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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Bhp Billiton Ltd | LSE:0HN3 | London | Ordinary Share | BHP BILLITON ADR REPTG 2 ORD SHS |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 51.49 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Crude Petroleum & Natural Gs | 54.19B | 12.92B | 2.5473 | 11.46 | 148.12B |
TIDMBHP
RNS Number : 3851A
BHP Group PLC
20 January 2020
Release Time IMMEDIATE 21 January Date 2020 Release Number 02/20
BHP OPERATIONAL REVIEW
FOR THE HALF YEARED 31 DECEMBER 2019
-- All production and unit cost guidance(1) (based on exchange rates of AUD/USD 0.70 and USD/CLP 683) remains unchanged for the 2020 financial year. Escondida unit costs tracking below full year guidance at the December 2019 half year largely as a result of higher by-product credits. -- Group copper equivalent production was broadly unchanged in the December 2019 half year, with volumes for the full year expected to be slightly higher than last year. -- All major projects under development are tracking to plan. In Petroleum, BHP and Woodside signed a non-binding Heads of Agreement to progress the Scarborough gas development. -- In Copper exploration, the third phase of the drilling program at Oak Dam in South Australia is in progress and is expected to be completed in the June 2020 quarter. -- The financial results for the December 2019 half year are expected to reflect certain items as summarised in the table on page two. Dec H19 Dec Q19 (vs Dec (vs Sep Production H18) Q19) Dec Q19 vs Sep Q19 commentary -------------- -------- -------- ---------------------------------------------- Lower gas sales at Bass Strait and Trinidad and Tobago, partially offset by higher volumes from the Gulf of Petroleum Mexico following Tropical Storm Barry (MMboe) 57 28 impacts in the prior quarter. (9%) (4%) Copper (kt) 885 455 Strong concentrator throughput at Escondida more than offset the impact from social unrest in Chile. Higher production at Olympic Dam following planned preparatory work in the prior quarter related to the refinery crane replacement. 7% 6% Lower volumes at Western Australia Iron Ore (WAIO) due to completion of Iron ore a major car dumper maintenance program (Mt) 121 60 in October 2019. 2% (1%) Metallurgical 20 11 Higher volumes following completion coal (Mt) of significant planned wash plant maintenance activities in the prior quarter. (2%) 17% Energy coal 12 6 Higher volumes at New South Wales Energy (Mt) Coal (NSWEC) as a result of a higher average strip ratio in the prior quarter, and higher volumes at Cerrejon due to adverse weather in the prior quarter. (12%) 8% Volumes reflected the impact of major quadrennial maintenance activities at the Kwinana refinery and Kalgoorlie Nickel (kt) 35 14 smelter. (11%) (37%)
Mike Henry assumed the role of BHP Chief Executive Officer and Executive Director on 1 January 2020.
BHP Chief Executive Officer, Mike Henry, said: "We delivered solid operational performances across the portfolio in the first half of the 2020 financial year, offsetting the expected impacts of planned maintenance and natural field decline. Production and cost guidance is unchanged, and we remain on track to deliver slightly higher production than last year. Our six major development projects are progressing well, and we continue to advance our exploration programs in petroleum and copper."
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Summary
Operational performance
Production and guidance are summarised below.
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs FY20 Production H19 Q19 Dec H18 Dec Q18 Sep Q19 guidance ------------------------------- ------ ------ ---------- ---------- ---------- ------------- Petroleum (MMboe) 57 28 (9%) (6%) (4%) 110 - 116 Lower end of range Copper (kt) 885 455 7% 9% 6% 1,705 - 1,820 Escondida (kt) 602 309 4% 9% 5% 1,160 - 1,230 Unchanged Other copper(i) (kt) 283 147 15% 11% 7% 545 - 590 Unchanged Iron ore (Mt) 121 60 2% 4% (1%) 242 - 253 WAIO (100% basis) (Mt) 137 68 2% 4% (2%) 273 - 286 Unchanged Metallurgical coal (Mt) 20 11 (2%) 6% 17% 41 - 45 Queensland Coal (100% basis) (Mt) 36 20 0% 9% 21% 73 - 79 Unchanged Energy coal (Mt) 12 6 (12%) (9%) 8% 24 - 26 NSWEC (Mt) 7 4 (11%) (13%) 5% 15 - 17 Unchanged Cerrejón (Mt) 4 2 (13%) (2%) 13% 9 Unchanged Nickel (kt) 35 14 (11%) (24%) (37%) 87 Unchanged (i) Other copper comprises Pampa Norte, Olympic Dam and Antamina.
Summary of disclosures
BHP expects its December 2019 half year financial results to reflect certain items as summarised in the table below. The table does not provide a comprehensive list of all items impacting the period. The financial statements are the subject of ongoing work that will not be finalised until the release of the financial results on 18 February 2020. Accordingly the information is subject to update.
H1 FY20 impact Description US$M(i) Classification(ii) ------------------------------------------------- ------------------- ------------------ Unit costs for Petroleum, WAIO, Queensland Refer footnote(iii) Operating costs Coal and NSWEC expected to be in line with full year guidance Unit costs for Escondida tracking below Refer footnote(iii) Operating costs full year guidance in H1 FY20 primarily due to higher by-product credits Exploration expense (including petroleum 231 Exploration and minerals exploration programs) expense The Group's adjusted effective tax rate Refer footnote(iii) Taxation expense for H1 FY20 is expected to be at the lower end of the guidance range of 33 to 38 per cent Application of IFRS 16 Leases, new leases, 2,100 - Net debt lease payments, remeasurement of vessel 2,500 lease contracts(iv) and inclusion of derivatives in net debt The Group's net debt target range is US$12 - Net debt to US$17 billion, with net debt expected to remain towards the lower end of the range in the near term Dividends received from equity accounted 110 Operating cash investments inflow Dividends paid to non-controlling interests 610 Financing cash outflow Provision related to cancellation of power 500(V) Exceptional contracts (after taxation) as part of shift item charge towards 100 per cent renewable energy at Escondida and Spence (no cash outflow in H1 FY20) Financial impact on BHP Brasil of the Samarco Refer footnote(iii) Exceptional dam failure item charge (i) Numbers are not tax effected, unless otherwise noted.
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(ii) There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant.
(iii) Financial impact is the subject of ongoing work and is not yet finalised.
(iv) Vessel lease contracts must be remeasured at each reporting date and are priced with reference to a freight index.
(v) Provision related to cancellation of power contracts of approximately US$780 million before taxation.
Major development projects
At the end of December 2019, BHP had six major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$11.4 billion over the life of the projects. All major projects under development are tracking to plan.
Average realised prices
The average realised prices achieved for our major commodities are summarised below.
Dec H19 Dec H19 Dec H19 vs vs vs Average realised prices(i) Dec H19 Dec H18 Jun H19 FY19 Dec H18 Jun H19 FY19 ------------------------------------- -------- -------- -------- ------- --------- --------- -------- Oil (crude and condensate) (US$/bbl) 60.64 69.91 63.29 66.59 (13%) (4%) (9%) Natural gas (US$/Mscf)(ii) 4.26 4.67 4.42 4.55 (9%) (4%) (6%) LNG (US$/Mscf) 7.62 10.19 8.53 9.43 (25%) (11%) (19%) Copper (US$/lb) 2.60 2.54 2.70 2.62 2% (4%) (1%) Iron ore (US$/wmt, FOB) 78.30 55.62 77.74 66.68 41% 1% 17% Metallurgical coal (US$/t) 140.94 179.82 179.53 179.67 (22%) (21%) (22%) Hard coking coal (US$/t)(iii) 154.01 197.86 201.33 199.61 (22%) (24%) (23%) Weak coking coal (US$/t)(iii) 101.06 134.12 126.46 130.18 (25%) (20%) (22%) Thermal coal (US$/t)(iv) 58.55 84.15 72.18 77.90 (30%) (19%) (25%) Nickel metal (US$/t) 15,715 12,480 12,444 12,462 26% 26% 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 large majority of iron ore shipments were linked to the index price for the month of shipment, with price differentials predominantly a reflection of market fundamentals and product quality. The large 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 2019, the Group had 345 kt of outstanding copper sales that were revalued at a weighted average price of US$2.80 per pound. The final price of these sales will be determined over the remainder of the 2020 financial year. In addition, 322 kt of copper sales from the 2019 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will increase Underlying EBITDA(2) by US$16 million in the 2020 financial year and is included in the average realised copper price in the above table.
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Corporate update
In November 2019, BHP approved US$44 million for BHP Brasil's share of the funding for work related to the restart of one concentrator at Samarco. The funding will enable the construction of a filtration plant and the commencement of operation readiness activities. This follows the approval of the Corrective Operating Licence (LOC) for Samarco's operating activities at its Germano Complex in October 2019. Restart can occur when the filtration system is complete and Samarco has met all necessary safety requirements, and will be subject to final approval by Samarco's shareholders.
In December 2019, BHP agreed to fund a total of US$793 million in further financial support for the Renova Foundation and Samarco. This comprises US$581 million to fund the Renova Foundation until 31 December 2020 which will be offset against the Group's provision for the Samarco dam failure, and a short-term facility of up to US$212 million(3) to be made available to Samarco until 31 December 2020.
As at the date of this Operational Review, for the purpose of the December 2019 half year financial results, we are not in a position to provide an update on the ongoing potential financial impacts on BHP Brasil of the Samarco dam failure. Any financial impacts will continue to be treated as an exceptional item.
Petroleum
Production
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs H19 Q19 Dec H18 Dec Q18 Sep Q19 ------ ------ ---------- ---------- ---------- Crude oil, condensate and natural gas liquids (MMboe) 26 13 (9%) (7%) 7% Natural gas (bcf) 189 89 (8%) (6%) (12%) Total petroleum production (MMboe) 57 28 (9%) (6%) (4%)
Petroleum - Total petroleum production decreased by nine per cent to 57 MMboe. Guidance for the 2020 financial year remains unchanged at between 110 and 116 MMboe, with volumes expected to be towards the lower end of the guidance range.
Crude oil, condensate and natural gas liquids production declined by nine per cent to 26 MMboe due to the impact of Tropical Storm Barry in the Gulf of Mexico and natural field decline across the portfolio. This decline was partially offset by higher uptime at Pyrenees following the 70 day dry dock maintenance program during the September 2018 quarter.
Natural gas production decreased by eight per cent to 189 bcf, reflecting a decrease in tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract, maintenance at North West Shelf, reduced domestic gas sales in Western Australia, and natural field decline across the portfolio.
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Projects
Project and Capital expenditure Initial production ownership US$M target date Capacity Progress ---------------------- ---------------------- ---------------------- ---------------------- ---------------------- Atlantis Phase 3 696 CY20 New subsea production On schedule and (US Gulf of Mexico) system that will tie budget. 44% (non-operator) back to the existing The overall project is Atlantis facility, 36% complete. with capacity to produce up to 38,000 gross barrels of oil equivalent per day. Ruby 283 CY21 Five production wells On schedule and (Trinidad & Tobago) tied back into budget. 68.46% (operator) existing operated The overall project is processing facilities, 13% complete. with capacity to produce up to 16,000 gross barrels of oil per day and 80 million gross standard cubic feet of natural gas per day. Mad Dog Phase 2 2,154 CY22 New floating On schedule and (US Gulf of Mexico) production facility budget. 23.9% (non-operator) with the capacity to The overall project is produce up to 140,000 65% complete. gross barrels of crude oil per day.
The Bass Strait West Barracouta project is tracking to plan and is expected to achieve first production in the 2021 calendar year.
On 18 November 2019, BHP and Woodside signed a non-binding Heads of Agreement to progress the Scarborough gas development which, amongst other terms, includes agreement on a competitive tariff for gas processing through the Pluto LNG facility and BHP's election not to exercise its option for an additional 10 per cent of the WA-1-R lease. BHP and Woodside are targeting finalisation of the required conditional binding agreements by the end of March 2020. A final investment decision by BHP is expected from the middle of the 2020 calendar year.
Petroleum exploration
Exploration and appraisal wells drilled during the December 2019 quarter are summarised below.
Total Formation Water well Well Location Target age BHP equity Spud date depth depth Status ----------- ----------- -------- -------------- ------------ -------------- ------- ------- ------------- Trinidad Dry hole; & Tobago 70% (BHP 30 September 2,119 4,347 Plugged and Carnival-1 Block 14 Gas Late Miocene Operator) 2019 m m abandoned
In Trinidad and Tobago, we completed the exploration program on our Northern licences as part of Phase 4 of our deepwater drilling campaign. The Carnival-1 well was spud on 30 September 2019 and was a dry hole. The well was plugged and abandoned on 13 October 2019. Development planning studies of the discoveries in the North are ongoing. Following Carnival-1, the Deepwater Invictus rig returned to the US Gulf of Mexico where it is currently completing regulatory abandonment work on Shenzi appraisal and exploration boreholes.
During the December 2019 quarter, we extended our contract for the Deepwater Invictus rig for an additional year through to May 2021 to support our ongoing exploration activities.
As reported in the September 2019 Operational Review, we were the apparent highest bidder on blocks GC124 and GC168 in Green Canyon in the central Gulf of Mexico and on 18 additional blocks(4) in the western Gulf of Mexico. All leases were awarded by the Regulator in the December 2019 quarter.
Petroleum exploration expenditure for the December 2019 half year was US$306 million, of which US$164 million was expensed. A US$0.7 billion exploration and appraisal program is being executed for the 2020 financial year.
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Copper
Production
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs H19 Q19 Dec H18 Dec Q18 Sep Q19 ------ ------ ---------- ---------- ---------- Copper (kt) 885 455 7% 9% 6% Zinc (t) 42,937 22,483 (22%) (7%) 10% Uranium (t) 1,886 949 27% 2% 1%
Copper - Total copper production increased by seven per cent to 885 kt. Guidance for the 2020 financial year remains unchanged at between 1,705 and 1,820 kt.
Escondida copper production increased by four per cent to 602 kt, with record average concentrator throughput of 367 ktpd for the half year, driven by ongoing improvements in maintenance and operational performance under our Transformation program. This offset expected grade decline and a 5 kt concentrate production impact related to stoppages associated with the social unrest in Chile. Including cathodes, the total production impact of the stoppages is expected to be 7 kt for the 2020 financial year. The Escondida Water Supply Expansion project was completed in December 2019, on schedule and budget, further increasing total desalinated water capacity to 3,800 litres per second. Guidance for the 2020 financial year remains unchanged at between 1,160 and 1,230 kt, with further improvements in concentrator throughput expected to offset an approximately five per cent reduction in the copper grade of concentrator feed versus the prior year.
Pampa Norte copper production increased by 18 per cent to 124 kt, reflecting the impact of a fire at the electro-winning plant at Spence in the prior year. Guidance for the 2020 financial year remains unchanged at between 230 and 250 kt, including expected grade decline of approximately 10 per cent.
Olympic Dam copper production increased by 32 per cent to 86 kt as a result of the prior period acid plant outage, partially offset by the impact of planned preparatory work undertaken in the September 2019 quarter related to the replacement of the refinery crane. The physical replacement and commissioning of the refinery crane is scheduled for the March 2020 quarter. Guidance for the 2020 financial year remains unchanged at between 180 and 205 kt.
Antamina copper production decreased by two per cent to 74 kt and zinc production decreased by 22 per cent to 43 kt, reflecting lower copper and zinc head grades, in line with the mine plan. Guidance for the 2020 financial year remains unchanged at approximately 135 kt for copper and approximately 110 kt for zinc.
Projects
Initial Capital production Project and expenditure target ownership US$M date Capacity Progress -------------------- ----------- ---------- -------------------------------------------------------------------------------------------------- -------------------------------------- Spence Growth Option 2,460 H1 FY21 New 95 ktpd concentrator is expected to increase Spence's payable copper in concentrate production On schedule and budget. by approximately 185 ktpa in the first 10 years of operation and extend the mining operations by more than 50 years. (Chile) The overall project is 81% complete. 100%
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Iron Ore
Production
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs H19 Q19 Dec H18 Dec Q18 Sep Q19 ------- ------ ---------- ---------- ---------- Iron ore production (kt) 121,400 60,395 2% 4% (1%)
Iron ore - Total iron ore production increased by two per cent to 121 Mt (137 Mt on a 100 per cent basis). Guidance for the 2020 financial year remains unchanged at between 242 and 253 Mt (273 and 286 Mt on a 100 per cent basis), with a stronger second half performance expected in line with our plans.
At WAIO, higher volumes reflected record production at Jimblebar and the impact of the train derailment in the December 2018 half year. This was partly offset by a major car dumper maintenance campaign (completed on 16 October 2019) to further improve port reliability and provide a stable base for our tightly coupled supply chain. Mine operations continued to deliver consistent performance.
Consistent with our revised mine plan, we expect Jimblebar fines Fe grade to improve in the second half of the 2020 financial year, with the typical specification returning to above 60 per cent in the June 2020 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. Approval of the Corrective Operating Licence (LOC) for Samarco's operating activities at its Germano Complex was received in October 2019 and operation readiness activities for restart have commenced. Restart can occur when the filtration system is complete and Samarco has met all necessary safety requirements, and will be subject to final approval by Samarco's shareholders.
Projects
Initial Capital production Project and expenditure target ownership US$M date Capacity Progress ------------- ----------- ---------- ------------------------------------------------------------------------------------------ -------------------------------------- South Flank 3,061 CY21 Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi On schedule and budget. mine. (Australia) The overall project is 58% complete. 85%
Coal
Production
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs H19 Q19 Dec H18 Dec Q18 Sep Q19 ---------- ---------- ---------- Metallurgical coal (kt) 20,282 10,924 (2%) 6% 17% Energy coal (kt) 11,725 6,078 (12%) (9%) 8%
Metallurgical coal - Metallurgical coal production was down two per cent to 20 Mt (36 Mt on a 100 per cent basis). Guidance for the 2020 financial year remains unchanged at between 41 and 45 Mt (73 and 79 Mt on a 100 per cent basis), with a stronger second half performance expected in line with our plans.
At Queensland Coal, strong underlying operational performance at Poitrel, Peak Downs, Caval Ridge and Broadmeadow was offset by planned major wash plant shutdowns at Goonyella, Peak Downs and Caval Ridge, low opening raw coal inventories at Blackwater, and truck and shovel underperformance at South Walker Creek.
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Energy coal - Energy coal production decreased by 12 per cent to 12 Mt. Guidance for the 2020 financial year remains unchanged at between 24 and 26 Mt.
New South Wales Energy Coal production decreased by 11 per cent to 7 Mt as a result of the change in product strategy to focus on higher quality products. Smoke from regional bushfires and dust have reduced air quality at our operations, which has impacted December 2019 production. We are monitoring the situation and if air quality continues to deteriorate then operations could be constrained further in the second half of the year. Guidance for the 2020 financial year remains unchanged at between 15 and 17 Mt.
Cerrejón production decreased by 13 per cent to 4 Mt as a result of a focus on higher quality products, in line with the mine plan, and the impact of adverse weather in the September 2019 quarter. Guidance for the 2020 financial year remains unchanged at approximately 9 Mt.
Other
Nickel production
Dec H19 Dec Q19 Dec Q19 Dec Dec vs vs vs H19 Q19 Dec H18 Dec Q18 Sep Q19 ------ ------ ---------- ---------- ---------- Nickel (kt) 35.3 13.7 (11%) (24%) (37%)
Nickel - Nickel West production decreased by 11 per cent to 35 kt due to the major quadrennial maintenance shutdowns at the Kwinana refinery and the Kalgoorlie smelter, as well as planned routine maintenance at the concentrators, in the December 2019 quarter. Guidance for the 2020 financial year remains unchanged, with production expected to be broadly in line with the 2019 financial year.
Operations Services - In Australia, Operations Services has now been deployed at 13 locations across WAIO, Queensland Coal and NSWEC, with over 1,500 permanent jobs created. Deployments are successfully accelerating safety and productivity outcomes.
Potash project
Project and Investment ownership US$M Scope Progress ------------- ---------- ------------------------------------------------------------------------------------- ------------------------------------------------------------ Jansen Potash 2,700 Investment to finish the excavation and lining of the production and service shafts, The project is 85% complete and within the approved budget. and to Final shaft lining work is continuing. continue the installation of essential surface infrastructure and utilities. (Canada) 100%
Minerals exploration
Minerals exploration expenditure for the December 2019 half year was US$84 million, of which US$67 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Mexico, Peru, Canada, South Australia and the south-west United States.
Consistent with our focus on copper, in November 2019, BHP increased its interest in SolGold Plc, the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador, by 3.6 per cent to 14.7 per cent.
At Oak Dam in South Australia, the third phase of the drilling program commenced in November 2019 and is expected to be completed in the June 2020 quarter. This follows encouraging results from the previous drilling phases, which confirmed high-grade mineralised intercepts of copper, with associated gold, uranium and silver.
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Variance analysis relates to the relative performance of BHP and/or its operations during the December 2019 half year compared with the December 2018 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 2019 financial year average realised prices.
The following footnotes apply to this Operational Review:
(1) 2020 financial year unit cost guidance: Petroleum US$10.50-11.50/boe, Escondida US$1.20-1.35/lb, WAIO US$13-14/t, Queensland Coal US$67-74/t and NSWEC US$55-61/t; based on exchange rates of AUD/USD 0.70 and USD/CLP 683.
(2) Underlying EBIT and Underlying EBITDA are used to reflect the underlying performance of BHP. Underlying EBIT is earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and impairment.
(3) Short-term facility of up to US$212 million includes US$2 million related to the decommissioning of the Germano dam which will be offset against the Group's provision.
(4) We were the apparent high bidder on 18 additional blocks: GB630, GB574, GB575, GB619, GB676, GB677, EB655, EB656, EB701, GB762, GB805, GB806, GB851, GB852, GB895, GB672, GB716 and GB760.
The following abbreviations may have been used throughout this report: barrels (bbl); billion cubic feet (bcf); cost and freight (CFR); cost, insurance and freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent (Mboe); thousand barrels of oil equivalent per day (Mboe/d); thousand ounces (koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
In this release, the terms 'BHP', 'Group', 'BHP Group', 'we', 'us', 'our' and ourselves' are used to refer to BHP Group Limited, BHP Group plc and, except where the context otherwise requires, their respective subsidiaries as defined in note 28 'Subsidiaries' in section 5.1 of BHP's 30 June 2019 Annual Report and Form 20-F, unless stated otherwise. Notwithstanding that this release may include production, financial and other information from non-operated assets, non-operated assets are not included in the BHP Group and, as a result, statements regarding our operations, assets and values apply only to our operated assets unless stated otherwise.
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Production summary
Quarter ended Year to date BHP Dec Mar Jun Sep Dec Dec Dec interest 2018 2019 2019 2019 2019 2019 2018 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Petroleum (1) Petroleum Production Crude oil, condensate and NGL (Mboe) 14,497 13,236 13,366 12,507 13,412 25,919 28,584 Natural gas (bcf) 93.9 92.9 97.8 100.4 88.7 189.1 206.2 Total (Mboe) 30,147 28,719 29,666 29,240 28,195 57,436 62,951 Copper (2) Copper Payable metal in concentrate (kt) Escondida (3) 57.5% 212.6 205.4 224.1 237.0 240.3 477.3 452.6 Antamina 33.8% 38.3 34.5 37.4 37.6 36.2 73.8 75.3 Total 250.9 239.9 261.5 274.6 276.5 551.1 527.9 Cathode (kt) Escondida (3) 57.5% 71.9 62.4 63.5 55.9 68.4 124.3 127.3 Pampa Norte (4) 100% 61.8 67.2 74.1 63.9 60.0 123.9 105.2 Olympic Dam 100% 31.6 50.2 45.2 35.1 50.5 85.6 64.9 Total 165.3 179.8 182.8 154.9 178.9 333.8 297.4 Total copper (kt) 416.2 419.7 444.3 429.5 455.4 884.9 825.3 Lead Payable metal in concentrate (t) Antamina 33.8% 600 456 770 405 383 788 1,163 Total 600 456 770 405 383 788 1,163 Zinc Payable metal in concentrate (t)
Antamina 33.8% 24,237 20,848 22,469 20,454 22,483 42,937 54,795 Total 24,237 20,848 22,469 20,454 22,483 42,937 54,795 Gold Payable metal in concentrate (troy oz) Escondida (3) 57.5% 73,726 73,998 74,704 48,801 49,209 98,010 137,304 Olympic Dam (refined gold) 100% 17,856 28,609 37,032 43,205 35,382 78,587 41,327 Total 91,582 102,607 111,736 92,006 84,591 176,597 178,631 Silver Payable metal in concentrate (troy koz) Escondida (3) 57.5% 2,570 2,189 2,074 1,626 1,798 3,424 4,567 Antamina 33.8% 1,178 1,062 1,209 1,101 1,173 2,274 2,487 Olympic Dam (refined silver) 100% 212 230 268 245 203 448 425 Total 3,960 3,481 3,551 2,972 3,174 6,146 7,479 Uranium Payable metal in concentrate (t) Olympic Dam 100% 929 1,106 975 937 949 1,886 1,484 Total 929 1,106 975 937 949 1,886 1,484 Molybdenum Payable metal in concentrate (t) Antamina 33.8% 417 82 178 405 527 932 881 Total 417 82 178 405 527 932 881
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Production summary
Quarter ended Year to date BHP Dec Mar Jun Sep Dec Dec Dec interest 2018 2019 2019 2019 2019 2019 2018 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Iron Ore Iron Ore Production (kt) (5) Newman 85% 17,578 15,608 17,058 16,316 15,766 32,082 33,956 Area C Joint Venture 85% 10,280 11,627 13,837 12,620 12,727 25,347 21,976 Yandi Joint Venture 85% 15,627 15,214 17,486 17,827 14,857 32,684 32,497 Jimblebar (6) 85% 14,326 13,658 14,209 14,239 17,045 31,284 30,679 Wheelarra 85% 30 10 5 3 - 3 144 Samarco 50% - - - - - - - Total 57,841 56,117 62,595 61,005 60,395 121,400 119,252 Coal Metallurgical coal Production (kt) (7) BMA 50% 7,694 7,608 9,090 6,905 8,723 15,628 15,438 BHP Mitsui Coal (8) 80% 2,578 2,269 2,804 2,453 2,201 4,654 5,192 Total 10,272 9,877 11,894 9,358 10,924 20,282 20,630 Energy coal Production (kt) Australia 100% 4,311 4,552 5,412 3,592 3,763 7,355 8,293 Colombia 33.3% 2,356 2,199 2,017 2,055 2,315 4,370 5,014 Total 6,667 6,751 7,429 5,647 6,078 11,725 13,307 Other Nickel Saleable production (kt) Nickel West (9) 100% 18.1 19.2 28.7 21.6 13.7 35.3 39.5 Total 18.1 19.2 28.7 21.6 13.7 35.3 39.5 Cobalt Saleable production (t) Nickel West 100% 154 194 302 211 120 331 403 Total 154 194 302 211 120 331 403
(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 1,000 Mboe.
(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.
12
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Petroleum (1) Bass Strait Crude oil and condensate (Mboe) 1,401 893 1,246 1,409 1,427 2,836 3,054 NGL (Mboe) 1,447 849 1,299 1,810 1,405 3,215 3,287 Natural gas (bcf) 25.2 21.0 30.6 36.6 27.8 64.4 60.3 Total petroleum products (Mboe) 7,048 5,242 7,645 9,319 7,465 16,784 16,391 North West Shelf Crude oil and condensate (Mboe) 1,520 1,431 1,357 1,337 1,376 2,713 3,034 NGL (Mboe) 206 193 189 202 200 402 448 Natural gas (bcf) 37.5 36.6 34.8 32.1 32.9 65.0 74.1 Total petroleum products (Mboe) 7,976 7,724 7,346 6,889 7,059 13,948 15,832 Pyrenees Crude oil and condensate (Mboe) 1,101 940 1,001 979 934 1,913 1,383 Total petroleum products (Mboe) 1,101 940 1,001 979 934 1,913 1,383 Other Australia (2) Crude oil and condensate (Mboe) 8 6 7 8 1 9 15 Natural gas (bcf) 13.9 13.0 12.2 12.0 11.4 23.4 27.7 Total petroleum products (Mboe) 2,325 2,173 2,040 2,008 1,901 3,909 4,632 Atlantis (3) Crude oil and condensate (Mboe) 3,802 3,888 3,607 2,759 3,525 6,284 6,992 NGL (Mboe) 268 275 248 192 245 437 483 Natural gas (bcf) 1.9 2.0 2.2 1.4 1.8 3.2 3.4 Total petroleum products (Mboe) 4,387 4,496 4,222 3,184 4,070 7,254 8,042 Mad Dog (3) Crude oil and condensate (Mboe) 1,158 1,258 1,246 1,096 1,202 2,298 2,428 NGL (Mboe) 54 58 23 49 52 101 115 Natural gas (bcf) 0.2 0.2 0.2 0.2 0.2 0.4 0.4 Total petroleum products (Mboe) 1,245 1,349 1,302 1,178 1,287 2,466 2,610 Shenzi (3) Crude oil and condensate (Mboe) 2,024 1,881 1,725 1,345 1,671 3,016 4,040 NGL (Mboe) 121 112 (2) 70 94 164 243 Natural gas (bcf) 0.4 0.4 0.4 0.2 0.3 0.5 0.8 Total petroleum products (Mboe) 2,212 2,060 1,790 1,448 1,815 3,263 4,416 Trinidad/Tobago Crude oil and condensate (Mboe) 200 284 235 175 166 341 647 Natural gas (bcf) 14.0 19.5 17.3 17.9 14.2 32.1 38.0 Total petroleum products (Mboe) 2,533 3,534 3,118 3,158 2,533 5,691 6,980 Other Americas (3) (4) Crude oil and condensate (Mboe) 218 284 272 185 230 415 425 NGL (Mboe) 4 18 3 2 4 6 7 Natural gas (bcf) 0.1 0.2 0.1 - 0.1 0.1 0.1 Total petroleum products (Mboe) 239 335 292 187 251 438 449 UK (5) Crude oil and condensate (Mboe) 36 - - - - - 72 NGL (Mboe) 21 - - - - - 42 Natural gas (bcf) 0.7 - - - - - 1.4 Total petroleum products (Mboe) 174 - - - - - 347 Algeria Crude oil and condensate (Mboe) 908 866 910 889 880 1,769 1,869 Total petroleum products (Mboe) 908 866 910 889 880 1,769 1,869
13
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Petroleum (1) Total production Crude oil and condensate (Mboe) 12,376 11,731 11,606 10,182 11,412 21,594 23,959 NGL (Mboe) 2,121 1,505 1,760 2,325 2,000 4,325 4,625 Natural gas (bcf) 93.9 92.9 97.8 100.4 88.7 189.1 206.2 Total (Mboe) 30,147 28,719 29,666 29,240 28,195 57,436 62,951
(1) Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe. 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.
14
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Copper Metals production is payable metal unless otherwise stated. Escondida, Chile (1) Material mined (kt) 105,580 103,936 100,693 101,026 100,057 201,083 212,840 Sulphide ore milled (kt) 30,507 32,027 32,519 33,956 33,659 67,615 61,020 Average concentrator head grade (%) 0.87% 0.82% 0.86% 0.86% 0.87% 0.86% 0.91% Production ex mill (kt) 219.9 216.9 230.9 245.0 246.1 491.1 461.8 Production Payable copper (kt) 212.6 205.4 224.1 237.0 240.3 477.3 452.6 Copper cathode (EW) (kt) 71.9 62.4 63.5 55.9 68.4 124.3 127.3 - Oxide leach (kt) 23.4 20.9 23.4 21.9 28.3 50.2 42.9 - Sulphide leach (kt) 48.5 41.5 40.1 34.1 40.1 74.2 84.3 Total copper (kt) 284.5 267.8 287.6 292.9 308.7 601.6 579.9 (troy Payable gold concentrate oz) 73,726 73,998 74,704 48,801 49,209 98,010 137,304 (troy Payable silver concentrate koz) 2,570 2,189 2,074 1,626 1,798 3,424 4,567 Sales Payable copper (kt) 229.2 212.0 223.4 222.2 248.3 470.5 445.7 Copper cathode (EW) (kt) 72.3 56.6 67.5 52.3 70.6 122.9 125.5 (troy Payable gold concentrate oz) 73,726 73,999 74,704 48,801 49,209 98,010 137,304 (troy Payable silver concentrate koz) 2,570 2,189 2,074 1,626 1,798 3,424 4,567
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Pampa Norte, Chile Cerro Colorado Material mined (kt) 19,875 15,561 13,534 15,071 18,102 33,173 38,363 Ore milled (kt) 5,069 4,277 4,740 3,995 5,009 9,004 9,871 Average copper grade (%) 0.62% 0.63% 0.64% 0.54% 0.57% 0.56% 0.58% Production Copper cathode (EW) (kt) 19.4 18.2 23.4 16.4 13.8 30.2 33.6 Sales Copper cathode (EW) (kt) 19.0 15.5 26.8 14.5 15.8 30.3 32.8 Spence Material mined (kt) 21,661 18,632 19,213 21,040 23,132 44,172 44,668 Ore milled (kt) 5,428 4,376 5,224 5,635 5,133 10,768 11,070 Average copper grade (%) 1.10% 1.03% 1.02% 0.95% 0.90% 0.93% 1.16% Production Copper cathode (EW) (kt) 42.4 49.0 50.7 47.5 46.2 93.7 71.6 Sales Copper cathode (EW) (kt) 39.1 46.1 55.0 46.7 44.3 91.0 68.8
15
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Copper (continued) Metals production is payable metal unless otherwise stated. Antamina, Peru Material mined (100%) (kt) 62,850 57,900 58,994 59,299 63,224 122,523 125,320 Sulphide ore milled (100%) (kt) 12,912 11,466 12,864 13,121 13,637 26,758 26,109 Average head grades - Copper (%) 1.02% 1.04% 1.02% 0.99% 0.96% 0.97% 0.99% - Zinc (%) 0.85% 0.87% 0.86% 0.80% 0.82% 0.81% 0.98% Production Payable copper (kt) 38.3 34.5 37.4 37.6 36.2 73.8 75.3 Payable zinc (t) 24,237 20,848 22,469 20,454 22,483 42,937 54,795 (troy Payable silver koz) 1,178 1,062 1,209 1,101 1,173 2,274 2,487 Payable lead (t) 600 456 770 405 383 788 1,163 Payable molybdenum (t) 417 82 178 405 527 932 881 Sales Payable copper (kt) 40.7 33.3 36.0 33.1 43.6 76.7 74.3 Payable zinc (t) 26,072 20,595 21,750 20,196 23,808 44,004 57,894 (troy Payable silver koz) 1,236 1,027 937 954 1,396 2,350 2,429 Payable lead (t) 649 749 296 844 432 1,276 1,261 Payable molybdenum (t) 535 256 127 173 400 573 743 Olympic Dam, Australia Material mined (1) (kt) 2,434 2,191 2,425 2,477 2,347 4,824 4,478 Ore milled (kt) 2,157 2,371 2,195 2,200 2,153 4,353 3,399 Average copper grade (%) 2.10% 2.22% 2.30% 2.31% 2.36% 2.33% 2.08% Average uranium grade (kg/t) 0.62 0.65 0.65 0.65 0.71 0.68 0.62 Production Copper cathode (ER and EW) (kt) 31.6 50.2 45.2 35.1 50.5 85.6 64.9 Payable uranium (t) 929 1,106 975 937 949 1,886 1,484 (troy Refined gold oz) 17,856 28,609 37,032 43,205 35,382 78,587 41,327 (troy Refined silver koz) 212 230 268 245 203 448 425 Sales Copper cathode (ER and EW) (kt) 26.6 47.4 50.5 32.1 49.0 81.1 60.5 Payable uranium (t) 828 550 1,427 778 638 1,416 1,593 (troy Refined gold oz) 17,812 27,574 36,133 40,073 36,507 76,580 38,957 (troy Refined silver koz) 177 241 257 250 202 452 393
(1) Material mined refers to run of mine ore mined and hoisted.
16
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Iron Ore Iron ore production and sales are reported on a wet tonnes basis. Pilbara, Australia Production Newman (kt) 17,578 15,608 17,058 16,316 15,766 32,082 33,956 Area C Joint Venture (kt) 10,280 11,627 13,837 12,620 12,727 25,347 21,976 Yandi Joint Venture (kt) 15,627 15,214 17,486 17,827 14,857 32,684 32,497 Jimblebar (1) (kt) 14,326 13,658 14,209 14,239 17,045 31,284 30,679 Wheelarra (kt) 30 10 5 3 - 3 144 Total production (kt) 57,841 56,117 62,595 61,005 60,395 121,400 119,252 Total production (100%) (kt) 65,515 63,609 71,133 69,257 68,044 137,301 134,857 Sales Lump (kt) 14,020 13,603 15,568 14,785 15,982 30,767 29,034 Fines (kt) 44,059 41,981 48,064 45,509 45,785 91,294 90,586 Total (kt) 58,079 55,584 63,632 60,294 61,767 122,061 119,620 Total sales (100%) (kt) 65,758 62,853 72,173 68,291 69,481 137,772 135,179 (1) Shown on a 100% basis. BHP interest in saleable production is 85%. Samarco, Brazil (1) Production (kt) - - - - - - - Sales (kt) 10 - - - - - 10
(1) Mining and processing operations remain suspended following the failure of the Fundão tailings dam and Santarém water dam on
5 November 2015.
17
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Coal Coal production is reported on the basis of saleable product. Queensland Coal Production (1) BMA Blackwater (kt) 1,680 1,484 1,735 1,045 1,734 2,779 3,384 Goonyella (kt) 1,813 2,141 2,620 1,489 2,662 4,151 3,802 Peak Downs (kt) 1,685 1,468 1,649 1,423 1,386 2,809 2,816 Saraji (kt) 1,288 1,250 1,243 1,214 1,325 2,539 2,399 Daunia (kt) 419 470 669 556 579 1,135 1,039 Caval Ridge (kt) 809 795 1,174 1,178 1,037 2,215 1,998 Total BMA (kt) 7,694 7,608 9,090 6,905 8,723 15,628 15,438 Total BMA (100%) (kt) 15,388 15,216 18,180 13,810 17,446 31,256 30,876 BHP Mitsui Coal (2) South Walker Creek (kt) 1,636 1,429 1,624 1,378 1,196 2,574 3,141 Poitrel (kt) 942 840 1,180 1,075 1,005 2,080 2,051 Total BHP Mitsui Coal (kt) 2,578 2,269 2,804 2,453 2,201 4,654 5,192 Total Queensland Coal (kt) 10,272 9,877 11,894 9,358 10,924 20,282 20,630 Total Queensland Coal (100%) (kt) 17,966 17,485 20,984 16,263 19,647 35,910 36,068 Sales Coking coal (kt) 7,514 7,221 7,932 7,299 7,775 15,074 14,870 Weak coking coal (kt) 3,058 3,282 2,942 2,466 2,475 4,941 5,871 Thermal coal (kt) 157 379 350 94 30 124 298 Total (kt) 10,729 10,882 11,224 9,859 10,280 20,139 21,039 Total (100%) (kt) 18,818 19,176 19,789 17,145 18,459 35,604 36,920
(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) 4,311 4,552 5,412 3,592 3,763 7,355 8,293 Sales Export thermal coal (kt) 4,809 3,529 5,181 3,075 3,952 7,027 8,358 Inland thermal coal (kt) 393 302 975 567 - 567 725 Total (kt) 5,202 3,831 6,156 3,642 3,952 7,594 9,083 Cerrejón, Colombia Production (kt) 2,356 2,199 2,017 2,055 2,315 4,370 5,014 Sales thermal coal - export (kt) 2,297 2,200 2,245 2,069 2,261 4,330 4,886
18
Production and sales report
Quarter ended Year to date Dec Mar Jun Sep Dec Dec Dec 2018 2019 2019 2019 2019 2019 2018 Other Nickel production is reported on the basis of saleable product Nickel West, Australia Mt Keith Nickel concentrate (kt) 44.9 52.5 52.8 43.7 31.5 75.2 95.1 Average nickel grade (%) 19.8 19.2 19.5 18.3 17.3 17.9 19.3 Leinster Nickel concentrate (kt) 65.3 51.8 48.3 67.2 56.6 123.8 144.1 Average nickel grade (%) 8.4 9.3 10.8 10.0 8.6 9.4 8.4 Saleable production Refined nickel (1) (2) (kt) 16.3 17.6 19.9 17.4 11.1 28.5 36.1 Intermediates and nickel by- products (1) (3) (kt) 1.8 1.6 8.8 4.2 2.6 6.8 3.4 Total nickel (1) (kt) 18.1 19.2 28.7 21.6 13.7 35.3 39.5 Cobalt by-products (t) 154 194 302 211 120 331 403 Sales Refined nickel (1) (2) (kt) 17.3 17.9 19.9 17.0 10.6 27.6 36.6 Intermediates and nickel by- products (1) (3) (kt) 2.1 0.1 8.4 5.7 2.7 8.4 4.3 Total nickel (1) (kt) 19.4 18.0 28.3 22.7 13.3 36.0 40.9 Cobalt by-products (t) 154 194 302 212 131 343 403
(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.
19
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END
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January 21, 2020 02:00 ET (07:00 GMT)
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