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 22, 2019

 

 

 

BHP GROUP LIMITED

(ABN 49 004 028 077)

(Exact name of Registrant as specified in its charter)

 

VICTORIA, AUSTRALIA

(Jurisdiction of incorporation or organisation)

 

171 COLLINS STREET, MELBOURNE,

VICTORIA 3000 AUSTRALIA

(Address of principal executive offices)

  

BHP GROUP PLC

(REG. NO. 3196209)

(Exact name of Registrant as specified in its charter)

 

ENGLAND AND WALES

(Jurisdiction of incorporation or organisation)

 

NOVA SOUTH, 160 VICTORIA STREET

LONDON, SW1E 5LB

UNITED KINGDOM

(Address of principal executive offices)

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

☒ Form 20-F    ☐ Form 40-F

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

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

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

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

 

 

 


NEWS RELEASE    LOGO

 

Release Time        

   IMMEDIATE

Date

   22 January 2019

Release Number

   01/19

BHP OPERATIONAL REVIEW FOR THE HALF YEAR ENDED 31 DECEMBER 2018

 

 

Production guidance for the 2019 financial year remains unchanged for petroleum, iron ore, metallurgical coal and energy coal. Total copper production guidance increased to between 1,645 and 1,740 kt and reflects the retention of Cerro Colorado.

 

 

Group copper equivalent production(1) was broadly unchanged in the December 2018 half year, with volumes for the full year also expected to be in line with last year.

 

 

Full year unit costs for all major assets are expected to be in line with guidance(2), predominantly reflecting stronger anticipated volumes in the second half of the year. However, unit costs were tracking above full year guidance at the December 2018 half year as a result of planned maintenance and production outages during the period.

 

 

All major projects under development are tracking to plan.

 

 

In Petroleum, the first appraisal well at Trion in Mexico (Trion-2DEL) encountered oil, in line with expectations. A downdip sidetrack is currently being drilled to further appraise the field.

 

 

The Onshore US sale process was completed on 31 October 2018, with the net proceeds of US$10.4 billion to be returned to shareholders. On 17 December 2018, a US$5.2 billion off-market buyback of BHP Group Limited shares was successfully completed. The balance of the net proceeds will be paid on 30 January 2019 as a special dividend of US$1.02 per share.

 

 

The financial results for the December 2018 half year are expected to reflect certain items as summarised in the table on page two.

 

 

Productivity for the December 2018 half year has been impacted by unplanned production outages at Olympic Dam, Spence and Western Australia Iron Ore, with a total negative impact of approximately US$600 million.

 

Production

   Dec H18
(vs Dec H17)
    Dec Q18
(vs Sep Q18)
   

Dec Q18 commentary

Petroleum (MMboe)

    

63

(-1

 

%) 

   
30
(-8
 
%) 
  Lower seasonal gas sales at Bass Strait partially offset by Pyrenees resuming production following maintenance in the previous quarter.

Copper (kt)

    
825
(-1
 
%) 
   
416
(+2
 
%) 
  Record throughput at Cerro Colorado and higher volumes at Spence as production returned to full capacity following a fire in September 2018, partially offset by lower volumes at Escondida as a result of expected lower copper grades.

Iron ore (Mt)

    
119
(+2

%) 
   
58
(-6
 
%) 
  Volumes at Western Australia Iron Ore (WAIO) impacted by a train derailment on 5 November 2018.

Metallurgical coal (Mt)

    

21

(+2

 

%) 

   
10
(-1
 
%) 
  Record production at South Walker Creek offset by the impact of the scheduled longwall move at Broadmeadow.

Energy coal (Mt)

    

13

(-5

 

%) 

   
7
(0
 
%) 
  Increased production at New South Wales Energy Coal (NSWEC) as a result of higher bypass coal offset by the impact of mine sequence changes at Cerrejón.

BHP Chief Executive Officer, Andrew Mackenzie, said: “Production in the first half was broadly in line with the prior period despite planned maintenance and outages. In Petroleum, our first appraisal well at Trion in Mexico encountered oil and we added to our exploration options with successful bids for two licences offshore Eastern Canada. We completed the sale of our US shale assets and returned US$5.2 billion to shareholders through a share buy-back program, with a further US$5.2 billion to be returned as a special dividend on 30 January 2019.”

 

 

BHP Operational Review for the half year ended 31 December 2018    1


Summary

Operational performance

Production for the December 2018 half year and guidance for the 2019 financial year are summarised below.

 

Production

   Dec
H18
     Dec
Q18
     Dec H18
vs
Dec H17
    Dec Q18
vs
Dec Q17
    Dec Q18
vs
Sep Q18
    Previous
FY19
guidance
     Current
FY19
guidance
        

Petroleum – Conventional (MMboe)

     63        30        (1 %)      (2 %)      (8 %)      113 - 118        113 - 118        Upper end of range  

Copper (kt)

     825        416        (1 %)      (3 %)      2     1,620 - 1,705        1,645 - 1,740        Increased  

Escondida (kt)

     580        285        0     (10 %)      (4 %)      1,120 - 1,180        1,120 - 1,180        Unchanged  

Other copper(i) (kt)

     245        132        (2 %)      15     16     500 - 525        525 - 560       

Cerro Colorado
60 - 70 kt for
FY19
 
 
 

Iron ore(ii) (Mt)

     119        58        2     (6 %)      (6 %)      241 - 250        241 - 250        Unchanged  

WAIO (100% basis) (Mt)

     135        66        (1 %)      (9 %)      (6 %)      273 - 283        273 - 283        Unchanged  

Metallurgical coal (Mt)

     21        10        2     6     (1 %)      43 - 46        43 - 46        Unchanged  

Energy coal (Mt)

     13        7        (5 %)      (9 %)      0     28 - 29        28 - 29        Unchanged  

 

(i)

Other copper comprises Pampa Norte (including Cerro Colorado production for the full 2019 financial year to reflect its retention, previous guidance only included 35 kt of production for the first half of the 2019 financial year), Olympic Dam and Antamina.

(ii)

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

Summary of disclosures

BHP expects its financial results for the first half of the 2019 financial year to reflect certain items as summarised in the table below. The table does not provide a comprehensive list of all items impacting the period. The financial statements are the subject of ongoing work that will not be finalised until the release of the financial results on 19 February 2019. Accordingly, the information is subject to update.

 

Description

   H1 FY19
impact
US$M(i)
    Classification(ii)  

Continuing operations

 

Change in the accounting classification of treatment and refining charges as a result of IFRS15(3) (reclassification between revenue and operating costs)

     ~260     i

i

Revenue

Operating costs

 

 

Unit costs tracking above full year guidance(2) in H1 FY19 as a result of planned maintenance and production outages

     Refer footnote (iii)     h Operating costs  

Exploration expense (including petroleum and minerals exploration programs)

     222     h Exploration expense  

Impairment charges related to the Whenan shaft refurbishment project at Olympic Dam (changes to the mine access plan) and Cerro Colorado (termination of the sale and purchase agreement)

     100-150     h
 

Depreciation, amortisation
and impairments
 
 
 

The Group’s adjusted effective tax rate for H1 FY19 is expected to be slightly above the full year guidance range of 30 to 35 per cent

     Refer footnote (iii)     h Taxation expense  

Non-cash fair value adjustments related to interest rate and exchange rate movements are expected to increase net debt in H1 FY19

     Refer footnote (iii)     h Net debt  

Higher Australian and Chilean income tax payments in H1 FY19 compared with H1 FY18 primarily due to higher instalment rates and settlement of an Australian transfer pricing dispute

     ~700     i Operating cash inflow  

Dividends paid to non-controlling interests

     ~620     h Financing cash outflow  

Reversal of provisions for global taxation matters which were resolved during the period

     ~240       Exceptional item credit  

Financial impact on BHP Billiton Brasil of the Samarco Dam failure

     Refer footnote (iii)       Exceptional item charge  

Discontinued operations

 

Loss from Onshore US (after taxation) mainly due to incremental costs (including redundancy costs and retention payments to employees) and State and Federal tax expenses

     275-325     i Profit after taxation  

Net proceeds received from the sale of Onshore US (comprising Fayetteville US$0.3 billion and Eagle Ford, Haynesville and Permian US$6.7 billion, representing one-half of the gross consideration at completion less customary completion adjustments and two instalment payments)

     7,028     h Investing cash inflow  

 

(i)

Numbers are not tax effected, unless otherwise noted.

(ii)

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

(iii)

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

 

 

BHP Operational Review for the half year ended 31 December 2018    2


Productivity for the December 2018 half year has been impacted by lower than expected volumes at Olympic Dam (unplanned acid plant outage in August 2018, volume impact of 45 kt), Spence (fire at the electro-winning plant in September 2018, volume impact of 25 kt) and WAIO (train derailment in November 2018, volume impact of 4 Mt), with a total negative impact of approximately US$600 million. Productivity guidance for the full year is currently under review and revised guidance will be provided in the December 2018 half year financial results.

Average realised prices

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

 

Average realised prices(i)

   Dec H18      Dec H17      Jun H18      FY18      Dec H18
vs

Dec H17
    Dec H18
vs

Jun H18
    Dec H18
vs

FY18
 

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

     69.41        53.76        67.07        60.12        29     3     15

Natural gas (US$/Mscf)(ii)

     3.98        3.54        3.71        3.62        12     7     10

US natural gas (US$/Mscf)

     2.88        2.84        2.77        2.80        1     4     3

LNG (US$/Mscf)

     10.19        7.48        8.65        8.07        36     18     26

Copper (US$/lb)(v)

     2.54        3.08        2.93        3.00        (18 %)      (13 %)      (15 %) 

Iron ore (US$/wmt, FOB)

     55.62        56.54        56.86        56.71        (2 %)      (2 %)      (2 %) 

Metallurgical coal (US$/t)

     179.82        164.22        189.66        177.22        9     (5 %)      1

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

     197.86        182.29        205.80        194.59        9     (4 %)      2

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

     134.12        120.99        143.40        131.70        11     (6 %)      2

Thermal coal (US$/t)(iv)

     84.15        87.49        86.47        86.94        (4 %)      (3 %)      (3 %) 

Nickel metal (US$/t)

     12,480        11,083        13,974        12,591        13     (11 %)      (1 %) 

 

(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.

(v)

Comparative financial information has been restated for the new accounting standard, IFRS15 Revenue from Contracts with Customers, which became effective from 1 July 2018.

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 31 December 2018, the Group had 339 kt of outstanding copper sales that were revalued at a weighted average price of US$2.70 per pound. The final price of these sales will be determined over the remainder of the 2019 financial year. In addition, 364 kt of copper sales from the 2018 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will decrease Underlying EBITDA(4) by US$272 million in the 2019 financial year and is included in the average realised copper price in the above table.

Major development projects

During the December 2018 quarter, the North West Shelf Greater Western Flank-B project achieved first production ahead of schedule and under budget. The North West Shelf Greater Western Flank-B project will not be reported in future Operational Reviews.

At the end of December 2018, 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 half year ended 31 December 2018    3


Corporate update

The Onshore US sales process was completed on 31 October 2018, with the net proceeds of US$10.4 billion to be returned to shareholders through an off-market buy-back and a special dividend shareholder return program. On 17 December 2018, the US$5.2 billion off-market buy-back of BHP Group Limited shares was successfully completed and enabled the buy-back of approximately 265.8 million shares (5.0 per cent of the total issued capital of BHP Group Limited and BHP Group Plc) at A$27.64 per share. In addition, the Board of BHP determined to pay a special dividend to shareholders of US$1.02 per share, representing the residual US$5.2 billion of net proceeds, based on the reduced number of shares on issue (approximately 5,058 million) following completion of the off-market buy-back.

On 19 November 2018, BHP settled its transfer pricing dispute relating to its marketing operations in Singapore with the Australian Taxation Office. The settlement fully resolved all prior years, being 2003 to 2018, with no admission of tax avoidance by BHP. As part of the settlement, BHP paid a total of approximately A$529 million in additional taxes for the prior years (BHP paid A$328 million of this amount when the amended assessments were received in prior years, with the balance of A$201 million paid in the December 2018 quarter). In addition, the settlement provides certainty in relation to the future taxation treatment as, due to a change in ownership of the main marketing entity, all profits made in Singapore in relation to the Australian assets owned by BHP Group Limited will be fully subject to Australian tax under the Controlled Foreign Company tax rules from the 2020 financial year.

BHP has agreed to fund a total of US$515 million in further financial support for the Renova Foundation and Samarco. This comprises US$438 million to fund the Renova Foundation until 31 December 2019 which will be offset against the Group’s provision for the Samarco dam failure, and a short-term facility of up to US$77 million to be made available to Samarco until 30 June 2019.

As at the date of this Operational Review, we are not in a position to provide an update, for the purpose of the December 2018 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 treated as an exceptional item.

 

 

BHP Operational Review for the half year ended 31 December 2018    4


Petroleum

Production

 

     Dec H18      Dec Q18      Dec H18
vs

Dec H17
    Dec Q18
vs

Dec Q17
    Dec Q18
vs

Sep Q18
 

Crude oil, condensate and natural gas liquids (MMboe)

     29        14        (5 %)      (3 %)      3

Natural gas (bcf)

     206        94        1     (2 %)      (16 %) 

Total petroleum production (MMboe)

     63        30        (1 %)      (2 %)      (8 %) 

Petroleum - Total Conventional petroleum production was broadly flat at 63 MMboe. Guidance for the 2019 financial year remains unchanged at between 113 and 118 MMboe, with volumes expected to be towards the upper end of the guidance range.

Crude oil, condensate and natural gas liquids production declined by five per cent to 29 MMboe due to natural field decline across the portfolio and a 70 day planned dry dock maintenance program at Pyrenees completed during the September 2018 quarter. This decline was partially offset by higher uptimes at our Gulf of Mexico assets.

Natural gas production was broadly flat at 206 bcf, reflecting increased tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract. This was partially offset by planned maintenance at Trinidad and Tobago in the December 2018 quarter and natural field decline across the portfolio.

On 30 November 2018, BHP completed the sale of its interests in the Bruce and Keith oil and gas fields in the United Kingdom to Serica Energy UK Ltd, with an effective date of 1 January 2018.

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.   

First production achieved in October

2018, ahead of schedule and below budget. The overall project is 98% 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 37% complete.

During the December 2018 quarter, the Bass Strait West Barracouta project was approved. The A$200 million (BHP share) investment is expected to produce first gas in the 2021 calendar year to help offset Bass Strait production decline, and to deliver competitive returns.

On 8 January 2019, BP (the operator) announced the sanction of the Atlantis Phase 3 project. Approval from BHP’s Board will be sought during the March 2019 quarter. Study work continues on the Ruby project in Trinidad and Tobago.

Petroleum exploration

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

 

Well

   Location    Target    Formation
age
  

BHP equity

  

Spud date

  

Water depth

  

Total well

depth

  

Status

Samurai-2

ST01

(sidetrack)

   US Gulf of
Mexico GC476
   Oil    Miocene   

50%

(Murphy

Operator)

   25 August 2018    1,088 m    10,088 m    Plugged and abandoned
Concepcion-1    Trinidad &
Tobago Block
TTDAA 5
   Gas   

Pleistocene/

Pliocene

  

65%

(BHP

Operator)

   30 September 2018    1,721 m    3,506 m   

No commercial

hydrocarbons encountered; plugged and abandoned

Trion-2DEL    Mexico

Block
AE-0093

   Oil    Eocene   

60%

(BHP

Operator)

   15 November 2018    2,379 m    4,659 m    Hydrocarbons encountered

 

 

BHP Operational Review for the half year ended 31 December 2018    5


In the US Gulf of Mexico, a sidetrack of the Samurai-2 exploration well commenced on 25 August 2018 to further appraise the discovery, and was plugged and abandoned on 2 November 2018 after delineating the Samurai discovery. Appraisal and development planning is in progress. In the Western US Gulf of Mexico, the Ocean Bottom Node(5) seismic acquisition is expected to be completed in the March 2019 quarter. This is the world’s first deepwater exploration ocean bottom node seismic acquisition.

In Trinidad and Tobago, the Concepcion-1 well was spud on 30 September 2018 to further test the Magellan play, with no commercial hydrocarbons encountered. The well was plugged and abandoned on 25 October 2018. This completed Phase 2 of our deepwater exploration drilling campaign in Trinidad and Tobago.

In Mexico, we spud the Trion-2DEL appraisal well on 15 November 2018 and encountered oil in line with expectations. This was the first well drilled by an international operator in the Mexican deepwater. A downdip sidetrack of the Trion-2DEL well commenced on 4 January 2019 to further appraise the field, including the oil water contact.

BHP was successful in its bids to acquire a 100 per cent interest in, and operatorship of, two exploration licences for blocks 8 and 12 in the Orphan Basin, offshore Eastern Canada. BHP’s aggregate bid amount of US$625 million reflects the costs of the drilling and seismic work likely to be performed during the exploration phase, although there is no minimum work program under the licence agreements. BHP’s minimum commitment under the licence agreements, if no work is performed, is approximately US$119 million for block 8 and US$38 million for block 12.

Petroleum exploration expenditure for the December 2018 half year was US$316 million, of which US$166 million was expensed. A US$750 million exploration and appraisal program is being executed for the 2019 financial year.

Onshore US – Discontinued operations

The Onshore US sales process was completed on 31 October 2018, with the rights to the economic profits transferring to the purchasers from 1 July 2018. Onshore US production for the July 2018 to October 2018 period was 26 MMboe, with drilling and development expenditure of US$0.4 billion. Our operated rig count remained unchanged at five, with two rigs at Eagle Ford, two rigs at Permian and one at Haynesville. We continue to provide certain transitional services to BP for up to nine months following completion, however no further production will be reported by BHP.

 

 

BHP Operational Review for the half year ended 31 December 2018    6


Copper

Production

 

     Dec H18      Dec Q18      Dec H18
vs

Dec H17
    Dec Q18
vs

Dec Q17
    Dec Q18
vs

Sep Q18
 

Copper (kt)

     825        416        (1 %)      (3 %)      2

Zinc (t)

     54,795        24,237        (6 %)      (17 %)      (21 %) 

Uranium oxide concentrate (t)

     1,495        936        33     285     67

Copper – Total copper production decreased by one per cent to 825 kt. Guidance for the 2019 financial year has been increased to between 1,645 and 1,740 kt and reflects the retention of Cerro Colorado.

Escondida copper production was broadly unchanged at 580 kt as higher concentrator throughput and improved recoveries offset the impact of expected lower copper grades. Production guidance remains unchanged at between 1,120 and 1,180 kt for the 2019 financial year.

Pampa Norte copper production decreased by 17 per cent to 105 kt and reflects planned maintenance and a production outage at Spence following a fire at the electro-winning plant in September 2018. Record ore milled was achieved in the half year at both Spence and Cerro Colorado. Spence returned to full capacity during the December 2018 quarter, with production guidance of between 160 and 175 kt unchanged for the 2019 financial year. In the December 2018 quarter, BHP and EMR Capital agreed to terminate their agreement for the sale and purchase of Cerro Colorado after it became clear that the financing conditions of the transaction would not be satisfied by the end of the 2018 calendar year. Production at Cerro Colorado for the 2019 financial year is expected to be between 60 and 70 kt.

Olympic Dam copper production increased by 20 per cent to 65 kt as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018. Surface operations resumed at the end of October 2018 following completion of acid plant remediation works. Underground operations continue to progress into the Southern Mine Area, with record development kilometres achieved and the mine’s third decline becoming fully operational in the quarter. Production guidance for the 2019 financial year remains unchanged at between 170 and 180 kt.

Antamina copper production increased by eight per cent to 75 kt due to higher head grades. Production guidance for the 2019 financial year remains unchanged at approximately 135 kt for copper and approximately 85 kt for zinc.

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 34% complete.

 

 

BHP Operational Review for the half year ended 31 December 2018    7


Iron Ore

Production

 

     Dec H18      Dec Q18      Dec H18
vs
Dec H17
    Dec Q18
vs
Dec Q17
    Dec Q18
vs
Sep Q18
 

Iron ore (kt)

     119,226        57,835        2     (6 %)      (6 %) 

Iron ore – Total iron ore production increased by two per cent to 119 Mt (135 Mt on a 100 per cent basis). Guidance for the 2019 financial year remains unchanged at between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per cent basis.

At WAIO, increased volumes reflected record production at Jimblebar and the impact from the Mt Whaleback fire in the prior period. This was partially offset by the impact of planned maintenance in the September 2018 quarter and a train derailment on 5 November 2018 which resulted in the suspension of rail operations for five days and a production impact of approximately 4 Mt. During the rail outage, mine stockpile levels were built and are expected to be partially drawn down in the March 2019 quarter.

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

Projects

 

Project and ownership

   Capital
expenditure
US$M
     Initial
production
target date
    

Capacity

  

Progress

South Flank

(Australia)

85%

     3,061        CY21      Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi mine.    On schedule and budget. The overall project is 21% complete.

Coal

Production

 

     Dec H18      Dec Q18      Dec H18
vs
Dec H17
    Dec Q18
vs
Dec Q17
    Dec Q18
vs
Sep Q18
 

Metallurgical coal (kt)

     20,630        10,272        2     6     (1 %) 

Energy coal (kt)

     13,307        6,667        (5 %)      (9 %)      0

Metallurgical coal – Metallurgical coal production increased by two per cent to 21 Mt. Guidance for the 2019 financial year remains unchanged at between 43 and 46 Mt, with volumes weighted to the second half of the year as expected.

At Queensland Coal, increased production was supported by record production at South Walker Creek and higher wash-plant throughput at Poitrel following the purchase of the Red Mountain processing facility. This increase was partially offset by the scheduled longwall move at Broadmeadow which was successfully completed during the quarter.

The Caval Ridge Southern Circuit project was completed according to plan with the conveying of first coal in October 2018.

Energy coal – Energy coal production decreased by five per cent to 13 Mt. Guidance for the 2019 financial year remains unchanged at approximately 28 to 29 Mt.

New South Wales Energy Coal production decreased by four per cent as a result of a higher average strip ratio. Cerrejón production decreased by seven per cent due to mine sequence changes.

 

 

BHP Operational Review for the half year ended 31 December 2018    8


Other

Nickel production

 

     Dec H18      Dec Q18      Dec H18
vs

Dec H17
    Dec Q18
vs

Dec Q17
    Dec Q18
vs

Sep Q18
 

Nickel (kt)

     39.5        18.1        (15 %)      (22 %)      (15 %) 

Nickel — Nickel West production decreased by 15 per cent to 40 kt as operations were suspended following a fire at the Kalgoorlie smelter in September 2018. The smelter returned to operation on 1 October 2018, with full repairs now expected to be completed in the March 2019 quarter. Planned maintenance at the Kwinana refinery was brought forward to align with the smelter outage and, as a result, production guidance for the 2019 financial year remains unchanged and is expected to be broadly in line with 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.    The project is 82% complete and within the approved budget. The main activity for the quarter focussed on removing the boring equipment from both shafts.

Minerals exploration

Minerals exploration expenditure for the December 2018 half year was US$81 million, of which US$56 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.

Consistent with our exploration focus on copper, in September 2018, BHP acquired an initial 6.1 per cent interest in SolGold Plc (SolGold), the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador. On 15 October 2018, BHP entered into an agreement to acquire an additional 100 million shares in SolGold, for an investment of US$59 million, with our total interest now approximately 11.2 per cent.

In November 2018, BHP confirmed identification of a potential new iron oxide, copper, gold (IOCG) mineralised system, located 65 kilometres to the south east of BHP’s operations at Olympic Dam in South Australia. BHP is evaluating and interpreting the results reported and planning a further drilling program, to commence in early in the 2019 calendar year.

Variance analysis relates to the relative performance of BHP and/or its operations during the December 2018 half year compared with the December 2017 half year, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis. Numbers presented may not add up precisely to the totals provided due to rounding. Copper equivalent production based on 2018 financial year average realised prices.

The following footnotes apply to this Operational Review:

 

(1)

Excludes production from Onshore US.

(2)

2019 financial year unit cost guidance: Conventional Petroleum <US$11/boe, Escondida <US$1.15/lb, WAIO <US$14/t, Queensland Coal US$68-72/t and NSWEC US$43-48/t; based on exchange rates of AUD/USD 0.75 and USD/CLP 663.

(3)

IFRS15 Revenue from Contracts with Customers became effective for the Group from 1 July 2018.

(4)

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.

(5)

WGOM OBN 2018 Seismic Permit is OCS Permit T18-010.

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 Group Limited, BHP Group Plc and, except where the context otherwise requires, their respective subsidiaries as defined in note 27 ‘Subsidiaries’ in section 5.1 of BHP’s 30 June 2018 Annual Report on Form 20-F, unless stated otherwise. Notwithstanding that this release may include production, financial and other information from non-operated assets, non-operated assets are not included in the BHP Group and, as a result, statements regarding our operations, assets and values apply only to our operated assets unless stated otherwise.

 

 

BHP Operational Review for the half year ended 31 December 2018    9


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BHP Operational Review for the half year ended 31 December 2018    10


Production summary  
          Quarter ended      Year to date  
   

BHP

interest

    Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Petroleum (1)

                     

Petroleum

                     

Conventional

                     

Crude oil, condensate and NGL (Mboe)

      14,869        13,960        13,486        14,087        14,497        28,584        29,959  

Natural gas (bcf)

      96.1        82.9        90.7        112.3        93.9        206.2        203.4  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total (Mboe)

      30,886        27,777        28,603        32,804        30,147        62,951        63,859  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Copper (2)

                     

Copper

                     

Payable metal in concentrate (kt)

                     

Escondida (3)

    57.5     238.5        244.9        246.1        240.0        212.6        452.6        434.8  

Antamina

    33.8     33.8        35.2        34.6        37.0        38.3        75.3        69.7  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      272.3        280.1        280.7        277.0        250.9        527.9        504.5  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cathode (kt)

                     

Escondida (3)

    57.5     76.1        69.4        70.1        55.4        71.9        127.3        148.0  

Pampa Norte (4)

    100     68.4        66.8        70.6        43.4        61.8        105.2        126.4  

Olympic Dam

    100     12.2        40.5        42.0        33.3        31.6        64.9        54.2  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      156.7        176.7        182.7        132.1        165.3        297.4        328.6  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                     
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total copper (kt)

      429.0        456.8        463.4        409.1        416.2        825.3        833.1  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Lead

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     1,009        464        546        563        600        1,163        2,424  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      1,009        464        546        563        600        1,163        2,424  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Zinc

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     29,054        25,562        35,983        30,558        24,237        54,795        58,255  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      29,054        25,562        35,983        30,558        24,237        54,795        58,255  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gold

                     

Payable metal in concentrate (troy oz)

                     

Escondida (3)

    57.5     50,279        59,953        68,345        63,578        73,726        137,304        100,804  

Olympic Dam (refined gold)

    100     15,969        28,989        33,497        23,471        17,856        41,327        29,070  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      66,248        88,942        101,842        87,049        91,582        178,631        129,874  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Silver

                     

Payable metal in concentrate (troy koz)

                     

Escondida (3)

    57.5     2,193        2,339        2,527        1,997        2,570        4,567        3,930  

Antamina

    33.8     1,331        1,189        1,321        1,309        1,178        2,487        2,927  

Olympic Dam (refined silver)

    100     135        248        278        213        212        425        266  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      3,659        3,776        4,126        3,519        3,960        7,479        7,123  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Uranium

                     

Payable metal in concentrate (t)

                     

Olympic Dam

    100     243        1,118        1,123        559        936        1,495        1,123  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      243        1,118        1,123        559        936        1,495        1,123  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Molybdenum

                     

Payable metal in concentrate (t)

                     

Antamina

    33.8     579        420        261        464        417        881        981  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      579        420        261        464        417        881        981  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the half year ended 31 December 2018    11


Production summary  
          Quarter ended      Year to date  
   

BHP

interest

    Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Iron Ore

                     

Iron Ore

                     

Production (kt) (5)

                     

Newman

    85     18,317        16,412        18,500        16,378        17,578        33,956        32,159  

Area C Joint Venture

    85     13,575        12,802        12,041        11,696        10,280        21,976        26,674  

Yandi Joint Venture

    85     16,348        15,802        17,339        16,870        15,627        32,497        30,907  

Jimblebar (6)

    85     4,583        4,669        15,092        16,333        14,320        30,653        10,866  

Wheelarra

    85     8,734        8,006        614        114        30        144        16,538  

Samarco

    50     —          —          —          —          —          —          —    
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      61,557        57,691        63,586        61,391        57,835        119,226        117,144  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Coal

                     

Metallurgical coal

                     

Production (kt) (7)

                     

BMA

    50     7,394        7,983        9,220        7,744        7,694        15,438        15,690  

BHP Mitsui Coal (8)

    80     2,291        2,396        2,789        2,614        2,578        5,192        4,562  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      9,685        10,379        12,009        10,358        10,272        20,630        20,252  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Energy coal

                     

Production (kt)

                     

Australia

    100     4,383        3,662        6,261        3,982        4,311        8,293        8,618  

Colombia

    33.3     2,914        2,444        2,762        2,658        2,356        5,014        5,411  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      7,297        6,106        9,023        6,640        6,667        13,307        14,029  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other

                     

Nickel

                     

Saleable production (kt)

                     

Nickel West (9)

    100     23.1        21.1        25.6        21.4        18.1        39.5        46.4  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      23.1        21.1        25.6        21.4        18.1        39.5        46.4  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt

                     

Saleable production (t)

                     

Nickel West

    100     263        240        277        249        154        403        543  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

      263        240        277        249        154        403        543  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

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

(2)

Metal production is reported on the basis of payable metal.

(3)

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

(4)

Includes Cerro Colorado and Spence.

(5)

Iron ore production is reported on a wet tonnes basis.

(6)

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

(7)

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

(8)

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

(9)

Production restated to include other nickel by-products.

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

 

 

BHP Operational Review for the half year ended 31 December 2018    12


Production and sales report

                       
          Quarter ended      Year to date  
          Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Petroleum - Conventional (1)

                       

Bass Strait

                       

Crude oil and condensate

   (Mboe)      1,513        1,126        1,361        1,653        1,401        3,054        3,328  

NGL

   (Mboe)      1,584        1,170        1,428        1,840        1,447        3,287        3,534  

Natural gas

   (bcf)      32.9        20.5        29.9        35.1        25.2        60.3        75.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      8.6        5.7        7.8        9.3        7.0        16.4        19.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North West Shelf

                       

Crude oil and condensate

   (Mboe)      1,442        1,377        1,267        1,514        1,520        3,034        2,916  

NGL

   (Mboe)      200        210        186        242        206        448        427  

Natural gas

   (bcf)      36.2        35.8        34.2        36.6        37.5        74.1        72.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      7.7        7.6        7.2        7.9        8.0        15.8        15.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pyrenees

                       

Crude oil and condensate

   (Mboe)      1,210        1,250        1,168        282        1,101        1,383        2,720  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.2        1.3        1.2        0.3        1.1        1.4        2.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Australia (2)

                       

Crude oil and condensate

   (Mboe)      8        8        7        7        8        15        17  

Natural gas

   (bcf)      13.3        13.4        13.9        13.8        13.9        27.7        29.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.2        2.2        2.3        2.3        2.3        4.6        4.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Atlantis (3)

                       

Crude oil and condensate

   (Mboe)      3,377        3,459        3,471        3,190        3,802        6,992        6,399  

NGL

   (Mboe)      195        248        217        215        268        483        413  

Natural gas

   (bcf)      1.8        1.8        1.5        1.5        1.9        3.4        3.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.9        4.0        3.9        3.7        4.4        8.0        7.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Mad Dog (3)

                       

Crude oil and condensate

   (Mboe)      1,231        1,140        581        1,270        1,158        2,428        2,251  

NGL

   (Mboe)      72        55        27        61        54        115        116  

Natural gas

   (bcf)      0.2        0.2        0.1        0.2        0.2        0.4        0.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.3        1.2        0.6        1.4        1.2        2.6        2.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shenzi (3)

                       

Crude oil and condensate

   (Mboe)      2,513        2,323        2,110        2,016        2,024        4,040        4,804  

NGL

   (Mboe)      184        140        151        122        121        243        325  

Natural gas

   (bcf)      0.5        0.4        0.4        0.4        0.4        0.8        0.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.8        2.5        2.3        2.2        2.2        4.4        5.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Trinidad/Tobago

                       

Crude oil and condensate

   (Mboe)      135        232        233        447        200        647        253  

Natural gas

   (bcf)      10.5        10.0        9.8        24.0        14.0        38.0        20.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.9        1.9        1.9        4.4        2.5        7.0        3.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Americas (3) (4)

                       

Crude oil and condensate

   (Mboe)      207        189        313        207        218        425        436  

NGL

   (Mboe)      3        3        22        3        4        7        8  

Natural gas

   (bcf)      0.1        —          0.3        —          0.1        0.1        0.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.2        0.2        0.4        0.2        0.2        0.4        0.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

UK (5)

                       

Crude oil and condensate

   (Mboe)      22        43        38        36        36        72        62  

NGL

   (Mboe)      13        18        18        21        21        42        52  

Natural gas

   (bcf)      0.6        0.8        0.6        0.7        0.7        1.4        1.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      0.1        0.2        0.2        0.2        0.2        0.3        0.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Algeria

                       

Crude oil and condensate

   (Mboe)      960        969        888        961        908        1,869        1,898  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      1.0        1.0        0.9        1.0        0.9        1.9        1.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the half year ended 31 December 2018    13


Production and sales report

                      
           Quarter ended      Year to date  
           Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Petroleum - Total (1)

                      

Conventional

                      

Crude oil and condensate

     (Mboe)       12,618        12,116        11,437        11,583        12,376        23,959        25,084  

NGL

     (Mboe)       2,251        1,844        2,049        2,504        2,121        4,625        4,875  

Natural gas

     (bcf)       96.1        82.9        90.7        112.3        93.9        206.2        203.4  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     (Mboe)       30,886        27,777        28,603        32,804        30,147        62,951        63,859  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

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

(2)

Other Australia includes Minerva and Macedon.

(3)

Gulf of Mexico volumes are net of royalties.

(4)

Other Americas includes Neptune, Genesis and Overriding Royalty Interest.

(5)

BHP completed the sale of its interest in the Bruce and Keith oil and gas fields on 30 November 2018. The sale has an effective date of 1 January 2018.

 

 

BHP Operational Review for the half year ended 31 December 2018    14


Production and sales report

                 
          Quarter ended     Year to date  
          Dec
2017
    Mar
2018
    Jun
2018
    Sep
2018
    Dec
2018
    Dec
2018
    Dec
2017
 

Copper

                 

Metals production is payable metal unless otherwise stated.

 

Escondida, Chile (1)

                 

Material mined

   (kt)      101,371       103,385       106,788       107,260       105,580       212,840       206,238  

Sulphide ore milled

   (kt)      30,260       32,203       31,732       30,513       30,507       61,020       54,340  

Average concentrator head grade

   (%)      0.98     0.96     0.96     0.94     0.87     0.91     1.02

Production ex mill

   (kt)      245.7       252.6       253.6       241.9       219.9       461.8       449.9  

Production

                 

Payable copper

   (kt)      238.5       244.9       246.1       240.0       212.6       452.6       434.8  

Copper cathode (EW)

   (kt)      76.1       69.4       70.1       55.4       71.9       127.3       148.0  

- Oxide leach

   (kt)      27.4       24.5       27.1       19.5       23.4       42.9       49.8  

- Sulphide leach

   (kt)      48.7       44.9       43.0       35.8       48.5       84.3       98.2  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total copper

   (kt)      314.6       314.3       316.2       295.4       284.5       579.9       582.8  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Payable gold concentrate

   (troy oz)      50,279       59,953       68,345       63,578       73,726       137,304       100,804  

Payable silver concentrate

   (troy koz)      2,193       2,339       2,527       1,997       2,570       4,567       3,930  

Sales

                 

Payable copper

   (kt)      236.7       228.3       260.3       216.5       229.2       445.7       431.8  

Copper cathode (EW)

   (kt)      84.1       61.7       80.9       53.2       72.3       125.5       145.7  

Payable gold concentrate

   (troy oz)      50,279       59,953       68,345       63,578       73,726       137,304       100,804  

Payable silver concentrate

   (troy koz)      2,193       2,339       2,527       1,997       2,570       4,567       3,930  

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

    

Pampa Norte, Chile

                 

Cerro Colorado

                 

Material mined

   (kt)      20,191       17,766       17,918       18,488       19,875       38,363       41,572  

Ore milled

   (kt)      4,611       4,905       4,833       4,802       5,069       9,871       8,562  

Average copper grade

   (%)      0.59     0.58     0.58     0.53     0.62     0.58     0.60

Production

                 

Copper cathode (EW)

   (kt)      17.4       13.6       19.0       14.2       19.4       33.6       30.7  

Sales

                 

Copper cathode (EW)

   (kt)      17.7       13.7       20.9       13.8       19.0       32.8       30.0  

Spence

                 

Material mined

   (kt)      23,096       21,463       23,103       23,007       21,661       44,668       45,410  

Ore milled

   (kt)      4,919       5,144       4,009       5,642       5,428       11,070       10,294  

Average copper grade

   (%)      1.18     1.03     1.11     1.15     1.07     1.11     1.20

Production

                 

Copper cathode (EW)

   (kt)      51.0       53.2       51.6       29.2       42.4       71.6       95.7  

Sales

                 

Copper cathode (EW)

   (kt)      52.2       49.8       57.1       29.7       39.1       68.8       95.2  

 

 

BHP Operational Review for the half year ended 31 December 2018    15


Production and sales report

                       
          Quarter ended      Year to date  
          Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Copper (continued)

                       

Metals production is payable metal unless otherwise stated.

 

Antamina, Peru

                       

Material mined (100%)

   (kt)      59,125        58,085        59,002        62,470        62,850        125,320        118,341  

Sulphide ore milled (100%)

Average head grades

   (kt)      13,098        12,166        12,973        13,197        12,912        26,109        25,920  

- Copper

   (%)      0.89      1.01      0.91      0.96      1.02      0.99      0.91

- Zinc

   (%)      0.93      1.01      1.19      1.10      0.85      0.98      0.96

Production

                       

Payable copper

   (kt)      33.8        35.2        34.6        37.0        38.3        75.3        69.7  

Payable zinc

   (t)      29,054        25,562        35,983        30,558        24,237        54,795        58,255  

Payable silver

   (troy koz)      1,331        1,189        1,321        1,309        1,178        2,487        2,927  

Payable lead

   (t)      1,009        464        546        563        600        1,163        2,424  

Payable molybdenum

   (t)      579        420        261        464        417        881        981  

Sales

                       

Payable copper

   (kt)      37.0        32.1        36.6        33.6        40.7        74.3        68.9  

Payable zinc

   (t)      30,340        26,456        33,088        31,822        26,072        57,894        55,564  

Payable silver

   (troy koz)      1,470        1,052        1,311        1,193        1,236        2,429        2,945  

Payable lead

   (t)      972        859        595        612        649        1,261        2,596  

Payable molybdenum

   (t)      693        500        388        208        535        743        861  

Olympic Dam, Australia

                       

Material mined (1)

   (kt)      1,391        2,056        2,201        2,044        2,434        4,478        3,242  

Ore milled

   (kt)      554        2,188        2,171        1,242        2,157        3,399        2,856  

Average copper grade

   (%)      2.22      2.36      2.12      2.05      2.10      2.08      2.12

Average uranium grade

   (kg/t)      0.58        0.71        0.69        0.62        0.62        0.62        0.56  

Production

                       

Copper cathode (ER and EW)

   (kt)      12.2        40.5        42.0        33.3        31.6        64.9        54.2  

Uranium oxide concentrate

   (t)      243        1,118        1,123        559        936        1,495        1,123  

Refined gold

   (troy oz)      15,969        28,989        33,497        23,471        17,856        41,327        29,070  

Refined silver

   (troy koz)      135        248        278        213        212        425        266  

Sales

                       

Copper cathode (ER and EW)

   (kt)      24.3        36.8        46.0        33.9        26.6        60.5        55.9  

Uranium oxide concentrate

   (t)      338        509        1,230        765        828        1,593        1,018  

Refined gold

   (troy oz)      17,999        20,715        35,714        21,145        17,812        38,957        40,434  

Refined silver

   (troy koz)      118        202        307        216        177        393        337  

 

(1)

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

 

 

BHP Operational Review for the half year ended 31 December 2018    16


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

Iron Ore

                       

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

 

Pilbara, Australia

                       

Production

                       

Newman

   (kt)      18,317        16,412        18,500        16,378        17,578        33,956        32,159  

Area C Joint Venture

   (kt)      13,575        12,802        12,041        11,696        10,280        21,976        26,674  

Yandi Joint Venture

   (kt)      16,348        15,802        17,339        16,870        15,627        32,497        30,907  

Jimblebar (1)

   (kt)      4,583        4,669        15,092        16,333        14,320        30,653        10,866  

Wheelarra

   (kt)      8,734        8,006        614        114        30        144        16,538  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production

   (kt)      61,557        57,691        63,586        61,391        57,835        119,226        117,144  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production (100%)

   (kt)      71,611        67,048        72,145        69,342        65,515        134,857        135,898  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Lump

   (kt)      15,145        13,993        15,173        15,014        14,020        29,034        29,041  

Fines

   (kt)      45,769        44,332        47,730        46,527        44,059        90,586        86,502  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      60,914        58,325        62,903        61,541        58,079        119,620        115,543  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total sales (100%)

   (kt)      70,733        67,799        71,385        69,421        65,758        135,179        134,055  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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

    

Samarco, Brazil (1)

                       

Production

   (kt)      —          —          —          —          —          —          —    

Sales

   (kt)      14        25        —          —          10        10        14  

 

(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 2018    17


Production and sales report    

          Quarter ended      Year to date  
          Dec
2017
     Mar
2018
     Jun
2018
     Sep
2018
     Dec
2018
     Dec
2018
     Dec
2017
 

Coal

                       

Coal production is reported on the basis of saleable product.

 

Queensland Coal

                       

Production (1)

                       

BMA

                       

Blackwater

   (kt)      1,470        1,384        1,849        1,704        1,680        3,384        3,455  

Goonyella

   (kt)      1,369        2,314        2,639        1,989        1,813        3,802        3,008  

Peak Downs

   (kt)      1,367        1,723        1,658        1,131        1,662        2,793        2,969  

Saraji

   (kt)      1,198        1,240        1,201        1,111        1,288        2,399        2,612  

Daunia

   (kt)      718        547        629        620        419        1,039        1,380  

Caval Ridge

   (kt)      1,272        775        1,244        1,189        832        2,021        2,266  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA

   (kt)      7,394        7,983        9,220        7,744        7,694        15,438        15,690  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                       

South Walker Creek

   (kt)      1,524        1,490        1,615        1,505        1,636        3,141        2,924  

Poitrel

   (kt)      767        906        1,174        1,109        942        2,051        1,638  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BHP Mitsui Coal

   (kt)      2,291        2,396        2,789        2,614        2,578        5,192        4,562  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

   (kt)      9,685        10,379        12,009        10,358        10,272        20,630        20,252  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Coking coal

   (kt)      6,341        7,177        8,489        7,356        7,514        14,870        14,275  

Weak coking coal

   (kt)      2,816        2,598        2,866        2,813        3,058        5,871        5,966  

Thermal coal

   (kt)      173        168        85        141        157        298        275  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      9,330        9,943        11,440        10,310        10,729        21,039        20,516  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)   Production figures include some thermal coal.

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

    

    

NSW Energy Coal, Australia

                       

Production

   (kt)      4,383        3,662        6,261        3,982        4,311        8,293        8,618  

Sales

                       

Export thermal coal

   (kt)      4,048        3,181        5,795        3,549        4,809        8,358        7,670  

Inland thermal coal

   (kt)      411        400        160        332        393        725        816  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      4,459        3,581        5,955        3,881        5,202        9,083        8,486  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cerrejón, Colombia

                       

Production

   (kt)      2,914        2,444        2,762        2,658        2,356        5,014        5,411  

Sales thermal coal - export

   (kt)      2,619        2,480        2,763        2,589        2,297        4,886        5,137  

 

 

BHP Operational Review for the half year ended 31 December 2018    18


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

Nickel production is reported on the basis of saleable product

 

Nickel West, Australia

                       

Mt Keith

                       

Nickel concentrate

   (kt)      49.8        44.9        55.6        50.2        44.9        95.1        104.2  

Average nickel grade

   (%)      20.3        21.3        18.8        18.9        19.8        38.7        40.7  

Leinster

                       

Nickel concentrate

   (kt)      87.6        54.7        78.4        78.8        65.3        144.1        166.3  

Average nickel grade

   (%)      8.8        9.3        9.8        8.4        8.4        16.8        18.1  

Saleable production

                       

Refined nickel (1) (2)

   (kt)      17.7        19.2        18.5        19.8        16.3        36.1        33.7  

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

   (kt)      5.4        1.9        7.1        1.6        1.8        3.4        12.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)      23.1        21.1        25.6        21.4        18.1        39.5        46.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)      263        240        277        249        154        403        543  

Sales

                       —          —    

Refined nickel (1) (2)

   (kt)      17.7        19.5        17.5        19.3        17.3        36.6        34.0  

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

   (kt)      6.9        2.5        6.3        2.2        2.1        4.3        11.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)      24.6        21.9        23.8        21.5        19.4        40.9        45.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)      263        240        277        249        154        403        543  

 

(1)

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

(2)

High quality refined nickel metal, including briquettes and powder.

(3)

Nickel contained in matte and by-product streams.

 

 

BHP Operational Review for the half year ended 31 December 2018    19


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

Onshore US - Discontinued operations (1)(2)

                       

Eagle Ford (3)

                       

Crude oil and condensate

   (Mboe)      3,720        2,838        3,826        3,256        1,035        4,291        7,177  

NGL

   (Mboe)      2,100        1,555        1,767        1,919        614        2,533        3,956  

Natural gas

   (bcf)      14.4        12.6        13.9        13.8        4.3        18.1        28.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      8.2        6.5        7.9        7.5        2.4        9.8        15.8  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permian (3)

                       

Crude oil and condensate

   (Mboe)      1,142        1,398        1,903        1,478        631        2,109        2,321  

NGL

   (Mboe)      460        465        770        687        284        971        1,047  

Natural gas

   (bcf)      3.6        4.1        6.4        4.8        1.9        6.7        8.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      2.2        2.5        3.7        3.0        1.2        4.2        4.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Haynesville (3)

                       

Crude oil and condensate

   (Mboe)      1        —          —          11        —          11        1  

NGL

   (Mboe)      —          —          —          —          —          —          —    

Natural gas

   (bcf)      22.0        28.7        33.1        39.0        13.9        52.9        43.5  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.7        4.8        5.5        6.5        2.3        8.8        7.3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Fayetteville (4)

                       

Natural gas

   (bcf)      20.5        18.7        19.1        18.6        —          18.6        42.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (MMboe)      3.4        3.1        3.2        3.1        —          3.1        7.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Onshore US

                       

Crude oil and condensate

   (Mboe)      4,863        4,236        5,729        4,745        1,666        6,411        9,499  

NGL

   (Mboe)      2,560        2,020        2,537        2,606        898        3,504        5,003  

Natural gas

   (bcf)      60.5        64.1        72.5        76.2        20.1        96.3        121.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      17,506        16,939        20,349        20,051        5,914        25,965        34,819  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

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

(2)

Volumes are net of mineral holder royalties.

(3)

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

(4)

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

 

 

BHP Operational Review for the half year ended 31 December 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 Group Limited and BHP Group Plc
Date: January 22, 2019     By:  

/s/ Rachel Agnew

    Name:   Rachel Agnew
    Title:   Company Secretary