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BHP Group Limited Annual Report 2017

Jul 18, 2017

14787_rns_2017-07-18_4fd32ce8-16ae-477f-a054-a5aa798db3d8.pdf

Annual Report

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Release Time IMMEDIATE Date 19 July 2017 Release Number 19/17

BHP OPERATIONAL REVIEW FOR THE YEAR ENDED 30 JUNE 2017

  • Achieved full year production guidance for petroleum and iron ore, with annual production records at Western Australia Iron Ore (WAIO), Spence and two Queensland Coal mines.

  • Lower copper production reflected the impact of industrial action at Escondida and the power outage and unplanned maintenance at Olympic Dam. Lower metallurgical coal volumes as a result of damage to third party rail infrastructure caused by Cyclone Debbie.

  • We expect to achieve full year unit cost guidance at WAIO and Conventional petroleum, however industrial action and Cyclone Debbie have impacted unit costs at Escondida and Queensland Coal respectively.

  • Group copper equivalent production expected to increase by 7% in the 2018 financial year.

  • In Onshore US, development activity is increasing with up to 10 rigs operating in the 2018 financial year.

  • Divestment of non-core Onshore US acreage is progressing, with the sale of a portion of the southern Hawkville anticipated in the September 2017 quarter.

  • In Petroleum exploration, drilling of the Wildling-2 appraisal well in the Gulf of Mexico is continuing, with results expected in the September 2017 quarter.

  • All major projects under development are tracking to plan.

Production FY17 vs FY16
Petroleum (MMboe) 208
(13%)		 Deferral of development activity in Onshore US for value and natural
field decline in Conventional assets.
Copper (kt) 1,326
(16%)		 Reduced volumes following industrial action at Escondida and the
power outage and unplanned maintenance at Olympic Dam.
Iron ore(1)(Mt) 231
4%		 Record WAIO volumes reflects productivity improvements across the
supply chain and additional capacity at Jimblebar.
Metallurgical coal(1)(Mt) 40
(6%)		 Record volumes at two Queensland Coal mines more than offset by
the impacts from Cyclone Debbie.
Energy coal(1)(Mt) 29
7%		 Strong performance at both NSWEC and Cerrejón.

BHP Chief Executive Officer, Andrew Mackenzie said: “Our people have stepped up to unlock low-cost latent capacity and achieve strong productivity gains across our tier one assets.

Improved productivity led to record annual production at Western Australia Iron Ore, Spence and two Queensland Coal mines while production guidance was achieved by Petroleum and Western Australia Iron Ore. Copper production is expected to rebound strongly in the 2018 financial year with the commissioning of the Escondida Water Supply project and ramp-up of the Los Colorados Extension project during the September 2017 quarter to enable utilisation of Escondida’s three concentrators.

In Petroleum, the recently approved Mad Dog phase 2 project will extend low-risk oil volumes as supply tightens while in the near-term, Onshore US development activity is to increase with up to 10 rigs planned for the 2018 financial year.

Our relentless focus on safety, productivity and capital discipline will support strong growth in shareholder value.”

1

Summary

Operational performance

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

Jun FY17 Jun Q17 Jun Q17
2017 vs vs vs FY18 FY18e
Production FY17 Qtr FY16 Jun Q16 Mar Q17 guidance vs FY17
Petroleum (MMboe) 208 52 (13%) (7%) 3% 180 -190 (9%) - (13%)
Onshore US (MMboe) 80 20 (26%) (15%) (4%) 61 - 67 (16%) - (24%)
Conventional (MMboe) 128 32 (2%) (2%) 7% 119 - 123 (4%) - (7%)
Copper (kt) 1,326 387 (16%) (6%) 71% 1,655 - 1,790 25% - 35%
Escondida (kt) 772 225 (21%) (16%) 138% 1,130 - 1,230 46% - 59%
Other copper(i)(kt) 554 162 (8%) 12% 23% 525 - 560 (5%) - 1%
Iron ore(ii)(Mt) 231 60 4% 8% 12% 239 - 243 3% - 5%
WAIO (100% basis) (Mt) 268 70 4% 8% 12% 275 - 280(iii) 3% - 4%
Metallurgical coal(ii)(Mt) 40 8 (6%) (27%) (16%) 44 - 46 10% - 15%
Energy coal(ii)(Mt) 29 8 7% 30% 10% 29 - 30 0% - 3%

(i) Other copper comprises Pampa Norte, Olympic Dam and Antamina.

(ii) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.

(iii) Subject to regulatory approvals to increase capacity above 270 Mt.

Major development projects

During the year, the Bass Strait Longford Gas Conditioning Plant was fully commissioned and is running at design capacity, enabling full production from the Turrum and Kipper fields. The BHP Board also approved the Mad Dog Phase 2 project in the deepwater Gulf of Mexico. The Escondida Water Supply project achieved mechanical completion in the December 2016 quarter and was transitioned to operations effective 1 July 2017, following completion of project commissioning in June 2017.

At the end of the 2017 financial year, BHP had three major projects under development in Petroleum and Potash, with a combined budget of US$5.1 billion over the life of the projects.

Corporate update

BHP expects to record exceptional items of US$546 million (US$740 million post-tax) in the second half of the 2017 financial year. These items relate to idle capacity and other strike-related costs incurred as a result of the Escondida industrial action in the March 2017 quarter and Chilean withholding tax on a one-off dividend paid while a concessional tax rate was available.

Exceptional items to be recognised in the June 2017 half year
Charges/(credits) Loss before Loss after
(US$ million) taxation Taxation taxation
Escondida industrial action costs 546 (179) 367
Withholding tax on Chilean dividends - 373 373

On 18 January 2017, Samarco and its shareholders, Vale S.A. and BHP Billiton Brasil, entered into a preliminary agreement with the Federal Prosecutors’ Office in Brazil in relation to the Samarco dam failure (Preliminary Agreement). The Preliminary Agreement outlines the process and timeline for negotiation of a settlement of the BRL 155 billion (approximately US$47.5 billion) and BRL 20 billion (approximately US$6.1 billion) Public Civil Claims relating to the dam failure. The Court has extended the final date for negotiation of a settlement until 30 October 2017, allowing for the continuation of the interim security arrangements provided to the Court on 24 January 2017 and the provision of ongoing expert advice to the Federal Prosecutors in respect of the remediation and compensation programs identified under the Framework Agreement.

BHP Operational Review for the year ended 30 June 2017

2

On 30 June 2017, BHP announced a total of US$250 million in financial support for the Renova Foundation and Samarco until 31 December 2017. The amount of US$174 million will be used to fund the Renova Foundation and will be offset against the Group’s provision for the Samarco dam failure. A short-term facility of up to US$76 million will be made available to Samarco to carry out remediation and stablisation work and to support Samarco’s operations. These funds will be released to Samarco only as required, and subject to achievement of key milestones.

For the second half of the 2017 financial year, we are not yet in a position to provide an update to the ongoing potential financial impacts on BHP Billiton Brasil of the Samarco dam failure. Any financial impacts will continue to be classified as an exceptional item.

The above guidance will be updated should material information or events arise as the Group finalises its financial statements.

On 16 June 2017, the BHP Board elected Ken MacKenzie to succeed Jac Nasser as Chairman. Mr MacKenzie will assume the role of Chairman effective 1 September 2017, following Mr Nasser’s retirement as both Chairman and a Non-executive Director.

In July 2017, BHP filed an amendment to its 2016 20-F (2016 20-F/A) to restate its 2016 report on internal controls over financial reporting, as deficiencies were identified in the controls and processes that were used to determine the impairments of certain Onshore US assets. The identified deficiencies did not require any change to the carrying values of the Company’s Onshore US assets at 31 December 2016 or any prior period and there is no need for a restatement of any of the Group’s financial statements. A remediation plan has been implemented and we expect to confirm the controls are operating effectively as part of the 2017 financial year annual reporting process.

Marketing update

The average realised prices achieved for our major commodities are summarised in the table below. The majority of iron ore shipments were linked to the index price for the month of shipment, with price differentials predominantly a reflection of product quality and market fundamentals. The majority of metallurgical coal and energy coal exports were linked to the index price for the month of shipment or sold on the spot market at fixed or index-linked prices, with price differentials reflecting product quality.

FY17 Jun H17 Jun H17
vs vs vs
Average realised prices(i) Jun H17 Dec H16 FY17 FY16 FY16 Jun H16 Dec H16
Oil (crude and condensate) (US$/bbl) 50 45 48 39 23% 35% 11%
Natural gas (US$/Mscf)(ii) 3.48 3.21 3.34 2.83 18% 27% 8%
US natural gas (US$/Mscf) 2.98 2.79 2.88 2.16 33% 52% 7%
LNG (US$/Mscf) 7.37 6.35 6.84 7.71 (11%) 4% 16%
Copper (US$/lb) 2.70 2.41 2.54 2.14 19% 25% 12%
Iron ore (US$/wmt, FOB) 62 55 58 44 32% 41% 13%
Hard coking coal (US$/t) 180 179 180 83 117% 117% 1%
Weak coking coal (US$/t) 121 122 121 69 75% 73% (1%)
Thermal coal (US$/t)(iii) 75 74 75 48 56% 63% 1%
Nickel metal (US$/t) 9,799 10,581 10,184 9,264 10% 11% (7%)

(i) Based on provisional, unaudited estimates. Prices exclude 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. In Copper, the adjustment will increase Underlying EBITDA by US$27 million in the 2017 financial year.

(ii) Includes internal sales.

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

At 30 June 2017, the Group had 254 kt of outstanding copper sales that were revalued at a weighted average price of US$2.69 per pound. The final price of these sales will be determined in the 2018 financial year. In addition, 316 kt of copper sales from the 2016 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$27 million in the 2017 financial year.

BHP Operational Review for the year ended 30 June 2017

3

Petroleum

Production

Production
Jun FY17 Jun Q17 Jun Q17
FY17 2017 vs vs vs
Qtr FY16 Jun Q16 Mar Q17
Crude oil, condensate and natural gas liquids (MMboe) 97 24 (16%) (9%) (3%)
Natural gas (bcf) 668 167 (10%) (6%) 8%
Total petroleum production (MMboe) 208 52 (13%) (7%) 3%

Total petroleum production – Total petroleum production for the 2017 financial year decreased by 13 per cent to 208 MMboe.

Petroleum production is forecast to decrease to between 180 and 190 MMboe in the 2018 financial year.

In Onshore US, volumes are expected to decline to between 61 and 67 MMboe as production from the phased rampup of development activity is more than offset by natural field decline. The expanded rig program is forecast to deliver production growth of approximately 35 per cent in the 2019 financial year, with investment plans subject to market conditions.

In our Conventional business, volumes are expected to decrease to between 119 and 123 MMboe as infill drilling and brownfield projects are more than offset by planned maintenance at Mad Dog and natural field decline across the portfolio.

Crude oil, condensate and natural gas liquids – Production for the 2017 financial year decreased by 16 per cent to 97 MMboe.

Onshore US liquids volumes decreased by 29 per cent to 34 MMboe as value accretive deferral of activity in the Black Hawk and natural field decline across all fields were partially offset by increased production from the Permian.

Conventional liquids volumes decreased by eight per cent to 63 MMboe as an additional infill well at Mad Dog and higher production at North West Shelf and Algeria partially offset planned maintenance at Atlantis and natural field decline across the portfolio.

Natural gas – Production for the 2017 financial year declined by 10 per cent to 668 bcf.

Divestment of our Pakistan gas business in December 2015 and lower Onshore US gas volumes as a result of deferred development activity for value, were partially offset by strong performance at Bass Strait and Macedon and increased LNG volumes at North West Shelf.

Projects

Projects
Capital Initial
Project and expenditure production
ownership **(US$m) ** target date Capacity Progress
North West Shelf Greater 314 CY19 To maintain LNG plant throughput from On schedule and budget. The overall
Western Flank-B the North West Shelf operations. project is 47% complete.
(Australia)
16.67% (non-operator)
Mad Dog Phase 2 2,154 CY22 New floating production facility with the On schedule and budget. The overall
(US Gulf of Mexico) capacity to produce up to 140,000 gross project is 3% complete.
23.9% (non-operator) barrels of crude oil per day.

Petroleum capital expenditure for the 2017 financial year declined by approximately 41 per cent to US$1.5 billion. In the 2018 financial year we expect an increase to approximately US$2.0 billion (including higher forecast capital creditor movements of approximately US$0.2 billion, the majority relating to Onshore US). This includes Conventional capital expenditure of US$0.8 billion, which remains focused on high-return infill drilling opportunities in the Gulf of Mexico, a life extension project at North West Shelf along with investments related to the recently approved Mad Dog Phase 2 project.

BHP Operational Review for the year ended 30 June 2017

4

Onshore US development activity

Onshore US drilling and development expenditure for the 2017 financial year was approximately US$554 million. During the June 2017 quarter, our operated rig count increased to five, as two additional rigs commenced operations in the Haynesville.

FY17 Liquids focused areas Gas focused areas
(FY16) Eagle Ford Permian Haynesville Fayetteville Total
Capital expenditure(i) US$ billion 0.3 (0.8) 0.2 (0.4) 0.1 (0.0) 0.0 (0.0) 0.6 (1.2)
Rig allocation At period end 1 (2) 1 (2) 3 (0) 0 (0) 5 (4)
Net wells drilled and completed(ii) Period total 51 (89) 21 (30) 5 (5) 2 (11) 79 (136)
Net productive wells At period end 963 (929) 126 (107) 394 (411) 1,044 (1,086) 2,527 (2,533)

(i) Includes land acquisition, site preparation, drilling, completions, well site facilities, mid-stream infrastructure and pipelines.

(ii) Can vary between periods based on changes in rig activity and the inventory of wells drilled but not yet completed at period end.

Onshore US capital expenditure is expected to be approximately US$1.2 billion in the 2018 financial year. Our plan considers up to five additional rigs.

  •  Evaluation of trials in the Black Hawk are expected to be completed in the September 2017 quarter and, subject to approval, one additional rig will commence toward the end of that quarter.

  •  One rig has recently commenced operations in the Hawkville executing a 14 well program that will include a mix of completion trials and acreage retention drilling.

  •  In the Permian, the current rig will focus on near-term lease obligations while an additional one to two rigs will continue to focus on completion trials that will inform a transition to full pad development as early as the 2019 financial year.

  •  One additional rig is expected to commence in the Haynesville in the September 2017 quarter. Further, our hedging strategy allows us to reduce price risk and secure average rates of return in excess of 20 per cent.

  •  At this point we do not anticipate any operated development in the Fayetteville, however we continue to work with joint venture partners to assess the potential of the Moorefield horizon through non-operated activity.

The divestment of non-core acreage for value is progressing, with the sale of a portion of the southern Hawkville anticipated to be executed in the September 2017 quarter. Our Fayetteville acreage is currently under review and we are considering all options including divestment.

Petroleum exploration

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

Total well
Well Location Target BHP equity Spud date Water depth depth Status
Wildling-2 US Gulf of Mexico Oil 100% 15 April 2017 1,267 m 8,928 m Drilling ahead
GC520 (Operator)

The Wildling-2 well was spud on 15 April 2017 and drilling is in progress, with results expected in the September 2017 quarter. The Scimitar exploration well is expected to be spud in the September 2017 quarter.

In Mexico, BHP has commenced working in partnership with Pemex to plan and execute, during the next 24 months, the Minimum Work Program for blocks AE-0092 and AE-0093 consisting of one appraisal well, one exploration well and the acquisition of additional seismic data.

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

In the US Gulf of Mexico, BHP was the apparent high bidder on two leases adjacent to the Scimitar prospect (GC260 and GC304) in the Central Gulf of Mexico Lease Sale 247. BHP (28.32 per cent equity interest), with BP (Operator), was the apparent high bidder on two leases adjacent to the Mad Dog field (GC738 and GC870). All four leases were awarded by the Regulator during the June 2017 quarter.

BHP Operational Review for the year ended 30 June 2017

5

In Australia, BHP has completed its evaluation of the WA-480-P permit in the Northern Beagle sub-basin and has elected to exit this exploration permit. Acquisition of the seismic survey in the Exmouth sub-basin was completed on 1 May 2017. Processed data will be delivered during the June 2018 quarter.

Petroleum exploration expenditure for the 2017 financial year was US$805 million, of which US$473 million was expensed. We are pursuing high-quality oil plays in our priority basins and an US$840 million exploration program is planned for the 2018 financial year taking advantage of low rig rates. This program includes one well in the US Gulf of Mexico, three wells in Trinidad and Tobago, and one well in Mexico.

BHP Operational Review for the year ended 30 June 2017

6

Copper

Production

Production
Jun FY17 Jun Q17 Jun Q17
FY17 2017 vs vs vs
Qtr FY16 Jun Q16 Mar Q17
Copper (kt) 1,326 387 (16%) (6%) 71%
Zinc (t) 87,502 29,076 58% 349% 41%
Uranium oxide concentrate (t) 3,661 737 (16%) (16%) (22%)

Copper – Total copper production for the 2017 financial year decreased by 16 per cent to 1.3 Mt. Total copper production is forecast to increase to between 1,655 and 1,790 kt in the 2018 financial year.

Escondida copper production for the 2017 financial year decreased by 21 per cent to 772 kt. The decrease was due to: a four day site-wide suspension of operations following a fatality in October 2016, 44 days of industrial action in the March 2017 quarter and severe weather in early June 2017, reducing production by 21 kt, 214 kt and 12 kt, respectively. Copper production of between 1,130 and 1,230 kt is expected in the 2018 financial year, supported by the ramp-up of the Los Colorados Extension project during the September 2017 quarter, enabling utilisation of three concentrators.

Pampa Norte copper production for the 2017 financial year increased by one per cent to 254 kt, supported by record cathode production and ore milled at Spence following the completion of the Recovery Optimisation project. Pampa Norte copper production for the 2018 financial year is expected to be higher than the prior year.

Olympic Dam copper production for the 2017 financial year decreased by 18 per cent to 166 kt following the statewide power outage during September and October 2016 and unplanned maintenance at the refinery during December 2016 and January 2017. Copper production of 150 kt is expected in the 2018 financial year as a major smelter maintenance campaign is phased through August to November 2017, including a rebuild of the electric slag furnace, the flash furnace and the electro static precipitator. This is the largest maintenance program undertaken by BHP at Olympic Dam and on completion, the improved operational performance will underpin an expected increase in copper production to approximately 215 kt in the 2019 financial year. This will provide a stable base for the potential to increase capacity to 280 kt in the 2022 financial year.

Antamina copper production for the 2017 financial year decreased by nine per cent to 134 kt as record material mined was more than offset by lower copper grades as mining progressed through a zinc rich ore zone. Copper production is expected to decrease in the 2018 financial year to approximately 125 kt, as mining continues through a zinc rich ore zone consistent with the mine plan. Zinc production is expected to increase from 88 kt to approximately 100 kt in the 2018 financial year.

BHP Operational Review for the year ended 30 June 2017

7

Iron Ore

Production

Production
Jun FY17 Jun Q17 Jun Q17
FY17 2017 vs vs vs
Qtr FY16 Jun Q16 Mar Q17
Iron ore(i)(kt) 231,352 60,141 4% 8% 12%

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

Iron ore – Total iron ore production for the 2017 financial year increased by four per cent to 231 Mt, or 268 Mt on a 100 per cent basis. WAIO production is expected to increase to between 239 and 243 Mt, or between 275 and 280 Mt on a 100 per cent basis, in the 2018 financial year. BHP will continue to work with the relevant authorities to obtain the necessary approvals to increase system capacity to 290 Mtpa (100 per cent basis).

Record annual production of 268 Mt (100 per cent basis) at WAIO reflects strong productivity improvements across the supply chain as well as the commissioning of a new primary crusher and additional conveying capacity at Jimblebar. Following recovery from the wet season, WAIO produced at a record annualised rate of 280 Mt (100 per cent basis) in the June 2017 quarter. The rail renewal and maintenance program was completed in May 2017.

In June 2017, BHP approved initial funding of US$184 million (BHP share) for the South Flank sustaining mine project. The initial funding will be used primarily for the expansion of accommodation facilities to support construction and future operational workforce requirements. The South Flank project, which will leverage and expand the existing Mining Area C hub, is BHP’s preferred option to replace production from the 80 Mtpa (100 per cent basis) Yandi mine when it reaches the end of its economic life in the early-to-mid 2020s. The project is expected to be submitted for Board approval in the middle of the 2018 calendar year and, if approved, first ore is targeted in the 2021 calendar year with ramp-up timed to coincide with the ramp-down of Yandi. The capital cost for South Flank is expected to be in the range of US$30 to US$40 per tonne, with expenditure fitting within WAIO’s previously indicated average annual sustaining capital expenditure of US$4 per tonne over the next five years.

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

BHP Operational Review for the year ended 30 June 2017

8

Coal

Production

Production
Jun FY17 Jun Q17 Jun Q17
FY17 2017 vs vs vs
Qtr FY16 Jun Q16 Mar Q17
Metallurgical coal(i)(kt) 39,770 8,494 (6%) (27%) (16%)
Energy coal(ii)(kt) 29,135 8,186 7% 30% 10%

(i) Represents Queensland Coal. Excludes production from Haju following the divestment of IndoMet Coal (2017 financial year: 129 kt).

(ii) Excludes production from New Mexico Coal following divestments (2017 financial year: 451 kt).

Metallurgical coal – Metallurgical coal production for the 2017 financial year decreased by six per cent to 40 Mt. Production is expected to increase to between 44 and 46 Mt in the 2018 financial year.

At Queensland Coal, production for the 2017 financial year was lower as a result of damage caused by Cyclone Debbie to the network infrastructure of rail track provider Aurizon. Mine operations recovered quickly after the cyclone, as dewatering infrastructure installed after the 2011 floods worked as designed. Force majeure was declared for all Queensland Coal products on 5 April 2017 and was lifted on 1 July 2017.

Despite the impacts of Cyclone Debbie, Peak Downs and Saraji achieved record annual production underpinned by improved stripping and mining performance, and utilisation of latent wash-plant capacity, including approximately 2 Mt trucked to Caval Ridge (100 per cent). Three additional mines were on track for record production prior to Cyclone Debbie.

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

Energy coal – Energy coal production for the 2017 financial year increased by seven per cent to 29 Mt. Production is expected to remain broadly unchanged at approximately 29 to 30 Mt in the 2018 financial year.

New South Wales Energy Coal production increased by six per cent as it benefitted from a lower strip ratio and additional bypass coal. Cerrejón production increased by nine per cent compared to the prior year, which was constrained by drought conditions.

BHP Operational Review for the year ended 30 June 2017

9

Other

Nickel production

Nickelproduction
Jun FY17 Jun Q17 Jun Q17
FY17 2017 vs vs vs
Qtr FY16 Jun Q16 Mar Q17
Nickel (kt) 85.1 25.2 5% 8% 33%

Nickel – Nickel West production for the 2017 financial year increased by five per cent to 85.1 kt. Debottlenecking activities at the Kwinana refinery have resulted in record refined metal production. Nickel production for the 2018 financial year is expected to remain broadly unchanged from the 2017 financial year.

Potash project

Potashproject
Project and Investment
ownership (US$m) Scope Progress
Jansen Potash 2,600 Investment to finish the excavation and lining of the The project is 70% complete and within the
(Canada) production and service shafts, and to continue the approved budget. Shaft excavation is
100% installation of essential surface infrastructure and progressing.
utilities.

Minerals exploration

Minerals exploration expenditure for the 2017 financial year was US$163 million, of which US$139 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Peru, Canada, South Australia and the South-West United States. BHP was awarded five exploration concessions in Ecuador in June 2017.

Variance analysis relates to the relative performance of BHP and/or its operations during the 2017 financial year compared with the 2016 financial year, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis. Copper equivalent production based on 2017 financial year average realised prices.

The following footnotes apply to this Operational Review:

  • (1) Excludes production from Samarco, Haju (IndoMet Coal) and New Mexico Coal.

  • (2) Underlying EBITDA and Underlying attributable profit are used to reflect the underlying performance of BHP. Underlying EBITDA is earnings before net finance costs, taxation, depreciation, amortisation, impairment and any exceptional items. Underlying attributable profit is Attributable profit excluding any exceptional items.

The following abbreviations may have been used throughout this report: barrels (bbl); billion cubic feet (bcf); cost and freight (CFR); cost, insurance and freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent (Mboe); thousand ounces (koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).

BHP Operational Review for the year ended 30 June 2017

10

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BHP Operational Review for the year ended 30 June 2017

11

Production summary

BHP
interest		 Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
~~Jun-16~~
~~Sep-16~~
~~Dec-16~~
~~Mar-17~~
~~Jun-17~~
Quarter ended		 Year to date
Jun
Jun
2017
2016
Petroleum (1)
Petroleum
Crude oil, condensate and NGL (Mboe)
Onshore US
Conventional
Total
Natural gas (bcf)
Onshore US
Conventional
Total
Total petroleum production (MMboe)		 9,469
8,288
8,143
9,439
8,501
16,896
15,959
15,768
15,369
15,612
26,365
24,247
23,911
24,808
24,113
82.0
73.9
67.8
66.1
67.2
95.7
107.8
97.1
88.4
99.5
177.7
181.7
164.9
154.5
166.7
56.0
54.5
51.4
50.6
51.9		 34,371
48,181
62,708
67,858
97,079
116,039
275.0
364.5
392.8
380.2
667.8
744.7
208.4
240.1
Copper (2)
Copper
Payable metal in concentrate (kt)
Escondida(3)
57.5%
Antamina
33.8%
Total
Cathode (kt)
Escondida(3)
57.5%
Pampa Norte(4)
100%
Olympic Dam
100%
Total
Total copper (kt)
Lead
Payable metal in concentrate (t)
Antamina
33.8%
Total
Zinc
Payable metal in concentrate (t)
Antamina
33.8%
Total
Gold
Payable metal in concentrate (troy oz)
Escondida(3)
57.5%
Olympic Dam (refined gold)
100%
Total
Silver
Payable metal in concentrate (troy koz)
Escondida(3)
57.5%
Antamina
33.8%
Olympic Dam (refined silver)
100%
Total
Uranium
Payable metal in concentrate (t)
Olympic Dam
100%
Total
Molybdenum
Payable metal in concentrate (t)
Antamina
33.8%
Total		 182.7
147.0
162.6
67.6
162.4
38.7
34.1
32.0
29.2
38.5
221.4
181.1
194.6
96.8
200.9
85.3
70.5
71.5
27.2
62.8
65.8
62.1
53.8
66.1
72.3
40.7
40.9
37.2
36.8
51.4
191.8
173.5
162.5
130.1
186.5
413.2
354.6
357.1
226.9
387.4
645
1,146
1,220
1,308
1,799
645
1,146
1,220
1,308
1,799
6,474
15,367
22,406
20,653
29,076
6,474
15,367
22,406
20,653
29,076
35,894
27,561
37,784
11,572
33,941
20,010
24,366
29,651
21,941
28,188
55,904
51,927
67,435
33,513
62,129
1,874
1,229
1,323
540
1,234
1,558
1,345
1,446
1,301
1,691
232
163
188
174
243
3,664
2,737
2,957
2,015
3,168
876
916
1,060
948
737
876
916
1,060
948
737
562
561
225
30
328
562
561
225
30
328		 539.6
648.9
133.8
146.4
673.4
795.3
232.0
330.3
254.3
251.4
166.3
202.8
652.6
784.5
1,326.0
1,579.8
5,473
3,719
5,473
3,719
87,502
55,438
87,502
55,438
110,858
108,996
104,146
117,686
215,004
226,682
4,326
5,561
5,783
6,711
768
917
10,877
13,189
3,661
4,363
3,661
4,363
1,144
1,113
1,144
1,113

BHP Operational Review for the year ended 30 June 2017

12

Production summary

Production summary
BHP
interest		 Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Iron Ore
Iron Ore
Production (kt)(5)
Newman
85%
Area C Joint Venture
85%
Yandi Joint Venture
85%
Jimblebar(6)
85%
Wheelarra
85%
Samarco
50%
Total		 15,115
18,008
17,751
16,283
16,241
11,911
12,384
12,179
11,165
13,016
18,325
15,729
17,555
14,656
17,415
5,304
6,057
5,178
4,824
5,891
4,971
5,409
7,386
6,647
7,578
-
-
-
-
-
55,626
57,587
60,049
53,575
60,141		 68,283
65,941
48,744
46,799
65,355
67,375
21,950
18,890
27,020
22,549
-
5,404
231,352
226,958
Coal
Metallurgical coal
Production (kt) (7)
BMA
50%
BHP Mitsui Coal(8)
80%
Haju (9)
75%
Total
Energy coal
Production (kt)
USA
100%
Australia
100%
Colombia
33.3%
Total		 9,225
8,384
8,684
7,996
6,394
2,345
2,145
1,929
2,138
2,100
260
102
27
-
-
11,830
10,631
10,640
10,134
8,494
632
451
-
-
-
3,991
3,952
3,851
4,662
5,711
2,329
2,928
2,800
2,756
2,475
6,952
7,331
6,651
7,418
8,186		 31,458
33,413
8,312
8,898
129
529
39,899
42,840
451
7,052
18,176
17,101
10,959
10,094
29,586
34,247
Other
Nickel
Saleable production (kt)
Nickel West
100%
Total		 23.4
18.8
22.1
19.0
25.2
23.4
18.8
22.1
19.0
25.2		 85.1
80.7
85.1
80.7

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

(2) Metal production is reported on the basis of payable metal.

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

(4) Includes Cerro Colorado and Spence.

(5) Iron ore production is reported on a wet tonnes basis.

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

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

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

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

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

BHP Operational Review for the year ended 30 June 2017

13

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Petroleum (1)
Bass Strait
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
North West Shelf
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Pyrenees
Crude oil and condensate
(Mboe)
Total petroleum products
(MMboe)
Other Australia(2)
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Atlantis(3)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Mad Dog (3)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Shenzi (3)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Eagle Ford (4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Permian (4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Haynesville(4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Fayetteville (4)
Natural gas
(bcf)
Total petroleum products
(MMboe)		 1,745
1,922
1,770
1,355
1,552
1,831
2,102
1,460
1,236
1,661
38.1
41.9
31.3
28.7
37.4
9.9
11.0
8.4
7.4
9.4
925
1,486
1,468
1,239
1,314
241
292
263
200
209
27.6
38.7
36.9
32.2
32.5
5.8
8.2
7.9
6.8
6.9
2,097
1,676
1,726
1,509
1,606
2.1
1.7
1.7
1.5
1.6
9
10
8
8
9
17.2
17.5
17.1
15.2
16.3
2.9
2.9
2.9
2.5
2.7
4,058
3,054
3,263
3,881
3,637
269
208
207
295
213
1.9
1.5
1.6
2.1
1.9
4.6
3.5
3.7
4.5
4.2
1,134
950
1,170
1,185
1,167
52
36
52
59
68
0.2
0.1
0.2
0.2
0.2
1.2
1.0
1.3
1.3
1.3
2,813
2,632
2,692
2,675
2,588
192
94
131
161
179
0.6
0.5
0.5
0.5
0.6
3.1
2.8
2.9
2.9
2.9
4,949
3,871
4,008
5,451
4,278
2,717
2,268
2,159
2,354
2,240
19.5
16.5
15.2
17.0
15.1
10.9
8.9
8.7
10.6
9.0
1,410
1,415
1,378
1,202
1,336
393
734
580
428
646
4.9
4.4
4.4
4.0
6.2
2.6
2.9
2.7
2.3
3.0
-
-
3
1
1
-
-
15
3
-
31.1
28.2
24.0
22.0
21.4
5.2
4.7
4.0
3.7
3.6
26.5
24.8
24.2
23.1
24.5
4.4
4.1
4.0
3.9
4.1		 6,599
6,825
6,459
6,684
139.3
131.0
36.3
35.3
5,507
4,834
964
962
140.3
130.2
29.9
27.5
6,517
8,617
6.5
8.6
35
39
66.1
64.4
11.1
10.8
13,835
16,008
923
1,048
7.1
7.4
15.9
18.3
4,472
3,250
215
157
0.7
0.5
4.8
3.5
10,587
12,369
565
903
2.1
2.7
11.5
13.7
17,608
26,823
9,021
13,971
63.8
95.8
37.3
56.8
5,331
5,744
2,388
1,642
19.0
14.6
10.9
9.8
5
1
18
-
95.6
136.6
16.0
22.8
96.6
117.5
16.1
19.6

BHP Operational Review for the year ended 30 June 2017

14

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Petroleum (1)(continued)
Trinidad/Tobago
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Other Americas (3) (5)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
UK
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Algeria
Crude oil and condensate
(Mboe)
Total petroleum products
(MMboe)
Pakistan(6)
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)		 162
140
156
127
139
8.6
6.4
8.4
8.4
9.4
1.6
1.2
1.6
1.5
1.7
308
275
269
257
238
10
1
5
6
10
0.2
0.1
0.1
0.1
0.1
0.4
0.3
0.3
0.3
0.3
76
69
63
72
64
10
22
49
32
16
1.3
1.1
1.0
1.0
1.1
0.3
0.3
0.3
0.3
0.3
964
990
1,016
1,072
942
1.0
1.0
1.0
1.1
0.9
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-		 562
709
32.6
31.0
6.0
5.9
1,039
1,363
22
50
0.4
0.8
1.1
1.5
268
274
119
43
4.2
4.3
1.1
1.0
4,020
3,689
4.0
3.7
-
42
-
7.9
-
1.4
BHP Petroleum
Crude oil and condensate
Onshore US
(Mboe)
Conventional(7)
(Mboe)
Total
(Mboe)
NGL
Onshore US
(Mboe)
Conventional
(Mboe)
Total
(Mboe)
Natural gas
Onshore US
(bcf)
Conventional
(bcf)
Total
(bcf)
Total petroleum products
Onshore US
(Mboe)
Conventional(7)
(Mboe)
Total
(Mboe)		 6,359
5,286
5,389
6,654
5,615
14,291
13,204
13,601
13,380
13,256
20,650
18,490
18,990
20,034
18,871
3,110
3,002
2,754
2,785
2,886
2,605
2,755
2,167
1,989
2,356
5,715
5,757
4,921
4,774
5,242
82.0
73.9
67.8
66.1
67.2
95.7
107.8
97.1
88.4
99.5
177.7
181.7
164.9
154.5
166.7
23,136
20,605
19,443
20,456
19,701
32,846
33,926
31,951
30,102
32,195		 22,944
32,568
53,441
58,011
76,385
90,579
11,427
15,613
9,267
9,847
20,694
25,460
275.0
364.5
392.8
380.2
667.8
744.7
80,204
108,931
128,175
131,225
55,982
54,530
51,394
50,558
51,896		 208,379
240,156

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

(2) Other Australia includes Minerva and Macedon.

(3) Gulf of Mexico volumes are net of royalties.

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

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

(6) BHP completed the sale of the Pakistan gas business on 31 December 2015.

(7) September 2015 includes (8) Mboe for the finalisation adjustment following the cessation of production at Stybarrow on 26 June 2015.

BHP Operational Review for the year ended 30 June 2017

15

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Copper
Escondida, Chile (1)
Material mined
(kt)
108,037
106,504
90,863
26,045
93,389
Sulphide ore milled
(kt)
22,905
20,787
19,866
8,054
18,777
Average copper grade
(%)
0.94%
0.87%
1.02%
1.01%
1.07%
Production ex mill
(kt)
181.7
153.2
168.6
68.7
167.0
Production
Payable copper
(kt)
182.7
147.0
162.6
67.6
162.4
Copper cathode (EW)
(kt)
85.3
70.5
71.5
27.2
62.8
- Oxide leach
(kt)
31.3
26.8
24.4
8.9
20.3
- Sulphide leach
(kt)
54.0
43.7
47.1
18.3
42.5
Total copper
(kt)
268.0
217.5
234.1
94.8
225.2
Payable gold concentrate
(troy oz)
35,894
27,561
37,784
11,572
33,941
Payable silver concentrate
(troy koz)
1,874
1,229
1,323
540
1,234
Sales
Payable copper
(kt)
186.6
134.9
172.7
63.7
163.3
Copper cathode (EW)
(kt)
83.8
65.6
71.8
39.4
56.0
Payable gold concentrate
(troy oz)
35,894
27,561
37,784
11,572
33,941
Payable silver concentrate
(troy koz)
1,874
1,229
1,323
540
1,234
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Metals production is payable metal unless otherwise stated.		 316,801
433,274
67,484
84,989
0.99%
0.98%
557.5
670.0
539.6
648.9
232.0
330.3
80.4
117.8
151.6
212.5
771.6
979.2
110,858
108,996
4,326
5,561
534.6
649.7
232.8
329.0
110,858
108,996
4,326
5,561
Pampa Norte, Chile
Cerro Colorado
Material mined
(kt)
12,453
13,011
14,286
15,178
15,760
Ore milled
(kt)
4,375
3,241
3,342
4,179
4,411
Average copper grade
(%)
0.80%
0.68%
0.65%
0.57%
0.53%
Production
Copper cathode (EW)
(kt)
24.8
17.1
12.1
16.7
18.8
Sales
Copper cathode (EW)
(kt)
25.2
16.4
13.7
15.6
19.8
Spence
Material mined
(kt)
21,124
23,638
22,635
22,939
24,230
Ore milled
(kt)
4,836
4,713
5,187
5,225
4,968
Average copper grade
(%)
1.22%
1.17%
1.19%
1.09%
1.13%
Production
Copper cathode (EW)
(kt)
41.0
45.0
41.7
49.4
53.5
Sales
Copper cathode (EW)
(kt)
40.9
41.2
41.5
49.0
55.7		 58,235
53,668
15,173
17,946
0.60%
0.77%
64.7
77.3
65.5
76.5
93,442
88,188
20,093
19,256
1.14%
1.33%
189.6
174.1
187.4
173.6

BHP Operational Review for the year ended 30 June 2017

16

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%)
(kt)
62,793
65,111
61,355
55,771
62,254
Sulphide ore milled (100%)
(kt)
14,711
13,522
13,399
11,955
13,229
Average head grades
- Copper
(%)
0.90%
0.84%
0.84%
0.88%
1.00%
- Zinc
(%)
0.33%
0.60%
0.83%
0.84%
0.95%
Production
Payable copper
(kt)
38.7
34.1
32.0
29.2
38.5
Payable zinc
(t)
6,474
15,367
22,406
20,653
29,076
Payable silver
(troy koz)
1,558
1,345
1,446
1,301
1,691
Payable lead
(t)
645
1,146
1,220
1,308
1,799
Payable molybdenum
(t)
562
561
225
30
328
Sales
Payable copper
(kt)
42.4
32.8
33.0
30.2
36.9
Payable zinc
(t)
3,035
16,043
22,334
23,669
27,936
Payable silver
(troy koz)
2,055
1,277
1,388
1,304
1,513
Payable lead
(t)
1,108
767
1,100
1,475
1,493
Payable molybdenum
(t)
331
648
476
-
-		 244,491
226,899
52,105
55,609
0.89%
0.93%
0.80%
0.55%
133.8
146.4
87,502
55,438
5,783
6,711
5,473
3,719
1,144
1,113
132.9
145.4
89,982
54,302
5,482
6,956
4,835
3,503
1,124
803
Olympic Dam, Australia
Material mined(1)
(kt)
1,993
2,204
1,887
1,943
1,974
Ore milled
(kt)
2,031
2,279
2,116
2,112
2,097
Average copper grade
(%)
2.20%
1.97%
2.00%
2.07%
2.30%
Average uranium grade
(kg/t)
0.59
0.60
0.68
0.61
0.58
Production
Copper cathode (ER and EW)
(kt)
40.7
40.9
37.2
36.8
51.4
Uranium oxide concentrate
(t)
876
916
1,060
948
737
Refined gold
(troy oz)
20,010
24,366
29,651
21,941
28,188
Refined silver
(troy koz)
232
163
188
174
243
Sales
Copper cathode (ER and EW)
(kt)
43.9
37.5
41.2
33.5
51.5
Uranium oxide concentrate
(t)
778
1,085
883
839
1,298
Refined gold
(troy oz)
22,134
21,901
28,234
22,333
24,726
Refined silver
(troy koz)
201
184
203
108
251		 8,008
8,932
8,604
9,699
2.08%
2.01%
0.62
0.61
166.3
202.8
3,661
4,363
104,146
117,686
768
917
163.7
203.1
4,105
3,729
97,194
118,952
746
877

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

BHP Operational Review for the year ended 30 June 2017

17

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Iron Ore
Pilbara, Australia
Production
Newman
(kt)
15,115
18,008
17,751
16,283
16,241
Area C Joint Venture
(kt)
11,911
12,384
12,179
11,165
13,016
Yandi Joint Venture
(kt)
18,325
15,729
17,555
14,656
17,415
Jimblebar(1)
(kt)
5,304
6,057
5,178
4,824
5,891
Wheelarra
(kt)
4,971
5,409
7,386
6,647
7,578
Total production
(kt)
55,626
57,587
60,049
53,575
60,141
Total production (100%)
(kt)
64,508
66,681
69,730
62,177
69,714
Sales
Lump
(kt)
13,054
14,156
14,127
12,804
15,104
Fines
(kt)
42,673
42,278
45,447
41,043
46,249
Total
(kt)
55,727
56,434
59,574
53,847
61,353
Total sales (100%)
(kt)
64,617
65,368
69,196
62,513
71,149
Iron ore production and sales are reported on a wet tonnes basis.		 68,283
65,941
48,744
46,799
65,355
67,375
21,950
18,890
27,020
22,549
231,352
221,554
268,302
257,320
56,191
54,323
175,017
167,255
231,208
221,578
268,226
257,346

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

Samarco, Brazil (1)
Production (kt) - - - - - - 5,404
Sales (kt) 94 12 - 35 - 47 6,274

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

BHP Operational Review for the year ended 30 June 2017

18

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Coal
Queensland Coal
Production (1)
BMA
Blackwater
(kt)
2,206
1,981
1,855
1,694
1,766
Goonyella
(kt)
2,709
2,123
2,204
1,871
1,157
Peak Downs
(kt)
1,385
1,520
1,715
1,582
1,238
Saraji
(kt)
1,123
1,238
1,307
1,276
913
Gregory Joint Venture (2)
(kt)
-
-
-
-
-
Daunia
(kt)
684
646
680
674
560
Caval Ridge
(kt)
1,118
876
923
899
760
Total BMA
(kt)
9,225
8,384
8,684
7,996
6,394
BHP Mitsui Coal
(3)
South Walker Creek
(kt)
1,382
1,341
1,080
1,354
1,348
Poitrel
(kt)
963
804
849
784
752
Total BHP Mitsui Coal
(kt)
2,345
2,145
1,929
2,138
2,100
Total Queensland Coal
(kt)
11,570
10,529
10,613
10,134
8,494
Sales
Coking coal
(kt)
8,059
7,240
7,658
7,133
5,496
Weak coking coal
(kt)
3,196
2,799
2,659
2,761
2,502
Thermal coal
(kt)
310
206
154
96
142
Total
(kt)
11,565
10,245
10,471
9,990
8,140
Coal production is reported on the basis of saleable product.		 7,296
7,626
7,355
8,996
6,055
5,031
4,734
4,206
-
1,329
2,560
2,624
3,458
3,601
31,458
33,413
5,123
5,436
3,189
3,462
8,312
8,898
39,770
42,311
27,527
30,064
10,721
11,818
598
927
38,846
42,809

(1) Production figures include some thermal coal.

(2) Longwall mining at Crinum completed during the December 2015 quarter.

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

Haju, Indonesia (1)
Production (kt) 260 102 27 - - 129 529
Sales - export (kt) 239 117 - - - 117 239

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

New Mexico, USA
Production
Navajo Coal(1)
(kt)
San Juan Coal (2)
(kt)
Total
(kt)
Sales thermal coal - local utility		 632
451
-
-
-
-
-
-
-
-
632
451
-
-
-
613
105
-
-
-		 451
3,999
-
3,053
451
7,052
105
7,051

(1) The divestment of Navajo Coal was completed on 29 July 2016, with no further production reported by BHP. Management of Navajo Coal was transferred to Navajo Transitional Energy Company on 31 December 2016.

(2) BHP completed the sale of San Juan Mine on 31 January 2016.

NSW Energy Coal, Australia
Production
(kt)
Sales
Export thermal coal
(kt)
Inland thermal coal
(kt)
Total
(kt)		 3,991
3,952
3,851
4,662
5,711
3,993
3,640
3,539
4,407
4,913
440
331
311
431
327
4,433
3,971
3,850
4,838
5,240		 18,176
17,101
16,499
16,614
1,400
1,156
17,899
17,770
Cerrejón, Colombia
Production
(kt)
Sales thermal coal - export
(kt)		 2,329
2,928
2,800
2,756
2,475
2,844
2,905
2,722
2,613
2,803		 10,959
10,094
11,043
10,601

BHP Operational Review for the year ended 30 June 2017

19

Production and sales report

Jun
Sep
Dec
Mar
Jun
2016
2016
2016
2017
2017
Quarter ended		 Year to date
Jun
Jun
2017
2016
Other
Nickel West, Australia
Production
Nickel contained in concentrate
(kt)
0.3
0.3
0.2
0.2
-
Nickel contained in finished matte
(kt)
5.8
1.8
4.1
2.3
5.3
Nickel metal
(kt)
17.3
16.7
17.8
16.5
19.9
Total nickel production
(kt)
23.4
18.8
22.1
19.0
25.2
Sales
Nickel contained in concentrate
(kt)
0.3
0.3
0.2
0.2
-
Nickel contained in finished matte
(kt)
5.9
1.8
4.1
2.2
4.9
Nickel metal
(kt)
17.4
16.5
17.6
17.1
18.1
Total nickel sales
(kt)
23.6
18.6
21.9
19.5
23.0
Nickel production is reported on the basis of saleable product		 0.7
1.5
13.5
16.2
70.9
63.0
85.1
80.7
0.7
1.5
13.0
16.5
69.3
62.9
83.0
80.9

BHP Operational Review for the year ended 30 June 2017

20

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