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 18, 2018

 

 

 

BHP BILLITON 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 BILLITON 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

   18 July 2018

Release Number

   10/18

BHP OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2018

 

  Met or exceeded full year production guidance for petroleum, copper, iron ore and energy coal. Met revised guidance for metallurgical coal.

 

  Group copper equivalent production increased by 8% in the 2018 financial year, with annual production records at Western Australia Iron Ore (WAIO), Queensland Coal and Spence.

 

  We expect to achieve full year unit cost guidance at our major assets (based on 2018 financial year guidance exchange rates of AUD/USD 0.75 and USD/CLP 663).

 

  Group copper equivalent production for the 2019 financial year is expected to be broadly in line with the 2018 financial year(1).

 

  The exit process for Onshore US is progressing to plan. Bids have been received and we aim to announce one or more transactions within the coming months, targeting completion of any transactions by the end of the 2018 calendar year.

 

  In Petroleum, the Victoria-1 exploration well in Trinidad and Tobago encountered gas and the Samurai-2 well in the US Gulf of Mexico encountered hydrocarbons in multiple horizons.

 

  The South Flank sustaining iron ore project was approved during the June 2018 quarter.

 

  We expect the financial results for the second half of the 2018 financial year to reflect certain items as summarised in the table on page two.

 

Production

   FY18
(vs FY17)
    Jun Q18
(vs Mar Q18)
   

Jun Q18 commentary

Petroleum (MMboe)

    
192
(-8
 
%) 
   
49
(+9
 
%) 
  Improved well performance and positive trial results in Onshore US offset by natural field decline.

Copper (kt)

    
1,753
(+32
 
%) 
   
463
(+1
 
%) 
  Higher volumes at Escondida supported by the ramp-up of the Los Colorados Extension project.

Iron ore(2) (Mt)

    
238
(+3
 
%) 
   
64
(+10
 
%) 
  Record annualised production rate of 289 Mtpa (100% basis) reflects increased productivity across the supply chain following completion of the rail reliability project and improved car dumper performance. Production records at Jimblebar and Newman.

Metallurgical coal(2) (Mt)

    
43
(+7
 
%) 
   
12
(+16
 
%) 
  Record quarterly production at Queensland Coal following improved performance at Blackwater and Broadmeadow, and higher feed rates at Caval Ridge. Production records at South Walker Creek and Poitrel.

Energy coal(2) (Mt)

    
29
(0
 
%) 
   
9
(+48
 
%) 
  Record production at New South Wales Energy Coal underpinned by improved stripping fleet performance.

BHP Chief Executive Officer, Andrew Mackenzie, said: “We have delivered a strong finish to the 2018 financial year with an eight per cent increase in annual production and record output at Western Australia Iron Ore, Queensland Coal and at our Spence copper mine in Chile. We further simplified the portfolio with the announced divestment of Cerro Colorado in Chile and Gregory Crinum in Australia and our investment in South Flank supports our ability to supply low cost, high quality products into Asia.

Good prices and our culture of continuous improvement give us positive momentum into the 2019 financial year.”

 

 

BHP Operational Review for the year ended 30 June 2018    1


Summary

Operational performance

Production for the 2018 financial year and guidance for the 2019 financial year are summarised in the table below.

 

Production

   FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs
Jun Q17
    Jun Q18
vs
Mar Q18
    FY19
guidance
    FY19e
vs
FY18
 

Petroleum (MMboe)

     192        49        (8 %)      (6 %)      9    

Onshore US (MMboe)

     72        20        (10 %)      3     20     Refer footnote (iii)   

Conventional (MMboe)

     120        29        (6 %)      (11 %)      3     113 - 118       (6%) - (2%

Copper (kt)

     1,753        463        32     20     1     1,675 - 1,770       (4%) - 1%  

Escondida (kt)

     1,213        316        57     40     1     1,120 - 1,180       (8%) - (3%

Other copper(i) (kt)

     540        147        (3 %)      (9 %)      3     555 - 590       3% - 9%  

Iron ore(ii) (Mt)

     238        64        3     6     10     241 - 250       1% - 5%  

WAIO (100% basis) (Mt)

     275        72        3     3     8     273 - 283       (1%) - 3%  

Metallurgical coal(ii) (Mt)

     43        12        7     41     16     43 - 46       1% - 8%  

Energy coal(ii) (Mt)

     29        9        0     10     48     28 - 29       (4%) - (1%

 

(i) Other copper comprises Pampa Norte (including Cerro Colorado production for the first half of the 2019 financial year), Olympic Dam and Antamina.
(ii) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(iii) Given our intention to exit Onshore US, no annual guidance for the 2019 financial year for these assets will be provided; however, until completion, we expect a production run rate broadly consistent with the second half of the 2018 financial year.

Summary of disclosures

BHP expects its financial results for the second half of the 2018 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 21 August 2018. Accordingly the information is subject to update.

 

Description

   H2 FY18
impact

US$M(i)
    Classification(ii)  

Non-cash fair value adjustment related to the Angostura (Trinidad and Tobago) gas sale embedded derivative

     ~60       h Operating costs  

Exploration expense (including petroleum and minerals exploration programs)

     448       h Exploration expense  

The Group’s adjusted effective tax rate for the full year is expected to be within the guidance range of 30 to 35 per cent

     —         Income tax expense  

Non-cash fair value adjustments related to interest rate and exchange rate movements (weaker US dollar in the period) are expected to reduce net debt in the June 2018 half year

     Under review       i Net debt  

Dividends paid to non-controlling interests

     ~650       h Financing cash outflow  

Financial impact on BHP Billiton Brasil of the Samarco Dam failure

     440 (iii)       Exceptional item charge  

 

(i) Numbers are not tax effected.
(ii) There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant.
(iii) The total financial impact on BHP Billiton Brasil of the Samarco Dam failure is expected to be US$650 million in the 2018 financial year (H1 US$210 million and H2 US$440 million).

 

 

BHP Operational Review for the year ended 30 June 2018    2


Average realised prices

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

 

Average realised prices(i)

   Jun H18      Dec H17      FY18      FY17      FY18
vs
FY17
    Jun H18
vs

Jun H17
    Jun H18
vs

Dec H17
 

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

     67.07        53.76        60.12        47.61        26     35     25

Natural gas (US$/Mscf)(ii)

     3.71        3.54        3.62        3.34        8     7     5

US natural gas (US$/Mscf)

     2.77        2.84        2.80        2.88        (3 %)      (7 %)      (2 %) 

LNG (US$/Mscf)

     8.65        7.48        8.07        6.84        18     17     16

Copper (US$/lb)

     3.05        3.20        3.12        2.54        23     13     (5 %) 

Iron ore (US$/wmt, FOB)

     56.86        56.54        56.71        58.42        (3 %)      (8 %)      1

Metallurgical coal (US$/t)

     189.66        164.22        177.22        163.30        9     16     15

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

     205.80        182.29        194.59        179.83        8     14     13

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

     143.40        120.99        131.70        121.32        9     19     19

Thermal coal (US$/t)(iv)

     86.47        87.49        86.94        74.67        16     15     (1 %) 

Nickel metal (US$/t)

     13,974        11,083        12,591        10,184        24     43     26

 

(i) Based on provisional, unaudited estimates. Prices exclude sales from equity accounted investments, third party product and internal sales, and represent the weighted average of various sales terms (for example: FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional pricing and finalisation adjustments.
(ii) Includes internal sales.
(iii) Hard coking coal (HCC) refers generally to those metallurgical coals with a Coke Strength after Reaction (CSR) of 35 and above, which includes coals across the spectrum from Premium Coking to Semi Hard Coking coals, while weak coking coal (WCC) refers generally to those metallurgical coals with a CSR below 35.
(iv) Export sales only; excludes 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 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.

At 30 June 2018, the Group had 364 kt of outstanding copper sales that were revalued at a weighted average price of US$3.01 per pound. The final price of these sales will be determined in the 2019 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(3) by US$2 million in the 2018 financial year and is included in the average realised copper price in the above table.

Major development projects

During the June 2018 quarter, the BHP Board approved US$2.9 billion (BHP share; US$3.4 billion 100 per cent) in capital expenditure for the South Flank sustaining iron ore project in Western Australia. A US$122 million increase in the budget of the Jansen project to US$2.7 billion has been incorporated to fund support services at the site as work continues on completion of the shafts. The forecast for the North West Shelf Greater Western Flank-B project has been reduced by US$98 million to US$216 million as the project is tracking ahead of schedule.

At the end of the 2018 financial year, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$10.6 billion over the life of the projects.

 

 

BHP Operational Review for the year ended 30 June 2018    3


Corporate update

On 25 June 2018, Samarco, Vale and BHP, together with the Federal Government of Brazil, the states of Espirito Santo and Minas Gerais and the Public Prosecutors agreed an arrangement which settles the BRL20 billion Civil Claim, enhances community participation in decisions related to the remediation and compensation programs, and establishes a process to renegotiate those programs and to progress settlement of the BRL155 billion Civil Claim (Governance Agreement). The Governance Agreement is conditional on the Federal Government of Brazil signing the Agreement and ratification by the 12th Federal Court of Minas Gerais.

On 29 June 2018, BHP announced a total of US$211 million in further financial support for the Renova Foundation and Samarco until 31 December 2018. This comprises US$158 million to fund the Renova Foundation which will be offset against the Group’s provision for the Samarco dam failure and a short-term facility of up to US$53 million to be made available to Samarco.

Unrelated to the new Governance Agreement, BHP expects to recognise an income statement charge in the second half of the 2018 financial year of US$440 million in respect of the Samarco dam failure. This charge largely reflects updated assumptions relating to the continuation of the fishing ban, the number of eligible claimants, and the timeline and technical scope for resettlement of the communities.

The US$440 million income statement charge will be recognised as an exceptional item in the June 2018 half year.

The net increase in the provision is approximately US$250 million due to the offsetting impact of payments to the Renova Foundation to fund remediation and compensation Programs under the Framework Agreement.

 

 

BHP Operational Review for the year ended 30 June 2018    4


Petroleum

Production

 

     FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs

Jun Q17
    Jun Q18
vs

Mar Q18
 

Crude oil, condensate and natural gas liquids (MMboe)

     86        22        (11 %)      (10 %)      8

Natural gas (bcf)

     636        163        (5 %)      (2 %)      11

Total petroleum production (MMboe)

     192        49        (8 %)      (6 %)      9

Petroleum - Total petroleum production for the 2018 financial year decreased by eight per cent to 192 MMboe.

In our Conventional business, volumes are expected to decrease to between 113 and 118 MMboe in the 2019 financial year as a result of additional downtime from planned dry dock maintenance at Pyrenees and natural field decline across the portfolio. Given our intention to exit Onshore US, no annual guidance for the 2019 financial year for these assets will be provided, however until completion, which we are targeting by the end of the 2018 calendar year, we expect a production run rate broadly consistent with the second half of the 2018 financial year.

 

Production breakdown

   FY18      vs FY17      

Crude oil, condensate and natural gas liquids (MMboe)

Conventional

     57        (8 %)    Hurricane Harvey and Hurricane Nate in the Gulf of Mexico and natural field decline across the portfolio.

Onshore US

     29        (16 %)    Hurricane Harvey and natural field decline, which more than offset improved recoveries and additional wells in the Black Hawk and Permian.
  

 

 

    

 

 

   

Total

     86        (11 %)   
  

 

 

    

 

 

   

Natural gas (bcf)

       

Conventional

     377        (4 %)    Maintenance at Bass Strait and Macedon.

Onshore US

     259        (6 %)    Hurricane Harvey and natural field decline, partially offset by additional wells in the Eagle Ford, Permian and Haynesville.
  

 

 

    

 

 

   

Total

     636        (5 %)   
  

 

 

    

 

 

   

In the June 2018 quarter, BHP agreed to sell its 90 per cent interest in the Minerva Gas Plant in Victoria to the Casino Henry Joint Venture. The agreement provides for the transfer of the plant and associated land after the cessation of current operations processing gas from the offshore Minerva gas field, and remains conditional on completion of regulatory approvals and assignments.

 

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)

     216        CY19      To maintain LNG plant throughput from the North West Shelf operations.    Ahead of schedule and budget. The overall project is 87% 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 23% complete.

Petroleum capital expenditure for the 2018 financial year increased by five per cent to US$1.6 billion.

 

 

BHP Operational Review for the year ended 30 June 2018    5


Onshore US development activity

Onshore US drilling and development expenditure for 2018 financial year was US$0.9 billion. Our operated rig count declined from seven to five during the June 2018 quarter.

 

FY18         Liquids focused areas      Gas focused areas         

(FY17)

      Eagle Ford      Permian      Haynesville      Fayetteville      Total  

Capital expenditure(i)

   US$ billion      0.3 (0.3)        0.4 (0.2)        0.2 (0.1)        0.0 (0.0)        0.9 (0.6)  

Rig allocation

   At period end      2 (1)        2 (1)        1 (3)        0 (0)        5 (5)  

Net wells drilled and completed(ii)

   Period total      36 (51)        29 (21)        20 (5)        0 (2)        85 (79)  

Net productive wells

   At period end      958 (963)        155 (126)        393 (394)        1,042 (1,044)        2,548 (2,527)  

 

(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.

The exit process for our Onshore US assets is progressing to plan. Bids have been received and we aim to announce one or more transactions within the coming months, targeting completion of any transactions by the end of the 2018 calendar year.

Petroleum exploration

Exploration and appraisal wells drilled during the June 2018 quarter are summarised below.

 

Well

   Location   

Target

   BHP equity   Spud date    Water depth    Total well
depth
   Status
Samurai-2    US Gulf of Mexico
GC432
   Oil    50%
(Murphy
Operator)
  16 April 2018    1,088 m    8,615 m    Hydrocarbons encountered,
drilling ahead
Victoria-1    Trinidad &

Tobago Block 5

   Gas    65%

(BHP
Operator)

  12 June 2018    1,828 m    2,545 m    Hydrocarbons encountered,
drilling ahead

In the US Gulf of Mexico, we increased our equity interest in the Murphy operated Samurai prospect (GC432 and GC476), the northern extension of the Wildling sub-basin, from 33.33 to 50 per cent. The Samurai-2 exploration well was spud on 16 April 2018 and encountered hydrocarbons in multiple horizons not previously observed by the Wildling-2 exploration well. As reported in the March 2018 Operational Review, we were the apparent high bidder on three blocks, EB914 and EB699 in the western Gulf of Mexico and GC823 to the west of the Mad Dog field, which we co-own with BP and Chevron. All three leases were awarded by the Regulator during the June 2018 quarter.

In Trinidad and Tobago, following the gas discovery at LeClerc, we commenced Phase 2 of our deepwater exploration drilling campaign to further assess the commercial potential of the Magellan play. The Victoria-1 exploration well was spud on 12 June 2018 and encountered gas. Following completion of the Victoria-1 well, we expect the Deepwater Invictus to drill the Bongos prospect in Northern Trinidad and Tobago.

In Mexico, we expect to begin drilling the first appraisal well at Trion in the December 2018 quarter.

In Australia, the fast track of the Exmouth sub-basin 3D seismic data has been received. The final processed data will be delivered during the September 2018 quarter.

Petroleum exploration expenditure for the 2018 financial year was US$709 million, of which US$516 million was expensed.

 

 

BHP Operational Review for the year ended 30 June 2018    6


Copper

Production

 

     FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs
Jun Q17
    Jun Q18
vs
Mar Q18
 

Copper (kt)

     1,753        463        32     20     1

Zinc (t)

     119,800        35,983        37     24     41

Uranium oxide concentrate (t)

     3,364        1,123        (8 %)      52     0

Copper – Total copper production for the 2018 financial year increased by 32 per cent to 1,753 kt. Total copper production of between 1,675 and 1,770 kt is expected in the 2019 financial year.

Escondida copper production for the 2018 financial year increased by 57 per cent to 1,213 kt, reflecting a full year of production following the industrial action in the previous year and supported by the start-up of the Los Colorados Extension project on 10 September 2017. Production of between 1,120 and 1,180 kt is forecast in the 2019 financial year, as higher expected throughput is offset by a significant decrease in average concentrator head grade consistent with the mine plan. The existing agreement with Union N°1 will expire on 1 August 2018 and negotiations for a new agreement are in progress. The Escondida Water Supply Extension (EWSE) is in execution phase and will deliver first water production in the 2020 financial year.

Pampa Norte copper production increased by four per cent to 264 kt supported by record production at Spence of 200 kt reflecting better recoveries and higher utilisation of the solvent extraction and electrowinning plants. On 19 June 2018, BHP entered into an agreement to sell Cerro Colorado to EMR Capital(4). The transaction is expected to close during the December 2018 quarter, subject to financing and customary closing conditions. Production at Spence is expected to be between 185 and 200 kt in the 2019 financial year, with volumes weighted to the second half as planned maintenance in May and June 2018 resulted in a lower stacking rate. During the period, we successfully completed the advanced negotiation with Spence Union N°1 (operators and maintenance) with the new agreement effective from 1 June 2018 for 36 months. An agreement was also reached with the Cerro Colorado Union N°2 (supervisors and staff) on the terms and conditions for a new collective agreement, effective for 36 months from 1 July 2018.

Olympic Dam copper production decreased by 18 per cent to 137 kt as a result of the planned major smelter maintenance campaign in the first half of the 2018 financial year and a slower than planned ramp-up. The operation returned to full capacity during the June 2018 quarter. Production is expected to increase to between 200 and 220 kt in the 2019 financial year reflecting improved operational stability and higher ore grades from the Southern Mine Area.

Antamina copper production increased by four per cent to 140 kt and zinc production increased 37 per cent to 120 kt due to higher head grades as mining continued through a zinc-rich ore zone. Copper production is expected to remain at similar levels in the 2019 financial year at approximately 135 kt, while zinc production is expected to be approximately 85 kt, consistent with the mine plan.

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 14% complete.

 

 

BHP Operational Review for the year ended 30 June 2018    7


Iron Ore

Production

 

     FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs
Jun Q17
    Jun Q18
vs
Mar Q18
 

Iron ore (kt)

     238,421        63,586        3     6     10

Iron ore – Total iron ore production for the 2018 financial year increased by three per cent to a record 238 Mt (275 Mt on a 100 per cent basis). WAIO production of between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per cent basis, is expected in the 2019 financial year. A program of work to optimise maintenance schedules across our supply chain and improve port reliability and performance is planned for the September 2018 quarter, with a corresponding impact expected on production and unit costs.

At WAIO, increased production was supported by improved productivity and stability across the supply chain, including both rail and port, which has enabled record production at Jimblebar and Mining Area C. This was partially offset by the impact of lower opening stockpile levels following the Mt Whaleback fire in June 2017 and unplanned car dumper maintenance in the March 2018 quarter. WAIO produced at record annualised rates of 289 Mtpa (100 per cent basis) in the June 2018 quarter.

On 14 June 2018, the BHP Board approved US$2.9 billion (BHP share; US$3.4 billion 100 per cent) in capital expenditure for the South Flank project. The South Flank project will fully replace production from the 80 Mtpa (100 per cent basis) Yandi mine, with first ore targeted in the 2021 calendar year. South Flank will contribute to an increase in WAIO’s average iron grade from 61 per cent to 62 per cent, and the overall proportion of lump from 25 per cent to approximately 35 per cent.

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 (i)      CY21      Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi mine.    Project approved on 14 June 2018.

 

(i) Includes initial funding of US$184 million announced on 26 June 2017.

 

 

BHP Operational Review for the year ended 30 June 2018    8


Coal

Production

 

     FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs
Jun Q17
    Jun Q18
vs
Mar Q18
 

Metallurgical coal (kt)

     42,640        12,009        7     41     16

Energy coal (kt)

     29,158        9,023        0     10     48

Metallurgical coal – Metallurgical coal production for the 2018 financial year increased by seven per cent to a record 43 Mt. Production is expected to increase to between 43 and 46 Mt in the 2019 financial year, with volumes weighted to the second half of the year. An extensive maintenance program is planned for the first half of the 2019 financial year, with a corresponding impact expected on production and unit costs.

At Queensland Coal, record production for the 2018 financial year was supported by record stripping performance, increased truck hours and higher wash-plant utilisation from low-cost debottlenecking activities. Production records were achieved at Peak Downs, Saraji, Caval Ridge, South Walker Creek and Poitrel. In the June 2018 quarter production increased by 16 per cent from the previous quarter following improved operational conditions at Blackwater (geotechnical issues) and Broadmeadow (challenging roof conditions), increased feed rates at the Caval Ridge wash-plant, and utilisation of additional wash-plant capacity at Poitrel following the purchase of the remaining 50 per cent of the Red Mountain processing facility.

On 30 May 2018, BHP announced it has entered into an arrangement to sell the Gregory Crinum mine, which was placed into care and maintenance in January 2016, to Sojitz Corporation(5). Completion of the sale is subject to the fulfilment of conditions precedent including customary regulatory approvals, which could take several months.

On the Central Queensland Coal Network, where Aurizon is the rail track provider, we continue to engage with stakeholders and encourage Aurizon to ensure infrastructure productivity is maximised while they await the Queensland Competition Authority’s final decision in respect of Access Undertaking 5 (UT5).

The Caval Ridge Southern Circuit project is progressing according to plan, and is expected to ramp-up early in the 2019 financial year. A longwall move at Broadmeadow is scheduled for the December 2018 quarter.

Energy coal – Energy coal production for the 2018 financial year was flat at 29 Mt. Production is expected to remain broadly unchanged at approximately 28 to 29 Mt in the 2019 financial year.

New South Wales Energy Coal production increased by two per cent, supported by record production and sales volumes during the June 2018 quarter from improved stripping performance, utilisation of raw coal inventory build from the prior quarter and additional bypass coal. Increasing stripping requirements in the September 2018 quarter are expected to result in lower production rates for the quarter compared to the remainder of the 2019 financial year. This was offset by a three per cent decline in Cerrejón production due to unfavourable weather impacts on mine sequencing, equipment availability and higher strip ratio areas being mined.

 

 

BHP Operational Review for the year ended 30 June 2018    9


Other    

Nickel production

 

     FY18      Jun
2018
Qtr
     FY18
vs
FY17
    Jun Q18
vs

Jun Q17
    Jun Q18
vs

Mar Q18
 

Nickel (kt)

     90.6        24.9        6     (1 %)      21

Nickel – Nickel West production for the 2018 financial year increased by six per cent to 91 kt, with increased production at the Mt Keith and Leinster operations supporting record metal production. Nickel production for the 2019 financial year is expected to remain broadly unchanged from the 2018 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.    Budget revised to fund support services at the site as work continues on completion of the shafts. The project is 79% complete.

Minerals exploration

Minerals exploration expenditure for the 2018 financial year was US$165 million, of which US$124 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 2018 financial year compared with the 2017 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. Copper equivalent production based on 2017 financial year average realised prices.

The following footnotes apply to this Operational Review:

 

(1) Excludes production from Onshore US and Cerro Colorado.
(2) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.
(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) On 19 June 2018, BHP announced it has entered into an agreement to sell the Cerro Colorado copper mine in Chile to EMR Capital. The total cash consideration consist of US$230 million to be paid to BHP after the closing of the transaction, plus approximately US$40 million in proceeds from the post-closing sale of certain copper inventory, and a contingent payment of up to US$50 million to be paid in the future, depending upon copper price performance.
(5) On 30 May 2018, BHP Billiton Mitsubishi Alliance (BMA) announced it has entered into an agreement to sell the Gregory Crinum coal mine in central Queensland to Sojitz Corporation for A$100 million (100 per cent basis). In addition to the sale of the mine to Sojitz, BHP will be providing appropriate funding for rehabilitation of existing areas of disturbance at the site, with all rehabilitation liabilities transferred to Sojitz on completion.

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).

In this release, the terms ‘BHP’, ‘Group’, ‘BHP Group’, ‘we’, ‘us’, ‘our’ and ourselves’ are used to refer to BHP Billiton Limited, BHP Billiton Plc and, except where the context otherwise requires, their respective subsidiaries as defined in note 28 ‘Subsidiaries’ in section 5.1 of BHP’s 30 June 2017 Annual Report on Form 20-F and in note 13 ‘Related undertaking of the Group’ in section 5.2 of BHP’s 30 June 2017 Annual Report on Form 20-F. Notwithstanding that this release may include production and other data from non-operated assets, non-operated assets are not included in the BHP Group.

 

 

BHP Operational Review for the year ended 30 June 2018    10


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BHP Operational Review for the year ended 30 June 2018    11


Production summary      
           Quarter ended      Year to date  
     BHP
interest
    Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Petroleum (1)

                      

Petroleum

                      

Crude oil, condensate and NGL (Mboe)

                      

Onshore US

       8,501        7,079        7,423        6,256        8,266        29,024        34,371  

Conventional

       15,612        15,090        14,869        13,960        13,486        57,405        62,708  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       24,113        22,169        22,292        20,216        21,752        86,429        97,079  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Natural gas (bcf)

                      

Onshore US

       67.2        61.4        60.5        64.1        72.5        258.5        275.0  

Conventional

       99.5        107.3        96.1        82.9        90.7        377.0        392.8  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       166.7        168.7        156.6        147.0        163.2        635.5        667.8  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                      
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum production (MMboe)

       51.9        50.3        48.4        44.7        49.0        192.4        208.4  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Copper (2)

                      

Copper

                      

Payable metal in concentrate (kt)

                      

Escondida (3)

     57.5     162.4        196.3        238.5        244.9        246.1        925.8        539.6  

Antamina

     33.8     38.5        35.9        33.8        35.2        34.6        139.5        133.8  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       200.9        232.2        272.3        280.1        280.7        1,065.3        673.4  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cathode (kt)

                      

Escondida (3)

     57.5     62.8        71.9        76.1        69.4        70.1        287.5        232.0  

Pampa Norte (4)

     100     72.3        58.0        68.4        66.8        70.6        263.8        254.3  

Olympic Dam

     100     51.4        42.0        12.2        40.5        42.0        136.7        166.3  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       186.5        171.9        156.7        176.7        182.7        688.0        652.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                      
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total copper (kt)

       387.4        404.1        429.0        456.8        463.4        1,753.3        1,326.0  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Lead

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     1,799        1,415        1,009        464        546        3,434        5,473  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       1,799        1,415        1,009        464        546        3,434        5,473  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Zinc

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     29,076        29,201        29,054        25,562        35,983        119,800        87,502  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       29,076        29,201        29,054        25,562        35,983        119,800        87,502  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gold

                      

Payable metal in concentrate (troy oz)

                      

Escondida (3)

     57.5     33,941        50,525        50,279        59,953        68,345        229,102        110,858  

Olympic Dam (refined gold)

     100     28,188        13,101        15,969        28,989        33,497        91,556        104,146  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       62,129        63,626        66,248        88,942        101,842        320,658        215,004  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Silver

                      

Payable metal in concentrate (troy koz)

                      

Escondida (3)

     57.5     1,234        1,737        2,193        2,339        2,527        8,796        4,326  

Antamina

     33.8     1,691        1,596        1,331        1,189        1,321        5,437        5,783  

Olympic Dam (refined silver)

     100     243        131        135        248        278        792        768  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       3,168        3,464        3,659        3,776        4,126        15,025        10,877  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Uranium

                      

Payable metal in concentrate (t)

                      

Olympic Dam

     100     737        880        243        1,118        1,123        3,364        3,661  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       737        880        243        1,118        1,123        3,364        3,661  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Molybdenum

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     328        402        579        420        261        1,662        1,144  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       328        402        579        420        261        1,662        1,144  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the year ended 30 June 2018    12


Production summary      
           Quarter ended      Year to date  
   BHP
interest
    Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Iron Ore

                      

Iron Ore

                      

Production (kt) (5)

                      

Newman

     85     16,241        13,842        18,317        16,412        18,500        67,071        68,283  

Area C Joint Venture

     85     13,016        13,099        13,575        12,802        12,041        51,517        48,744  

Yandi Joint Venture

     85     17,415        14,559        16,348        15,802        17,339        64,048        65,355  

Jimblebar (6)

     85     5,891        6,283        4,583        4,669        15,092        30,627        21,950  

Wheelarra

     85     7,578        7,804        8,734        8,006        614        25,158        27,020  

Samarco

     50     —          —          —          —          —          —          —    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       60,141        55,587        61,557        57,691        63,586        238,421        231,352  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Coal

                      

Metallurgical coal

                      

Production (kt) (7)

                      

BMA

     50     6,394        8,296        7,394        7,983        9,220        32,893        31,458  

BHP Mitsui Coal (8)

     80     2,100        2,271        2,291        2,396        2,789        9,747        8,312  

Haju (9)

     75     —          —          —          —          —          —          129  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       8,494        10,567        9,685        10,379        12,009        42,640        39,899  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Energy coal

                      

Production (kt)

                      

USA

     100     —          —          —          —          —          —          451  

Australia

     100     5,711        4,235        4,383        3,662        6,261        18,541        18,176  

Colombia

     33.3     2,475        2,497        2,914        2,444        2,762        10,617        10,959  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       8,186        6,732        7,297        6,106        9,023        29,158        29,586  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other

                      

Nickel

                      

Saleable production (kt)

                      

Nickel West

     100     25.2        22.8        22.4        20.5        24.9        90.6        85.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       25.2        22.8        22.4        20.5        24.9        90.6        85.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(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 year ended 30 June 2018    13


Production and sales report                                                          
          Quarter ended      Year to date  
          Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Petroleum (1)

                       

Bass Strait

                       

Crude oil and condensate

   (Mboe)      1,552        1,815        1,513        1,126        1,361        5,815        6,599  

NGL

   (Mboe)      1,661        1,950        1,584        1,170        1,428        6,132        6,459  

Natural gas

   (bcf)      37.4        42.6        32.9        20.5        29.9        125.9        139.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      9.4        10.9        8.6        5.7        7.8        32.9        36.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North West Shelf

                       

Crude oil and condensate

   (Mboe)      1,314        1,474        1,442        1,377        1,267        5,560        5,507  

NGL

   (Mboe)      209        227        200        210        186        823        964  

Natural gas

   (bcf)      32.5        36.2        36.2        35.8        34.2        142.4        140.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      6.9        7.7        7.7        7.6        7.2        30.1        29.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pyrenees

                       

Crude oil and condensate

   (Mboe)      1,606        1,510        1,210        1,250        1,168        5,138        6,517  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.6        1.5        1.2        1.3        1.2        5.1        6.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Australia (2)

                       

Crude oil and condensate

   (Mboe)      9        9        8        8        7        32        35  

Natural gas

   (bcf)      16.3        16.1        13.3        13.4        13.9        56.7        66.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.7        2.7        2.2        2.2        2.3        9.5        11.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Atlantis (3)

                       

Crude oil and condensate

   (Mboe)      3,637        3,022        3,377        3,459        3,471        13,329        13,835  

NGL

   (Mboe)      213        218        195        248        217        878        923  

Natural gas

   (bcf)      1.9        1.6        1.8        1.8        1.5        6.7        7.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      4.2        3.5        3.9        4.0        3.9        15.3        15.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Mad Dog (3)

                       

Crude oil and condensate

   (Mboe)      1,167        1,020        1,231        1,140        581        3,972        4,472  

NGL

   (Mboe)      68        44        72        55        27        198        215  

Natural gas

   (bcf)      0.2        0.1        0.2        0.2        0.1        0.6        0.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.3        1.1        1.3        1.2        0.6        4.3        4.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shenzi (3)

                       

Crude oil and condensate

   (Mboe)      2,588        2,291        2,513        2,323        2,110        9,237        10,587  

NGL

   (Mboe)      179        141        184        140        151        616        565  

Natural gas

   (bcf)      0.6        0.4        0.5        0.4        0.4        1.7        2.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.9        2.5        2.8        2.5        2.3        10.1        11.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Eagle Ford (4)

                       

Crude oil and condensate

   (Mboe)      4,278        3,457        3,720        2,838        3,826        13,841        17,608  

NGL

   (Mboe)      2,240        1,856        2,100        1,555        1,767        7,278        9,021  

Natural gas

   (bcf)      15.1        13.8        14.4        12.6        13.9        54.7        63.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      9.0        7.6        8.2        6.5        7.9        30.2        37.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permian (4)

                       

Crude oil and condensate

   (Mboe)      1,336        1,179        1,142        1,398        1,903        5,622        5,331  

NGL

   (Mboe)      646        587        460        465        770        2,282        2,388  

Natural gas

   (bcf)      6.2        4.5        3.6        4.1        6.4        18.6        19.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.0        2.5        2.2        2.5        3.7        11.0        10.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Haynesville (4)

                       

Crude oil and condensate

   (Mboe)      1        —          1        —          —          1        5  

NGL

   (Mboe)      —          —          —          —          —          —          18  

Natural gas

   (bcf)      21.4        21.5        22.0        28.7        33.1        105.3        95.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.6        3.6        3.7        4.8        5.5        17.6        16.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fayetteville (4)

                       

Natural gas

   (bcf)      24.5        21.6        20.5        18.7        19.1        79.9        96.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      4.1        3.6        3.4        3.1        3.2        13.3        16.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the year ended 30 June 2018    14


Production and sales report                                                          
          Quarter ended      Year to date  
          Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Petroleum (1) (continued)

                       

Trinidad/Tobago

                       

Crude oil and condensate

   (Mboe)      139        118        135        232        233        718        562  

Natural gas

   (bcf)      9.4        9.7        10.5        10.0        9.8        40.0        32.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.7        1.7        1.9        1.9        1.9        7.4        6.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Americas (3) (5)

                       

Crude oil and condensate

   (Mboe)      238        229        207        189        313        938        1,039  

NGL

   (Mboe)      10        5        3        3        22        33        22  

Natural gas

   (bcf)      0.1        0.1        0.1        —          0.3        0.5        0.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.3        0.3        0.2        0.2        0.4        1.1        1.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

UK

                       

Crude oil and condensate

   (Mboe)      64        40        22        43        38        143        268  

NGL

   (Mboe)      16        39        13        18        18        88        119  

Natural gas

   (bcf)      1.1        0.5        0.6        0.8        0.6        2.5        4.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.3        0.2        0.1        0.2        0.2        0.6        1.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Algeria

                       

Crude oil and condensate

   (Mboe)      942        938        960        969        888        3,755        4,020  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.9        0.9        1.0        1.0        0.9        3.8        4.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Petroleum

                       

Crude oil and condensate

                       

Onshore US

   (Mboe)      5,615        4,636        4,863        4,236        5,729        19,464        22,944  

Conventional

   (Mboe)      13,256        12,466        12,618        12,116        11,437        48,637        53,441  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      18,871        17,102        17,481        16,352        17,166        68,101        76,385  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NGL

                       

Onshore US

   (Mboe)      2,886        2,443        2,560        2,020        2,537        9,560        11,427  

Conventional

   (Mboe)      2,356        2,624        2,251        1,844        2,049        8,768        9,267  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      5,242        5,067        4,811        3,864        4,586        18,328        20,694  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Natural gas

                       

Onshore US

   (bcf)      67.2        61.4        60.5        64.1        72.5        258.5        275.0  

Conventional

   (bcf)      99.5        107.3        96.1        82.9        90.7        377.0        392.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (bcf)      166.7        168.7        156.6        147.0        163.2        635.5        667.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

                       

Onshore US

   (Mboe)      19,701        17,312        17,506        16,939        20,349        72,107        80,204  

Conventional

   (Mboe)      32,195        32,973        30,886        27,777        28,603        120,238        128,175  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      51,896        50,286        48,392        44,716        48,952        192,346        208,379  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(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 year ended 30 June 2018    15


Production and sales report      
          Quarter ended     Year to date  
      Jun
2017
    Sep
2017
    Dec
2017
    Mar
2018
    Jun
2018
    Jun
2018
    Jun
2017
 

Copper

                 

Metals production is payable metal unless otherwise stated.

 

Escondida, Chile (1)

                 

Material mined

   (kt)      93,389       104,867       101,371       103,385       106,788       416,411       316,801  

Sulphide ore milled

   (kt)      18,777       24,080       30,260       32,203       31,732       118,275       67,484  

Average concentrator head grade

   (%)      1.07     1.06     0.98     0.96     0.96     0.99     0.99

Production ex mill

   (kt)      167.0       204.2       245.7       252.6       253.6       956.1       557.5  

Production

                 

Payable copper

   (kt)      162.4       196.3       238.5       244.9       246.1       925.8       539.6  

Copper cathode (EW)

   (kt)      62.8       71.9       76.1       69.4       70.1       287.5       232.0  

- Oxide leach

   (kt)      20.3       22.4       27.4       24.5       27.1       101.4       80.4  

- Sulphide leach

   (kt)      42.5       49.5       48.7       44.9       43.0       186.1       151.6  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total copper

   (kt)      225.2       268.2       314.6       314.3       316.2       1,213.3       771.6  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Payable gold concentrate

   (troy oz)      33,941       50,525       50,279       59,953       68,345       229,102       110,858  

Payable silver concentrate

   (troy koz)      1,234       1,737       2,193       2,339       2,527       8,796       4,326  

Sales

                 

Payable copper

   (kt)      163.3       195.1       236.7       228.3       260.3       920.4       534.6  

Copper cathode (EW)

   (kt)      56.0       61.6       84.1       61.7       80.9       288.3       232.8  

Payable gold concentrate

   (troy oz)      33,941       50,525       50,279       59,953       68,345       229,102       110,858  

Payable silver concentrate

   (troy koz)      1,234       1,737       2,193       2,339       2,527       8,796       4,326  

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

    

Pampa Norte, Chile

                 

Cerro Colorado

                 

Material mined

   (kt)      15,760       21,381       20,191       17,766       17,918       77,256       58,235  

Ore milled

   (kt)      4,411       3,951       4,611       4,905       4,833       18,300       15,173  

Average copper grade

   (%)      0.53     0.62     0.59     0.58     0.58     0.59     0.60

Production

                 

Copper cathode (EW)

   (kt)      18.8       13.3       17.4       13.6       19.0       63.3       64.7  

Sales

                 

Copper cathode (EW)

   (kt)      19.8       12.3       17.7       13.7       20.9       64.6       65.5  

Spence

                 

Material mined

   (kt)      24,230       22,314       23,096       21,463       23,103       89,976       93,442  

Ore milled

   (kt)      4,968       5,375       4,919       5,144       4,009       19,447       20,093  

Average copper grade

   (%)      1.13     1.21     1.18     1.03     1.11     1.13     1.14

Production

                 

Copper cathode (EW)

   (kt)      53.5       44.7       51.0       53.2       51.6       200.5       189.6  

Sales

                 

Copper cathode (EW)

   (kt)      55.7       43.0       52.2       49.8       57.1       202.1       187.4  

 

 

BHP Operational Review for the year ended 30 June 2018    16


Production and sales report      
          Quarter ended     Year to date  
      Jun
2017
    Sep
2017
    Dec
2017
    Mar
2018
    Jun
2018
    Jun
2018
    Jun
2017
 

Copper (continued)

                 

Metals production is payable metal unless otherwise stated.

 

Antamina, Peru

                 

Material mined (100%)

   (kt)      62,254       59,216       59,125       58,085       59,002       235,428       244,491  

Sulphide ore milled (100%)

   (kt)      13,229       12,822       13,098       12,166       12,973       51,059       52,105  

Average head grades

                 

- Copper

   (%)      1.00     0.94     0.89     1.01     0.91     0.94     0.89

- Zinc

   (%)      0.95     0.99     0.93     1.01     1.19     1.03     0.80

Production

                 

Payable copper

   (kt)      38.5       35.9       33.8       35.2       34.6       139.5       133.8  

Payable zinc

   (t)      29,076       29,201       29,054       25,562       35,983       119,800       87,502  

Payable silver

   (troy koz)      1,691       1,596       1,331       1,189       1,321       5,437       5,783  

Payable lead

   (t)      1,799       1,415       1,009       464       546       3,434       5,473  

Payable molybdenum

   (t)      328       402       579       420       261       1,662       1,144  

Sales

                 

Payable copper

   (kt)      36.9       31.9       37.0       32.1       36.6       137.6       132.9  

Payable zinc

   (t)      27,936       25,224       30,340       26,456       33,088       115,108       89,982  

Payable silver

   (troy koz)      1,513       1,475       1,470       1,052       1,311       5,308       5,482  

Payable lead

   (t)      1,493       1,624       972       859       595       4,050       4,835  

Payable molybdenum

   (t)      —         168       693       500       388       1,749       1,124  

Olympic Dam, Australia

                 

Material mined (1)

   (kt)      1,974       1,851       1,391       2,056       2,201       7,499       8,008  

Ore milled

   (kt)      2,097       2,302       554       2,188       2,171       7,215       8,604  

Average copper grade

   (%)      2.30     2.10     2.22     2.36     2.12     2.19     2.08

Average uranium grade

   (kg/t)      0.58       0.55       0.58       0.71       0.69       0.64       0.62  

Production

                 

Copper cathode (ER and EW)

   (kt)      51.4       42.0       12.2       40.5       42.0       136.7       166.3  

Uranium oxide concentrate

   (t)      737       880       243       1,118       1,123       3,364       3,661  

Refined gold

   (troy oz)      28,188       13,101       15,969       28,989       33,497       91,556       104,146  

Refined silver

   (troy koz)      243       131       135       248       278       792       768  

Sales

                 

Copper cathode (ER and EW)

   (kt)      51.5       31.6       24.3       36.8       46.0       138.7       163.7  

Uranium oxide concentrate

   (t)      1,298       680       338       509       1,230       2,757       4,105  

Refined gold

   (troy oz)      24,726       22,435       17,999       20,715       35,714       96,863       97,194  

Refined silver

   (troy koz)      251       219       118       202       307       846       746  

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

    

 

 

 

BHP Operational Review for the year ended 30 June 2018    17


Production and sales report      
          Quarter ended      Year to date  
      Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Iron Ore

                       

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

 

Pilbara, Australia

                       

Production

                       

Newman

   (kt)      16,241        13,842        18,317        16,412        18,500        67,071        68,283  

Area C Joint Venture

   (kt)      13,016        13,099        13,575        12,802        12,041        51,517        48,744  

Yandi Joint Venture

   (kt)      17,415        14,559        16,348        15,802        17,339        64,048        65,355  

Jimblebar (1)

   (kt)      5,891        6,283        4,583        4,669        15,092        30,627        21,950  

Wheelarra

   (kt)      7,578        7,804        8,734        8,006        614        25,158        27,020  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production

   (kt)      60,141        55,587        61,557        57,691        63,586        238,421        231,352  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production (100%)

   (kt)      69,714        64,287        71,611        67,048        72,145        275,091        268,302  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Lump

   (kt)      15,104        13,896        15,145        13,993        15,173        58,207        56,191  

Fines

   (kt)      46,249        40,733        45,769        44,332        47,730        178,564        175,017  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      61,353        54,629        60,914        58,325        62,903        236,771        231,208  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total sales (100%)

   (kt)      71,149        63,322        70,733        67,799        71,385        273,239        268,226  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

Samarco, Brazil (1)

                       

Production

   (kt)      —          —          —          —          —          —          —    

Sales

   (kt)      —          —          14        25        —          39        47  

(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 2018    18


Production and sales report      
          Quarter ended      Year to date  
          Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Coal

                       

Coal production is reported on the basis of saleable product.

 

Queensland Coal

                       

Production (1)

                       

BMA

                       

Blackwater

   (kt)      1,766        1,985        1,470        1,384        1,849        6,688        7,296  

Goonyella

   (kt)      1,157        1,639        1,369        2,314        2,639        7,961        7,355  

Peak Downs

   (kt)      1,238        1,602        1,367        1,723        1,658        6,350        6,055  

Saraji

   (kt)      913        1,414        1,198        1,240        1,201        5,053        4,734  

Daunia

   (kt)      560        662        718        547        629        2,556        2,560  

Caval Ridge

   (kt)      760        994        1,272        775        1,244        4,285        3,458  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA

   (kt)      6,394        8,296        7,394        7,983        9,220        32,893        31,458  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                       

South Walker Creek

   (kt)      1,348        1,400        1,524        1,490        1,615        6,029        5,123  

Poitrel

   (kt)      752        871        767        906        1,174        3,718        3,189  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BHP Mitsui Coal

   (kt)      2,100        2,271        2,291        2,396        2,789        9,747        8,312  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

   (kt)      8,494        10,567        9,685        10,379        12,009        42,640        39,770  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Coking coal

   (kt)      5,496        7,934        6,341        7,177        8,489        29,941        27,527  

Weak coking coal

   (kt)      2,502        3,150        2,816        2,598        2,866        11,430        10,721  

Thermal coal

   (kt)      142        102        173        168        85        528        598  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      8,140        11,186        9,330        9,943        11,440        41,899        38,846  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(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)      —          —          —          —          —          —          129  

Sales - export

   (kt)      —          —          —          —          —          —          117  

(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)      5,711        4,235        4,383        3,662        6,261        18,541        18,176  

Sales

                       

Export thermal coal

   (kt)      4,913        3,622        4,048        3,181        5,795        16,646        16,499  

Inland thermal coal

   (kt)      327        405        411        400        160        1,376        1,400  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      5,240        4,027        4,459        3,581        5,955        18,022        17,899  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cerrejón, Colombia

                       

Production

   (kt)      2,475        2,497        2,914        2,444        2,762        10,617        10,959  

Sales thermal coal - export

   (kt)      2,803        2,518        2,619        2,480        2,763        10,380        11,043  

 

 

BHP Operational Review for the year ended 30 June 2018    19


Production and sales report      
          Quarter ended      Year to date  
          Jun
2017
     Sep
2017
     Dec
2017
     Mar
2018
     Jun
2018
     Jun
2018
     Jun
2017
 

Other

                       

Nickel production is reported on the basis of saleable product

 

Nickel West, Australia

                       

Production

                       

Nickel contained in concentrate

   (kt)      —          —          —          —          —          —          0.7  

Nickel contained in finished matte

   (kt)      5.3        6.8        4.6        1.3        6.4        19.1        13.5  

Nickel metal

   (kt)      19.9        16.0        17.8        19.2        18.5        71.5        70.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel production

   (kt)      25.2        22.8        22.4        20.5        24.9        90.6        85.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Nickel contained in concentrate

   (kt)      —          —          —          —          —          —          0.7  

Nickel contained in finished matte

   (kt)      4.9        4.6        6.4        2.1        5.9        19.0        13.0  

Nickel metal

   (kt)      18.1        16.6        17.9        19.7        17.8        72.0        69.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel sales

   (kt)      23.0        21.2        24.3        21.8        23.7        91.0        83.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the year ended 30 June 2018    20


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: July 18, 2018     By:  

/s/ Margaret Taylor

    Name:   Margaret Taylor
    Title:   Group Company Secretary