UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

July 17, 2019

 

 

 

BHP GROUP LIMITED

(ABN 49 004 028 077)

(Exact name of Registrant as specified in its charter)

 

VICTORIA, AUSTRALIA

(Jurisdiction of incorporation or organisation)

 

171 COLLINS STREET, MELBOURNE,

VICTORIA 3000 AUSTRALIA

(Address of principal executive offices)

  

BHP GROUP PLC

(REG. NO. 3196209)

(Exact name of Registrant as specified in its charter)

 

ENGLAND AND WALES

(Jurisdiction of incorporation or organisation)

 

NOVA SOUTH, 160 VICTORIA STREET

LONDON, SW1E 5LB

UNITED KINGDOM

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:  

☒ Form 20-F    ☐ Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:  ☐ Yes    ☒ No

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): n/a

 

 

 


NEWS RELEASE    LOGO

 

Release Time        

   IMMEDIATE

Date

   17 July 2019

Release Number

   14/19

BHP OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2019

 

 

Exceeded full year production guidance for petroleum and met revised guidance for copper and iron ore. Metallurgical coal and energy coal production marginally below guidance predominantly as a result of lower than expected wash plant yields and adverse weather impacts during the June 2019 quarter.

 

 

Group copper equivalent production increased by 11% in the June 2019 quarter reflecting a strong operational performance across the portfolio, particularly at Western Australia Iron Ore and Queensland Coal which achieved annualised run rates above 290 Mt (excluding the impact of Tropical Cyclone Veronica) and 48 Mt respectively during the quarter.

 

 

Group copper equivalent production for the 2019 financial year declined by 2%(1), with annual production records at two petroleum and four minerals operations offset by grade and natural field decline, weather-related interruptions and several unplanned outages.

 

 

We expect to achieve full year unit cost guidance(2) at Petroleum, Escondida and Western Australia Iron Ore. Queensland Coal and New South Wales Energy Coal unit costs are expected to be marginally above guidance (based on 2019 financial year guidance exchange rates of AUD/USD 0.75 and USD/CLP 663).

 

 

Group copper equivalent production(1) for the 2020 financial year is expected to be slightly higher than the 2019 financial year despite a ~7% decline in petroleum volumes largely due to natural field decline.

 

 

In Petroleum, the Bélé-1, Tuk-1 and Hi-Hat-1 exploration wells in Trinidad and Tobago all encountered hydrocarbons during the quarter. Over the full year, seven out of nine wells drilled were successful.

 

 

All major projects under development are tracking to plan.

 

 

Underlying improvements in productivity were largely offset by the impact of unplanned production outages of US$835 million during the first half, in addition to grade decline in copper and higher unit costs in coal. A negative movement of approximately US$1 billion is now expected to be recorded for the 2019 financial year.

 

Production

   FY19
(vs FY18)
    Jun Q19
(vs Mar Q19)
   

Jun Q19 commentary

Petroleum (MMboe)

    
121
(+1
 
%) 
   
30
(+3
 
%) 
  Higher seasonal gas volumes and higher uptime due to planned shutdowns in the previous quarter at Bass Strait.

Copper (kt)

    
1,689
(-4
 
%) 
   
444
(+6
 
%) 
  Strong performance at all three Chilean operations partially offset by the impact of two minor production outages at Olympic Dam.

Iron ore (Mt)

    
238
(0
 
%) 
   
63
(+12
 
%) 
  Increased production at Western Australia Iron Ore (WAIO) reflected the return to full capacity following Tropical Cyclone Veronica in March 2019.

Metallurgical coal (Mt)

    
42
(-1
 
%) 
   
12
(+20
 
%) 
  Record production at BMC and improved mining performance across most operations following significant wet weather impacts in the previous quarter.

Energy coal (Mt)

    
27
(-6
 
%) 
   
7
(+10
 
%) 
  Increased stripping performance at New South Wales Energy Coal (NSWEC), partially offset by the impact of adverse weather at Cerrejón

Nickel (kt)

    
87
(-6
 
%) 
   
29
(+49
 
%) 
  Increased production reflected completion of final repairs and ramp up of the Kalgoorlie smelter in the prior quarter.

We expect the financial results for the second half of the 2019 financial year to reflect certain items as summarised in the table on page 3.

 

 

 

BHP Operational Review for the year ended 30 June 2019    1


Summary

BHP Chief Executive Officer, Andrew Mackenzie:

“We finished the 2019 financial year with an 11 per cent increase in quarterly production, driven by strong operational performances across our portfolio, including annual production records at a number of our petroleum, copper, iron ore and metallurgical coal operations. Our overall production was broadly in line with last year, overcoming the impacts of weather, grade and natural field decline, and unplanned outages in the first half. Our exploration program delivered encouraging results, with seven out of nine petroleum wells successful and further evaluation of the Oak Dam copper prospect underway. Strong underlying performance puts us in a position to deliver higher volumes in the 2020 financial year. BHP’s suite of attractive options, together with our culture and transformation programs, will grow returns and create long-term financial and social value.”

Operational performance

Production and guidance are summarised below.

 

Production

   FY19      Jun
Q19
     FY19
vs
FY18
    Jun Q19
vs

Jun Q18
    Jun Q19
vs

Mar Q19
    FY20
guidance
     FY20e
vs FY19
 

Petroleum (MMboe)

     121        30        1     4     3     110 - 116        (9%) - (4 %) 

Copper (kt)

     1,689        444        (4 %)      (4 %)      6     1,705 - 1,820        1% - 8

Escondida (kt)

     1,135        288        (6 %)      (9 %)      7     1,160 - 1,230        2% - 8

Other copper(i) (kt)

     554        157        3     6     3     545 - 590        (2%) - 6

Iron ore(ii) (Mt)

     238        63        0     (2 %)      12     242 - 253        2% - 6

WAIO (100% basis) (Mt)

     270        71        (2 %)      (1 %)      12     273 - 286        1% - 6

Metallurgical coal (Mt)

     42        12        (1 %)      (1 %)      20     41 - 45        (3%) - 6

Queensland Coal (100% basis) (Mt)

     75        21        (1 %)      (1 %)      20     73 - 79        (2%) - 6

Energy coal (Mt)

     27        7        (6 %)      (18 %)      10     24 - 26        (13%) - (5 %) 

NSWEC (Mt)

     18        5        (2 %)      (14 %)      19     15 - 17        (18%) - (7 %) 

Cerrejón (Mt)

     9        2        (13 %)      (28 %)      (8 %)      ~9        Broadly unchanged  

Nickel (kt)

     87        29        (6 %)      12     49     ~87        Broadly unchanged  

 

(i)

Other copper comprises Pampa Norte, Olympic Dam and Antamina.

(ii)

Increase in BHP’s share of volumes reflects the expiry of the Wheelarra Joint Venture sublease in March 2018, with control of the sublease area reverted to the Jimblebar Joint Venture, which is accounted for on a consolidated basis with minority interest adjustments.

Major development projects

During the year, the North West Shelf Greater Western Flank-B project achieved first production ahead of schedule and under budget. The BHP Board also approved the Atlantis Phase 3 project in the US Gulf of Mexico.

At the end of the 2019 financial year, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$11.1 billion over the life of the projects.

 

 

BHP Operational Review for the year ended 30 June 2019    2


Summary of disclosures

BHP expects its financial results for the second half of the 2019 financial year 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 20 August 2019. Accordingly the information is subject to update.

 

Description

   H2 FY19
impact
US$M(i)
    Classification(ii)  

Continuing operations

 

Unit costs for Petroleum, Escondida and WAIO expected to be in line with full year guidance, although tracking to upper limits

     Refer footnote (iii)    h Operating costs  

Queensland Coal and NSWEC unit costs expected to be marginally above full year guidance due to the impacts of higher stripping costs and wet weather in Queensland

     Refer footnote (iii)    h Operating costs  

Increase in closure and rehabilitation provision for closed mines(iv)

     ~250     h Operating costs  

Restructuring and redundancy costs in relation to World Class Functions

     ~100     h Operating costs  

Exploration expense (including petroleum and minerals exploration programs)

     294     h Exploration expense  

The Group’s adjusted effective tax rate for the full year is expected to be at the higher end of the guidance range of 33 to 38 per cent

     Refer footnote (iii)    h Taxation expense  

Non-cash fair value adjustments related to interest rate and exchange rate movements are expected to increase net debt in the June 2019 half year

     Refer footnote (iii)    h Net debt  

Special dividend paid to shareholders on 30 January 2019

     5,188     h Financing cash outflow  

Dividends paid to non-controlling interests

     ~570     h Financing cash outflow  

Provision for decommissioning the Germano dam at Samarco

     ~260     h Exceptional item charge  

Financial impact on BHP Billiton Brasil of the Samarco dam failure

     Refer footnote (iii)    h Exceptional item charge  

Discontinued operations

    

Net proceeds received from the sale of Onshore US (including final four instalment payments)

     3,503     h Investing cash inflow  

 

(i)

Numbers are not tax effected, unless otherwise noted.

(ii)

There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant.

(iii)

Financial impact is the subject of ongoing work and is not yet finalised.

(iv)

Increase is attributable to closed mines managed by Petroleum due to their geographical location.

Underlying improvements in productivity were largely offset by the impact of unplanned production outages of US$835 million during the December 2018 half year. Productivity for the June 2019 half year has been impacted by higher than expected unit costs at Queensland Coal (lower volumes, wet weather and increased contractor stripping costs); New South Wales Energy Coal (higher strip ratio and contractor stripping costs); and Nickel West (mine plan changes); in addition to expected grade decline in copper. As a result, we expect a negative movement in productivity of approximately US$1 billion for the 2019 financial year, excluding the impact of Tropical Cyclone Veronica on our WAIO operations.

 

 

BHP Operational Review for the year ended 30 June 2019    3


Average realised prices

The average realised prices achieved for our major commodities are summarised below.

 

Average realised prices(i)

   Jun H19      Dec H18      FY19      FY18      FY19
vs
FY18
    Jun H19
vs
Jun H18
    Jun H19
vs
Dec H18
 

Oil (crude and condensate) (US$/bbl)

     63.29        69.91        66.59        60.57        10     (7 %)      (9 %) 

Natural gas (US$/Mscf)(ii)

     4.42        4.67        4.55        4.44        2     (8 %)      (5 %) 

LNG (US$/Mscf)

     8.53        10.19        9.43        8.07        17     (1 %)      (16 %) 

Copper (US$/lb)(iii)

     2.70        2.54        2.62        3.00        (13 %)      (8 %)      6

Iron ore (US$/wmt, FOB)

     77.74        55.62        66.68        56.71        18     37     40

Metallurgical coal (US$/t)

     179.53        179.82        179.67        177.22        1     (5 %)      0

Hard coking coal (US$/t)(iv)

     201.33        197.86        199.61        194.59        3     (2 %)      2

Weak coking coal (US$/t)(iv)

     126.46        134.12        130.18        131.70        (1 %)      (12 %)      (6 %) 

Thermal coal (US$/t)(v)

     72.18        84.15        77.90        86.94        (10 %)      (17 %)      (14 %) 

Nickel metal (US$/t)

     12,444        12,480        12,462        12,591        (1 %)      (11 %)      0

 

(i)

Based on provisional, unaudited estimates. Prices exclude sales from equity accounted investments, third party product and internal sales, and represent the weighted average of various sales terms (for example: FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional pricing and finalisation adjustments.

(ii)

Includes internal sales.

(iii)

Comparative financial information has been restated for the new accounting standard, IFRS 15 Revenue from Contracts with Customers, which became effective from 1 July 2018.

(iv)

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.

(v)

Export sales only; excludes Cerrejón. Includes thermal coal sales from metallurgical coal mines.

The majority of iron ore shipments were linked to the index price for the month of shipment, with price differentials predominantly a reflection of market fundamentals and product quality. The majority of metallurgical coal and energy coal exports were linked to the index price for the month of shipment or sold on the spot market at fixed or index-linked prices, with price differentials reflecting product quality.

At 30 June 2019, the Group had 322 kt of outstanding copper sales that were revalued at a weighted average price of US$2.72 per pound. The final price of these sales will be determined in the 2020 financial year. In addition, 364 kt of copper sales from the 2018 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will decrease Underlying EBITDA(3) by US$242 million in the 2019 financial year and is included in the average realised copper price in the above table.

 

 

BHP Operational Review for the year ended 30 June 2019    4


Corporate update

On 26 June 2019, BHP Western Australia Iron Ore and its Joint Venture Partners (JVPs) settled a dispute with the Western Australian Government in relation to a long-standing deduction made by BHP and its JVPs in the calculation of royalties. The settlement resolved all issues relating to this deduction and there is no assertion by the State that BHP, or its JVPs, have deliberately or knowingly sought to avoid or minimise the royalties payable to the State of Western Australia. As part of the settlement, BHP and its JVPs have ceased to claim the deduction in question and have agreed to make a payment of A$250 million (100 per cent basis) to the State in resolution of the dispute. The payment will be made in the first half of the 2020 financial year.

In January 2019, BHP agreed to fund US$438 million in financial support for the Renova Foundation until 31 December 2019 which will be offset against the Group’s provision for the Samarco dam failure. In addition, in June 2019 BHP agreed to fund a short-term facility of up to US$79 million to be made available to Samarco until 31 December 2019.

BHP is currently reviewing the assumptions used to determine the Group’s provision for the Samarco dam failure, including an expected increase in the total cost estimate related to the timing of lifting the fishing ban, delays in the resettlement of communities impacted by the dam failure and increases in the number of people eligible for financial assistance and compensation. For the second half of the 2019 financial year, we are not yet in a position to provide an update to the ongoing potential financial impacts on BHP Billiton Brasil of the Samarco dam failure. Any financial impacts will continue to be treated as an exceptional item.

Due to legislative changes in Brazil, Samarco is currently progressing plans for the accelerated decommissioning of its upstream tailings dams (the Germano dam complex). The accelerated timing is expected to result in a provision of approximately US$260 million (BHP share), as Samarco is not currently expected to generate sufficient cash flows to fund the required decommissioning costs. BHP will recognise this in its financial results for the second half of the 2019 financial year and treat it as an exceptional item.

Petroleum

Production

 

     FY19      Jun Q19      FY19
vs
FY18
    Jun Q19
vs
Jun Q18
    Jun Q19
vs
Mar Q19
 

Crude oil, condensate and natural gas liquids (MMboe)

     55        13        (4 %)      (1 %)      1

Natural gas (bcf)

     397        98        5     8     5

Total petroleum production (MMboe)

     121        30        1     4     3

Petroleum - Total petroleum production increased by one per cent to 121 MMboe. Volumes are expected to decrease to between 110 and 116 MMboe in the 2020 financial year as a result of planned maintenance at Atlantis and natural field decline across the portfolio.

Crude oil, condensate and natural gas liquids production decreased by four per cent to 55 MMboe due to natural field decline across the portfolio and a 70-day planned dry dock maintenance program at Pyrenees completed during the September 2018 quarter. This decline was partly offset by higher uptime and stronger field performance at Atlantis and Mad Dog.

Natural gas production increased by five per cent to 397 bcf, reflecting increased tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract and higher uptime at North West Shelf. This was partially offset by planned maintenance at Trinidad and Tobago in the December 2018 quarter, the impact of Tropical Cyclone Veronica in Western Australia and natural field decline across the portfolio.

 

 

BHP Operational Review for the year ended 30 June 2019    5


Projects

 

Project and

ownership

   Capital
expenditure
US$M
     Initial
production
target date
    

Capacity

  

Progress

Mad Dog Phase 2

(US Gulf of Mexico)

23.9% (non-operator)

     2,154        CY22      New floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day.    On schedule and budget. The overall project is 53% complete.

Atlantis Phase 3

(US Gulf of Mexico)

44% (non-operator)

     696        CY20      New subsea production system that will tie back to the existing Atlantis facility, with capacity to produce up to 38,000 gross barrels of oil equivalent per day.    On schedule and budget. The overall project is 13% complete.

The Bass Strait West Barracouta project is tracking to plan and study work continues on the Ruby project in Trinidad and Tobago with an investment decision expected during the September 2019 quarter.

Petroleum exploration

Exploration and appraisal wells drilled during the June 2019 quarter are summarised below.

 

Well

   Location   Target    Formation
age
  

BHP equity

  

Spud date

  

Water depth

  

Total well
depth

  

Status

Bélé-1    Trinidad & Tobago
Block 23(a)
  Gas    Pliocene    70%
(BHP Operator)
   2 March 2019    2,102 m    3,982 m    Hydrocarbons encountered; Plugged and abandoned
Tuk-1    Trinidad & Tobago
Block 23(a)
  Gas    Pliocene    70%
(BHP Operator)
   24 April 2019    1,954 m    4,511 m    Hydrocarbons encountered; Plugged and abandoned
Hi-Hat-1    Trinidad & Tobago
Block 14
  Gas    Pliocene    70%
(BHP Operator)
   20 May 2019    1,782 m    3,804 m    Hydrocarbons encountered; Plugged and abandoned
Achernar-1    Western Australia
WA-28-P
  Gas    Jurassic    15.8%
(Woodside Operator)
   2 May 2019    122 m    3,285 m    Dry hole; Plugged and abandoned

In Trinidad and Tobago, Phase 3 of our deepwater drilling campaign was completed. This campaign included three wells – Bélé-1, Tuk-1 and Hi-Hat-1 – which have all been successfully drilled and encountered gas. These three discoveries in our Northern licences have established additional volumes around the Bongos discovery and evaluations are ongoing. Technical work is underway to assess further exploration targets and commercial options for the Northern Gas play.

In Australia, as part of the North West Shelf Joint Venture, we participated in the Achernar-1 exploration to fulfil a well commitment on the WA-28-P exploration permit. The well was a dry hole and was plugged and abandoned.

In Mexico, we spud the Trion-3DEL appraisal well on 9 July 2019 to further delineate the scale and characterisation of the resource.

Petroleum exploration expenditure for the 2019 financial year was US$685 million, of which US$388 million was expensed.

 

 

BHP Operational Review for the year ended 30 June 2019    6


Copper

Production

 

     FY19      Jun Q19      FY19
vs
FY18
    Jun Q19
vs
Jun Q18
    Jun Q19
vs
Mar Q19
 

Copper (kt)

     1,689        444        (4 %)      (4 %)      6

Zinc (t)

     98,112        22,469        (18 %)      (38 %)      8

Uranium (t)

     3,565        975        6     (13 %)      (12 %) 

Copper – Total copper production decreased by four per cent to 1,689 kt. Production of between 1,705 and 1,820 kt is expected in the 2020 financial year.

Escondida copper production decreased by six per cent to 1,135 kt, as an expected 12 per cent decline in copper grade was partially offset by record average concentrator throughput of 344 ktpd. Production of between 1,160 and 1,230 kt is expected in the 2020 financial year, underpinned by a further uplift in concentrator throughput, partly offset by an approximately five per cent reduction in copper grade of concentrator feed.

Pampa Norte copper production decreased by seven per cent to 247 kt due to adverse weather impacts in the March 2019 quarter and a production outage at Spence following a fire at the electro-winning plant in September 2018. This was partially offset by record ore milled at Spence and Cerro Colorado after implementing maintenance improvement initiatives as part of our broader transformation program. Production at Pampa Norte is expected to be between 230 and 250 kt in the 2020 financial year.

Olympic Dam copper production increased by 17 per cent to 160 kt as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018, and two minor production outages in May 2019 relating to the smelter and to the refinery crane. Underground operations continue to perform well, with record development kilometres achieved(4). Production is expected to increase to between 180 and 205 kt in the 2020 financial year reflecting improved operational performance, partially offset by planned maintenance related to the replacement of the refinery crane (pre-work scheduled for the September 2019 quarter and physical replacement and commissioning scheduled for the March 2020 quarter). During the 2019 financial year, we successfully completed the heap leach research and development trial, confirming the viability of the technology to extract copper, uranium, gold and silver at Olympic Dam.

Antamina copper production increased by six per cent to 147 kt and zinc production decreased by 18 per cent to 98 kt, reflecting higher copper head grades and lower zinc head grades, in line with the mine plan. Antamina successfully completed a collective agreement with the SUTRACOMASA Union on 11 June 2019, for 36 months expiring on 31 July 2021. Copper production of approximately 135 kt and zinc production of approximately 110 kt is expected in the 2020 financial year.

During the June 2019 quarter, we went live with our Integrated Operations centre in Santiago, which enables planning, control and monitoring across the supply chains for Escondida and Spence.

Projects

 

Project and ownership

   Capital
expenditure
US$M
     Initial
production
target date
    

Capacity

  

Progress

Spence Growth Option

(Chile)

100%

     2,460        FY21      New 95 ktpd concentrator is expected to increase Spence’s payable copper in concentrate production by approximately 185 ktpa in the first 10 years of operation and extend the mining operations by more than 50 years.    On schedule and budget. The overall project is 60% complete.

 

 

BHP Operational Review for the year ended 30 June 2019    7


Iron Ore

Production

 

     FY19      Jun Q19      FY19
vs
FY18
    Jun Q19
vs
Jun Q18
    Jun Q19
vs
Mar Q19
 

Iron ore production (kt)

     237,964        62,595        0     (2 %)      12

Iron ore – Total iron ore production was broadly unchanged at 238 Mt (270 Mt on a 100 per cent basis). Production of between 242 and 253 Mt (273 and 286 Mt on a 100 per cent basis) is expected in the 2020 financial year as we undertake a significant maintenance program at Port Hedland. This program is designed to improve productivity and provide a stable base for our tightly coupled supply chain as we sustainably increase production towards 290 Mtpa (100 per cent basis). As part of this, a major car dumper maintenance campaign is planned for the September 2019 quarter, with a corresponding impact expected on production.

At WAIO, volumes were flat reflecting record production at Jimblebar and inventory impacts from the Mt Whaleback fire in the prior period. This was offset by the impacts of planned maintenance in the September 2018 quarter, a train derailment on 5 November 2018 and Tropical Cyclone Veronica in March 2019. The port ramp up subsequent to the cyclone was achieved on 10 April 2019. During the quarter, WAIO achieved an annualised run rate above 290 Mt, excluding the cyclone impact.

Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.

Projects

 

Project and ownership

   Capital
expenditure
US$M
     Initial
production
target date
    

Capacity

  

Progress

South Flank

(Australia)

85%

     3,061        CY21      Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi mine.    On schedule and budget. The overall project is 39% complete.

 

 

BHP Operational Review for the year ended 30 June 2019    8


Coal

Production

 

     FY19      Jun Q19      FY19
vs
FY18
    Jun Q19
vs
Jun Q18
    Jun Q19
vs
Mar Q19
 

Metallurgical coal (kt)

     42,401        11,894        (1 %)      (1 %)      20

Energy coal (kt)

     27,487        7,429        (6 %)      (18 %)      10

Metallurgical coal – Metallurgical coal production was broadly flat at 42 Mt (75 Mt on a 100 per cent basis). Production is expected to be between 41 and 45 Mt (73 and 79 Mt on a 100 per cent basis) in the 2020 financial year. With major wash plant shutdowns at Goonyella, Peak Downs and Caval Ridge planned in the September 2019 quarter, volumes will be significantly weighted to the subsequent three quarters of the financial year.

At Queensland Coal, record annual production was achieved at BMC due to improved wash plant performance and increased yields at South Walker Creek and higher wash plant throughput at Poitrel following the purchase of the remaining 50 per cent of Red Mountain processing facility. Despite record stripping, BMA’s production decreased slightly due to unfavourable weather impacts (March and June 2019 quarters) and lower wash plant yields (June 2019 quarter).

Energy coal – Energy coal production for the 2019 financial year decreased six per cent to 27 Mt. Production is expected to decrease to between 24 and 26 Mt in the 2020 financial year.

New South Wales Energy Coal production decreased by two per cent as record stripping performance was offset by higher strip ratios and lower wash plant yields as we progress through the monocline and optimise our mine plan to focus on higher quality products given widening quality differentials. In the 2020 financial year, the combination of the monocline and a changed product mix to focus on higher quality products is expected to result in a decrease in production to between 15 and 17 Mt.

Cerrejón production decreased by 13 per cent due to adverse weather and its impacts on mine sequencing. Production is expected to be approximately 9 Mt in the 2020 financial year.

Other

Nickel production

 

     FY19      Jun Q19      FY19
vs
FY18
    Jun Q19
vs
Jun Q18
    Jun Q19
vs
Mar Q19
 

Nickel (kt)

     87.4        28.7        (6 %)      12     49

Nickel – Nickel West production decreased by six per cent to 87 kt as operations were suspended following a fire at the Kalgoorlie smelter in September 2018. The smelter returned to operation on 1 October 2018, with final repairs and ramp up completed in the March 2019 quarter. The Kwinana refinery achieved record saleable production of 74 kt in the 2019 financial year. Total nickel production is expected to be broadly unchanged in the 2020 financial year.

Potash project

 

Project and ownership

   Investment
US$M
    

Scope

  

Progress

Jansen Potash

(Canada)

100%

     2,700      Investment to finish the excavation and lining of the production and service shafts, and to continue the installation of essential surface infrastructure and utilities.    The project is 84% complete and within the approved budget. Boring equipment has been removed from both shafts and preparation work for final shaft lining is continuing.

 

 

BHP Operational Review for the year ended 30 June 2019    9


Minerals exploration

Minerals exploration expenditure for the 2019 financial year was US$188 million, of which US$128 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States.

During the June 2019 quarter, the second phase of the drilling program at Oak Dam was progressed, with 12,425 metres in 10 holes. The program tested lateral continuity, thicknesses and orientation of the central part of the mineralised system, with the drill results currently being evaluated and interpreted.

Consistent with our exploration focus on copper, in April 2019, BHP secured a five per cent interest in Midland Exploration Inc., which has copper exploration tenements in Canada.

In May 2019, BHP entered into a two-year, US$2 million Exploration Financing Agreement with Riverside Resources to fund exploration in Mexico’s north-eastern Sonora region. The exploration program will focus on the central part of the Laramide Copper Belt.

In July 2019, BHP entered into a binding earn-in and joint venture agreement with Luminex for its Tarqui and Tarqui 2 mining concessions in Ecuador. BHP will act as manager and operator of the joint venture company, and is preparing to continue exploration activities on the sites.

Variance analysis relates to the relative performance of BHP and/or its operations during the 2019 financial year compared with the 2018 financial year, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis. Numbers presented may not add up precisely to the totals provided due to rounding. Copper equivalent production based on 2019 financial year average realised prices.

The following footnotes apply to this Operational Review:

 

(1)

Excludes production from Onshore US.

(2)

2019 financial year unit cost guidance: Petroleum <US$11/boe, Escondida <US$1.15/lb, WAIO <US$15/t, Queensland Coal US$68-72/t and NSWEC ~US$51/t; based on exchange rates of AUD/USD 0.75 and USD/CLP 663.

(3)

Underlying EBIT and Underlying EBITDA are used to reflect the underlying performance of BHP. Underlying EBIT is earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and impairment.

(4)

Based on business-as-usual development; excludes project development.

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 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’, ‘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 27 ‘Subsidiaries’ in section 5.1 of BHP’s 30 June 2018 Annual Report and Form 20-F, unless stated otherwise. 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.

 

 

BHP Operational Review for the year ended 30 June 2019    10


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BHP Operational Review for the year ended 30 June 2019    11


Production summary

          Quarter ended      Year to date  
    BHP
interest
    Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Petroleum (1)

                     

Petroleum

                     

Conventional

                     

Crude oil, condensate and NGL (Mboe)

      13,486        14,087        14,497        13,236        13,366        55,186        57,405  

Natural gas (bcf)

      90.7        112.3        93.9        92.9        97.8        396.9        377.0  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total (Mboe)

      28,603        32,804        30,147        28,719        29,666        121,336        120,238  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Copper (2)

                     

Copper

                     

Payable metal in concentrate (kt)

                     

Escondida (3)

    57.5     246.1        240.0        212.6        205.4        224.1        882.1        925.8  

Antamina

    33.8     34.6        37.0        38.3        34.5        37.4        147.2        139.5  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      280.7        277.0        250.9        239.9        261.5        1,029.3        1,065.3  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cathode (kt)

                     

Escondida (3)

    57.5     70.1        55.4        71.9        62.4        63.5        253.2        287.5  

Pampa Norte (4)

    100     70.6        43.4        61.8        67.2        74.1        246.5        263.8  

Olympic Dam

    100     42.0        33.3        31.6        50.2        45.2        160.3        136.7  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      182.7        132.1        165.3        179.8        182.8        660.0        688.0  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                     
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total copper (kt)

      463.4        409.1        416.2        419.7        444.3        1,689.3        1,753.3  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Lead

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     546        563        600        456        770        2,389        3,434  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      546        563        600        456        770        2,389        3,434  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Zinc

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     35,983        30,558        24,237        20,848        22,469        98,112        119,800  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      35,983        30,558        24,237        20,848        22,469        98,112        119,800  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gold

                     

Payable metal in concentrate (troy oz)

                     

Escondida (3)

    57.5     68,345        63,578        73,726        73,998        74,704        286,006        229,102  

Olympic Dam (refined gold)

    100     33,497        23,471        17,856        28,609        37,032        106,968        91,556  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      101,842        87,049        91,582        102,607        111,736        392,974        320,658  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Silver

                     

Payable metal in concentrate (troy koz)

                     

Escondida (3)

    57.5     2,527        1,997        2,570        2,189        2,074        8,830        8,796  

Antamina

    33.8     1,321        1,309        1,178        1,062        1,209        4,758        5,437  

Olympic Dam (refined silver)

    100     278        213        212        230        268        923        792  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      4,126        3,519        3,960        3,481        3,551        14,511        15,025  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Uranium

                     

Payable metal in concentrate (t)

                     

Olympic Dam

    100     1,123        555        929        1,106        975        3,565        3,364  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      1,123        555        929        1,106        975        3,565        3,364  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Molybdenum

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     261        464        417        82        178        1,141        1,662  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      261        464        417        82        178        1,141        1,662  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the year ended 30 June 2019    12


Production summary

 

          Quarter ended      Year to date  
    BHP
interest
    Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Iron Ore

                     

Iron Ore

                     

Production (kt) (5)

                     

Newman

    85     18,500        16,378        17,578        15,608        17,058        66,622        67,071  

Area C Joint Venture

    85     12,041        11,696        10,280        11,627        13,837        47,440        51,517  

Yandi Joint Venture

    85     17,339        16,870        15,627        15,214        17,486        65,197        64,048  

Jimblebar (6)

    85     15,092        16,353        14,326        13,658        14,209        58,546        30,627  

Wheelarra

    85     614        114        30        10        5        159        25,158  

Samarco

    50     —          —          —          —          —          —          —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      63,586        61,411        57,841        56,117        62,595        237,964        238,421  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Coal

                     

Metallurgical coal

                     

Production (kt) (7)

                     

BMA

    50     9,220        7,744        7,694        7,608        9,090        32,136        32,893  

BHP Mitsui Coal (8)

    80     2,789        2,614        2,578        2,269        2,804        10,265        9,747  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      12,009        10,358        10,272        9,877        11,894        42,401        42,640  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Energy coal

                     

Production (kt)

                     

Australia

    100     6,261        3,982        4,311        4,552        5,412        18,257        18,541  

Colombia

    33.3     2,762        2,658        2,356        2,199        2,017        9,230        10,617  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      9,023        6,640        6,667        6,751        7,429        27,487        29,158  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other

                     

Nickel

                     

Saleable production (kt)

                     

Nickel West (9)

    100     25.6        21.4        18.1        19.2        28.7        87.4        93.0  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      25.6        21.4        18.1        19.2        28.7        87.4        93.0  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt

                     

Saleable production (t)

                     

Nickel West

    100     277        249        154        194        302        899        1,060  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      277        249        154        194        302        899        1,060  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(1)

LPG and ethane are reported as natural gas liquids (NGL). Product-specific conversions are made and NGL is reported in barrels of oil equivalent (boe). Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe.

(2)

Metal production is reported on the basis of payable metal.

(3)

Shown on a 100% basis. BHP interest in saleable production is 57.5%.

(4)

Includes Cerro Colorado and Spence.

(5)

Iron ore production is reported on a wet tonnes basis.

(6)

Shown on a 100% basis. BHP interest in saleable production is 85%.

(7)

Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.

(8)

Shown on a 100% basis. BHP interest in saleable production is 80%.

(9)

Production restated to include other nickel by-products.

Throughout this report figures in italics indicate that this figure has been adjusted since it was previously reported.

 

 

BHP Operational Review for the year ended 30 June 2019    13


Production and sales report

 

          Quarter ended     Year to date  
          Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
    Jun
2019
     Jun
2018
 

Petroleum - Conventional (1)

                      

Bass Strait

                      

Crude oil and condensate

   (Mboe)      1,361        1,653        1,401        893        1,246       5,193        5,815  

NGL

   (Mboe)      1,428        1,840        1,447        849        1,299       5,435        6,132  

Natural gas

   (bcf)      29.9        35.1        25.2        21.0        30.6       111.9        125.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      7.8        9.3        7.0        5.2        7.6       29.3        32.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

North West Shelf

                      

Crude oil and condensate

   (Mboe)      1,267        1,514        1,520        1,431        1,357       5,822        5,560  

NGL

   (Mboe)      186        242        206        193        189       830        823  

Natural gas

   (bcf)      34.2        36.6        37.5        36.6        34.8       145.5        142.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      7.2        7.9        8.0        7.7        7.3       30.9        30.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Pyrenees

                      

Crude oil and condensate

   (Mboe)      1,168        282        1,101        940        1,001       3,324        5,138  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.2        0.3        1.1        0.9        1.0       3.3        5.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Other Australia (2)

                      

Crude oil and condensate

   (Mboe)      7        7        8        6        7       28        32  

Natural gas

   (bcf)      13.9        13.8        13.9        13.0        12.2       52.9        56.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.3        2.3        2.3        2.2        2.0       8.8        9.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Atlantis (3)

                      

Crude oil and condensate

   (Mboe)      3,471        3,190        3,802        3,888        3,607       14,487        13,329  

NGL

   (Mboe)      217        215        268        275        248       1,006        878  

Natural gas

   (bcf)      1.5        1.5        1.9        2.0        2.2       7.6        6.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.9        3.7        4.4        4.5        4.2       16.8        15.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Mad Dog (3)

                      

Crude oil and condensate

   (Mboe)      581        1,270        1,158        1,258        1,246       4,932        3,972  

NGL

   (Mboe)      27        61        54        58        23       196        198  

Natural gas

   (bcf)      0.1        0.2        0.2        0.2        0.2       0.8        0.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.6        1.4        1.2        1.3        1.3       5.3        4.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Shenzi (3)

                      

Crude oil and condensate

   (Mboe)      2,110        2,016        2,024        1,881        1,725       7,646        9,237  

NGL

   (Mboe)      151        122        121        112        (2     353        616  

Natural gas

   (bcf)      0.4        0.4        0.4        0.4        0.4       1.6        1.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.3        2.2        2.2        2.1        1.8       8.3        10.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Trinidad/Tobago

                      

Crude oil and condensate

   (Mboe)      233        447        200        284        235       1,166        718  

Natural gas

   (bcf)      9.8        24.0        14.0        19.5        17.3       74.8        40.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.9        4.4        2.5        3.5        3.1       13.6        7.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Other Americas (3) (4)

                      

Crude oil and condensate

   (Mboe)      313        207        218        284        272       981        938  

NGL

   (Mboe)      22        3        4        18        3       28        33  

Natural gas

   (bcf)      0.3        —          0.1        0.2        0.1       0.4        0.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.4        0.2        0.2        0.3        0.3       1.1        1.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

UK (5)

                      

Crude oil and condensate

   (Mboe)      38        36        36        —          —         72        143  

NGL

   (Mboe)      18        21        21        —          —         42        88  

Natural gas

   (bcf)      0.6        0.7        0.7        —          —         1.4        2.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.2        0.2        0.2        —          —         0.3        0.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Algeria

                      

Crude oil and condensate

   (Mboe)      888        961        908        866        910       3,645        3,755  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.9        1.0        0.9        0.9        0.9       3.6        3.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

 

BHP Operational Review for the year ended 30 June 2019    14


Production and sales report

 

          Quarter ended      Year to date  
          Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Petroleum - Total (1)

                       

Conventional

                       

Crude oil and condensate

   (Mboe)      11,437        11,583        12,376        11,731        11,606        47,296        48,637  

NGL

   (Mboe)      2,049        2,504        2,121        1,505        1,760        7,890        8,768  

Natural gas

   (bcf)      90.7        112.3        93.9        92.9        97.8        396.9        377.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      28,603        32,804        30,147        28,719        29,666        121,336        120,238  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe. Negative production figures represent finalisation adjustments.

(2)

Other Australia includes Minerva and Macedon.

(3)

Gulf of Mexico volumes are net of royalties.

(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 year ended 30 June 2019    15


Production and sales report

 

          Quarter ended     Year to date  
          Jun
2018
    Sep
2018
    Dec
2018
    Mar
2019
    Jun
2019
    Jun
2019
    Jun
2018
 

Copper

                 

Metals production is payable metal unless otherwise stated.

 

Escondida, Chile (1)

                 

Material mined

   (kt)      106,788       107,260       105,580       103,936       100,693       417,469       416,411  

Sulphide ore milled

   (kt)      31,732       30,513       30,507       32,027       32,519       125,566       118,275  

Average concentrator head grade

   (%)      0.96     0.94     0.87     0.82     0.86     0.87     0.99

Production ex mill

   (kt)      253.6       241.9       219.9       216.9       230.9       909.6       956.1  

Production

                 

Payable copper

   (kt)      246.1       240.0       212.6       205.4       224.1       882.1       925.8  

Copper cathode (EW)

   (kt)      70.1       55.4       71.9       62.4       63.5       253.2       287.5  

- Oxide leach

   (kt)      27.1       19.5       23.4       20.9       23.4       87.2       101.4  

- Sulphide leach

   (kt)      43.0       35.8       48.5       41.5       40.1       165.9       186.1  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total copper

   (kt)      316.2       295.4       284.5       267.8       287.6       1,135.3       1,213.3  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Payable gold concentrate

   (troy oz)      68,345       63,578       73,726       73,998       74,704       286,006       229,102  

Payable silver concentrate

   (troy koz)      2,527       1,997       2,570       2,189       2,074       8,830       8,796  

Sales

                 

Payable copper

   (kt)      260.3       216.5       229.2       212.0       223.4       881.1       920.4  

Copper cathode (EW)

   (kt)      80.9       53.2       72.3       56.6       67.5       249.6       288.3  

Payable gold concentrate

   (troy oz)      68,345       63,578       73,726       73,999       74,704       286,007       229,102  

Payable silver concentrate

   (troy koz)      2,527       1,997       2,570       2,189       2,074       8,830       8,796  

(1)   Shown on a 100% basis. BHP interest in saleable production is 57.5%.

    

Pampa Norte, Chile

                 

Cerro Colorado

                 

Material mined

   (kt)      17,918       18,488       19,875       15,561       13,534       67,458       77,256  

Ore milled

   (kt)      4,833       4,802       5,069       4,277       4,740       18,888       18,300  

Average copper grade

   (%)      0.58     0.53     0.62     0.63     0.64     0.60     0.59

Production

                 

Copper cathode (EW)

   (kt)      19.0       14.2       19.4       18.2       23.4       75.2       63.3  

Sales

                 

Copper cathode (EW)

   (kt)      20.9       13.8       19.0       15.5       26.8       75.1       64.6  

Spence

                 

Material mined

   (kt)      23,103       23,007       21,661       18,632       19,213       82,513       89,976  

Ore milled

   (kt)      4,009       5,642       5,428       4,376       5,224       20,670       19,447  

Average copper grade

   (%)      1.11     1.21     1.10     1.03     1.02     1.09     1.13

Production

                 

Copper cathode (EW)

   (kt)      51.6       29.2       42.4       49.0       50.7       171.3       200.5  

Sales

                 

Copper cathode (EW)

   (kt)      57.1       29.7       39.1       46.1       55.0       169.9       202.1  

 

 

BHP Operational Review for the year ended 30 June 2019    16


Production and sales report

 

          Quarter ended     Year to date  
          Jun
2018
    Sep
2018
    Dec
2018
    Mar
2019
    Jun
2019
    Jun
2019
    Jun
2018
 

Copper (continued)

                 

Metals production is payable metal unless otherwise stated.

 

Antamina, Peru

                 

Material mined (100%)

   (kt)      59,002       62,470       62,850       57,900       58,994       242,214       235,428  

Sulphide ore milled (100%)

   (kt)      12,973       13,197       12,912       11,466       12,864       50,439       51,059  

Average head grades

                 

- Copper

   (%)      0.91     0.96     1.02     1.04     1.02     1.01     0.94

- Zinc

   (%)      1.19     1.10     0.85     0.87     0.86     0.92     1.03

Production

                 

Payable copper

   (kt)      34.6       37.0       38.3       34.5       37.4       147.2       139.5  

Payable zinc

   (t)      35,983       30,558       24,237       20,848       22,469       98,112       119,800  

Payable silver

   (troy koz)      1,321       1,309       1,178       1,062       1,209       4,758       5,437  

Payable lead

   (t)      546       563       600       456       770       2,389       3,434  

Payable molybdenum

   (t)      261       464       417       82       178       1,141       1,662  

Sales

                 

Payable copper

   (kt)      36.6       33.6       40.7       33.3       36.0       143.6       137.6  

Payable zinc

   (t)      33,088       31,822       26,072       20,595       21,750       100,239       115,108  

Payable silver

   (troy koz)      1,311       1,193       1,236       1,027       937       4,393       5,308  

Payable lead

   (t)      595       612       649       749       296       2,306       4,050  

Payable molybdenum

   (t)      388       208       535       256       127       1,126       1,749  

Olympic Dam, Australia

                 

Material mined (1)

   (kt)      2,201       2,044       2,434       2,191       2,425       9,094       7,499  

Ore milled

   (kt)      2,171       1,242       2,157       2,371       2,195       7,965       7,215  

Average copper grade

   (%)      2.12     2.05     2.10     2.22     2.30     2.18     2.19

Average uranium grade

   (kg/t)      0.69       0.62       0.62       0.65       0.65       0.64       0.64  

Production

                 

Copper cathode (ER and EW)

   (kt)      42.0       33.3       31.6       50.2       45.2       160.3       136.7  

Payable uranium

   (t)      1,123       555       929       1,106       975       3,565       3,364  

Refined gold

   (troy oz)      33,497       23,471       17,856       28,609       37,032       106,968       91,556  

Refined silver

   (troy koz)      278       213       212       230       268       923       792  

Sales

                 

Copper cathode (ER and EW)

   (kt)      46.0       33.9       26.6       47.4       50.5       158.4       138.7  

Payable uranium

   (t)      1,230       765       828       550       1,427       3,570       2,757  

Refined gold

   (troy oz)      35,714       21,145       17,812       27,574       36,133       102,664       96,863  

Refined silver

   (troy koz)      307       216       177       241       257       891       846  

 

(1)

Material mined refers to run of mine ore mined and hoisted.

 

 

BHP Operational Review for the year ended 30 June 2019    17


Production and sales report

 

          Quarter ended      Year to date  
          Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Iron Ore

                       

Iron ore production and sales are reported on a wet tonnes basis.

 

Pilbara, Australia

                       

Production

                       

Newman

   (kt)      18,500        16,378        17,578        15,608        17,058        66,622        67,071  

Area C Joint Venture

   (kt)      12,041        11,696        10,280        11,627        13,837        47,440        51,517  

Yandi Joint Venture

   (kt)      17,339        16,870        15,627        15,214        17,486        65,197        64,048  

Jimblebar (1)

   (kt)      15,092        16,353        14,326        13,658        14,209        58,546        30,627  

Wheelarra

   (kt)      614        114        30        10        5        159        25,158  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production

   (kt)      63,586        61,411        57,841        56,117        62,595        237,964        238,421  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production (100%)

   (kt)      72,145        69,342        65,515        63,609        71,133        269,599        275,091  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Lump

   (kt)      15,173        15,014        14,020        13,603        15,296        57,933        58,207  

Fines

   (kt)      47,730        46,527        44,059        41,981        47,570        180,137        178,564  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      62,903        61,541        58,079        55,584        62,866        238,070        236,771  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total sales (100%)

   (kt)      71,385        69,421        65,758        62,853        72,478        270,510        273,239  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)   Shown on a 100% basis. BHP interest in saleable production is 85%.

    

Samarco, Brazil (1)

                       

Production

   (kt)      —          —          —          —          —          —          —    

Sales

   (kt)      —          —          10        —          —          10        39  

 

(1)

Mining and processing operations remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.

 

 

BHP Operational Review for the year ended 30 June 2019    18


Production and sales report

 

            Quarter ended      Year to date  
            Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Coal

                       

Coal production is reported on the basis of saleable product.

 

                 

Queensland Coal

                       

Production (1)

                       

BMA

                       

Blackwater

     (kt)        1,849        1,704        1,680        1,484        1,735        6,603        6,688  

Goonyella

     (kt)        2,639        1,989        1,813        2,141        2,620        8,563        7,961  

Peak Downs

     (kt)        1,658        1,131        1,685        1,468        1,649        5,933        6,350  

Saraji

     (kt)        1,201        1,111        1,288        1,250        1,243        4,892        5,053  

Daunia

     (kt)        629        620        419        470        669        2,178        2,556  

Caval Ridge

     (kt)        1,244        1,189        809        795        1,174        3,967        4,285  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA

     (kt)        9,220        7,744        7,694        7,608        9,090        32,136        32,893  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA (100%)

     (kt)        18,440        15,488        15,388        15,216        18,180        64,272        65,786  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                       

South Walker Creek

     (kt)        1,615        1,505        1,636        1,429        1,624        6,194        6,029  

Poitrel

     (kt)        1,174        1,109        942        840        1,180        4,071        3,718  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BHP Mitsui Coal

     (kt)        2,789        2,614        2,578        2,269        2,804        10,265        9,747  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                       
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

     (kt)        12,009        10,358        10,272        9,877        11,894        42,401        42,640  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal (100%)

     (kt)        21,229        18,102        17,966        17,485        20,984        74,537        75,533  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Coking coal

     (kt)        8,489        7,356        7,514        7,221        7,932        30,023        29,941  

Weak coking coal

     (kt)        2,866        2,813        3,058        3,282        2,942        12,095        11,430  

Thermal coal

     (kt)        85        141        157        379        350        1,027        528  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (kt)        11,440        10,310        10,729        10,882        11,224        43,145        41,899  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total (100%)

     (kt)        20,162        18,102        18,818        19,176        19,789        75,885        74,083  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Production figures include some thermal coal.

(2)

Shown on a 100% basis. BHP interest in saleable production is 80%.

 

NSW Energy Coal, Australia

                       

Production

   (kt)      6,261        3,982        4,311        4,552        5,412        18,257        18,541  

Sales

                       

Export thermal coal

   (kt)      5,795        3,549        4,809        3,529        5,181        17,068        16,646  

Inland thermal coal

   (kt)      160        332        393        302        975        2,002        1,376  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      5,955        3,881        5,202        3,831        6,156        19,070        18,022  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cerrejón, Colombia

                       

Production

   (kt)      2,762        2,658        2,356        2,199        2,017        9,230        10,617  

Sales thermal coal - export

   (kt)      2,763        2,589        2,297        2,200        2,245        9,331        10,380  

 

 

BHP Operational Review for the year ended 30 June 2019    19


Production and sales report

 

         Quarter ended      Year to date  
         Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Other

                      

Nickel production is reported on the basis of saleable product

 

Nickel West, Australia

                      

Mt Keith

                      

Nickel concentrate

   (kt)     55.6        50.2        44.9        52.5        52.8        200.4        204.8  

Average nickel grade

   (%)     18.8        18.9        19.8        19.2        19.5        77.4        80.9  

Leinster

                      

Nickel concentrate

   (kt)     78.4        78.8        65.3        51.8        48.3        244.2        299.4  

Average nickel grade

   (%)     9.8        8.4        8.4        9.3        10.8        36.9        37.2  

Saleable production

                      

Refined nickel (1) (2)

   (kt)     18.5        19.8        16.3        17.6        19.9        73.6        71.4  

Intermediates and nickel by-products (1) (3)

   (kt)     7.1        1.6        1.8        1.6        8.8        13.8        21.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)     25.6        21.4        18.1        19.2        28.7        87.4        93.0  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)     277        249        154        194        302        899        1,060  

Sales

                      —          —    

Refined nickel (1) (2)

   (kt)     17.5        19.3        17.3        17.9        19.9        74.4        71.0  

Intermediates and nickel by-products (1) (3)

   (kt)     6.3        2.2        2.1        0.1        8.4        12.8        20.7  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)     23.8        21.5        19.4        18.0        28.3        87.2        91.7  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)     277        249        154        194        302        899        1,060  

 

(1)

Production and sales restated to include other nickel by-products.

(2)

High quality refined nickel metal, including briquettes and powder.

(3)

Nickel contained in matte and by-product streams.

 

 

BHP Operational Review for the year ended 30 June 2019    20


Production and sales report

 

          Quarter ended      Year to date  
          Jun
2018
     Sep
2018
     Dec
2018
     Mar
2019
     Jun
2019
     Jun
2019
     Jun
2018
 

Onshore US - Discontinued operations (1)(2)

                       

Eagle Ford (3)

                       

Crude oil and condensate

   (Mboe)      3,826        3,256        1,035        —          —          4,291        13,841  

NGL

   (Mboe)      1,767        1,919        614        —          —          2,533        7,278  

Natural gas

   (bcf)      13.9        13.8        4.3        —          —          18.1        54.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      7.9        7.5        2.4        —          —          9.8        30.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permian (3)

                       

Crude oil and condensate

   (Mboe)      1,903        1,478        631        —          —          2,109        5,622  

NGL

   (Mboe)      770        687        284        —          —          971        2,282  

Natural gas

   (bcf)      6.4        4.8        1.9        —          —          6.7        18.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.7        3.0        1.2        —          —          4.2        11.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Haynesville (3)

                       

Crude oil and condensate

   (Mboe)      —          11        —          —          —          11        1  

NGL

   (Mboe)      —          —          —          —          —          —          —    

Natural gas

   (bcf)      33.1        39.0        13.9        —          —          52.9        105.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      5.5        6.5        2.3        —          —          8.8        17.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fayetteville (4)

                       

Natural gas

   (bcf)      19.1        18.6        —          —          —          18.6        79.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.2        3.1        —          —          —          3.1        13.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Onshore US

                       

Crude oil and condensate

   (Mboe)      5,729        4,745        1,666        —          —          6,411        19,464  

NGL

   (Mboe)      2,537        2,606        898        —          —          3,504        9,560  

Natural gas

   (bcf)      72.5        76.2        20.1        —          —          96.3        258.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      20,349        20,051        5,914        —          —          25,965        72,107  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe. Negative production figures represent finalisation adjustments.

(2)

Volumes are net of mineral holder royalties.

(3)

BHP completed the sale of its interests in the Eagle Ford, Haynesville and Permian assets on 31 October 2018.

(4)

BHP completed the sale of its Fayetteville assets on 28 September 2018.

 

 

BHP Operational Review for the year ended 30 June 2019    21


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

      BHP Group Limited and BHP Group Plc
Date: July 17, 2019     By:  

/s/ Rachel Agnew

    Name:   Rachel Agnew
    Title:   Company Secretary