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

January 18, 2018

 

 

 

BHP BILLITON LIMITED

(ABN 49 004 028 077)

(Exact name of Registrant as specified in its charter)

  

BHP BILLITON PLC

(REG. NO. 3196209)

(Exact name of Registrant as specified in its charter)

VICTORIA, AUSTRALIA

(Jurisdiction of incorporation or organisation)

  

ENGLAND AND WALES

(Jurisdiction of incorporation or organisation)

171 COLLINS STREET, MELBOURNE,

VICTORIA 3000 AUSTRALIA

(Address of principal executive offices)

  

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

   18 January 2018

Release Number

   01/18

BHP OPERATIONAL REVIEW FOR THE HALF YEAR ENDED 31 DECEMBER 2017

 

  Full year production and unit cost guidance(1) maintained for Petroleum, Copper, Iron Ore and Energy Coal. At Western Australia Iron Ore (WAIO), a record annualised production rate of 284 Mt (100 per cent basis) was achieved for the December 2017 quarter.

 

  Production guidance for Metallurgical Coal reduced to between 41 and 43 Mt as a result of challenging roof conditions at Broadmeadow, which are expected to continue through the March 2018 quarter, and geotechnical issues triggered by wet weather impacts at Blackwater. Unit cost guidance is also expected to be negatively impacted and is currently under review.

 

  We continue to release latent capacity across our portfolio, with the Los Colorados Extension project successfully ramped up during the December 2017 quarter.

 

  In Onshore US, our operated rig count remained at nine during the December 2017 quarter but is expected to fall as we tailor plans to maximise value in the exit process. We continue to progress a number of alternatives to divest our Onshore US assets for value.

 

  All major projects under development are tracking to plan.

 

  Underlying EBIT(2) in the December 2017 half year is expected to include impairment charges, predominately related to conveyors at Escondida, in a range of US$250 million to US$350 million.

 

Production

   Dec H17      vs Dec H16      

Petroleum (MMboe)

     99        (7 %)    Lower volumes reflect the impact of Hurricane Harvey and Hurricane Nate on US petroleum assets and natural field decline.

Copper (kt)

     833        17   Increased volumes at Escondida supported by the ramp-up of the Los Colorados Extension project.

Iron ore(3) (Mt)

     117        0   Record production at Jimblebar and Mining Area C offset by planned maintenance and lower opening stockpile levels following the Mt Whaleback fire in June 2017.

Metallurgical coal(3) (Mt)

     20        (4 %)    Record production at four Queensland Coal mines offset by the lower volumes at Broadmeadow (roof conditions) and Blackwater (geotechnical issues).

Energy coal(3) (Mt)

     14        4   Strong performance at New South Wales Energy Coal offset by the impacts of unfavourable wet weather at Cerrejón.

BHP Chief Executive Officer, Andrew Mackenzie, said: “A strong operating performance in the first half allowed us to capture the benefit of higher prices. The successful Los Colorados Extension project ramp-up contributed to a 17 per cent increase in copper output and production records were achieved at a number of Western Australia Iron Ore and Queensland Coal mines. We have revised down our metallurgical coal production forecast for the full year as a result of geotechnical issues at both Broadmeadow and Blackwater. The momentum we’ve built across the wider portfolio during the second quarter will flow through to an expected stronger second half operating performance. Together with incremental production from latent capacity projects in iron ore and copper, we expect volume growth of six per cent for the full year.”

 

 

BHP Operational Review for the half year ended 31 December 2017    1


Summary

Operational performance

Production for the December 2017 half year and guidance for the 2018 financial year are summarised in the table below.

 

Production

   Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
    Previous
FY18
guidance
    Current
FY18
guidance
 

Petroleum (MMboe)

     99        48        (7 %)      (6 %)      (4 %)      180 -190       180 - 190  

Onshore US (MMboe)

     35        18        (13 %)      (10 %)      1     61 - 67       61 - 67  

Conventional (MMboe)

     64        31        (3 %)      (3 %)      (6 %)      119 - 123       119 - 123  

Copper (kt)

     833        429        17     20     6     1,655 - 1,790     1,655 - 1,790  

Escondida (kt)

     583        315        29     34     17     1,130 - 1,230       1,130 - 1,230  

Other copper(i) (kt)

     250        114        (4 %)      (7 %)      (16 %)      525 - 560       525 - 560  

Iron ore(ii) (Mt)

     117        62        0     3     11     239 - 243       239 - 243  

WAIO (100% basis) (Mt)

     136        72        0     3     11     275 - 280 (iii)       275 - 280 (iii)  

Metallurgical coal(ii) (Mt)

     20        10        (4 %)      (9 %)      (8 %)      44 - 46       41 - 43  

Energy coal(ii) (Mt)

     14        7        4     10     8     29 - 30       29 - 30  

 

(i) Other copper comprises Pampa Norte, Olympic Dam and Antamina.
(ii) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(iii) Subject to regulatory approvals to increase capacity above 270 Mt.

Major development projects

During the December 2017 half year, the BHP Board approved an investment of US$2.5 billion for the development of the Spence Growth Option.

BHP has four major projects under development in Petroleum, Copper and Potash, with a combined budget of US$7.5 billion over the life of the projects. All projects remain on time and on budget.

Corporate update

BHP expects Underlying EBIT in the December 2017 half year to include impairment charges (predominately related to conveyors at Escondida that are no longer planned to be utilised due to the successful completion of the Los Colorados Extension project) in a range of US$250 million to US$350 million.

The Group’s adjusted effective tax rate(4) for the December 2017 half year is currently being finalised and is expected to be below the full year guidance range of 32 to 37 per cent.

As previously highlighted, during the December 2017 half year we made final corporate income tax cash payments in Australia of approximately US$1.3 billion relating to the prior year. We also successfully concluded a US$2.9 billion multi-currency bond repurchase plan, with total costs in relation to the repurchase program of approximately US$100 million to be reported in net finance costs in the December 2017 half year financial results.

On 16 November 2017, Samarco and its shareholders, Vale S.A. and BHP Billiton Brasil, entered into an agreement with the Federal Prosecutors’ Office in Brazil and the Minas Gerais State Prosecutors Office (Amendment Agreement). The Amendment Agreement, subject to ratification by the 12th Federal Court of Minas Gerais, amends the Preliminary Agreement(5) entered into on 18 January 2017 in relation to the Samarco dam failure (Preliminary Agreement). The Amendment Agreement provides for the State Prosecutors to become a party to the Preliminary Agreement and provides for additional community consultation.

Samarco, Vale S.A., BHP Billiton Brasil and the Federal Prosecutors also jointly requested, and the 12th Federal Court has approved, an additional 150 days, ending on 20 April 2018, for the parties to continue negotiations for the settlement of the Public Civil Claims.

On 22 December 2017, BHP announced a total of US$181 million in further financial support for the Renova Foundation and Samarco until 30 June 2018. This comprises US$133 million to fund the Renova Foundation which will be offset against the Group’s provision for the Samarco dam failure, US$6 million of fees payable to experts appointed in connection with remediation and compensation programs and a short-term facility of up to US$42 million to be made available to Samarco.

 

 

BHP Operational Review for the half year ended 31 December 2017    2


As at the date of this Operational Review, we are not in a position to provide an update, for the purpose of the December 2017 half year financial results, on the ongoing potential financial impacts on BHP Billiton Brasil of the Samarco dam failure. Any financial impacts will continue to be classified as an exceptional item.

On 22 December 2017, the US President signed a new US tax law (H.R. 1). BHP is currently working through the financial impacts of the tax reform, which will include a non-cash revaluation of the Group’s US net deferred tax assets. The financial impact is expected to give rise to an exceptional item in the December 2017 half year financial results. Longer term, we expect US attributable profits to be positively impacted by the lower US corporate income tax rate.

Marketing update

The average realised prices achieved for our major commodities are summarised in the table below. The majority of iron ore shipments were linked to the index price for the month of shipment, with price differentials predominantly a reflection of product quality and market fundamentals. 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.

 

Average realised prices(i)

   Dec H17      Dec H16      Jun H17      FY17      Dec H17
vs
Dec H16
    Dec H17
vs
Jun H17
    Dec H17
vs

FY17
 

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

     54        45        50        48        20     8     13

Natural gas (US$/Mscf)(ii)

     3.54        3.21        3.48        3.34        10     2     6

US natural gas (US$/Mscf)

     2.84        2.79        2.98        2.88        2     (5 %)      (1 %) 

LNG (US$/Mscf)

     7.48        6.35        7.37        6.84        18     1     9

Copper (US$/lb)

     3.20        2.41        2.70        2.54        33     19     26

Iron ore (US$/wmt, FOB)

     57        55        62        58        4     (8 %)      (2 %) 

Hard coking coal (US$/t)

     182        179        180        180        2     1     1

Weak coking coal (US$/t)

     121        122        121        121        (1 %)      0     0

Thermal coal (US$/t)(iii)

     87        74        75        75        18     16     16

Nickel metal (US$/t)

     11,083        10,581        9,799        10,184        5     13     9

 

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

At 31 December 2017, the Group had 348 kt of outstanding copper sales that were revalued at a weighted average price of US$3.28 per pound. The final price of these sales will be determined over the remainder of the 2018 financial year. In addition, 254 kt of copper sales from the 2017 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will increase Underlying EBITDA(2) by US$246 million in the December 2017 half year.

 

 

BHP Operational Review for the half year ended 31 December 2017    3


Petroleum

Production

 

     Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
 

Crude oil, condensate and natural gas liquids (MMboe)

     45        22        (8 %)      (7 %)      1

Natural gas (bcf)

     325        157        (6 %)      (5 %)      (7 %) 

Total petroleum production (MMboe)

     99        48        (7 %)      (6 %)      (4 %) 

Petroleum – Total petroleum production for the December 2017 half year decreased by seven per cent to 99 MMboe. Guidance for the 2018 financial year remains unchanged at between 180 and 190 MMboe, comprising Conventional volumes between 119 and 123 MMboe and Onshore US volumes between 61 and 67 MMboe.

 

Production breakdown

   Dec H17     

vs Dec H16

    

Crude oil, condensate and natural gas liquids (MMboe)

Conventional      30      (6%)    Decrease due to the impact of Hurricane Harvey and Hurricane Nate in the Gulf of Mexico and natural field decline across the portfolio.
Onshore US      15      (12%)    Decrease due to the impact of Hurricane Harvey and natural field decline, which more than offset additional wells put online in the Black Hawk and Permian.
Total      45      (8%)   

Natural gas (bcf)

        
Conventional      203      (1%)    Production broadly unchanged.
Onshore US      122      (14%)    Decrease due to the impact of Hurricane Harvey and natural field decline, partially offset by additional wells put online in the Eagle Ford, Permian and Haynesville.
Total      325      (6%)   

Completion of the agreement with Chevron and ExxonMobil to withdraw from our 4.95 per cent interest in the Genesis deepwater asset in the Gulf of Mexico occurred in December 2017, with an effective date of 1 January 2017.

Projects

 

Project and ownership

   Capital
expenditure
(US$m)
     Initial
production
target date
    

Capacity

  

Progress

North West Shelf Greater

Western Flank-B

(Australia)

16.67% (non-operator)

     314        CY19      To maintain LNG plant throughput from the North West Shelf operations.    On schedule and budget. The overall project is 66% complete.

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 10% complete.

Petroleum capital expenditure of approximately US$1.9 billion is now planned in the 2018 financial year, a reduction from our previous guidance of US$2.0 billion. Onshore US capital expenditure is expected to be lower at US$1.1 billion, reflecting development activity tailored to support value in the exit process and meet Hold by Production obligations. Conventional capital expenditure of US$0.8 billion remains unchanged, focused on high-return infill drilling opportunities in the Gulf of Mexico, a life extension project at North West Shelf and investment in the Mad Dog Phase 2 project.

Onshore US development activity

Onshore US drilling and development expenditure for the December 2017 half year was US$336 million (US$511 million on an activity basis). Our operated rig count remained at nine during the December 2017 quarter.

 

  We have adjusted our Onshore US capital plans to optimise value for our planned exit.

 

  In the Permian, sub-surface trials have confirmed first year production improvements associated with larger completions. We reduced our rig count from three to two (in December 2017 quarter) as we focused on meeting Hold by Production obligations and progressing sub-surface trials.

 

 

 

BHP Operational Review for the half year ended 31 December 2017    4


  In the Eagle Ford, we increased our rig count from two to three in the December 2017 quarter to test the Austin Chalk horizon and trial larger completions in Hawkville. We anticipate a return to two rigs during the March 2018 quarter.

 

  In the Haynesville, we recently incorporated larger completions and have been operating new wells with larger chokes, both of which have improved results. We will continue to implement these changes in future wells, but expect to lower our rig count during the second half of the 2018 financial year as rig contracts expire and we optimise future investments ahead of our planned exit.

 

  In the Fayetteville, our plans remain unchanged at this time. We continue to assess the potential of the Moorefield horizon based on data from the new non-operated wells.

 

December 2017 half year

(December 2016 half year)

        Liquids focused areas      Gas focused areas  
      Eagle Ford      Permian      Haynesville      Fayetteville      Total  

Capital expenditure(i)

   US$ billion      0.1 (0.1)        0.1 (0.1)        0.1 (0.0)        0.0 (0.0)        0.3 (0.3)  

Rig allocation

   At period end      3 (1)        2 (1)        4 (1)        0 (0)        9 (3)  

Net wells drilled and completed(ii)

   Period total      9 (43)        10 (15)        10 (0)        0 (2)        29 (60)  

Net productive wells

   At period end      931 (942)        136 (118)        405 (394)        1,043 (1,042)        2,515 (2,496)  

 

(i) Includes land acquisition, site preparation, drilling, completions, well site facilities, mid-stream infrastructure and pipelines.
(ii) Can vary between periods based on changes in rig activity and the inventory of wells drilled but not yet completed at period end.

We continue to progress a number of alternatives to exit our Onshore US assets for value. We are preparing all appropriate documentation ahead of data rooms being opened to potential trade sale buyers by the end of the March 2018 quarter. In parallel, we continue to explore a potential exit via demerger or Initial Public Offering.

Petroleum exploration

Exploration and appraisal wells drilled during the December 2017 quarter are summarised below.

 

Well

   Location    Target    BHP equity   Spud date    Water depth      Total well
depth
     Status

Scimitar

   US Gulf of Mexico
GC392
   Oil    65%   1 October 2017      1,289 m        9,386 m      Drilling ahead
                   

In the US Gulf of Mexico, the Scimitar well was spud on 1 October 2017, with results expected in the March 2018 quarter. BHP holds a 65 per cent working interest and is the operator of the Scimitar prospect, with partner Repsol (20 per cent working interest) and Statoil (15 per cent working interest).

In Mexico, an Exploration and Appraisal plan for the Trion contractual area licence number CNH-A1-Trion/2016 (formerly referred to as blocks AE-0092 and AE-0093) was submitted to the Comisión Nacional de Hidrocarburos of Mexico by BHP and Pemex on 29 August 2017, in line with regulatory requirements. We have received positive feedback and planning continues for the exploration and appraisal wells which are expected to be drilled in the 2019 financial year.

In Trinidad and Tobago, we continued appraisal work to assess the potential commercialisation of the gas discovery at LeClerc. Preparations continued for Phase 2 deepwater exploration which is expected to commence in the second half of the 2018 financial year.

Petroleum exploration expenditure for the December 2017 half year was US$378 million, of which US$137 million was expensed. A US$715 million exploration program is planned for the 2018 financial year. This program comprises the Wildling-2 side track and Scimitar exploration well in the US Gulf of Mexico and two wells in Trinidad and Tobago, with the third well now expected to be drilled at the beginning of the 2019 financial year.

 

 

BHP Operational Review for the half year ended 31 December 2017    5


Copper

Production

 

     Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
 

Copper (kt)

     833        429        17     20     6

Zinc (t)

     58,255        29,054        54     30     (1 %) 

Uranium oxide concentrate (t)

     1,123        243        (43 %)      (77 %)      (72 %) 

Copper – Total copper production for the December 2017 half year increased by 17 per cent to 833 kt. Guidance for the 2018 financial year remains unchanged at between 1,655 and 1,790 kt.

Escondida copper production for the December 2017 half year increased by 29 per cent to 583 kt, supported by the start-up of the Los Colorados Extension (LCE) project on 10 September 2017. LCE successfully ramped up during the December 2017 quarter, enabling utilisation of the three concentrators. Production guidance for the 2018 financial year remains unchanged at between 1,130 and 1,230 kt. Escondida and Union N°2 of Supervisors and Staff signed a new Collective Agreement, valid from 1 October 2017, which has a duration of 36 months. The existing agreement with Union N°1 will expire on 1 August 2018, with planning underway for early negotiations.

Pampa Norte copper production for the December 2017 half year increased by nine per cent to 126 kt, supported by record material mined at Cerro Colorado and rapid ramp-up at the Spence tank house post unplanned maintenance during the September 2017 quarter. Pampa Norte production guidance for the 2018 financial year remains unchanged and is expected to be higher than the prior year.

Olympic Dam copper production for the December 2017 half year decreased by 31 per cent to 54 kt as a result of the planned major smelter maintenance campaign recently completed. Smelting operations have now resumed with the first anode cast from the flash furnace on 23 December 2017. Operations will continue to ramp-up to full capacity in the March 2018 quarter, with production guidance unchanged at 150 kt for the 2018 financial year. We expect production to increase to approximately 215 kt in the 2019 financial year, underpinned by improved operating performance and higher ore grades from the Southern Mine Area.

Antamina copper production for the December 2017 half year increased by five per cent to 70 kt and zinc production increased 54 per cent to 58 kt due to higher head grades and mining progressing through a zinc-rich ore zone consistent with the mine plan. Guidance for the 2018 financial year remains unchanged, with copper production of approximately 125 kt and zinc production of approximately 100 kt.

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 4% complete.

 

 

BHP Operational Review for the half year ended 31 December 2017    6


Iron Ore

Production

 

     Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
 

Iron ore(i) (kt)

     117,144        61,557        0     3     11

 

(i) Represents Western Australia Iron Ore (WAIO). Excludes production from Samarco.

Iron ore – Total iron ore production for the December 2017 half year was in line with the same period last year at 117 Mt, or 136 Mt on a 100 per cent basis. Guidance for the 2018 financial year remains unchanged at between 239 and 243 Mt, or between 275 and 280 Mt on a 100 per cent basis, with volumes weighted to the second half of the financial year as expected.

At WAIO, record production at Jimblebar and Mining Area C was offset by the impact of lower opening stockpile levels following the fire at the Mt Whaleback screening plant in June 2017, and planned maintenance in the previous quarter. Volumes increased by 11 per cent from the September 2017 quarter with a record annualised rate of 284 Mt (100 per cent basis) achieved for the December 2017 quarter. The higher volumes reflect increased plant availability and improved rail performance. Port debottlenecking activities were completed in the December 2017 quarter and will support higher volumes in the second half of the financial year.

BHP continues to work with the relevant authorities in relation to the necessary approvals to increase system capacity to 290 Mtpa (100 per cent basis).

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

Coal

Production

 

     Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
 

Metallurgical coal (kt)

     20,252        9,685        (4 %)      (9 %)      (8 %) 

Energy coal (kt)

     14,029        7,297        4     10     8

Metallurgical coal – Metallurgical coal production for the December 2017 half year decreased by four per cent to 20 Mt. Guidance for the 2018 financial year has been reduced to between 41 and 43 Mt and reflects lower volumes now expected at Broadmeadow and Blackwater. As a result of the reduced Broadmeadow and Blackwater volumes and compensatory increased production from higher cost pits, unit cost guidance is also expected to be negatively impacted and is currently under review.

At Queensland Coal, production for the December 2017 half year was lower due to the impacts of ongoing challenging roof conditions at Broadmeadow and geotechnical issues brought on by wet weather at Blackwater. This was partially offset by record production at South Walker Creek, Saraji, Caval Ridge and Daunia, underpinned by improved truck and shovel performance, utilisation of latent dragline capacity at Caval Ridge and increased wash-plant feed rates.

The Caval Ridge Southern Circuit project is progressing according to plan, with production expected to ramp-up early in the 2019 financial year.

Energy coal – Energy coal production for the December 2017 half year increased by four per cent to 14 Mt. Guidance for the 2018 financial year remains unchanged at 29 to 30 Mt.

New South Wales Energy Coal production increased by 10 per cent as it benefitted from improved stripping performance, higher truck utilisation and additional bypass coal. This was partially offset by a six per cent decline in Cerrejón production, which was impacted by wet weather conditions during the September 2017 quarter.

 

 

BHP Operational Review for the half year ended 31 December 2017    7


Other

Nickel production

 

     Dec H17      Dec Q17      Dec H17
vs
Dec H16
    Dec Q17
vs
Dec Q16
    Dec Q17
vs
Sep Q17
 

Nickel (kt)

     45.2        22.4        11     1     (2 %) 

Nickel – Nickel West production for the December 2017 half year increased by 11 per cent to 45 kt of nickel primarily due to improved performance at the Kalgoorlie smelter. Nickel production guidance for the 2018 financial year remains unchanged and is expected to be broadly in line with the 2017 financial year.

Potash project

 

Project and ownership

   Investment
(US$m)
    

Scope

  

Progress

Jansen Potash

(Canada)

100%

     2,600      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 75% complete and within the approved budget. Shaft excavation is progressing.

Minerals exploration

Minerals exploration expenditure for the December 2017 half year was US$86 million, of which US$55 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.

 

 

Variance analysis relates to the relative performance of BHP and/or its operations during the December 2017 half year compared with the December 2016 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. Copper equivalent production based on 2017 financial year average realised prices.

The following footnotes apply to this Operational Review:

 

(1) 2018 financial year unit cost guidance is based on exchange rates of AUD/USD 0.75 and USD/CLP 663.
(2) 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.
(3) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(4) Adjusted effective tax rate comprises Total taxation (expense)/benefit excluding exceptional items and exchange rate movements included in taxation (expense)/benefit divided by Profit/(loss) before taxation and exceptional items.
(5) The Preliminary Agreement outlines the process and timeline for negotiation of a settlement of the BRL 155 billion (approximately US$47 billion) and BRL 20 billion (approximately US$6 billion) Public Civil Claims relating to the dam failure.

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 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).

 

 

BHP Operational Review for the half year ended 31 December 2017    8


Further information on BHP can be found at: bhp.com

 

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BHP Operational Review for the half year ended 31 December 2017    9


Production summary  
           Quarter ended      Year to date  
     BHP
interest
    Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Petroleum (1)

                      

Petroleum

                      

Crude oil, condensate and NGL (Mboe)

                      

Onshore US

       8,143        9,439        8,501        7,079        7,423        14,502        16,431  

Conventional

       15,768        15,369        15,612        15,090        14,869        29,959        31,727  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       23,911        24,808        24,113        22,169        22,292        44,461        48,158  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Natural gas (bcf)

                      

Onshore US

       67.8        66.1        67.2        61.4        60.5        121.9        141.7  

Conventional

       97.1        88.4        99.5        107.3        96.1        203.4        204.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       164.9        154.5        166.7        168.7        156.6        325.3        346.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                      
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum production (MMboe)

       51.4        50.6        51.9        50.3        48.4        98.7        105.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Copper (2)

                      

Copper

                      

Payable metal in concentrate (kt)

                      

Escondida (3)

     57.5     162.6        67.6        162.4        196.3        238.5        434.8        309.6  

Antamina

     33.8     32.0        29.2        38.5        35.9        33.8        69.7        66.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       194.6        96.8        200.9        232.2        272.3        504.5        375.7  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cathode (kt)

                      

Escondida (3)

     57.5     71.5        27.2        62.8        71.9        76.1        148.0        142.0  

Pampa Norte (4)

     100     53.8        66.1        72.3        58.0        68.4        126.4        115.9  

Olympic Dam

     100     37.2        36.8        51.4        42.0        12.2        54.2        78.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       162.5        130.1        186.5        171.9        156.7        328.6        336.0  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                      
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total copper (kt)

       357.1        226.9        387.4        404.1        429.0        833.1        711.7  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Lead

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     1,220        1,308        1,799        1,415        1,009        2,424        2,366  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       1,220        1,308        1,799        1,415        1,009        2,424        2,366  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Zinc

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     22,406        20,653        29,076        29,201        29,054        58,255        37,773  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       22,406        20,653        29,076        29,201        29,054        58,255        37,773  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gold

                      

Payable metal in concentrate (troy oz)

                      

Escondida (3)

     57.5     37,784        11,572        33,941        50,525        50,279        100,804        65,345  

Olympic Dam (refined gold)

     100     29,651        21,941        28,188        13,101        15,969        29,070        54,017  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       67,435        33,513        62,129        63,626        66,248        129,874        119,362  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Silver

                      

Payable metal in concentrate (troy koz)

                      

Escondida (3)

     57.5     1,323        540        1,234        1,737        2,193        3,930        2,552  

Antamina

     33.8     1,446        1,301        1,691        1,596        1,331        2,927        2,791  

Olympic Dam (refined silver)

     100     188        174        243        131        135        266        351  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       2,957        2,015        3,168        3,464        3,659        7,123        5,694  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Uranium

                      

Payable metal in concentrate (t)

                      

Olympic Dam

     100     1,060        948        737        880        243        1,123        1,976  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       1,060        948        737        880        243        1,123        1,976  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Molybdenum

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     225        30        328        402        579        981        786  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       225        30        328        402        579        981        786  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the half year ended 31 December 2017    10


Production summary      
           Quarter ended      Year to date  
   BHP
interest
    Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Iron Ore

                      

Iron Ore

                      

Production (kt) (5)

                      

Newman

     85     17,751        16,283        16,241        13,842        18,317        32,159        35,759  

Area C Joint Venture

     85     12,179        11,165        13,016        13,099        13,575        26,674        24,563  

Yandi Joint Venture

     85     17,555        14,656        17,415        14,559        16,348        30,907        33,284  

Jimblebar (6)

     85     5,178        4,824        5,891        6,283        4,583        10,866        11,235  

Wheelarra

     85     7,386        6,647        7,578        7,804        8,734        16,538        12,795  

Samarco

     50     —          —          —          —          —          —          —    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       60,049        53,575        60,141        55,587        61,557        117,144        117,636  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Coal

                      

Metallurgical coal

                      

Production (kt) (7)

                      

BMA

     50     8,684        7,996        6,394        8,296        7,394        15,690        17,068  

BHP Mitsui Coal (8)

     80     1,929        2,138        2,100        2,271        2,291        4,562        4,074  

Haju (9)

     75     27        —          —          —          —          —          129  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       10,640        10,134        8,494        10,567        9,685        20,252        21,271  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Energy coal

                      

Production (kt)

                      

USA

     100     —          —          —          —          —          —          451  

Australia

     100     3,851        4,662        5,711        4,235        4,383        8,618        7,803  

Colombia

     33.3     2,800        2,756        2,475        2,497        2,914        5,411        5,728  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       6,651        7,418        8,186        6,732        7,297        14,029        13,982  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other

                      

Nickel

                      

Saleable production (kt)

                      

Nickel West

     100     22.1        19.0        25.2        22.8        22.4        45.2        40.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       22.1        19.0        25.2        22.8        22.4        45.2        40.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

(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) Shown on a 100% basis. BHP interest in saleable production is 75%.

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

 

 

BHP Operational Review for the half year ended 31 December 2017    11


Production and sales report

          Quarter ended      Year to date  
          Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Petroleum (1)

                       

Bass Strait

                       

Crude oil and condensate

   (Mboe)      1,770        1,355        1,552        1,815        1,513        3,328        3,692  

NGL

   (Mboe)      1,460        1,236        1,661        1,950        1,584        3,534        3,562  

Natural gas

   (bcf)      31.3        28.7        37.4        42.6        32.9        75.5        73.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      8.4        7.4        9.4        10.9        8.6        19.4        19.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North West Shelf

                       

Crude oil and condensate

   (Mboe)      1,468        1,239        1,314        1,474        1,442        2,916        2,954  

NGL

   (Mboe)      263        200        209        227        200        427        555  

Natural gas

   (bcf)      36.9        32.2        32.5        36.2        36.2        72.4        75.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      7.9        6.8        6.9        7.7        7.7        15.4        16.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pyrenees

                       

Crude oil and condensate

   (Mboe)      1,726        1,509        1,606        1,510        1,210        2,720        3,402  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.7        1.5        1.6        1.5        1.2        2.7        3.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Australia (2)

                       

Crude oil and condensate

   (Mboe)      8        8        9        9        8        17        18  

Natural gas

   (bcf)      17.1        15.2        16.3        16.1        13.3        29.4        34.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.9        2.5        2.7        2.7        2.2        4.9        5.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Atlantis (3)

                       

Crude oil and condensate

   (Mboe)      3,263        3,881        3,637        3,022        3,377        6,399        6,317  

NGL

   (Mboe)      207        295        213        218        195        413        415  

Natural gas

   (bcf)      1.6        2.1        1.9        1.6        1.8        3.4        3.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.7        4.5        4.2        3.5        3.9        7.4        7.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Mad Dog (3)

                       

Crude oil and condensate

   (Mboe)      1,170        1,185        1,167        1,020        1,231        2,251        2,120  

NGL

   (Mboe)      52        59        68        44        72        116        88  

Natural gas

   (bcf)      0.2        0.2        0.2        0.1        0.2        0.3        0.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.3        1.3        1.3        1.1        1.3        2.4        2.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shenzi (3)

                       

Crude oil and condensate

   (Mboe)      2,692        2,675        2,588        2,291        2,513        4,804        5,324  

NGL

   (Mboe)      131        161        179        141        184        325        225  

Natural gas

   (bcf)      0.5        0.5        0.6        0.4        0.5        0.9        1.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.9        2.9        2.9        2.5        2.8        5.3        5.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Eagle Ford (4)

                       

Crude oil and condensate

   (Mboe)      4,008        5,451        4,278        3,457        3,720        7,177        7,879  

NGL

   (Mboe)      2,159        2,354        2,240        1,856        2,100        3,956        4,427  

Natural gas

   (bcf)      15.2        17.0        15.1        13.8        14.4        28.2        31.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      8.7        10.6        9.0        7.6        8.2        15.8        17.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permian (4)

                       

Crude oil and condensate

   (Mboe)      1,378        1,202        1,336        1,179        1,142        2,321        2,793  

NGL

   (Mboe)      580        428        646        587        460        1,047        1,314  

Natural gas

   (bcf)      4.4        4.0        6.2        4.5        3.6        8.1        8.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.7        2.3        3.0        2.5        2.2        4.7        5.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Haynesville (4)

                       

Crude oil and condensate

   (Mboe)      3        1        1        —          1        1        3  

NGL

   (Mboe)      15        3        —          —          —          —          15  

Natural gas

   (bcf)      24.0        22.0        21.4        21.5        22.0        43.5        52.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      4.0        3.7        3.6        3.6        3.7        7.3        8.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fayetteville (4)

                       

Natural gas

   (bcf)      24.2        23.1        24.5        21.6        20.5        42.1        49.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      4.0        3.9        4.1        3.6        3.4        7.0        8.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the half year ended 31 December 2017    12


Production and sales report  
           Quarter ended      Year to date  
     Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Petroleum (1) (continued)

                      

Trinidad/Tobago

                      

Crude oil and condensate

     (Mboe)       156        127        139        118        135        253        296  

Natural gas

     (bcf)       8.4        8.4        9.4        9.7        10.5        20.2        14.8  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

     (MMboe     1.6        1.5        1.7        1.7        1.9        3.6        2.8  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Americas (3) (5)

                      

Crude oil and condensate

     (Mboe)       269        257        238        229        207        436        544  

NGL

     (Mboe)       5        6        10        5        3        8        6  

Natural gas

     (bcf)       0.1        0.1        0.1        0.1        0.1        0.2        0.2  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

     (MMboe)       0.3        0.3        0.3        0.3        0.2        0.5        0.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

UK

                      

Crude oil and condensate

     (Mboe)       63        72        64        40        22        62        132  

NGL

     (Mboe)       49        32        16        39        13        52        71  

Natural gas

     (bcf)       1.0        1.0        1.1        0.5        0.6        1.1        2.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

     (MMboe)       0.3        0.3        0.3        0.2        0.1        0.3        0.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Algeria

                      

Crude oil and condensate

     (Mboe)       1,016        1,072        942        938        960        1,898        2,006  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

     (MMboe)       1.0        1.1        0.9        0.9        1.0        1.9        2.0  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Petroleum

                      

Crude oil and condensate

                      

Onshore US

     (Mboe)       5,389        6,654        5,615        4,636        4,863        9,499        10,675  

Conventional

     (Mboe)       13,601        13,380        13,256        12,466        12,618        25,084        26,805  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (Mboe)       18,990        20,034        18,871        17,102        17,481        34,583        37,480  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NGL

                      

Onshore US

     (Mboe)       2,754        2,785        2,886        2,443        2,560        5,003        5,756  

Conventional

     (Mboe)       2,167        1,989        2,356        2,624        2,251        4,875        4,922  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (Mboe)       4,921        4,774        5,242        5,067        4,811        9,878        10,678  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Natural gas

                      

Onshore US

     (bcf)       67.8        66.1        67.2        61.4        60.5        121.9        141.7  

Conventional

     (bcf)       97.1        88.4        99.5        107.3        96.1        203.4        204.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (bcf)       164.9        154.5        166.7        168.7        156.6        325.3        346.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

                      

Onshore US

     (Mboe)       19,443        20,456        19,701        17,312        17,506        34,819        40,048  

Conventional

     (Mboe)       31,951        30,102        32,195        32,973        30,886        63,859        65,877  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (Mboe)       51,394        50,558        51,896        50,286        48,392        98,678        105,925  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(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)    Onshore US volumes are net of mineral holder royalties.

(5)    Other Americas includes Neptune, Genesis and Overriding Royalty Interest.

     

     

     

     

     

 

 

BHP Operational Review for the half year ended 31 December 2017    13


Production and sales report  
           Quarter ended     Year to date  
     Dec
2016
    Mar
2017
    Jun
2017
    Sep
2017
    Dec
2017
    Dec
2017
    Dec
2016
 

Copper

                

Metals production is payable metal unless otherwise stated.

 

Escondida, Chile (1)

                

Material mined

     (kt)       90,863       26,045       93,389       104,867       101,371       206,238       197,367  

Sulphide ore milled

     (kt)       19,866       8,054       18,777       24,080       30,260       54,340       40,653  

Average copper grade

     (%)       1.02     1.01     1.07     1.06     0.98     1.02     0.94

Production ex mill

     (kt)       168.6       68.7       167.0       204.2       245.7       449.9       321.8  

Production

                

Payable copper

     (kt)       162.6       67.6       162.4       196.3       238.5       434.8       309.6  

Copper cathode (EW)

     (kt)       71.5       27.2       62.8       71.9       76.1       148.0       142.0  

- Oxide leach

     (kt)       24.4       8.9       20.3       22.4       27.4       49.8       51.2  

- Sulphide leach

     (kt)       47.1       18.3       42.5       49.5       48.7       98.2       90.8  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total copper

     (kt)       234.1       94.8       225.2       268.2       314.6       582.8       451.6  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Payable gold concentrate

     (troy oz)       37,784       11,572       33,941       50,525       50,279       100,804       65,345  

Payable silver concentrate

     (troy koz)       1,323       540       1,234       1,737       2,193       3,930       2,552  

Sales

                

Payable copper

     (kt)       172.7       63.7       163.3       195.1       236.7       431.8       307.6  

Copper cathode (EW)

     (kt)       71.8       39.4       56.0       61.6       84.1       145.7       137.4  

Payable gold concentrate

     (troy oz)       37,784       11,572       33,941       50,525       50,278       100,803       65,345  

Payable silver concentrate

     (troy koz)       1,323       540       1,234       1,737       2,193       3,930       2,552  

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

     

Pampa Norte, Chile

                

Cerro Colorado

                

Material mined

     (kt)       14,286       15,178       15,760       21,381       20,191       41,572       27,297  

Ore milled

     (kt)       3,342       4,179       4,411       3,951       4,611       8,562       6,583  

Average copper grade

     (%)       0.65     0.57     0.53     0.62     0.59     0.60     0.66

Production

                

Copper cathode (EW)

     (kt)       12.1       16.7       18.8       13.3       17.4       30.7       29.2  

Sales

                

Copper cathode (EW)

     (kt)       13.7       15.6       19.8       12.3       17.7       30.0       30.1  

Spence

                

Material mined

     (kt)       22,635       22,939       24,230       22,314       23,457       45,771       46,273  

Ore milled

     (kt)       5,187       5,225       4,968       5,375       4,919       10,294       9,900  

Average copper grade

     (%)       1.19     1.09     1.13     1.21     0.95     1.09     1.18

Production

                

Copper cathode (EW)

     (kt)       41.7       49.4       53.5       44.7       51.0       95.7       86.7  

Sales

                

Copper cathode (EW)

     (kt)       41.5       49.0       55.7       43.0       52.2       95.2       82.7  

 

 

BHP Operational Review for the half year ended 31 December 2017    14


Production and sales report  
            Quarter ended     Year to date  
      Dec
2016
    Mar
2017
    Jun
2017
    Sep
2017
    Dec
2017
    Dec
2017
    Dec
2016
 

Copper (continued)

                 

Metals production is payable metal unless otherwise stated.

 

              

Antamina, Peru

                 

Material mined (100%)

     (kt)        61,355       55,771       62,254       59,216       59,125       118,341       126,466  

Sulphide ore milled (100%)

     (kt)        13,399       11,955       13,229       12,822       13,098       25,920       26,921  

Average head grades

                 

- Copper

     (%)        0.84     0.88     1.00     0.94     0.89     0.91     0.84

- Zinc

     (%)        0.83     0.84     0.95     0.99     0.93     0.96     0.71

Production

                 

Payable copper

     (kt)        32.0       29.2       38.5       35.9       33.8       69.7       66.1  

Payable zinc

     (t)        22,406       20,653       29,076       29,201       29,054       58,255       37,773  

Payable silver

     (troy koz)        1,446       1,301       1,691       1,596       1,331       2,927       2,791  

Payable lead

     (t)        1,220       1,308       1,799       1,415       1,009       2,424       2,366  

Payable molybdenum

     (t)        225       30       328       402       579       981       786  

Sales

                 

Payable copper

     (kt)        33.0       30.2       36.9       31.9       37.0       68.9       65.8  

Payable zinc

     (t)        22,334       23,669       27,936       25,224       30,340       55,564       38,377  

Payable silver

     (troy koz)        1,388       1,304       1,513       1,475       1,470       2,945       2,665  

Payable lead

     (t)        1,100       1,475       1,493       1,624       972       2,596       1,867  

Payable molybdenum

     (t)        476       —         —         168       693       861       1,124  

Olympic Dam, Australia

                 

Material mined (1)

     (kt)        1,887       1,943       1,974       1,851       1,391       3,242       4,091  

Ore milled

     (kt)        2,116       2,112       2,097       2,302       554       2,856       4,395  

Average copper grade

     (%)        2.00     2.07     2.30     2.10     2.22     2.12     1.98

Average uranium grade

     (kg/t)        0.68       0.61       0.58       0.55       0.58       0.56       0.64  

Production

                 

Copper cathode (ER and EW)

     (kt)        37.2       36.8       51.4       42.0       12.2       54.2       78.1  

Uranium oxide concentrate

     (t)        1,060       948       737       880       243       1,123       1,976  

Refined gold

     (troy oz)        29,651       21,941       28,188       13,101       15,969       29,070       54,017  

Refined silver

     (troy koz)        188       174       243       131       135       266       351  

Sales

                 

Copper cathode (ER and EW)

     (kt)        41.2       33.5       51.5       31.6       24.3       55.9       78.7  

Uranium oxide concentrate

     (t)        883       839       1,298       680       338       1,018       1,968  

Refined gold

     (troy oz)        28,234       22,333       24,726       22,435       17,999       40,434       50,135  

Refined silver

     (troy koz)        203       108       251       219       118       337       387  

(1)    Material mined refers to run of mine ore mined and hoisted.

     

 

 

BHP Operational Review for the half year ended 31 December 2017    15


Production and sales report  
            Quarter ended      Year to date  
      Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Iron Ore

                       

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

                       

Pilbara, Australia

                       

Production

                       

Newman

     (kt)        17,751        16,283        16,241        13,842        18,317        32,159        35,759  

Area C Joint Venture

     (kt)        12,179        11,165        13,016        13,099        13,575        26,674        24,563  

Yandi Joint Venture

     (kt)        17,555        14,656        17,415        14,559        16,348        30,907        33,284  

Jimblebar (1)

     (kt)        5,178        4,824        5,891        6,283        4,583        10,866        11,235  

Wheelarra

     (kt)        7,386        6,647        7,578        7,804        8,734        16,538        12,795  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production

     (kt)        60,049        53,575        60,141        55,587        61,557        117,144        117,636  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production (100%)

     (kt)        69,730        62,177        69,714        64,287        71,611        135,898        136,411  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Lump

     (kt)        14,127        12,804        15,104        13,896        15,145        29,041        28,283  

Fines

     (kt)        45,447        41,043        46,249        40,733        45,769        86,502        87,725  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (kt)        59,574        53,847        61,353        54,629        60,914        115,543        116,008  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total sales (100%)

     (kt)        69,196        62,513        71,149        63,322        70,733        134,055        134,564  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

     

Samarco, Brazil (1)

                       

Production

     (kt)        —          —          —          —          —          —          —    

Sales

     (kt)        —          35        —          —          14        14        12  

(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 half year ended 31 December 2017    16


Production and sales report  
           Quarter ended      Year to date  
           Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Coal

                      

Coal production is reported on the basis of saleable product.

                      

Queensland Coal

                      

Production (1)

                      

BMA

                      

Blackwater

     (kt)       1,855        1,694        1,766        1,985        1,470        3,455        3,836  

Goonyella

     (kt)       2,204        1,871        1,157        1,639        1,369        3,008        4,327  

Peak Downs

     (kt)       1,715        1,582        1,238        1,602        1,367        2,969        3,235  

Saraji

     (kt)       1,307        1,276        913        1,414        1,198        2,612        2,545  

Daunia

     (kt)       680        674        560        662        718        1,380        1,326  

Caval Ridge

     (kt)       923        899        760        994        1,272        2,266        1,799  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA

     (kt)       8,684        7,996        6,394        8,296        7,394        15,690        17,068  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                      

South Walker Creek

     (kt)       1,080        1,354        1,348        1,400        1,524        2,924        2,421  

Poitrel

     (kt)       849        784        752        871        767        1,638        1,653  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BHP Mitsui Coal

     (kt)       1,929        2,138        2,100        2,271        2,291        4,562        4,074  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

     (kt)       10,613        10,134        8,494        10,567        9,685        20,252        21,142  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                      

Coking coal

     (kt)       7,658        7,133        5,496        7,934        6,341        14,275        14,898  

Weak coking coal

     (kt)       2,659        2,761        2,502        3,150        2,816        5,966        5,458  

Thermal coal

     (kt)       154        96        142        102        173        275        360  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (kt)       10,471        9,990        8,140        11,186        9,330        20,516        20,716  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)    Production figures include some thermal coal.

     

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

     

Haju, Indonesia (1)

                      

Production

     (kt     27        —          —          —          —          —          129  

Sales - export

     (kt     —          —          —          —          —          —          —    

(1)    Shown on 100% basis. BHP interest in saleable production is 75%. BHP completed the sale of IndoMet Coal on 14 October 2016.

     

New Mexico, USA

                      

Production

                      

Navajo Coal (1)

     (kt     —          —          —          —          —          —          451  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (kt     —          —          —          —          —          —          451  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales thermal coal - local utility

       —          —          —          —          —          —          105  

(1)    The divestment of Navajo Coal was completed on 29 July 2016, with no further production reported by BHP.

     

         Management of Navajo Coal was transferred to Navajo Transitional Energy Company on 31 December 2016.  

NSW Energy Coal, Australia

                      

Production

     (kt)       3,851        4,662        5,711        4,235        4,383        8,618        7,803  

Sales

                      

Export thermal coal

     (kt)       3,539        4,407        4,913        3,622        4,048        7,670        7,179  

Inland thermal coal

     (kt)       311        431        327        405        411        816        642  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (kt)       3,850        4,838        5,240        4,027        4,459        8,486        7,821  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cerrejón, Colombia

                      

Production

     (kt)       2,800        2,756        2,475        2,497        2,914        5,411        5,728  

Sales thermal coal - export

     (kt)       2,722        2,613        2,803        2,518        2,619        5,137        5,627  

 

 

BHP Operational Review for the half year ended 31 December 2017    17


Production and sales report  
            Quarter ended      Year to date  
      Dec
2016
     Mar
2017
     Jun
2017
     Sep
2017
     Dec
2017
     Dec
2017
     Dec
2016
 

Other

                       

Nickel production is reported on the basis of saleable product

                       

Nickel West, Australia

                       

Production

                       

Nickel contained in concentrate

     (kt)        0.2        0.2        —          —          —          —          0.5  

Nickel contained in finished matte

     (kt)        4.1        2.3        5.3        6.8        4.6        11.4        5.9  

Nickel metal

     (kt)        17.8        16.5        19.9        16.0        17.8        33.8        34.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel production

     (kt)        22.1        19.0        25.2        22.8        22.4        45.2        40.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Nickel contained in concentrate

     (kt)        0.2        0.2        —          —          —          —          0.5  

Nickel contained in finished matte

     (kt)        4.1        2.2        4.9        4.6        6.4        11.0        5.9  

Nickel metal

     (kt)        17.6        17.1        18.1        16.6        17.9        34.5        34.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel sales

     (kt)        21.9        19.5        23.0        21.2        24.3        45.5        40.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the half year ended 31 December 2017    18


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 Billiton Limited and BHP Billiton Plc
Date: January 18, 2018     By:  

/s/ Rachel Agnew

    Name:   Rachel Agnew
    Title:   Company Secretary