----------------------------------------------------------------------------------------------------------------------------------
Dividends received from Cerrejon ~240/(iv)/ (Up Arrow) Operating cash inflow
-----------------------------------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interests ~1,250 (Up Arrow) Financing cash outflow
-----------------------------------------------------------------------------------------------------------------------------------
Impairment of US deferred tax assets no longer expected to be recoverable 400 - 450 (Up Arrow) Exceptional item charge
after the Petroleum merger (after tax)
-----------------------------------------------------------------------------------------------------------------------------------
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, unless otherwise noted.
(iii) Average exchange rates for H1 FY22 of AUD/USD 0.73 (guidance rate AUD/USD
0.78) and USD/CLP 798 (guidance rate USD/CLP 727).
(iv) There will be no net income statement impact in relation to Cerrejon for
H1 FY22. While the dividends received will be recognised as other income,
the associated adjustment to the proceeds to be received on sale
completion results in an offsetting expense to reflect the reduction in
the carrying value of the Cerrejon assets held for sale.
(v) Financial impact is the subject of ongoing work and is not yet finalised.
See corporate update section for further information on Samarco.
The December 2021 half year financial results are being prepared on the basis
that BHP Petroleum will be reported as a discontinued operation. BHP Petroleum
will be excluded from the consolidated Income Statement and will not be included
when calculating the minimum dividend payout. BMC will continue to be
consolidated with Queensland Coal as a continuing operation until the expected
completion in the middle of the 2022 calendar year. On the Balance Sheet, both
BMC and BHP Petroleum will be reclassified as assets held for sale and excluded
from net operating assets.
Major development projects
At the end of December 2021, BHP had two major projects under development, the
US$2.97 billion Jansen mine shafts project and the US$5.7 billion Jansen Stage 1
project.
--------------------------------------------------------------------------------
BHP Operational Review for the 3
half year ended 31 December 2021
Average realised prices
The average realised prices achieved for our major commodities are summarised
below.
Dec H21 Dec H21 Dec H21
vs vs vs
Average realised prices/(i)/ Dec H21 Dec H20 Jun H21 FY21 Dec H20 Jun H21 FY21
---------------------------- ------- ------- ------- ------- ------- ------- -------
Copper (US$/lb)............................ 4.31 3.32 4.34 3.81 30% (1%) 13%
Iron ore (US$/wmt, FOB).................... 113.54 103.78 158.17 130.56 9% (28%) (13%)
Metallurgical coal (US$/t)................. 259.71 97.61 114.81 106.64 166% 126% 144%
Hard coking coal (US$/t)/(ii)/.......... 278.60 106.30 118.54 112.72 162% 135% 147%
Weak coking coal (US$/t)/(ii)/.......... 218.65 73.17 104.40 89.62 199% 109% 144%
Thermal coal (US$/t)/(iii)/................ 137.68 44.35 70.83 58.42 210% 94% 136%
Nickel metal (US$/t)....................... 19,651 15,140 17,537 16,250 30% 12% 21%
Discontinued operations
Oil (crude and condensate) (US$/bbl)....... 74.26 41.40 63.05 52.56 79% 18% 41%
Natural gas (US$/Mscf)/(iv)/............... 5.80 3.83 4.86 4.34 51% 19% 34%
LNG (US$/Mscf)............................. 15.10 4.45 7.04 5.63 239% 114% 168%
(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) 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.
(iii) Export sales only; excludes Cerrejon. Includes thermal coal sales from
metallurgical coal mines.
(iv) Includes internal sales.
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 7.2 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 the month of
shipment, and three to four months after the month of shipment for copper
concentrates sales with price differentials applied for location and treatment
costs. 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.
At 31 December 2021, the Group had 333 kt of outstanding copper sales that were
revalued at a weighted average price of US$4.42 per pound. The final price of
these sales will be determined over the remainder of the 2022 financial year. In
addition, 323 kt of copper sales from the 2021 financial year were subject to a
finalisation adjustment in the current period. The provisional pricing and
finalisation adjustments will increase Underlying EBITDA(5) by US$11 million in
the December 2021 half year and are included in the average realised copper
price in the above table.
Corporate update
Portfolio
In November 2021, BHP announced it had signed a Share Sale and Purchase
Agreement with Stanmore Resources Limited to divest its 80 per cent interest in
BHP Mitsui Coal Pty Ltd (BMC), an operated metallurgical coal joint venture in
Queensland. The purchase price comprises US$1.1 billion cash on completion,
US$100 million in cash six months after completion and the potential for up to
US$150 million in a price-linked earn-out payable in the 2024 calendar year.
Completion is expected in the middle of the 2022 calendar year subject to the
satisfaction of certain conditions, including customary competition and
regulatory conditions.
In November 2021, BHP signed a binding Share Sale Agreement for the merger of
BHP's oil and gas portfolio with Woodside to create a global top 10 independent
energy company by production. It is proposed that Woodside will acquire BHP
Petroleum in exchange for new Woodside shares. Completion of the merger is
subject to satisfaction of conditions precedent including regulatory and
competition authority approvals and approval by Woodside's shareholders.
The process remains on track and the Australian Competition and Consumer Commission
provided informal clearance of the merger in December 2021. The Woodside shareholder
meeting to vote on the merger as well as completion of the merger is targeted for
the June 2022 quarter. In addition to its primary listing on the Australian
Securities Exchange, Woodside is pursuing a standard listing on the London Stock Exchange
and a listing of American Depositary Receipts on the New York Stock Exchange.
In December 2021, BHP announced a final decision to unify BHP's corporate structure
under its existing Australian parent company, BHP Group Limited. The Board believes
that unification is in the best interests of BHP shareholders. Unification will create
a corporate structure that is simpler and more efficient, reduces duplication and
streamlines BHP's governance and internal processes. Shareholder meetings of BHP
Group Limited and BHP Group Plc will take place on 20 January 2022 to approve unification.
Unification is expected to complete by 31 January 2022 subject to shareholder approval
of both BHP Group Limited and BHP Group Plc and UK Court sanction of the scheme.
--------------------------------------------------------------------------------
BHP Operational Review for the 4
half year ended 31 December 2021
In December 2021, BHP announced it would not increase or extend its offer to
acquire Noront Resources. BHP is committed to its strict capital discipline
framework and while the Eagle's Nest deposit is a promising resource, we do not
see adequate long-term value for BHP shareholders to support an increase in
BHP's offer to match the proposal from Wyloo Metals Pty Ltd.
In December 2021, BHP advanced its early-stage nickel interests by agreeing to
invest in the Kabanga Nickel Project (Kabanga), a high-quality nickel sulphide
deposit in Tanzania. Kabanga is a joint venture between Kabanga Nickel Limited
(84 per cent interest) and the Government of Tanzania (16 per cent). BHP has
made an initial investment of US$40 million in Kabanga, which will convert into
an 8.9 per cent equity stake in Kabanga Nickel Limited once approvals and
conditions are met. The proceeds will be used to accelerate drilling and study
work. Further investments, including a second tranche of US$50 million, have
been agreed in principle subject to the parties agreeing definitive
documentation and certain other conditions. In parallel, BHP has invested US$10
million in Lifezone Limited to progress its low-carbon hydrometallurgical
processing technology.
In January 2022, BHP completed the sale to Glencore of its 33.3 per cent
interest in the Cerrejon joint venture in Colombia. The transaction was first
announced on 29 June 2021 for a total cash consideration of US$294 million.
Samarco
Samarco's Judicial Reorganisation process is continuing in the Commercial Courts
of Belo Horizonte, State of Minas Gerais. The Judicial Reorganisation is a
process for Samarco to restructure its financial debts in order to establish a
sustainable independent financial position that would allow Samarco to continue
its operations safely and meet its Renova Foundation obligations. BHP Brasil
will continue to support Samarco in this process.
Negotiations are ongoing with State and Federal Prosecutors and certain other
Brazilian public authorities in relation to the review of the Framework
Agreement. The Framework Agreement was entered into between Samarco, Vale and
BHP Brasil and the relevant Brazilian authorities in March 2016 and established
the Renova Foundation to develop and implement environmental and socio-economic
programs to remediate and provide compensation for damage caused by the Samarco
dam failure.
In October 2021, the 12th Federal Court delivered a ruling that expanded the
scope of eligible individuals of the court mandated compensation process ("Novel
System"), extended its geographical scope and increased indemnification amounts
for certain categories of damage. The decision is under appeal and applications
have been made to clarify certain aspects of the ruling. BHP is currently
reviewing the impact of the 12th Federal Court's decision on the Group's
provision for the Samarco dam failure and it is possible that the provision
could materially increase.
In December 2021, BHP agreed to fund US$700 million in further financial support
for the Renova Foundation, which will be offset against the Group's provision
for the Samarco dam failure. Further funding requirements for the period to 31
December 2022 continue to be assessed and, will be subject to future approval by
BHP.
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
15 February 2022. Any financial impacts will continue to be treated as an
exceptional item.
--------------------------------------------------------------------------------
BHP Operational Review for the 5
half year ended 31 December 2021
Copper
Production
Dec H21 Dec Q21 Dec Q21
vs vs vs
Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21
------- ------- ------- ------- -------
Copper (kt)............ 742.0 365.5 (12%) (15%) (3%)
Zinc (t)............... 62,892 29,603 (18%) (29%) (11%)
Uranium (t)............ 818 287 (55%) (70%) (46%)
Copper - Total copper production decreased by 12 per cent to 742 kt. Full year
production is trending towards the low end of the guidance range for the 2022
financial year, which reflects lower production guidance at Pampa Norte, and
narrowed guidance ranges for Escondida and Olympic Dam. Volumes will be weighted
to the second half of the financial year as expected.
Uncertainty around impacts from COVID-19 remains as the pandemic evolves,
despite an improved operating environment for our Chilean assets in the December
2021 half year due to high COVID-19 vaccination rates and continued use of
successful control measures at our operating sites.
Escondida copper production decreased by 15 per cent to 488 kt due to
concentrator feed grade decline despite a record performance for material mined.
Guidance for the 2022 financial year has been narrowed to between 1,020 and
1,080 kt as concentrator feed grade is expected to improve in the June 2022 half
year as the mine sequence moves towards higher grade areas. Concentrator feed
grade decline remains forecasted at approximately two per cent for the 2022
financial year. Medium term guidance of an annual average of 1.2 Mt of copper
production over the next five years remains unchanged, with production expected
to be weighted towards the latter years.
Pampa Norte copper production increased by 40 per cent to 136 kt, reflecting the
continued ramp up of the Spence Growth Option (SGO), partially offset by the
impact of planned lower ore stacking grade, which is expected to decline by
approximately 10 per cent for the 2022 financial year. SGO demonstrated full
concentrator throughput of 95 ktpd in the December 2021 quarter. Guidance for
the 2022 financial year has been reduced from between 330 and 370 kt to between
260 and 300 kt, as the result of a fatality at the third party desalination
plant which impacted Spence operations, operational uncertainty related to Cerro
Colorado water access and licencing, including water extraction, and lower than
expected recoveries at SGO. Plant design modifications, including modifications
to the rougher floatation circuit will be required to increase SGO recoveries to
achieve planned copper production levels. The Spence guidance to average 300
ktpa (including cathodes) in the first four years of production will be subject
to the timing of these modifications being completed.
Olympic Dam copper production decreased by 56 per cent to 44 kt as a result of
the major smelter maintenance campaign in the period. The maintenance campaign
was completed in January 2022 and ramp up to full capacity is now expected by
April 2022 (previously March 2022), due to COVID-19 impacts on the availability
of workforce. The full scope of the maintenance campaign was delivered,
including the rebuild of the flash furnace and its ancillary equipment and
refurbishment of the acid plant, which has resulted in significant plant
improvements. Guidance for the 2022 financial year has been narrowed to between
140 and 150 kt as production is trending towards the low end of the original
guidance range.
Antamina copper production increased by one per cent to 74 kt reflecting higher
copper head grades and zinc production decreased by 18 per cent to 63kt
reflecting lower zinc head grades. Guidance remains unchanged for the 2022
financial year, with copper production of between 120 and 140 kt, and zinc
production of between 115 and 130 kt.
--------------------------------------------------------------------------------
BHP Operational Review for the 6
half year ended 31 December 2021
Iron Ore
Production
Dec H21 Dec Q21 Dec Q21
vs vs vs
Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21
------- ------- ------- ------- -------
Iron ore production (kt)....... 129,401 66,102 1% 6% 4%
Iron ore - Total iron ore production increased by one per cent to 129 Mt.
Guidance for the 2022 financial year remains unchanged at between 249 and 259
Mt.
WAIO finished the half year at near record production levels at 127 Mt (144 Mt
on a 100 per cent basis), despite impacts of temporary labour constraints
relating to COVID-19 border restrictions and the planned major maintenance on
car dumper one and the Jimblebar train load out. This reflects continued strong
supply chain performance including higher car dumper performance and improved
rail cycle times. South Flank ramp up to full production capacity of 80 Mtpa
(100 per cent basis) over three years remains on track with a peak rate of 45
Mtpa achieved in the half year contributing to record lump sales. In December
2021, we approved the South Flank Autonomous Haulage Project to automate the
current fleet of Komatsu haul trucks. The project is scheduled to commence in
the June 2022 quarter and is expected to be completed within 18 months. The
proposed easing of Western Australia's border restrictions on 5 February 2022
may introduce some short-term disruption to the operating environment as the
COVID-19 pandemic evolves in the state.
Samarco production was 2.1 Mt (BHP share), following the recommencement of iron
ore pellet production at one concentrator in December 2020. Guidance of between
3 and 4 Mt (BHP share) remains unchanged for the 2022 financial year.
Coal
Production
Dec H21 Dec Q21 Dec Q21
vs vs vs
Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21
------- ------- ------- ------- -------
Metallurgical coal (kt)/(2)/... 17,668 8,818 (8%) (7%) 0%
Energy coal (kt)/(3)/.......... 7,205 2,967 5% (8%) (30%)
Metallurgical coal - Metallurgical coal production decreased by eight per cent
to 18 Mt (31 Mt on a 100 per cent basis). Guidance for the 2022 financial year
has been reduced to between 38 and 41 Mt (68 and 72 Mt on a 100 per cent basis)
from between 39 and 44 Mt (70 and 78 Mt on a 100 per cent basis). The revision
is a result of significant La Nina related wet weather impacts during the
December 2021 quarter coupled with COVID-19 related labour constraints.
Workforce absenteeism arising from the COVID-19 Omicron variant is anticipated
to continue into the early part of the second half of the 2022 financial year.
Queensland Coal production decreased due to significant wet weather, with double
the amount of rainfall, coupled with COVID-19 related labour constraints
impacting stripping and mine productivity across most operations. A longwall
move was successfully executed at Broadmeadow and the Caval Ridge wash plant
maintenance was also completed on time during the December 2021 quarter.
Following the recent easing of Queensland's border restrictions, COVID-19
related absenteeism has increased and remains a risk for the remainder of the year.
Energy coal - Energy coal production increased by five per cent to 7 Mt.
Guidance for the 2022 financial year remains unchanged at between 13 and 15 Mt.
The divestment of our interest in Cerrejon was completed in January 2022 and
Cerrejon volumes are no longer included in energy coal guidance.
NSWEC production increased as a result of increased stripping volumes enabled by
continued truck productivity and mining in lower strip ratio areas, despite
increased rainfall and COVID-19 related impacts. High quality products now make
up approximately 80 per cent of sales compared to approximately 60 per cent of
sales in the prior period.
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BHP Operational Review for the 7
half year ended 31 December 2021
Other
Nickel production
Dec H21 Dec Q21 Dec Q21
vs vs vs
Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21
------- ------- ------- ------- -------
Nickel (kt)............ 39.3 21.5 (15%) (10%) 21%
Nickel - Nickel West production decreased by 15 per cent to 39 kt, reflecting
planned maintenance at the Kalgoorlie Smelter, Kwinana Refinery and the Leinster
and Kambalda concentrators in the September 2021 quarter, and planned asset
integrity work to support operational stability completed in the December 2021
quarter. Guidance for the 2022 financial year remains unchanged at between 85
and 95 kt, with volumes weighted towards the second half of the financial year.
The first batch of nickel sulphate crystals were produced in the September 2021
quarter and customer certification continues. First saleable production was
achieved in the December 2021 quarter.
Potash
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- -------------------------------------- ------------------------------------
Jansen Potash........... 2,972 CY27 Investment to finish the excavation The project is 98% complete.
(Canada) and lining of the production and Target project completion in CY22.
100% service shafts, and to continue the
installation of essential surface
infrastructure and utilities.
Jansen Stage 1.......... 5,723 CY27 Design, engineering and construction Approved in August 2021, project
(Canada) of an underground potash mine and is 3% complete
100% surface infrastructure, with capacity
to produce 4.35 Mtpa.
------------------------------------------------------------------------------------------------------------------------------
Minerals exploration
Minerals exploration expenditure for the December 2021 half year was US$110
million, of which US$80 million was expensed. We have continued to add to our
early stage options in future facing commodities. Greenfield minerals
exploration is being undertaken on advancing copper targets in Chile, Ecuador,
Mexico, Peru, Canada, Australia and the south-west United States. Nickel targets
are also being advanced in Canada and Australia. Specifically in copper, we are
undertaking target drilling in Chile, Ecuador and the United States while
further drilling is underway in Australia.
In October 2021, BHP executed its farm-in agreement for the early-stage
prospective Elliott copper project covering 7,200 km2 in the Northern Territory,
Australia. Under the terms of the agreement, BHP can earn up to 75 per cent
interest in Elliott by spending up to A$25 million over 10 years.
Also in October 2021, BHP exercised its option to form an exploration joint
venture with Red Tiger Resources for the Intercept Hill copper project, which
borders Oak Dam in South Australia.
At Oak Dam in South Australia, BHP is continuing next stage resource definition
drilling, after commencing the program in May 2021.
In December 2021, BHP advanced its early-stage nickel interests by investing in
the Kabanga Nickel Project (Kabanga), a high-quality nickel sulphide deposit in
Tanzania. Kabanga is a joint venture between Kabanga Nickel Limited (84 per cent
interest) and the Government of Tanzania (16 per cent).
--------------------------------------------------------------------------------
BHP Operational Review for the 8
half year ended 31 December 2021
Discontinued operations - Petroleum
Production
Dec H21 Dec Q21 Dec Q21
vs vs vs
Dec H21 Dec Q21 Dec H20 Dec Q20 Sep Q21
------- ------- ------- ------- -------
Crude oil, condensate and natural gas liquids (MMboe)... 25.1 12.3 13% 15% (3%)
Natural gas (bcf)....................................... 168.5 80.1 (1%) 2% (9%)
Total petroleum production (MMboe)...................... 53.2 25.7 5% 8% (7%)
BHP announced on 22 November 2021 a binding share sale agreement for the
proposed merger of BHP's oil and gas portfolio with Woodside. Completion of the
merger is expected in the June 2022 quarter subject to satisfaction of
conditions precedent including approval by Woodside shareholders. The effective
date of the merger is 1 July 2021. The half year financial results are being
prepared on the basis that BHP Petroleum is a discontinued operation.
Total petroleum production increased by 5 per cent to 53 MMboe. No further
guidance for the 2022 financial year will be provided for Petroleum given the
business will be presented as a discontinued operation. However, until merger
completion, we expect a production run rate broadly consistent with the original
2022 financial year production guidance of between 99 and 106 MMboe.
Crude oil, condensate and natural gas liquids production increased by 13 per
cent to 25 MMboe, reflecting the additional 28 percent working interest acquired
in Shenzi in November 2020, increased volumes from Ruby following first
production in May 2021, and lower impact from weather events in the Gulf of
Mexico, partially offset by natural field decline across the portfolio.
Natural gas production decreased by one per cent to 169 bcf, reflecting
decreased production at North West Shelf and natural field decline across the
portfolio, partially offset by increased volumes from Ruby and higher seasonal
demand for gas at Bass Strait.
Projects
Capital Initial
Project and expenditure production
ownership US$M target date Capacity Progress
----------- ----------- ----------- -------------------------------------- ---------------------------------------
Mad Dog Phase 2 2,154 Mid-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 97% complete.
23.9% (non-operator) gross barrels of oil equivalent per
day.
Shenzi North development 392 CY24 A two-well subsea tie-in to the On schedule and budget.
(US Gulf of Mexico) Shenzi platform, with the capacity to The overall project is 5% complete.
72% (operator) produce up to 30,000 gross barrels of
oil equivalent per day.
Scarborough 1,500 CY26 New upstream facilities designed to Sanctioned in November 2021.
(Western Australia) deliver daily gas quantities to On schedule and budget.
26.5% (non-operator) manufacture 8 Mtpa LNG and 180 TJ/day The overall project is 10% complete.
of domestic gas.
---------------------------------------------------------------------------------------------------------------------------------
On 22 November 2021, we announced the approval of US$1.5 billion in capital
expenditure for development of the Scarborough upstream project located in the
North Carnarvon Basin, Western Australia. The approved capital expenditure
represents BHP's 26.5 per cent participating interest in Phase 1 of the upstream
development. Final investment decisions have also been made by Woodside and the
Scarborough Joint Venture.
In the December 2021 quarter, we completed the Ruby project in Trinidad &
Tobago. The project was completed on schedule and within budget, and the Ruby
field is currently producing both oil and gas.
The Mad Dog Phase 2 project's semi-submersible platform, Argos, was towed to
final location in the US Gulf of Mexico and moored. Offshore execution of
construction and commissioning is in progress. First production from Mad Dog
Phase 2 is expected from mid-calendar year 2022.
In December 2021, we reached a commercial milestone with the Trion project in
Mexico with the filing of a Declaration of Commerciality with the National
Hydrocarbons Commission. As announced in August 2021, we have moved Trion into
the Front End Engineering Design (FEED) phase and work is progressing to plan.
Studies are underway, focused on completion of the engineering, commercial
arrangements and execution planning required to progress readiness for a Final
Investment Decision from mid-calendar year 2022.
--------------------------------------------------------------------------------
BHP Operational Review for the 9
half year ended 31 December 2021
Petroleum exploration
Exploration and appraisal wells drilled during the December 2021 quarter are
summarised below.
Water Total well
Well Location Target Formation age BHP equity Spud date depth depth Status
------------- ----------------- ------------ ------------- ---------- ---------------- --------- ------------- -------------------
Bongos-3X.... Trinidad & Tobago Gas Late Miocene 70% (BHP 27 July 2021 2,114 m 5,174 m Hydrocarbons
Block TTDAA 14 Operator) encountered
Bongos-3X.... Trinidad & Tobago Gas Late Miocene 70% (BHP 27 July 2021 2,114 m 5,169 m Hydrocarbons
ST01 Block TTDAA 14 Operator) encountered
Bongos-4..... Trinidad & Tobago Gas Late Miocene 70% (BHP 6 August 2021 2,177 m 5,163 m Hydrocarbons
Block TTDAA 14 Operator) encountered
Wasabi-1 Gulf of Mexico Oil Early Miocene 75% (BHP 7 October 2021 764 m 2,673 m Plugged and
GC124 Operator) abandoned
Wasabi-2 Gulf of Mexico Oil Early Miocene 75% (BHP 17 November 2021 764 m 6,895 m Drilling ahead/(i)/
GC124 Operator)
(i) Well depth and status as at 31 December 2021.
In Trinidad and Tobago, the Calypso appraisal drilling programme concluded on 20
December 2021. All wells encountered hydrocarbons. Bongos-3 confirmed volumes
downdip of prior penetrations and Bongos-4 established volumes in a new segment.
The well results are currently under evaluation and will be incorporated into
the development plan.
In the central Gulf of Mexico, the Wasabi-1 well encountered a mechanical
difficulty and was plugged and abandoned on 13 November 2021. Wasabi-2
(GC124-002) was spud on 17 November 2021 and drilling operations continue.
In Barbados, a 3D seismic survey was acquired in November 2021 over a portion of
the Bimshire and Carlisle Bay blocks(6). Processed data is expected to be
delivered in mid-calendar year 2022.
BHP has acquired interests in offshore exploration blocks in the Red Sea in
Egypt. In December 2021, the Minister of Energy in Egypt signed the Deed of
Assignment for Red Sea Block 1, finalising the assignment of a 45 per cent
participating interest from Chevron to BHP. The effective date of the transfer
is 12 September 2021. This follows a separate agreement with Shell in March 2021
for BHP to acquire a 30 and 25 per cent non-operated working interest in Egypt's
Red Sea Blocks 3 and 4, respectively. The effective date of BHP's participation
in Blocks 3 and 4 is pending final government approvals.
Petroleum exploration expenditure for the December 2021 half year was US$243
million, of which US$112 million was expensed. An approximately US$540 million
exploration and appraisal program is being executed for the 2022 financial year.
--------------------------------------------------------------------------------
BHP Operational Review for the 10
half year ended 31 December 2021
Variance analysis relates to the relative performance of BHP and/or its
operations during the December 2021 half year compared with the December 2020
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 is based on 2021 financial year average realised
prices.
The following footnotes apply to this Operational Review:
(1) 2022 financial year unit cost guidance: Escondida US$1.20-1.40/lb, WAIO
US$17.50-18.50/t, Queensland Coal US$85-94/t and NSWEC US$62-70/t; based on
exchange rates of AUD/USD 0.78 and USD/CLP 727.
(2) We announced the divestment of our interest in BMC in November 2021,
however will continue to report BMC production as part of Queensland Coal. We maintain
economic and operating control of BMC until the sale has completed.
(3) We have ceased providing Cerrejon production guidance due to the completion
of the divestment of our interest. The transaction has an effective
economic date of 31 December 2020 and volumes have been reported
separately.
(4) Excludes Petroleum production.
(5) 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).
(6) Permission for survey granted by the Barbados Ministry of Energy.
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 30 `Subsidiaries' in section 3.1 of BHP's 30 June 2021 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 the 11
half year ended 31 December 2021
Further information on BHP can be found at: bhp.com
Sponsor: UBS South Africa (Pty) Limited
Authorised for lodgement by:
Stefanie Wilkinson
Group Company Secretary
Media Relations Investor Relations
Email: media.relations@bhp.com Email: investor.relations@bhp.com
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Gabrielle Notley Dinesh Bishop
Tel: +61 3 9609 3830 Mobile: +61 411 071 715 Mobile: +61 407 033 909
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BHP Group Limited ABN 49 004 028 077 BHP Group plc Registration number 3196209
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--------------------------------------------------------------------------------
BHP Operational Review for the 12
half year ended 31 December 2021
Production summary
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2020 2021 2021 2021 2021 2021 2020
interest ------ ------- ------- ------ ------ ------- -------
Copper /(1)/
Copper
Payable metal in concentrate (kt)
Escondida /(2)/........................ 57.5% 236.7 202.7 195.6 194.7 196.2 390.9 473.4
Pampa Norte /(3)/...................... 100.0% 0.7 5.6 21.1 26.4 24.2 50.6 0.7
Antamina............................... 33.8% 38.6 34.7 36.1 35.8 38.4 74.2 73.2
------ ------- ------- ------ ------ ------- -------
Total.................................. 276.0 243.0 252.8 256.9 258.8 515.7 547.3
------ ------- ------- ------ ------ ------- -------
Cathode (kt)
Escondida /(2)/........................ 57.5% 50.9 46.6 51.1 49.0 48.4 97.4 98.8
Pampa Norte /(3)/...................... 100% 53.6 46.4 48.3 41.1 44.1 85.2 96.1
Olympic Dam............................ 100% 47.6 55.4 50.8 29.5 14.2 43.7 99.1
------ ------- ------- ------ ------ ------- -------
Total ................................. 152.1 148.4 150.2 119.6 106.7 226.3 294.0
------ ------- ------- ------ ------ ------- -------
------ ------- ------- ------ ------ ------- -------
Total copper (kt)......................... 428.1 391.4 403.0 376.5 365.5 742.0 841.3
------ ------- ------- ------ ------ ------- -------
Lead
Payable metal in concentrate (t)
Antamina............................... 33.8% 993 468 381 378 277 655 1,683
------ ------- ------- ------ ------ ------- -------
Total.................................. 993 468 381 378 277 655 1,683
------ ------- ------- ------ ------ ------- -------
Zinc
Payable metal in concentrate (t)
Antamina............................... 33.8% 41,909 33,299 35,483 33,289 29,603 62,892 76,307
------ ------- ------- ------ ------ ------- -------
Total.................................. 41,909 33,299 35,483 33,289 29,603 62,892 76,307
------ ------- ------- ------ ------ ------- -------
Gold
Payable metal in concentrate (troy oz)
Escondida /(2)/........................ 57.5% 47,789 37,954 38,893 41,962 42,937 84,899 90,121
Pampa Norte /(3)/...................... 100% -- -- 4,728 6,967 5,776 12,743 --
Olympic Dam (refined gold)............. 100% 23,837 37,075 48,478 26,277 37,805 64,082 60,445
------ ------- ------- ------ ------ ------- -------
Total.................................. 71,626 75,029 92,099 75,206 86,518 161,724 150,566
------ ------- ------- ------ ------ ------- -------
Silver
Payable metal in concentrate (troy koz)
Escondida /(2)/........................ 57.5% 1,627 1,318 1,234 1,291 1,462 2,753 3,207
Pampa Norte /(3)/...................... 100% -- -- 214 273 215 488 --
Antamina .............................. 33.8% 1,767 1,463 1,409 1,367 1,308 2,675 3,093
Olympic Dam (refined silver)........... 100% 193 275 185 191 258 449 350
------ ------- ------- ------ ------ ------- -------
Total.................................. 3,587 3,056 3,042 3,122 3,243 6,365 6,650
------ ------- ------- ------ ------ ------- -------
Uranium
Payable metal in concentrate (t)
Olympic Dam............................ 100% 945 834 614 531 287 818 1,819
------ ------- ------- ------ ------ ------- -------
Total.................................. 945 834 614 531 287 818 1,819
------ ------- ------- ------ ------ ------- -------
Molybdenum
Payable metal in concentrate (t)
Pampa Norte /(3)/...................... 100% -- -- -- -- -- -- --
Antamina............................... 33.8% 192 276 111 142 217 359 476
------ ------- ------- ------ ------ ------- -------
Total.................................. 192 276 111 142 217 359 476
------ ------- ------- ------ ------ ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for the 13
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------ ---------------
Dec Mar Jun Sep Dec Dec Dec
BHP 2020 2021 2021 2021 2021 2021 2020
interest ------ ------- ------- ------ ------ ------- -------
Iron Ore
Iron Ore
Production (kt) /(4)/
Newman................................. 85% 17,637 14,614 14,560 16,461 14,577 31,038 34,047
Area C Joint Venture................... 85% 11,567 13,010 15,920 18,947 22,911 41,858 23,456
Yandi Joint Venture.................... 85% 16,413 16,112 18,405 11,834 12,261 24,095 34,079
Jimblebar /(5)/........................ 85% 16,740 15,241 15,337 15,009 15,324 30,333 36,815
Samarco................................ 50% 37 878 1,023 1,048 1,029 2,077 37
------ ------- ------- ------ ------ ------- -------
Total.................................. 62,394 59,855 65,245 63,299 66,102 129,401 128,434
------ ------- ------- ------ ------ ------- -------
Coal
Metallurgical coal
Production (kt) /(6)/
BMA.................................... 50% 7,539 7,727 9,253 6,715 6,300 13,015 14,904
BHP Mitsui Coal /(7)//(8)/............. 80% 1,983 1,863 2,570 2,135 2,518 4,653 4,308
------ ------- ------- ------ ------ ------- -------
Total.................................. 9,522 9,590 11,823 8,850 8,818 17,668 19,212
------ ------- ------- ------ ------ ------- -------
Energy coal
Production (kt)
NSW Energy Coal........................ 100% 3,229 2,981 4,492 4,238 2,967 7,205 6,853
------ ------- ------- ------ ------ ------- -------
Total.................................. 3,229 2,981 4,492 4,238 2,967 7,205 6,853
------ ------- ------- ------ ------ ------- -------
Production (kt)
Cerrejon............................... 33.3% 347 1,795 1,784 2,060 2,176 4,236 1,385
------ ------- ------- ------ ------ ------- -------
Total.................................. 347 1,795 1,784 2,060 2,176 4,236 1,385
------ ------- ------- ------ ------ ------- -------
Other
Nickel
Saleable production (kt)
Nickel West............................ 100% 24.0 20.4 22.4 17.8 21.5 39.3 46.2
------ ------- ------- ------ ------ ------- -------
Total.................................. 24.0 20.4 22.4 17.8 21.5 39.3 46.2
------ ------- ------- ------ ------ ------- -------
Cobalt
Saleable production (t)
Nickel West............................ 100% 236 273 241 177 220 397 474
------ ------- ------- ------ ------ ------- -------
Total.................................. 236 273 241 177 220 397 474
------ ------- ------- ------ ------ ------- -------
Discontinued operations
Petroleum /(9)/
Production
Crude oil, condensate and NGL (Mboe)... 10,729 11,601 12,205 12,751 12,345 25,096 22,236
Natural gas (bcf)...................... 78.5 82.6 88.6 88.4 80.1 168.5 169.4
------ ------- ------- ------ ------ ------- -------
Total (Mboe)........................... 23,812 25,368 26,972 27,484 25,695 53,179 50,469
------ ------- ------- ------ ------ ------- -------
(1) Metal production is reported on the basis of payable metal.
(2) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
(3) Includes Cerro Colorado and Spence.
(4) Iron ore production is reported on a wet tonnes basis.
(5) Shown on a 100% basis. BHP interest in saleable production is 85%.
(6) Metallurgical coal production is reported on the basis of saleable product.
Production figures include some thermal coal.
(7) Shown on a 100% basis. BHP interest in saleable production is 80%.
(8) We announced the divestment of our interest in BHP Mitsui Coal (BMC) in
November 2021, but will continue to report BMC as part of Queensland Coal
as we maintain economic and operating control of BMC until the sale has
completed.
(9) 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.
Throughout this report figures in italics indicate that this figure has been
adjusted since it was previously reported.
--------------------------------------------------------------------------------
BHP Operational Review for the 14
half year ended 31 December 2021
Production and sales report
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile /(1)/
Material mined................................. (kt) 97,274 95,978 104,043 113,874 117,284 231,158 180,631
Concentrator throughput........................ (kt) 36,303 32,654 31,903 33,528 35,787 69,315 71,036
Average copper grade - concentrator............ (%) 0.83% 0.78% 0.77% 0.73% 0.71% 0.72% 0.84%
Production ex mill............................. (kt) 246.1 207.8 202.8 201.2 203.6 404.8 490.0
Production
Payable copper................................. (kt) 236.7 202.7 195.6 194.7 196.2 390.9 473.4
Copper cathode (EW)............................ (kt) 50.9 46.6 51.1 49.0 48.4 97.4 98.8
- Oxide leach................................. (kt) 18.0 16.1 14.5 14.8 13.1 27.9 33.3
- Sulphide leach.............................. (kt) 32.9 30.5 36.6 34.2 35.3 69.5 65.5
------- ------- ------- ------- ------- ------- -------
Total copper................................... (kt) 287.6 249.3 246.7 243.7 244.6 488.3 572.2
------- ------- ------- ------- ------- ------- -------
Payable gold concentrate....................... (troy oz) 47,789 37,954 38,893 41,962 42,937 84,899 90,121
Payable silver concentrate..................... (troy koz) 1,627 1,318 1,234 1,291 1,462 2,753 3,207
Sales
Payable copper................................. (kt) 244.3 196.9 194.1 190.5 200.2 390.7 481.4
Copper cathode (EW)............................ (kt) 47.7 49.6 49.6 46.7 49.7 96.4 94.2
Payable gold concentrate....................... (troy oz) 47,789 37,954 38,893 41,962 42,937 84,899 90,121
Payable silver concentrate..................... (troy koz) 1,627 1,318 1,234 1,291 1,462 2,753 3,207
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Pampa Norte, Chile
Cerro Colorado
Material mined................................. (kt) 6,750 6,153 5,498 5,378 4,782 10,160 19,368
Ore stacked.................................... (kt) 3,562 3,283 3,702 3,566 4,029 7,595 7,598
Average copper grade - stacked................. (%) 0.58% 0.58% 0.58% 0.60% 0.62% 0.61% 0.62%
Production
Copper cathode (EW)............................ (kt) 15.8 13.9 14.7 13.4 15.3 28.7 31.6
Sales
Copper cathode (EW)............................ (kt) 16.6 13.2 15.4 12.1 16.0 28.1 31.2
Spence
Material mined................................. (kt) 18,485 19,195 21,262 21,154 24,025 45,179 36,745
Ore stacked.................................... (kt) 5,602 5,536 4,609 5,258 5,071 10,329 10,010
Average copper grade - stacked................. (%) 0.83% 0.64% 0.72% 0.64% 0.66% 0.65% 0.95%
Concentrator throughput........................ (kt) 1,207 2,471 4,929 5,786 6,234 12,020 1,207
Average copper grade - concentrator............ (%) -- 0.58% 0.63% 0.65% 0.60% 0.62% --
Production
Payable copper................................. (kt) 0.7 5.6 21.1 26.4 24.2 50.6 0.7
Copper cathode (EW)............................ (kt) 37.8 32.5 33.6 27.7 28.8 56.5 64.5
------- ------- ------- ------- ------- ------- -------
Total copper................................... (kt) 38.5 38.1 54.7 54.1 53.0 107.1 65.2
------- ------- ------- ------- ------- ------- -------
Payable gold concentrate....................... (troy oz) -- -- 4,728 6,967 5,776 12,743 --
Payable silver concentrate..................... (troy koz) -- -- 214 273 215 488 --
Payable molybdenum............................. (t) -- -- -- -- -- -- --
Sales
Payable copper................................. (kt) -- 1.8 20.8 28.4 24.9 53.3 --
Copper cathode (EW)............................ (kt) 40.9 30.7 34.1 27.7 31.2 58.9 65.0
Payable gold concentrate....................... (troy oz) -- -- 4,728.0 6,967.0 5,776 12,743 --
Payable silver concentrate..................... (troy koz) -- -- 214.0 273.0 215 488 --
Payable molybdenum............................. (t) -- -- -- -- -- -- --
--------------------------------------------------------------------------------
BHP Operational Review for the 15
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%).......................... (kt) 57,029 53,762 63,393 66,581 58,179 124,760 102,487
Concentrator throughput (100%)................. (kt) 14,083 12,651 13,466 13,219 13,011 26,230 27,285
Average head grades
- Copper...................................... (%) 0.97% 0.94% 0.93% 0.97% 1.00% 0.98% 0.96%
- Zinc........................................ (%) 1.30% 1.16% 1.24% 1.16% 1.11% 1.14% 1.30%
Production
Payable copper................................. (kt) 38.6 34.7 36.1 35.8 38.4 74.2 73.2
Payable zinc................................... (t) 41,909 33,299 35,483 33,289 29,603 62,892 76,307
Payable silver................................. (troy koz) 1,767 1,463 1,409 1,367 1,308 2,675 3,093
Payable lead................................... (t) 993 468 381 378 277 655 1,683
Payable molybdenum............................. (t) 192 276 111 142 217 359 476
Sales
Payable copper................................. (kt) 40.7 31.7 37.3 32.7 41.9 74.6 74.5
Payable zinc................................... (t) 45,109 34,141 32,044 32,635 32,513 65,148 77,878
Payable silver................................. (troy koz) 1,728 1,342 1,540 1,103 1,405 2,508 3,038
Payable lead................................... (t) 945 689 556 232 344 576 1,693
Payable molybdenum............................. (t) 352 192 268 86 170 256 744
Olympic Dam, Australia
Material mined /(1)/........................... (kt) 2,379 1,979 2,143 1,935 1,998 3,933 4,582
Ore Milled..................................... (kt) 2,377 2,238 2,429 2,024 1,105 3,129 4,820
Average copper grade........................... (%) 2.01% 2.02% 1.95% 2.03% 2.17% 2.08% 2.02%
Average uranium grade.......................... (kg/t) 0.60 0.61 0.56 0.55 0.55 0.55 0.56
Production
Copper cathode (ER and EW)..................... (kt) 47.6 55.4 50.8 29.5 14.2 43.7 99.1
Payable uranium................................ (t) 945 834 614 531 287 818 1,819
Refined gold................................... (troy oz) 23,837 37,075 48,478 26,277 37,805 64,082 60,445
Refined silver................................. (troy koz) 193 275 185 191 258 449 350
Sales
Copper cathode (ER and EW)..................... (kt) 46.6 55.6 52.7 29.1 17.9 47.0 96.1
Payable uranium................................ (t) 999 779 1,179 536 541 1,077 1,858
Refined gold................................... (troy oz) 21,390 38,852 47,300 24,654 38,768 63,422 57,444
Refined silver................................. (troy koz) 165 242 245 126 290 416 387
(1) Material mined refers to underground ore mined, subsequently hoisted or
trucked to surface.
--------------------------------------------------------------------------------
BHP Operational Review for the 16
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Iron Ore
Iron ore production and sales are reported on a wet tonnes basis.
Western Australia Iron Ore, Australia
Production
Newman......................................... (kt) 17,637 14,614 14,560 16,461 14,577 31,038 34,047
Area C Joint Venture........................... (kt) 11,567 13,010 15,920 18,947 22,911 41,858 23,456
Yandi Joint Venture............................ (kt) 16,413 16,112 18,405 11,834 12,261 24,095 34,079
Jimblebar /(1)/................................ (kt) 16,740 15,241 15,337 15,009 15,324 30,333 36,815
Wheelarra...................................... (kt) -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total production............................... (kt) 62,357 58,977 64,222 62,251 65,073 127,324 128,397
------- ------- ------- ------- ------- ------- -------
Total production (100%)........................ (kt) 70,407 66,695 72,848 70,587 73,852 144,439 144,559
------- ------- ------- ------- ------- ------- -------
Sales
Lump........................................... (kt) 16,703 15,593 16,410 17,546 17,827 35,373 33,759
Fines.......................................... (kt) 46,124 42,939 48,837 45,039 46,809 91,848 94,514
------- ------- ------- ------- ------- ------- -------
Total.......................................... (kt) 62,827 58,532 65,247 62,585 64,636 127,221 128,273
------- ------- ------- ------- ------- ------- -------
Total sales (100%)............................. (kt) 70,772 66,032 73,712 70,815 73,222 144,037 144,127
------- ------- ------- ------- ------- ------- -------
(1) Shown on a 100% basis. BHP interest in saleable production is 85%.
Samarco, Brazil /(1)/
Production..................................... (kt) 37 878 1,023 1,048 1,029 2,077 37
Sales.......................................... (kt) -- 646 1,052 1,111 950 2,061 --
(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 the 17
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Coal
Coal production is reported on the basis of saleable product.
Queensland Coal, Australia
Production /(1)/
BMA
Blackwater..................................... (kt) 1,737 1,416 1,887 1,403 1,202 2,605 2,921
Goonyella...................................... (kt) 2,152 2,232 2,752 1,798 1,797 3,595 4,464
Peak Downs..................................... (kt) 1,213 1,595 1,597 1,223 960 2,183 2,700
Saraji......................................... (kt) 1,043 1,238 1,391 999 1,081 2,080 1,860
Daunia......................................... (kt) 464 496 478 377 304 681 954
Caval Ridge.................................... (kt) 930 750 1,148 915 956 1,871 2,005
------- ------- ------- ------- ------- ------- -------
Total BMA...................................... (kt) 7,539 7,727 9,253 6,715 6,300 13,015 14,904
------- ------- ------- ------- ------- ------- -------
Total BMA (100%)............................... (kt) 15,078 15,454 18,506 13,430 12,600 26,030 29,808
------- ------- ------- ------- ------- ------- -------
BHP Mitsui Coal /(2)/ /(3)/
South Walker Creek............................. (kt) 1,118 1,031 1,500 1,462 1,535 2,997 2,356
Poitrel........................................ (kt) 865 832 1,070 673 983 1,656 1,952
------- ------- ------- ------- ------- ------- -------
Total BHP Mitsui Coal.......................... (kt) 1,983 1,863 2,570 2,135 2,518 4,653 4,308
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal.......................... (kt) 9,522 9,590 11,823 8,850 8,818 17,668 19,212
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal (100%)................... (kt) 17,061 17,317 21,076 15,565 15,118 30,683 34,116
------- ------- ------- ------- ------- ------- -------
Sales
BMA
Coking coal.................................... (kt) 6,531 6,752 7,801 5,415 4,875 10,290 12,718
Weak coking coal............................... (kt) 936 1,038 1,069 734 754 1,488 1,913
Thermal coal................................... (kt) 3 206 400 576 455 1,031 61
------- ------- ------- ------- ------- ------- -------
Total BMA...................................... (kt) 7,470 7,996 9,270 6,725 6,084 12,809 14,692
------- ------- ------- ------- ------- ------- -------
Total BMA (100%)............................... (kt) 14,940 15,992 18,540 13,450 12,168 25,618 29,384
------- ------- ------- ------- ------- ------- -------
BHP Mitsui Coal /(2)/ /(3)/
Coking coal.................................... (kt) 604 357 535 313 458 771 1,275
Weak coking coal............................... (kt) 1,518 1,404 2,027 1,788 1,812 3,600 3,063
Thermal coal................................... (kt) -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total BHP Mitsui Coal.......................... (kt) 2,122 1,761 2,562 2,101 2,270 4,371 4,338
------- ------- ------- ------- ------- ------- -------
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal.......................... (kt) 9,592 9,757 11,832 8,826 8,354 17,180 19,030
------- ------- ------- ------- ------- ------- -------
Total Queensland Coal (100%)................... (kt) 17,062 17,753 21,102 15,551 14,438 29,989 33,722
------- ------- ------- ------- ------- ------- -------
(1) Production figures include some thermal coal.
(2) Shown on a 100% basis. BHP interest in saleable production is 80%.
(3) We announced the divestment of our interest in BHP Mitsui Coal (BMC) in
November 2021, but will continue to report BMC as part of Queensland Coal
as we maintain economic and operating control of BMC until the sale has
completed.
NSW Energy Coal, Australia
Production..................................... (kt) 3,229 2,981 4,492 4,238 2,967 7,205 6,853
Sales
Sales thermal coal - export.................... (kt) 3,940 2,827 4,691 3,780 3,718 7,498 7,108
Inland thermal coal /(1)/...................... (kt) -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total.......................................... (kt) 3,940 2,827 4,691 3,780 3,718 7,498 7,108
------- ------- ------- ------- ------- ------- -------
(1) The domestic sales contract ended in the September 2019 quarter.
Cerrejon, Colombia
Production..................................... (kt) 347 1,795 1,784 2,060 2,176 4,236 1,385
Sales thermal coal - export.................... (kt) 370 1,746 1,619 2,180 2,012 4,192 1,364
--------------------------------------------------------------------------------
BHP Operational Review for the 18
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Other
Nickel production is reported on the basis of saleable product
Nickel West, Australia
Mt Keith
Nickel concentrate............................. (kt) 55.7 54.1 50.4 53.7 47.0 100.7 120.1
Average nickel grade........................... (%) 14.7 13.3 13.3 14.6 13.2 13.9 15.3
Leinster
Nickel concentrate............................. (kt) 72.8 71.5 71.4 73.8 77.4 151.2 139.0
Average nickel grade........................... (%) 9.5 10.2 10.5 8.9 9.1 9.0 9.3
Saleable production
Refined nickel /(1)/........................... (kt) 20.4 15.2 17.1 14.4 18.2 32.6 37.7
Nickel sulphate /(2)/.......................... (kt) -- -- -- -- 0.4 0.4 --
Intermediates and nickel by-products /(3)/..... (kt) 3.6 5.2 5.3 3.4 2.9 6.3 8.5
------- ------- ------- ------- ------- ------- -------
Total nickel................................... (kt) 24.0 20.4 22.4 17.8 21.5 39.3 46.2
------- ------- ------- ------- ------- ------- -------
Cobalt by-products............................. (t) 236 273 241 177 220 397 474
Sales
Refined nickel /(1)/........................... (kt) 20.9 15.0 17.8 13.8 16.9 30.7 38.0
Nickel sulphate /(2)/.......................... (kt) -- -- -- -- 0.1 0.1 --
Intermediates and nickel by-products /(3)/..... (kt) 2.6 5.9 4.0 3.9 3.1 7.0 7.2
------- ------- ------- ------- ------- ------- -------
Total nickel................................... (kt) 23.5 20.9 21.8 17.7 20.1 37.8 45.2
------- ------- ------- ------- ------- ------- -------
Cobalt by-products............................. (t) 237 273 241 177 220 397 475
(1) High quality refined nickel metal, including briquettes and powder.
(2) Nickel sulphate crystals produced from nickel powder.
(3) Nickel contained in matte and by-product streams.
--------------------------------------------------------------------------------
BHP Operational Review for the 19
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Discontinued operations
Petroleum /(1)/
Bass Strait
Crude oil and condensate....................... (Mboe) 1,003 859 1,205 1,201 971 2,172 2,308
NGL............................................ (Mboe) 1,057 1,035 1,563 1,655 1,140 2,795 2,717
Natural gas.................................... (bcf) 23.4 22.7 32.8 35.8 25.8 61.6 57.5
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 5,960 5,677 8,235 8,823 6,411 15,234 14,608
------- ------- ------- ------- ------- ------- -------
North West Shelf
Crude oil and condensate....................... (Mboe) 1,180 1,183 933 973 1,027 2,000 2,395
NGL............................................ (Mboe) 165 188 177 148 180 328 327
Natural gas.................................... (bcf) 30.4 31.1 26.5 24.3 25.8 50.1 60.0
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 6,412 6,554 5,527 5,171 5,507 10,678 12,722
------- ------- ------- ------- ------- ------- -------
Pyrenees
Crude oil and condensate....................... (Mboe) 826 679 690 710 723 1,433 1,663
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 826 679 690 710 723 1,433 1,663
------- ------- ------- ------- ------- ------- -------
Macedon
Crude oil and condensate....................... (Mboe) 1 1 -- 1 1 2 2
Natural gas.................................... (bcf) 12.6 12.4 12.6 12.7 12.6 25.3 25.3
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 2,101 2,068 2,100 2,118 2,101 4,219 4,219
------- ------- ------- ------- ------- ------- -------
Atlantis /(2)/
Crude oil and condensate....................... (Mboe) 2,385 2,590 3,117 3,171 3,222 6,393 4,806
NGL............................................ (Mboe) 147 171 218 222 186 408 301
Natural gas.................................... (bcf) 1.1 1.4 1.6 1.7 1.5 3.2 2.3
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 2,715 2,994 3,602 3,676 3,658 7,334 5,490
------- ------- ------- ------- ------- ------- -------
Mad Dog /(2)/
Crude oil and condensate....................... (Mboe) 930 1,209 1,099 1,155 1,137 2,292 2,141
NGL............................................ (Mboe) 38 57 77 46 56 102 86
Natural gas.................................... (bcf) 0.1 0.2 0.2 0.2 0.1 0.3 0.3
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 985 1,299 1,209 1,234 1,210 2,444 2,277
------- ------- ------- ------- ------- ------- -------
Shenzi /(2)//(3)/
Crude oil and condensate....................... (Mboe) 1,764 2,328 2,023 2,016 2,335 4,351 3,159
NGL............................................ (Mboe) 87 130 87 102 134 236 158
Natural gas.................................... (bcf) 0.3 0.4 0.1 0.4 0.4 0.8 0.6
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 1,901 2,525 2,127 2,185 2,536 4,721 3,417
------- ------- ------- ------- ------- ------- -------
Trinidad/Tobago
Crude oil and condensate....................... (Mboe) 96 139 236 491 396 887 198
Natural gas.................................... (bcf) 10.5 14.4 14.7 13.3 13.9 27.2 23.3
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 1,846 2,539 2,686 2,708 2,713 5,421 4,081
------- ------- ------- ------- ------- ------- -------
Other Americas /(2)//(4)/
Crude oil and condensate....................... (Mboe) 190 187 104 83 81 164 402
NGL............................................ (Mboe) 11 -- 8 3 -- 3 13
Natural gas.................................... (bcf) 0.1 -- 0.1 -- -- -- 0.1
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 218 187 129 86 81 167 432
------- ------- ------- ------- ------- ------- -------
Algeria
Crude oil and condensate....................... (Mboe) 849 845 668 774 756 1,530 1,560
------- ------- ------- ------- ------- ------- -------
Total petroleum products....................... (Mboe) 849 845 668 774 756 1,530 1,560
------- ------- ------- ------- ------- ------- -------
--------------------------------------------------------------------------------
BHP Operational Review for the 20
half year ended 31 December 2021
Quarter ended Year to date
------------------------------------------- ----------------
Dec Mar Jun Sep Dec Dec Dec
2020 2021 2021 2021 2021 2021 2020
------- ------- ------- ------- ------- ------- -------
Discontinued operations (continued)
Petroleum /(1)/
Total production
Crude oil and condensate....................... (Mboe) 9,224 10,020 10,075 10,575 10,649 21,224 18,634
NGL............................................ (Mboe) 1,505 1,581 2,130 2,176 1,696 3,872 3,602
Natural gas.................................... (bcf) 78.5 82.6 88.6 88.4 80.1 168.5 169.4
------- ------- ------- ------- ------- ------- -------
Total.......................................... (Mboe) 23,812 25,368 26,972 27,484 25,695 53,179 50,469
------- ------- ------- ------- ------- ------- -------
(1) Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe.
Negative production figures represent finalisation adjustments.
(2) Gulf of Mexico volumes are net of royalties.
(3) BHP completed the acquisition of an additional 28% working interest in
Shenzi on 6 November 2020, taking its total working interest to 72%.
(4) Other Americas includes Neptune, Genesis and Overriding Royalty Interest.
(5) BHP completed the sale of its interest in the Bruce and Keith oil and gas
fields on 30 November 2018. The sale has an effective date of 1 January
2018.
--------------------------------------------------------------------------------
BHP Operational Review for the 21
half year ended 31 December 2021
BHP
Attachment 1
Restated financial information
For the year ended 30 June 2021 and the half year ended 31 December 2020
--------------------------------------------------------------------------------
Contents
Restated financial information Page
Basis of preparation of restated financial information..................... 24
Consolidated Income Statement - Restated................................... 25
Consolidated Statement of Comprehensive Income............................. 25
Consolidated Balance Sheet................................................. 26
Consolidated Cash Flow Statement - Restated................................ 27
Consolidated Statement of Changes in Equity................................ 28
Restated supplementary financial information............................... 29
--------------------------------------------------------------------------------
BHP Operational Review for the 23
half year ended 31 December 2021
Basis of preparation of restated financial information
This financial information for the year ended 30 June 2021 and the half year
ended 31 December 2020 for the Group is not audited and has been prepared to
restate previously published information for the effects of applying IFRS 5/AASB
5 `Non-current Assets Held for Sale and Discontinued Operations' to the Group's
Petroleum business.
On 22 November 2021, the Group and Woodside Petroleum Ltd (`Woodside') signed a
binding share sale agreement (SSA) for the merger of the Group's oil and gas
portfolio with Woodside (`Merger'). The merger, which has an effective date of 1
July 2021, is subject to satisfaction of conditions precedent by 30 June 2022 or
an agreed later date including shareholder, regulatory and other approvals.
Prior to completion, the Group will carry on its Petroleum business in the
normal course and, while the effective date at which the right to net cash flows
transferred to Woodside was 1 July 2021, the Group continues to control its
Petroleum assets until the completion date of the transaction.
As such, the Group will continue to recognise its share of revenue, expenses,
net finance costs and associated income tax expense related to the operation
until the completion date. However, as at 31 December 2021, the Petroleum
business will be classified as a disposal group held for sale and as a
discontinued operation.
The nature of each change reflected in the attached restated financial
information is as follows:
. All income and expense items relating to the Petroleum Discontinued
Operation have been removed from the individual line items in the
Consolidated Income Statement. The post-tax loss of the Petroleum
Discontinued Operation is presented as a single amount in the line item
titled "Loss after taxation from Discontinued operations"; and
. All cash flows and other items relating to the Petroleum Discontinued
Operation have been removed from the individual line items in the
Consolidated Cash Flow Statement. The net cash flows attributable to the
operating, investing and financing activities of the Petroleum Discontinued
Operation are each disclosed in single amounts in each section of the
Consolidated Cash Flow Statement.
The Consolidated Balance Sheet, the Consolidated Statement of Comprehensive
Income and the Consolidated Statement of Changes in Equity for these periods are
not required to be restated.
--------------------------------------------------------------------------------
BHP Operational Review for the 24
half year ended 31 December 2021
Consolidated Income Statement - Restated
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
----------- ------------
Continuing operations
Revenue........................................................................ 24,044 56,921
Other income................................................................... 136 380
Expenses excluding net finance costs........................................... (13,821) (30,871)
Loss from equity accounted investments, related impairments and expenses....... (470) (915)
----------- ------------
Profit from operations......................................................... 9,889 25,515
----------- ------------
Financial expenses............................................................. (922) (1,290)
Financial income............................................................... 46 67
----------- ------------
Net finance costs.............................................................. (876) (1,223)
----------- ------------
Profit before taxation......................................................... 9,013 24,292
----------- ------------
Income tax expense............................................................. (3,965) (10,376)
Royalty-related taxation (net of income tax benefit)........................... (28) (240)
----------- ------------
Total taxation expense......................................................... (3,993) (10,616)
----------- ------------
Profit after taxation from Continuing operations .............................. 5,020 13,676
----------- ------------
Discontinued operations
Loss after taxation from Discontinued operations............................... (192) (225)
----------- ------------
Profit after taxation from Continuing and Discontinued operations.............. 4,828 13,451
----------- ------------
Attributable to non-controlling interests................................... 952 2,147
Attributable to BHP shareholders............................................ 3,876 11,304
----------- ------------
Basic earnings per ordinary share (cents)...................................... 76.6 223.5
Diluted earnings per ordinary share (cents).................................... 76.5 223.0
Basic earnings from Continuing operations per ordinary share (cents)........... 80.4 228.0
Diluted earnings from Continuing operations per ordinary share (cents)......... 80.3 227.5
----------- ------------
Consolidated Statement of Comprehensive Income
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
----------- ------------
Profit after taxation from Continuing and Discontinued operations.............. 4,828 13,451
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Hedges:
Gains taken to equity....................................................... 1,074 863
Gains transferred to the income statement................................... (1,000) (837)
Exchange fluctuations on translation of foreign operations taken to equity..... -- 5
Tax recognised within other comprehensive income .............................. (22) (8)
----------- ------------
Total items that may be reclassified subsequently to the income statement...... 52 23
----------- ------------
Items that will not be reclassified to the income statement:
Re-measurement (losses)/gains on pension and medical schemes................... (4) 58
Equity investments held at fair value.......................................... 2 (2)
Tax recognised within other comprehensive income............................... 1 (20)
----------- ------------
Total items that will not be reclassified to the income statement.............. (1) 36
----------- ------------
Total other comprehensive income............................................... 51 59
----------- ------------
Total comprehensive income..................................................... 4,879 13,510
----------- ------------
Attributable to non-controlling interests................................... 953 2,158
Attributable to BHP shareholders............................................ 3,926 11,352
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 25
half year ended 31 December 2021
Consolidated Balance Sheet
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
----------- ------------
ASSETS
Current assets
Cash and cash equivalents...................................................... 9,291 15,246
Trade and other receivables.................................................... 4,573 6,059
Other financial assets......................................................... 227 230
Inventories.................................................................... 4,511 4,426
Assets held for sale........................................................... -- 324
Current tax assets............................................................. 295 279
Other.......................................................................... 113 129
----------- ------------
Total current assets........................................................... 19,010 26,693
----------- ------------
Non-current assets
Trade and other receivables.................................................... 270 337
Other financial assets......................................................... 2,269 1,610
Inventories.................................................................... 1,159 1,358
Property, plant and equipment.................................................. 73,711 73,813
Intangible assets.............................................................. 1,508 1,437
Investments accounted for using the equity method.............................. 2,094 1,742
Deferred tax assets............................................................ 3,178 1,912
Other.......................................................................... 34 25
----------- ------------
Total non-current assets....................................................... 84,223 82,234
----------- ------------
Total assets................................................................... 103,233 108,927
----------- ------------
LIABILITIES
Current liabilities
Trade and other payables....................................................... 5,663 7,027
Interest bearing liabilities................................................... 3,560 2,628
Liabilities directly associated with the assets held for sale.................. -- 17
Other financial liabilities.................................................... 237 130
Current tax payable............................................................ 1,184 2,800
Provisions..................................................................... 2,631 3,696
Deferred income................................................................ 86 105
----------- ------------
Total current liabilities...................................................... 13,361 16,403
----------- ------------
Non-current liabilities
Interest bearing liabilities................................................... 19,159 18,355
Other financial liabilities.................................................... 1,187 1,146
Non-current tax payable........................................................ 173 120
Deferred tax liabilities....................................................... 3,603 3,314
Provisions..................................................................... 12,128 13,799
Deferred income................................................................ 199 185
----------- ------------
Total non-current liabilities.................................................. 36,449 36,919
----------- ------------
Total liabilities.............................................................. 49,810 53,322
----------- ------------
Net assets..................................................................... 53,423 55,605
----------- ------------
EQUITY
Share capital - BHP Group Limited.............................................. 1,111 1,111
Share capital - BHP Group Plc.................................................. 1,057 1,057
Treasury shares................................................................ (30) (33)
Reserves....................................................................... 2,335 2,350
Retained earnings.............................................................. 44,449 46,779
----------- ------------
Total equity attributable to BHP shareholders.................................. 48,922 51,264
Non-controlling interests...................................................... 4,501 4,341
----------- ------------
Total equity................................................................... 53,423 55,605
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 26
half year ended 31 December 2021
Consolidated Cash Flow Statement - Restated
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
----------- ------------
Operating activities
Profit before taxation from Continuing operations.............................. 9,013 24,292
Adjustments for:
Depreciation and amortisation expense....................................... 2,405 5,084
Impairments of property, plant and equipment, financial assets
and intangibles.......................................................... 629 2,507
Net finance costs........................................................... 876 1,223
Loss from equity accounted investments, related impairments and expenses.... 470 915
Other....................................................................... 294 573
Changes in assets and liabilities:
Trade and other receivables................................................. (1,049) (2,389)
Inventories................................................................. (296) (405)
Trade and other payables.................................................... 45 1,149
Provisions and other assets and liabilities................................. (59) 486
----------- ------------
Cash generated from operations................................................. 12,328 33,435
Dividends received............................................................. 355 728
Interest received.............................................................. 60 97
Interest paid.................................................................. (447) (766)
Settlement of cash management related instruments.............................. (202) (401)
Net income tax and royalty-related taxation refunded........................... 47 222
Net income tax and royalty-related taxation paid............................... (2,993) (7,432)
----------- ------------
Net operating cash flows from Continuing operations............................ 9,148 25,883
----------- ------------
Net operating cash flows from Discontinued operations.......................... 221 1,351
----------- ------------
Net operating cash flows....................................................... 9,369 27,234
----------- ------------
Investing activities
Purchases of property, plant and equipment..................................... (2,835) (5,612)
Exploration expenditure........................................................ (86) (192)
Exploration expenditure expensed and included in operating cash flows.......... 56 134
Net investment and funding of equity accounted investments..................... (361) (553)
Proceeds from sale of assets................................................... 86 158
Other investing................................................................ (89) (260)
----------- ------------
Net investing cash flows from Continuing operations............................ (3,229) (6,325)
----------- ------------
Net investing cash flows from Discontinued operations.......................... (980) (1,520)
----------- ------------
Net investing cash flows....................................................... (4,209) (7,845)
----------- ------------
Financing activities
Proceeds from interest bearing liabilities..................................... 218 568
Proceeds from debt related instruments......................................... 90 167
Repayment of interest bearing liabilities...................................... (6,181) (8,357)
Purchase of shares by Employee Share Ownership Plan (ESOP) trusts.............. (174) (234)
Dividends paid................................................................. (2,767) (7,901)
Dividends paid to non-controlling interests.................................... (762) (2,127)
----------- ------------
Net financing cash flows from Continuing operations............................ (9,576) (17,884)
----------- ------------
Net financing cash flows from Discontinued operations.......................... (19) (38)
----------- ------------
Net financing cash flows....................................................... (9,595) (17,922)
----------- ------------
Net (decrease)/increase in cash and cash equivalents from Continuing
operations.................................................................. (3,657) 1,674
Net decrease in cash and cash equivalents from Discontinued operations......... (778) (207)
Cash and cash equivalents, net of overdrafts, at the beginning of the
financial year.............................................................. 13,426 13,426
Foreign currency exchange rate changes on cash and cash equivalents............ 300 353
----------- ------------
Cash and cash equivalents, net of overdrafts, at the end of period............. 9,291 15,246
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 27
half year ended 31 December 2021
Consolidated Statement of Changes in Equity for the half year ended 31 December
2020 and the year ended 30 June 2021
Attributable to BHP shareholders
--------------------------------------------------------------
Share capital Treasury shares
--------------- ---------------
Total equity
BHP BHP BHP BHP attributable Non-
Group Group Group Group Retained to BHP controlling Total
US$M Limited Plc Limited Plc Reserves earnings shareholders interests equity
---- ------- ------- ------- ------- -------- -------- ------------ ----------- --------
Balance as at 1 July 2020.............. 1,111 1,057 (5) -- 2,306 43,396 47,865 4,310 52,175
Total comprehensive income............. -- -- -- -- 53 3,873 3,926 953 4,879
Transactions with owners:
Purchase of shares by ESOP Trusts...... -- -- (171) (3) -- -- (174) -- (174)
Employee share awards exercised net
of employee contributions net
of tax.............................. -- -- 147 2 (106) (43) -- -- --
Vested employee share awards that have
lapsed, been cancelled or
forfeited........................... -- -- -- -- (2) 2 -- -- --
Accrued employee entitlement for
unexercised awards net of tax....... -- -- -- -- 84 -- 84 -- 84
Dividends.............................. -- -- -- -- -- (2,779) (2,779) (762) (3,541)
------- ------- ------- ------- -------- --------------------- ----------- --------
Balance as at 31 December 2020......... 1,111 1,057 (29) (1) 2,335 44,449 48,922 4,501 53,423
------- ------- ------- ------- -------- --------------------- ----------- --------
Attributable to BHP shareholders
--------------------------------------------------------------
Share capital Treasury shares
--------------- ---------------
Total equity
BHP BHP BHP BHP attributable Non-
Group Group Group Group Retained to BHP controlling Total
US$M Limited Plc Limited Plc Reserves earnings shareholders interests equity
---- ------- ------- ------- ------- -------- -------- ------------ ----------- --------
Balance as at 1 July 2020.............. 1,111 1,057 (5) -- 2,306 43,396 47,865 4,310 52,175
Total comprehensive income............. -- -- -- -- 22 11,330 11,352 2,158 13,510
Transactions with owners:
Purchase of shares by ESOP Trusts -- -- (229) (5) -- -- (234) -- (234)
Employee share awards exercised net
of employee contributions net
of tax.............................. -- -- 202 4 (149) (57) -- -- --
Vested employee share awards that have
lapsed, been cancelled or
forfeited........................... -- -- -- -- (4) 4 -- -- --
Accrued employee entitlement for
unexercised awards net of tax....... -- -- -- -- 175 -- 175 -- 175
Dividends.............................. -- -- -- -- -- (7,894) (7,894) (2,127) (10,021)
------- ------- ------- ------- -------- --------------------- ----------- --------
Balance as at 30 June 2021............. 1,111 1,057 (32) (1) 2,350 46,779 51,264 4,341 55,605
------- ------- ------- ------- -------- --------------------- ----------- --------
--------------------------------------------------------------------------------
BHP Operational Review for the 28
half year ended 31 December 2021
Restated supplementary financial information
For the half year ended 31 December 2020 and financial year ended 30 June 2021
The following pages present the supplementary financial information for the
Group for the half year ended 31 December 2020 and the financial year ended 30
June 2021, restated for the effect of the application of IFRS 5/AASB 5
`Non-current Assets Held for Sale and Discontinued Operations'.
As a consequence of this accounting treatment, the Group's Petroleum business no
longer meets the reporting segment recognition criteria as outlined in IFRS
8/AASB 8 `Operating segments' and therefore does not form part of the Group's
reportable segments as summarised below. Petroleum underlying EBITDA, revenue,
net operating assets and capital and exploration expenditure do not form part of
the comparative restated reportable segment(1).
Segment summary/(2)/
A summary of performance for the 31 December 2020 half year and 30 June 2021
financial year is presented below and excludes Petroleum discontinued
operations.
Half year ended Net
31 Dec 2020 Underlying Underlying Exceptional operating Capital Exploration Exploration
US$M Revenue/(3)/ EBITDA EBIT Items/(4)/ assets expenditure gross/(5)/ to profit/(6)/
--------------- ------------ ---------- ---------- ----------- --------- ----------- ----------- --------------
Copper............................. 7,067 3,738 2,899 (38) 26,623 1,108 18 18
Iron Ore........................... 14,058 10,244 9,320 (500) 19,026 1,101 49 26
Coal............................... 2,170 (201) (601) (959) 8,792 320 11 4
Group and unallocated items/(7)/... 749 106 (218) (14) 3,892 306 8 8
------------ ---------- ---------- ----------- --------- ----------- ----------- --------------
Total Group........................ 24,044 13,887 11,400 (1,511) 58,333 2,835 86 56
------------ ---------- ---------- ----------- --------- ----------- ----------- --------------
Year ended Net
30 June 2021 Underlying Underlying Exceptional operating Capital Exploration Exploration
US$M Revenue/(3)/ EBITDA EBIT Items/(4)/ assets expenditure gross/(5)/ to profit/(6)/
--------------- ------------ ---------- ---------- ----------- --------- ----------- ----------- --------------
Copper............................. 15,726 8,489 6,809 (144) 26,928 2,180 53 53
Iron Ore........................... 34,475 26,278 24,294 (1,319) 18,663 2,188 100 55
Coal............................... 5,154 288 (577) (1,567) 7,512 579 20 7
Group and unallocated items/(7)/... 1,566 18 (673) (1,308) 2,921 665 19 19
Total Group........................ 56,921 35,073 29,853 (4,338) 56,024 5,612 192 134
(1) As a result of the above mentioned planned Merger transaction with
Woodside, the Group's Petroleum business does not form part of the
reportable segments summarised above. Restated Petroleum financial
information has been included below to reflect the performance of the
Group's Petroleum discontinued operations business.
Petroleum - Discontinued Net
operations Underlying Underlying operating Capital Exploration Exploration
US$M Revenue EBITDA D&A EBIT assets expenditure gross to profit
------------------------ ------- ---------- ------- ---------- --------- ----------- -----------------------
Half year ended 31 December
2020....................... 1,595 793 901 (108) 8,548 498 195 242
Year ended 30 June 2021....... 3,896 2,306 1,868 438 8,073 994 322 382
(2) Group and segment 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 reportable segments, includes depreciation, amortisation
and impairments (D&A), net finance costs and taxation expense of US$259
million for H1 FY21 and US$626 million for FY21 related to equity accounted
investments. It excludes exceptional items loss of US$678 million for H1
FY21 and US$1,456 million for FY21 related to share of profit/loss from
equity accounted investments, related impairments and expenses.
Group profit before taxation comprised Underlying EBITDA, exceptional
items, depreciation, amortisation and impairments of US$3,998 million for
H1 FY21 and US$9,558 million for FY21 and net finance costs of US$876
million for H1 FY21 and US$1,223 million for FY21.
(3) Revenue is based on Group realised prices and includes third party
products. Sale of third party products by the Group contributed revenue of
US$958 million and Underlying EBITDA of US$58 million for H1 FY21 and
revenue of US$2,285 million and and Underlying EBITDA of US$65 million for
FY21.
(4) Exceptional items loss of US$1,511 million H1 FY21 (FY21: US$4,338 million)
excludes net finance costs of US$41 million H1 FY21 (FY21: US$85 million)
included in the total loss before taxation of US$358 million H1 FY21
(US$1,087 million FY21) related to the Samarco dam failure. Refer to
Exceptional items and Significant events - Samarco dam failure notes to the
financial statements evident in the respective published 2021 annual report
and FY21 half year reports for further information.
(5) Includes US$30 million capitalised exploration H1 FY21 (FY21: US$58 million).
(6) Includes US$ nil of exploration expenditure previously capitalised, written
off as impaired (included in depreciation and amortisation) H1 FY21 (FY21:
US$ nil).
(7) Group and unallocated items includes functions, other unallocated
operations including Potash, Nickel West, legacy assets, and consolidation
adjustments. Revenue not attributable to reportable segments comprises the
sale of freight and fuel to third parties, as well as revenues from
unallocated operations. Exploration and technology activities are
recognised within relevant segments.
--------------------------------------------------------------------------------
BHP Operational Review for the 29
half year ended 31 December 2021
Restated financial information for Petroleum Discontinued operations for the 31
December 2020 half year and the 30 June 2021 financial year, is presented below.
Half year ended Net
31 Dec 2020 Underlying Underlying operating Capital Exploration Exploration
US$M Revenue/(1)/ EBITDA D&A EBIT assets expenditure gross/(2)/ to profit/(3)/
--------------- ------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Australia Production Unit/(4)/........ 123 80 95 (15) 176 14
Bass Strait........................... 478 319 396 (77) 1,407 33
North West Shelf...................... 402 311 120 191 1,224 47
Atlantis.............................. 212 127 71 56 1,131 125
Shenzi................................ 137 89 59 30 1,005 10
Mad Dog............................... 88 61 26 35 1,774 164
Trinidad/Tobago....................... 68 40 19 21 439 70
Algeria............................... 75 54 -- 54 95 1
Exploration........................... -- (181) 80 (261) 1,122 1
Other/(5)/............................ 39 (105) 37 (142) 175 33.
------------ ---------- ------- ---------- --------- -----------
Total Petroleum from Group
production......................... 1,622 795 903 (108) 8,548 498
------------ ---------- ------- ---------- --------- -----------
Third party products.................. 3 -- -- -- -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Petroleum....................... 1,625 795 903 (108) 8,548 498 195 242
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Adjustment for equity accounted
investments/(6)/................... (6) (2) (2) -- -- -- -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Petroleum statutory result...... 1,619 793 901 (108) 8,548 498 195 242
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Inter-segment adjustments............. (24) -- -- -- -- -- -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Discontinued Operations
- Petroleum........................ 1,595 793 901 (108) 8,548 498 195 242
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Year ended Net
30 June 2021 Underlying Underlying operating Capital Exploration Exploration
US$M Revenue/(1)/ EBITDA D&A EBIT assets expenditure gross/(2)/ to profit/(3)/
------------ ------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Australia Production Unit/(4)/........ 327 202 186 16 64 23
Bass Strait........................... 1,066 798 775 23 1,136 70
North West Shelf...................... 893 761 239 522 1,281 104
Atlantis.............................. 560 401 162 239 1,109 178
Shenzi................................ 417 309 175 134 970 113
Mad Dog............................... 231 174 54 120 1,885 308
Trinidad/Tobago....................... 204 80 44 36 433 152
Algeria............................... 164 135 -- 135 107 2
Exploration........................... -- (296) 122 (418) 1,148 --
Other/(5)/............................ 85 (256) 114 (370) (60) 44
------------ ---------- ------- ---------- --------- -----------
Total Petroleum from Group
production......................... 3,947 2,308 1,871 437 8,073 994
------------ ---------- ------- ---------- --------- -----------
Third party products.................. 11 1 -- 1 -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Petroleum....................... 3,958 2,309 1,871 438 8,073 994 322 382
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Adjustment for equity accounted
investments/(6)/................... (12) (3) (3) -- -- -- -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Petroleum statutory result...... 3,946 2,306 1,868 438 8,073 994 322 382
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Inter-segment adjustments............. (50) -- -- -- -- -- -- --
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
Total Discontinued Operations
- Petroleum........................ 3,896 2,306 1,868 438 8,073 994 322 382
------------ ---------- ------- ---------- --------- ----------- ----------- --------------
(1) Petroleum revenue includes: crude oil US$769 million H1 FY21 (FY21:
US$2,013 million), natural gas US$434 million H1 FY21 (FY21: US$977
million), LNG US$292 million (FY21: US$682 million), NGL US$96 million
(FY21: US$212 million) and other (including Inter-segment adjustments) US$4
million (FY21: US$12 million).
(2) Includes US$14 million of capitalised exploration H1 FY21 (FY21: US$26
million).
(3) Includes US$61 million of exploration expenditure previously capitalised,
written off as impaired (included in depreciation and amortisation) H1 FY21
(FY21: US$86 million).
(4) Australia Production Unit includes Macedon and Pyrenees.
(5) Predominantly divisional activities, business development and Neptune (sale
finalised in May 2021). Also includes the Caesar oil pipeline and the
Cleopatra gas pipeline, which are equity accounted investments. The
financial information for the Caesar oil pipeline and the Cleopatra gas
pipeline presented above, with the exception of net operating assets,
reflects BHP's share.
(6) Total Petroleum statutory result revenue excludes US$6 million H1 FY21
(FY21: US$12 million) revenue related to the Caesar oil pipeline and the
Cleopatra gas pipeline. Total Petroleum statutory result Underlying EBITDA
includes US$2 million H1 FY21 (FY21: US$3 million) D&A related to the
Caesar oil pipeline and the Cleopatra gas pipeline.
--------------------------------------------------------------------------------
BHP Operational Review for the 30
half year ended 31 December 2021
Alternative Performance Measures
We use various Alternative Performance Measures (APMs) to reflect our underlying
financial performance.
These APMs are not defined or specified under the requirements of IFRS, but are
derived from the Group's restated Financial Statements for the half year ended
31 December 2020 and year ended 30 June 2021 prepared in accordance with IFRS.
The APMs and below reconciliations included in this document for the restated
half year ended 31 December 2020 and year ended 30 June 2021 periods are
unaudited. The APMs are consistent with how management review financial
performance of the Group with the Board and the investment community.
The definitions and calculation methodology to compute the Group's APMs have not
changed as a result of the proposed Merger. For further information and a list
of the "Definition and calculation of alternative performance measures" refer to
the Group's 2021 published Annual report.
Comparative periods have been adjusted for the effects of applying IFRS 5/AASB 5
`Non-current Assets Held for Sale and Discontinued Operations'.
The following tables provide reconciliations between the APMs and their nearest
respective IFRS measure. As the Group's balance sheet is not required to be
restated under IFRS 5/AASB 5 `Non-current Assets Held for Sale and Discontinued
Operations', certain APMs such as Net Debt Waterfall, Net debt and gearing ratio
and Underlying ROCE have not been restated and are presented consistently as
previously published in respective comparable period financial information.
Exceptional items
To improve the comparability of underlying financial performance between
reporting periods some of our APMs adjust the relevant IFRS measures for
exceptional items.
Exceptional items are those gains or losses where their nature, including the
expected frequency of the events giving rise to them, and impact is considered
material to the Group's Financial Statements. The exceptional items included
within the Group's profit for each restated comparative period are detailed
below.
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Exceptional items Restated Restated
----------------- ----------- ------------
Continuing operations
Revenue......................................................................... -- --
Other income.................................................................... -- 34
Expenses excluding net finance costs, depreciation, amortisation
and impairments (286) (545)
Depreciation and amortisation................................................... -- --
Net impairments................................................................. (547) (2,371)
Loss from equity accounted investments, related impairments and expenses........ (678) (1,456)
----------- ------------
Profit/(loss) from operations................................................... (1,511) (4,338)
----------- ------------
Financial expenses.............................................................. (41) (85)
Financial income................................................................ -- --
----------- ------------
Net finance costs............................................................... (41) (85)
----------- ------------
Profit/(loss) before taxation................................................... (1,552) (4,423)
----------- ------------
Income tax (expense)/benefit.................................................... (590) (1,057)
Royalty-related taxation (net of income tax benefit)............................ -- --
----------- ------------
Total taxation (expense)/benefit................................................ (590) (1,057)
----------- ------------
Profit/(loss) after taxation from Continuing operations......................... (2,142) (5,480)
----------- ------------
Discontinued operations
Profit/(loss) after taxation from Discontinued operations....................... (28) (317)
----------- ------------
Profit/(loss) after taxation from Continuing and Discontinued operations........ (2,170) (5,797)
----------- ------------
Total exceptional items attributable to non-controlling interests............... (10) (24)
Total exceptional items attributable to BHP shareholders........................ (2,160) (5,773)
----------- ------------
Exceptional items attributable to BHP shareholders per share (US cents)......... (42.8) (114.2)
----------- ------------
Weighted basic average number of shares (Million)............................... 5,057 5,057
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 31
half year ended 31 December 2021
APMs derived from Consolidated Income Statement
Underlying attributable profit - Continuing operations
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Underlying attributable profit - Continuing operations Restated Restated
------------------------------------------------------ ----------- ------------
Profit after taxation from Continuing and Discontinued operations
attributable to BHP shareholders............................................. 3,876 11,304
Loss after taxation from Discontinued operations attributable to
BHP shareholders............................................................. 192 225
Total exceptional items attributable to BHP shareholders........................ 2,160 5,773
Total exceptional items attributable to BHP shareholders for
Discontinued operations...................................................... (28) (317)
----------- ------------
Underlying attributable profit - Continuing operations.......................... 6,200 16,985
----------- ------------
Underlying basic earnings per share - Continuing operations
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Underlying basic earnings per share - Continuing operations Restated Restated
----------------------------------------------------------- ----------- ------------
Underlying attributable profit - Continuing operations.......................... 6,200 16,985
Weighted basic average number of shares (Million)............................... 5,057 5,057
----------- ------------
Underlying attributable earnings per ordinary share - Continuing
operations (US cents)........................................................ 122.6 335.9
----------- ------------
Underlying EBITDA
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Underlying EBITDA Restated Restated
----------------- ----------- ------------
Profit from operations.......................................................... 9,889 25,515
Exceptional items included in profit from operations............................ 1,511 4,338
----------- ------------
Underlying EBIT................................................................. 11,400 29,853
----------- ------------
Depreciation and amortisation expense........................................... 2,405 5,084
Net impairments................................................................. 629 2,507
Exceptional item included in Depreciation, amortisation and impairments......... (547) (2,371)
----------- ------------
Underlying EBITDA 13,887 35,073
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 32
half year ended 31 December 2021
Underlying EBITDA margin
Group and
Half year ended 31 Dec 2020 unallocated
US$M items/
Restated Copper Iron Ore Coal eliminations/(1)/ Total Group
--------------------------- -------- --------- --------- ----------------- -----------
Revenue - Group production................................... 6,129 14,050 2,170 737 23,086
Revenue - Third party products............................... 938 8 -- 12 958
-------- --------- --------- ----------------- -----------
Revenue...................................................... 7,067 14,058 2,170 749 24,044
-------- --------- --------- ----------------- -----------
Underlying EBITDA - Group production......................... 3,683 10,241 (201) 106 13,829
Underlying EBITDA - Third party products..................... 55 3 -- -- 58
-------- --------- --------- ----------------- -----------
Underlying EBITDA............................................ 3,738 10,244 (201) 106 13,887
-------- --------- --------- ----------------- -----------
Segment contribution to the Group's Underlying EBITDA/(2)/... 27% 74% (1%) 100%
Underlying EBITDA margin/(3)/................................ 60% 73% (9%) 60%
-------- --------- --------- ----------------- -----------
Group and
Year ended 30 June 2021 unallocated
US$M items/
Restated Copper Iron Ore Coal eliminations/(1)/ Total Group
----------------------- -------- --------- --------- ----------------- -----------
Revenue - Group production................................... 13,482 34,457 5,154 1,543 54,636
Revenue - Third party products............................... 2,244 18 -- 23 2,285
-------- --------- --------- ----------------- -----------
Revenue...................................................... 15,726 34,475 5,154 1,566 56,921
Underlying EBITDA - Group production......................... 8,425 26,277 288 18 35,008
Underlying EBITDA - Third party products..................... 64 1 -- -- 65
-------- --------- --------- ----------------- -----------
Underlying EBITDA............................................ 8,489 26,278 288 18 35,073
-------- --------- --------- ----------------- -----------
Segment contribution to the Group's Underlying EBITDA/(2)/... 24% 75% 1% 100%
Underlying EBITDA margin/(3)/................................ 62% 76% 6% 64%
-------- --------- --------- ----------------- -----------
(1) Group and unallocated items includes functions, other unallocated
operations including Potash, Nickel West, legacy assets and consolidation
adjustments.
(2) Percentage contribution to Group Underlying EBITDA, excluding Group and
unallocated items.
(3) Underlying EBITDA margin excludes Third party products.
--------------------------------------------------------------------------------
BHP Operational Review for the 33
half year ended 31 December 2021
APMs derived from Consolidated Cash Flow Statement
Capital and exploration expenditure
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Capital and exploration expenditure Restated Restated
----------------------------------- ----------- ------------
Capital expenditure (purchases of property, plant and equipment)................ 2,835 5,612
Add: Exploration expenditure.................................................... 86 192
----------- ------------
Capital and exploration expenditure (cash basis) - Continuing operations........ 2,921 5,804
----------- ------------
Capital and exploration expenditure - Discontinued operations................... 693 1,316
----------- ------------
Capital and exploration expenditure (cash basis) - Total operations............. 3,614 7,120
----------- ------------
Free cash flow
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Free cash flow Restated Restated
-------------- ----------- ------------
Net operating cash flows from Continuing operations............................. 9,148 25,883
Net investing cash flows from Continuing operations............................. (3,229) (6,325)
----------- ------------
Free cash flow - Continuing operations ......................................... 5,919 19,558
----------- ------------
Free cash flow - Discontinued operations ....................................... (759) (169)
----------- ------------
Free cash flow - Total operations .............................................. 5,160 19,389
----------- ------------
--------------------------------------------------------------------------------
BHP Operational Review for the 34
half year ended 31 December 2021
APMs derived from Consolidated Balance Sheet
The Group's balance sheet is not required to be restated under IFRS 5, however
Net operating assets presented below, has been restated to reflect the exclusion
of Petroleum from the Group's reportable segments which is to be recognised as
held for sale as at 31 December 2021.
Net operating assets
Half year Year
ended ended
31 Dec 2020 30 June 2021
US$M US$M
Restated Restated
----------- ------------
Net assets........................................................ 53,423 55,605
Less: Non-operating assets
Cash and cash equivalents......................................... (9,291) (15,246)
Trade and other receivables/(1)/.................................. (202) (280)
Other financial assets/(2)/....................................... (2,225) (1,516)
Current tax assets................................................ (295) (279)
Deferred tax assets............................................... (3,178) (1,912)
Assets held for sale.............................................. -- (324)
Petroleum discontinued operations operating assets/(3)/........... (13,745) (13,757)
----------- ------------
Add: Non-operating liabilities
Trade and other payables/(4)/..................................... 218 227
Interest bearing liabilities...................................... 22,719 20,983
Other financial liabilities/(5)/.................................. 752 588
Current tax payable............................................... 1,184 2,800
Non-current tax payable........................................... 173 120
Deferred tax liabilities.......................................... 3,603 3,314
Liabilities directly associated with the assets held for sale..... -- 17
Petroleum discontinued operations operating liabilities/(3)/...... 5,197 5,684
----------- ------------
Net operating assets.............................................. 58,333 56,024
----------- ------------
(1) Represents loans to associates, external finance receivable and accrued
interest receivable included within other receivables.
(2) Represents cross currency and interest rate swaps, forward exchange
contracts related to cash management and investment in shares and other
investments.
(3) Represents the Petroleum operating assets and operating liabilities as at
31 December 2020 and 30 June 2021 that are to be recognised as held for
sale as at 31 December 2021 under IFRS 5.
(4) Represents accrued interest payable included within other payables.
(5) Represents cross currency and interest rate swaps and forward exchange
contracts related to cash management.
--------------------------------------------------------------------------------
BHP Operational Review for the 35
half year ended 31 December 2021
Other APMs
The definition and calculation methodology to compute the Group's underlying
ROCE calculation below, has not changed as a result of the discontinued
operations impacts connected with the planned Petroleum Merger. As per our
definitions, the Group's underlying ROCE includes the contribution from
Discontinued operations.
However, Underlying ROCE by segment and Underlying ROCE by assets presented
below, have been restated to reflect the portion attributable to the Group's
Petroleum Discontinued operations and the Group's continued operations.
For further information and a list of the "Definition and calculation of
alternative performance measures" refer to the Group's 2021 published Annual
report.
Underlying return on capital employed (ROCE) by segment
Group and
Half year ended 31 Dec 2020 unallocated Petroleum
US$M items/ Total Discontinued
Restated Copper Iron Ore Coal eliminations/(1)/ Continuing operation Total Group
--------------------------- -------- --------- --------- ----------------- ---------- ------------ -----------
Annualised profit after taxation
excluding net finance costs and
exceptional items....................... 3,918 12,454 (1,066) 256 15,562 (260) 15,302
Average capital employed................ 23,941 16,367 8,743 5,877 54,928 9,813 64,741
-------- --------- --------- ----------------- ---------- ------------ -----------
Underlying Return on Capital Employed... 16% 76% (12%) -- 28.3% (2.6%) 23.6%
-------- --------- --------- ----------------- ---------- ------------ -----------
Group and
Year ended 30 June 2021 unallocated Petroleum
US$M items/ Total Discontinued
Restated Copper Iron Ore Coal eliminations/(1)/ Continuing operation Total Group
----------------------- -------- --------- --------- ----------------- ---------- ------------ -----------
Profit after taxation excluding net
finance costs and exceptional items..... 4,191 16,640 (454) (395) 19,982 149 20,131
Average capital employed................ 23,710 16,042 8,262 4,470 52,484 9,489 61,973
-------- --------- --------- ----------------- ---------- ------------ -----------
Underlying Return on Capital Employed... 18% 104% (5%) -- 38.1% 1.6% 32.5%
-------- --------- --------- ----------------- ---------- ------------ -----------
(1) Group and unallocated items includes functions, other unallocated
operations including Potash, Nickel West, legacy assets and consolidation
adjustments.
--------------------------------------------------------------------------------
BHP Operational Review for the 36
half year ended 31 December 2021
Underlying return on capital employed (ROCE) by asset
New
Half year ended South Petroleum
31 Dec 2020 Western Wales Discontinued
US$M Australia Pampa Olympic Queensland Energy Total operation Total
Restated Iron Ore Antamina Escondida Norte Potash Dam Coal Cerrejon Coal Other Continuing /(1)/ Group
---------------- --------- -------- --------- ----- ------ ------- ---------- -------- ------ ----- ---------- ------------ -------
Annualised
profit after
taxation
excluding net
finance costs
and
exceptional
items........... 12,458 522 3,292 172 78 78 (330) (58) (482) (168) 15,562 (260) 15,302
Average capital
employed........ 18,614 1,364 10,593 3,752 4,468 8,028 7,622 519 557 (589) 54,928 9,813 64,741
--------- -------- --------- ----- ------ ------- ---------- -------- ------ ----- ---------- ------------ -------
Underlying
Return on
Capital
Employed........ 67% 38% 31% 5% 2% 1% (4%) (11%) (87%) -- 28.3% (2.6%) 23.6%
--------- -------- --------- ----- ------ ------- ---------- -------- ------ ----- ---------- ------------ -------
New
Year ended South Petroleum
30 June 2021 Western Wales Discontinued
US$M Australia Pampa Olympic Queensland Energy Total operation Total
Restated Iron Ore Antamina Escondida Norte Potash Dam Coal Cerrejon Coal Other Continuing /(1)/ Group
---------------- --------- -------- --------- ----- ------ ------- ---------- -------- ------ ----- ---------- ------------ -------
Profit after
taxation
excluding net
finance costs
and exceptional
items........... 16,665 593 3,281 302 5 214 (103) (13) (203) (759) 19,982 149 20,131
Average
capital
employed........ 18,661 1,353 10,353 3,760 3,710 8,021 7,475 483 269 (1,601) 52,484 9,489 61,973
--------- -------- --------- ----- ------ ------- ---------- -------- ------ ----- ---------- ------------ -------
Underlying
Return on
Capital
Employed........ 89% 44% 32% 8% 0% 3% (1%) (3%) (75%) -- 38.1% 1.6% 32.5%
--------------- -------- -------- --------- ------ ------ ------- ----------- ------- ------ ----- --------- ----------- ------
(1) Includes exploration expenditure previously classified in Group and
unallocated.
--------------------------------------------------------------------------------
BHP Operational Review for the 37
half year ended 31 December 2021
Date: 19-01-2022 08:05:00
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