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BHP Group Limited Interim / Quarterly Report 2016

Jan 19, 2016

14787_rns_2016-01-19_d09919d4-c96b-4abc-ada0-c5f04aabbd7b.pdf

Interim / Quarterly Report

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Release Time IMMEDIATE Date 20 January 2016 Release Number 2/16

BHP BILLITON OPERATIONAL REVIEW FOR THE HALF YEAR ENDED 31 DECEMBER 2015

  • Further productivity improvements supported the robust production performance across our operated assets during the period.

  • Full year production guidance maintained for Petroleum, Copper and Coal.

  • Guidance at Western Australia Iron Ore (WAIO) maintained at 270 Mt (100% basis) as continued productivity is expected to offset one-off operational issues from the December quarter. Total iron ore guidance reduced by 10 Mt to 237 Mt due to the suspension of production at Samarco.

  • Four major projects under development are tracking to plan. The North West Shelf Greater Western Flank-A petroleum project was completed under budget and ahead of schedule. The Greater Western Flank-B project was approved during the period.

  • Underlying attributable profit[(1)] in the December 2015 half year is expected to include additional charges in a range of approximately US$300 million to US$450 million (detail presented on page 2).

Production Dec H15
vs Dec H14
Petroleum (MMboe) 125
(5%)		 Lower gas volumes reflect deferral of development activity in
Onshore US and natural field decline in our Conventional assets.
Copper (kt) 762
(6%)		 Increased throughput enabled by the ramp up of the Escondida
Organic Growth Project 1 and strong operating performance across
the businesspartiallyoffset expected lowergrades at Escondida.
Iron ore (Mt) 118
4%		 Record WAIO volumes for the half year as the Jimblebar mining hub
operated at full capacityfollowingramp-upin theprioryear.
Metallurgical coal (Mt) 21
(3%)		 Record production at four Queensland Coal mines partially offset a
convergence event at Broadmeadow andplanned closure of Crinum.
Energy coal (Mt) 19
(3%)		 Unfavourable weather conditions at NSWEC and Cerrejón.

BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “Our operated assets continued to perform well over the last six months. The strong performance of our conventional petroleum assets has offset lower shale volumes following a reduction in investment to preserve the value of our acreage in current market conditions. Increased throughput at Escondida helped mitigate the impact of expected grade decline and better productivity supported production at Queensland Coal. These efforts have allowed us to maintain production guidance for Petroleum, Copper, Coal and Western Australia Iron Ore.

“Commodity prices fell substantially in the first half of the 2016 financial year putting pressure on the whole resources sector. We continue to cut costs and remain focused on safely improving our operational performance to enhance the resilience of our business. In this environment, we are also committed to protecting our strong balance sheet so we have the financial flexibility to manage further volatility and take advantage of the expected recovery in copper and oil over the medium term.”

1

Summary

Operational performance

Production for the December 2015 half year and quarter and guidance for the 2016 financial year are summarised in the table below.

Dec Dec Dec H15 Dec Q15 Dec Q15 Previous Current
2015 2015 vs vs vs FY16 FY16
Production Half Qtr Dec H14 Dec Q14 Sep Q15 guidance guidance
Petroleum (MMboe) 124.7 60.2 (5%) (5%) (7%) 237 237
Onshore US (MMboe) 58.4 28.5 (5%) (9%) (4%) 112 109
Copper (Mt) 0.8 0.4 (6%) (9%) 2% 1.5 1.5
Escondida (kt) 452 221 (18%) (22%) (4%) 940 940
Iron ore (Mt) 118 57 4% 1% (7%) 247 237
WAIO (100% basis) (Mt) 131 64 6% 5% (4%) 270 270
Metallurgical coal (Mt) 21 10 (3%) (6%) 0% 40 40
Energy coal (Mt)(2) 19 10 (3%) (6%) (3%) 40 40

Major development projects

During the December 2015 quarter, BHP Billiton approved an investment of US$314 million (BHP Billiton share) for the North West Shelf Greater Western Flank-B petroleum project. This follows the delivery of first production from the North West Shelf Greater Western Flank-A project during the December 2015 quarter, which was completed under budget and ahead of schedule. The Flank-A project will not be reported in future Operational Reviews.

At the end of the December 2015 quarter, BHP Billiton had four major projects under development in Petroleum, Copper and Potash, with a combined budget of US$6.9 billion over the life of the projects.

Corporate update

BHP Billiton expects Underlying attributable profit in the December 2015 half year to include additional charges in a range of approximately US$300 million to US$450 million related to: (1) redundancies largely associated with the simplification of our business, rig terminations in Onshore US and closure of the Crinum coal mine; (2) inventory write-downs reflecting significantly weaker commodity prices; and (3) global royalty and taxation matters.

Additional charges to be recognised in the December 2015 half year
(US$ million)		 Underlying
EBIT(1)		 Underlying attributable
profit(1)
Redundancies and closure(i): across all businesses 200 to 250 125 to 175
Inventory write-downs: across all minerals businesses 100 to 150 50 to 100
Global royalty and taxation matters 125 to 175 125 to 175
Total charges 425 to 575 300 to 450

(i) Includes rig termination charges in Onshore US

In addition, the Group expects to record a number of exceptional items in the December 2015 half year.

On 15 January 2016, BHP Billiton announced that it expects to recognise an impairment charge of approximately US$4.9 billion post-tax (or approximately US$7.2 billion pre-tax) against the carrying value of its Onshore US assets. The impairment reflects changes to price assumptions, discount rates and development plans. This follows significant volatility and much weaker prices experienced in the oil and gas industry which have more than offset our substantial productivity improvements. This impairment will be reported as an exceptional item in the interim financial results to be released in February 2016.

‘Global taxation matters’ includes potential litigation and tax-related amounts.

BHP Billiton Operational Review for the half year ended 31 December 2015

2

Exceptional items to be recognised in the December 2015 half year
(US$ billion) Attributable profit
Impairment of Onshore US assets ~4.9
Global taxation matters 0.25 to 0.45

On 5 November 2015, the Samarco Mineração S.A (Samarco) iron ore operation in Minas Gerais, Brazil, experienced a breach of the Fundão tailings dam and Santarém water dam. Samarco is continuing to work on quantifying the estimated costs related to the tragedy and, therefore, it is too early to provide an estimate of the financial impact on BHP Billiton. We are continuing to work closely with Samarco and will provide an estimate as soon as we are in a position to do so. BHP Billiton’s 50 per cent interest in Samarco is recorded as an equity accounted investment as one line on the balance sheet. Any charges related to the event are expected to be classified as an exceptional item.

The Group’s adjusted effective tax rate[(3)] is expected to remain in the range of 33 per cent to 37 per cent in the December 2015 half year.

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

Marketing update

The average realised prices achieved for our major commodities are summarised in the table below. Iron ore shipments, on average, were linked to the index price for the month of shipment, with price differentials reflecting product quality. 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, with price differentials reflecting product quality.

Dec Dec June Dec H15
Dec H15		 Dec H15
2015 2014 2015 vs
vs		 vs
Average realised prices(i) Half Half Half FY15 Dec H14
Jun H15		 FY15
Oil (crude and condensate) (US$/bbl) 42 85 52 68 (51%)
(19%)		 (38%)
Natural gas (US$/Mscf)(ii) 2.91 4.21 3.29 3.77 (31%)
(12%)		 (23%)
US natural gas (US$/Mscf) 2.35 3.89 2.59 3.27 (40%)
(9%)		 (28%)
LNG (US$/Mscf) 8.24 13.76 9.40 11.65 (40%)
(12%)		 (29%)
Copper (US$/lb) 2.12 2.98 2.61 2.78 (29%)
(19%)		 (24%)
Iron ore (US$/wmt, FOB) 43 70 53 61 (39%)
(19%)		 (30%)
Hard coking coal (US$/t) 82 110 99 105 (25%)
(17%)		 (22%)
Weak coking coal (US$/t) 67 92 85 88 (27%)
(21%)		 (24%)
Thermal coal (US$/t)(iii) 49 61 56 58 (20%)
(13%)		 (16%)
Nickel metal (US$/t) 9,926 16,905 13,688 15,301 (41%)
(27%)		 (35%)

(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.

(ii) Includes internal sales

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

At 31 December 2015, the Group had 268 kt of outstanding copper sales that were revalued at a weighted average price of US$2.14 per pound. The final price of these sales will be determined over the remainder of the 2016 financial year. In addition, 363 kt of copper sales from the 2015 financial year were subject to a finalisation adjustment in the current period. The provisional pricing and finalisation adjustments will decrease earnings before interest and tax by US$336 million in the December 2015 half year.

BHP Billiton Operational Review for the half year ended 31 December 2015

3

Petroleum

Production

Production
Dec Dec Dec H15 Dec Q15 Dec Q15
2015 2015 vs vs vs
Half Qtr Dec H14 Dec Q14 Sep Q15
Crude oil, condensate and natural gas liquids (MMboe) 60.5 29.8 (3%) (4%) (3%)
Natural gas (bcf) 385.6 182.8 (7%) (6%) (10%)
Total petroleum production (MMboe) 124.7 60.2 (5%) (5%) (7%)

Total petroleum production – Total petroleum production for the December 2015 half year decreased by five per cent to 124.7 MMboe. Guidance for the 2016 financial year remains unchanged at 237 MMboe, as the strong performance by our Conventional business offset lower volumes following a further reduction in Onshore US activity, a third party gas plant outage in the Permian and the successful divestment of our gas business in Pakistan.

Crude oil, condensate and natural gas liquids – Crude oil, condensate and natural gas liquids production for the December 2015 half year decreased by three per cent to 60.5 MMboe.

Onshore US liquids volumes for the December 2015 half year rose by eight per cent to 26.3 MMboe, underpinned by an increase in liquids production from the Black Hawk and Permian of nine per cent and 78 per cent, respectively. However, a reduction in capital spend of approximately 25 per cent contributed to a three per cent decline in liquids production from the Black Hawk and Permian, relative to the September 2015 quarter. Given a further reduction in development activity, annual liquids volumes from these liquids-rich fields are now expected to show a modest decline year on year.

In our Conventional business, a nine per cent decrease in liquids production reflects the impact of industrial action at Bass Strait and natural field decline across the portfolio.

Natural gas – Natural gas production for the December 2015 half year declined by seven per cent to 386 bcf.

The decline primarily reflects lower Onshore US gas volumes as a result of the decision to defer development activity for longer-term value. This was partially offset by higher seasonal demand at Bass Strait.

Projects

Projects
Capital Initial
Project and expenditure production
ownership **(US$m) ** target date Capacity Progress
North West Shelf 400 CY16 To maintain LNG plant throughput from First production achieved in Q4 CY15.
Greater Western Flank-A the North West Shelf operations. Project completed ahead of schedule and
(Australia) under budget.
16.67% (non-operator)
Bass Strait Longford Gas 520 CY16 Designed to process approximately On schedule and budget. The overall
Conditioning Plant 400 MMcf/d of high-CO2gas. project is 76% complete.
(Australia)
50% (non-operator)
North West Shelf 314 CY19 To maintain LNG plant throughput from Project approved by all joint venture
Greater Western Flank-B the North West Shelf operations. partners in December 2015.
(Australia)
16.67% (non-operator)

Conventional capital expenditure of US$1.5 billion is expected for the 2016 financial year, and remains focused on high-return infill drilling opportunities in the Gulf of Mexico and Western Australia, as well as life extension projects at Bass Strait and North West Shelf.

BHP Billiton Operational Review for the half year ended 31 December 2015

4

Onshore US development activity

Onshore US drilling and development expenditure for the December 2015 half year was approximately US$850 million, less than half the December 2014 half year. Our operated rig count remained at seven in the December 2015 quarter, however, we plan a reduction of two additional rigs from the Black Hawk in the March 2016 quarter as we continue to improve drilling efficiency and defer development activity to preserve value. An update to the drilling and development expenditure budget for the 2016 financial year will be provided with the release of our interim results in February 2016.

release of our interim results in February 2016.
December 2015 half year
Liquids focused areas		 Gas focused areas
(December 2014 halfyear)
Eagle Ford
Permian
Haynesville
Fayetteville
Total
Capital expenditure(i)
US$ billion
0.6 (1.2)
0.2 (0.4)
0.0 (0.2)
0.0 (0.1)
0.8 (1.9)
Rig allocation
At period end
5 (18)
2 (5)
0 (3)
0 (0)
7 (26)
Net wells drilled and completed(ii)
Period total
74 (85)
19 (18)
4 (13)
10 (8)
107 (124)
Net productive wells
At period end
912 (732)
94 (49)
409 (406)
1,085 (1,021)
2,500 (2,208)

(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.

Petroleum exploration

Exploration and appraisal wells drilled during the December 2015 half year are summarised below.

Well Location Target BHP Billiton Spud date Water depth Total well Status
equity depth
Shenzi Gulf of Mexico Oil 44% 15 August 2015 1,309 m 9,332 m Hydrocarbons encountered;
North-ST2 GC609 (operator) Plugged and abandoned
Shenzi Gulf of Mexico Oil 72% 24 October 2015 1,309 m 9,577 m Hydrocarbons encountered;
North-ST3 GC609 (operator) Evaluation ongoing

Our Petroleum exploration is focused in the deepwater Gulf of Mexico, the Caribbean and the Beagle sub-basin off the coast of Western Australia. We are pursuing high-quality oil plays in these three focus areas and continue to invest opportunistically in future growth options. Since August 2015, BHP Billiton has acquired 26 blocks in the Western Gulf of Mexico Lease Sale with a 100 per cent working interest.

Petroleum exploration expenditure for the December 2015 half year was US$321 million, of which US$126 million was expensed. A US$600 million exploration program remains on plan for the 2016 financial year, largely focused on acreage access, seismic data acquisition across our three key focus areas and increased activity in our exploration drilling program.

BHP Billiton Operational Review for the half year ended 31 December 2015

5

Copper

Production

Production
Dec Dec Dec H15 Dec Q15 Dec Q15
2015 2015 vs vs vs
Half Qtr Dec H14 Dec Q14 Sep Q15
Copper (kt) 762 385 (6%) (9%) 2%
Zinc (t) 37,051 16,454 0% 1% (20%)
Silver (troy koz) 6,056 2,863 36% 37% (10%)
Uranium oxide concentrate (t) 2,547 1,386 31% 29% 19%

Copper – Total copper production for the December 2015 half year decreased by six per cent to 762 kt as continued strong operating performance across the business was offset by grade decline at Escondida, as anticipated. Guidance for the 2016 financial year remains unchanged at 1.5 Mt.

Escondida copper production for the December 2015 half year decreased by 18 per cent to 452 kt as record material mined, underpinned by improvements in truck availability and utilisation, was more than offset by a 25 per cent decline in grade. Increased ore milled during the period was enabled by a drawdown of historically high-cost, lower grade ore inventory. Production guidance for Escondida remains unchanged at approximately 940 kt for the 2016 financial year, as the ramp up of the Organic Growth Project 1 progresses ahead of plan and is expected to reach full capacity during the year. In the medium term, completion of the Escondida Water Supply project and the potential life extension of Los Colorados will enable utilisation of three concentrators to offset grade decline and support a strong recovery in production[(4)] .

Pampa Norte copper production for the December 2015 half year was broadly unchanged at 126 kt, as record ore milled and higher grade underpinned record production at Spence and offset lower recoveries at Cerro Colorado. Copper production at Cerro Colorado increased by 37 per cent in the December 2015 quarter relative to the September 2015 quarter as mining progressed through a zone of higher-grade ore. The Spence and Cerro Colorado triennial collective bargaining agreements were successfully concluded in December 2015 and January 2016 respectively. Production at Pampa Norte for the 2016 financial year is now expected to be ahead of the prior year despite a short period of industrial action at Cerro Colorado. In the short to medium term, the Spence Recovery Optimisation project will enable the full utilisation of approximately 200 ktpa of tankhouse capacity.

Olympic Dam copper production increased by 37 per cent from the December 2014 half year to a record 112 kt and reflects record ore milled and improved smelter utilisation following planned maintenance in the prior period. Copper grade increased by 35 per cent in the December 2015 quarter in line with the mine plan. Olympic Dam copper production is now on track to exceed 200 kt for the 2016 financial year.

Antamina copper production for the December 2015 half year increased by 36 per cent to 72 kt as higher grades and recoveries were supported by record material mined and milled. Antamina copper production of 136 kt is forecast for the 2016 financial year.

Project

Project
Capital Initial
Project and expenditure production
ownership (US$m) **target date ** Capacity Progress
Escondida Water Supply 3,430 CY17 New desalination facility to ensure On schedule and budget. The overall
(Chile) continued water supply to Escondida. project is 76% complete.
57.5%

BHP Billiton Operational Review for the half year ended 31 December 2015

6

Iron Ore

Production
Dec
2015
Half
Dec
2015
Qtr
Dec H15
vs
Dec H14		 Dec Q15
vs
Dec Q14
Dec Q15
vs
Sep Q15
Iron ore (kt)
118,275
56,960
4%		 1%
(7%)

Iron ore – Total iron ore production for the December 2015 half year increased by four per cent to 118 Mt. Production for the 2016 financial year is now expected to be 237 Mt, four per cent lower than prior guidance, and reflects the suspension of operations at Samarco.

WAIO production increased by six per cent in the December 2015 half year to a record 131 Mt (100 per cent basis), underpinned by the Jimblebar mining hub operating at full capacity and improved ore handling plant utilisation at Newman. This was partially offset by a train derailment and a power outage at the port which reduced volumes in the December 2015 quarter. WAIO guidance for the 2016 financial year remains unchanged at 270 Mt (100 per cent basis) subject to a benign wet season, as continued productivity is expected to offset the one-off operational issues from the December 2015 quarter. The ramp-up of additional capacity at the Jimblebar mining hub and further improvements in the efficiency of the integrated supply chain will deliver an increase in system capacity to 290 Mtpa over time.

Samarco production for the December 2015 half year decreased by 25 per cent to 11 Mt (100 per cent basis). Mining and processing operations at Samarco remain suspended following the breach of the Fundão tailings dam and Santarém water dam on 5 November 2015. Pellets continued to be shipped from port stockpiles during the December 2015 quarter with the final shipment of pellets expected in January 2016.

The sale of BHP Billiton’s 100 per cent interest in its Liberia iron ore project to Cavalla Resources was completed in October 2015.

BHP Billiton Operational Review for the half year ended 31 December 2015

7

Coal

Production

Production
Dec Dec Dec H15 Dec Q15 Dec Q15
2015 2015 vs vs vs
Half Qtr Dec H14 Dec Q14 Sep Q15
Metallurgical coal (kt) 20,934 10,485 (3%) (6%) 0%
Energy coal (kt) 19,384 9,537 (3%) (6%) (3%)

Metallurgical coal – Metallurgical coal production for the December 2015 half year decreased by three per cent to 21 Mt. Guidance for the 2016 financial year remains unchanged at 40 Mt.

Queensland Coal production declined in the December 2015 half year as record production at the Blackwater, Daunia, Caval Ridge and South Walker Creek mines was offset by a convergence event at the Broadmeadow mine, which has since resumed normal operations, and completion of longwall mining at the Crinum mine. The Crinum mine will transition into care and maintenance in the March 2016 quarter.

Energy coal – Energy coal production for the December 2015 half year decreased by three per cent to 19 Mt. Guidance for the 2016 financial year remains unchanged at 40 Mt[ (2)] .

Lower production for the December 2015 half year reflected continued drought conditions at Cerrejón and the impact of heavy rainfall at New South Wales Energy Coal. A 16 per cent increase in Navajo Coal volumes due to higher customer demand was offset by lower customer requirements for our San Juan product.

On 2 July 2015, BHP Billiton announced that the sale agreement for the San Juan Mine to Westmoreland Coal Company (WCC) had been executed. Regulatory approval has been received and the transaction is now expected to be completed in the March 2016 quarter, following agreement with both parties to ensure all closing conditions are met.

BHP Billiton Operational Review for the half year ended 31 December 2015

8

Other

Nickel production

Nickelproduction
Dec Dec Dec H15 Dec Q15 Dec Q15
2015 2015 vs vs vs
Half Qtr Dec H14 Dec Q14 Sep Q15
Nickel (kt) 37.3 15.2 (23%) (36%) (31%)

Nickel – Nickel West production for the December 2015 half year decreased by 23 per cent to 37.3 kt. Lower volumes reflected planned major outages at the Kalgoorlie smelter and Kwinana refinery during the December 2015 quarter and a reduction in third party ore delivered to the Kambalda concentrator.

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 54% 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 December 2015 half year was US$89 million, of which US$73 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Peru and the South-West United States.

Variance analysis relates to the relative performance of BHP Billiton and/or its operations during the December 2015 half year compared with the December 2014 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.

The following footnotes apply to this Operational Review:

  • (1) Underlying attributable profit and Underlying EBIT are used to reflect the underlying performance of BHP Billiton. Underlying attributable profit is Attributable profit excluding any exceptional items. Underlying EBIT is earnings before net finance costs, taxation and any exceptional items.

  • (2) Guidance assumes a full year of production from the San Juan mine.

  • (3) The Group’s adjusted effective tax rate excludes the influence of exchange rate movements and exceptional items.

  • (4) Subject to Escondida Owners Council approval.

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 Billiton Operational Review for the half year ended 31 December 2015

9

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BHP Billiton Operational Review for the half year ended 31 December 2015

10

PRODUCTION SUMMARY

BHP Billiton
DEC
MAR
JUN
SEP
DEC
interest
2014
2015
2015
2015
2015
~~Dec-14~~
~~Mar-15~~
~~Jun-15~~
~~Sep-15~~
~~Dec-15~~
QUARTER ENDED		 BHP Billiton
DEC
MAR
JUN
SEP
DEC
interest
2014
2015
2015
2015
2015
~~Dec-14~~
~~Mar-15~~
~~Jun-15~~
~~Sep-15~~
~~Dec-15~~
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Petroleum (1)
Petroleum
Crude oil, condensate and NGL (Mboe)
Onshore US
Conventional
Total
Natural gas (bcf)
Onshore US
Conventional
Total
Total petroleum production (MMboe)		 12,905
15,848
15,413
13,453
12,805
18,258
15,450
15,759
17,259
16,976
31,163
31,298
31,172
30,712
29,781
110.3
99.9
96.4
98.2
94.4
84.1
81.6
95.4
104.6
88.4
194.4
181.5
191.8
202.8
182.8
63.6
61.5
63.2
64.5
60.2		 26,258
24,365
34,235
37,743
60,493
62,108
192.6
223.9
193.0
189.4
385.6
413.3
124.7
131.0
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
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		 208.8
260.9
247.0
159.6
131.7
27.3
26.7
28.0
35.1
37.2
236.1
287.6
275.0
194.7
168.9
75.0
77.3
88.8
70.9
89.3
69.6
66.5
57.7
56.8
69.0
43.0
28.6
13.7
54.9
57.4
187.6
172.4
160.2
182.6
215.7
423.7
460.0
435.2
377.3
384.6
486
493
448
857
1,024
486
493
448
857
1,024
16,271
13,571
15,857
20,597
16,454
16,271
13,571
15,857
20,597
16,454
12,710
21,265
25,554
23,805
17,889
38,537
26,441
9,438
29,349
39,299
51,247
47,706
34,992
53,154
57,188
958
1,355
1,314
1,181
962
885
872
1,115
1,766
1,636
243
172
55
246
265
2,086
2,399
2,484
3,193
2,863
1,076
607
595
1,161
1,386
1,076
607
595
1,161
1,386
75
151
206
92
232
75
151
206
92
232		 291.3
408.2
72.3
53.0
363.6
461.2
160.2
144.3
125.8
125.4
112.3
82.2
398.3
351.9
761.9
813.1
1,881
1,119
1,881
1,119
37,051
37,007
37,051
37,007
41,694
34,690
68,648
68,901
110,342
103,591
2,143
2,117
3,402
1,839
511
497
6,056
4,453
2,547
1,942
2,547
1,942
324
115
324
115

BHP Billiton Operational Review for the half year ended 31 December 2015

11

PRODUCTION SUMMARY

PRODUCTION SUMMARY PRODUCTION SUMMARY
BHP Billiton
DEC
MAR
JUN
SEP
DEC
interest
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
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		 16,012
14,916
16,062
18,006
17,003
11,314
13,201
12,214
12,163
11,723
17,694
16,798
17,452
16,886
15,960
2,813
4,513
5,462
3,262
4,852
4,755
5,965
5,159
7,259
5,757
3,764
3,586
3,737
3,739
1,665
56,352
58,979
60,086
61,315
56,960		 35,009
32,719
23,886
24,579
32,846
34,301
8,114
6,784
13,016
7,870
5,404
7,190
118,275
113,443
Coal
Metallurgical coal
Production (kt) (7)
BMA
50%
BHP Billiton Mitsui Coal(8)
80%
Haju (9)
75%
Total
Energy coal
Production (kt)
USA
100%
Australia
100%
Colombia
33.3%
Total		 9,009
7,602
9,023
8,087
8,207
2,128
2,057
2,370
2,347
2,191
-
-
-
15
87
11,137
9,659
11,393
10,449
10,485
2,512
2,247
2,574
2,676
2,632
4,608
5,252
5,086
4,644
4,277
3,003
2,975
2,944
2,527
2,628
10,123
10,474
10,604
9,847
9,537		 16,294
17,237
4,538
4,332
102
-
20,934
21,569
5,308
5,202
8,921
9,360
5,155
5,372
19,384
19,934
Other
Nickel
Saleable production (kt)
Nickel West
100%
Total		 23.7
21.9
19.3
22.1
15.2
23.7
21.9
19.3
22.1
15.2		 37.3
48.7
37.3
48.7

(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 Billiton 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 Billiton 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 Billiton interest in saleable production is 80%.

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

BHP Billiton Operational Review for the half year ended 31 December 2015

12

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
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)
Stybarrow (2)
Crude oil and condensate
(Mboe)
Total petroleum products
(MMboe)
Pyrenees
Crude oil and condensate
(Mboe)
Total petroleum products
(MMboe)
Other Australia(3)
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Atlantis(4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Mad Dog (4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Shenzi (4)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Eagle Ford (5)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Permian (5)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Haynesville(5) (6)
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)		 2,284
1,156
1,707
1,877
1,390
1,512
961
1,548
2,091
1,307
18.8
18.3
31.9
38.7
23.9
6.9
5.2
8.6
10.4
6.7
1,395
1,355
1,215
1,362
1,423
273
268
198
227
235
33.4
32.8
29.9
33.9
34.9
7.2
7.1
6.4
7.2
7.5
248
194
93
(8)
-
0.2
0.2
0.1
(0.0)
-
1,901
1,709
1,435
2,096
2,331
1.9
1.7
1.4
2.1
2.3
11
11
13
13
9
13.0
14.1
16.0
16.6
14.4
2.2
2.4
2.7
2.8
2.4
3,740
3,645
3,110
3,637
4,257
294
245
209
231
278
2.3
1.7
1.7
1.6
2.0
4.4
4.2
3.6
4.1
4.9
877
720
651
588
648
42
37
20
23
41
0.1
0.1
0.1
0.1
0.1
0.9
0.8
0.7
0.6
0.7
3,502
3,283
3,369
3,277
3,185
260
235
174
236
269
0.8
0.7
0.7
0.7
0.8
3.9
3.6
3.7
3.6
3.6
8,098
10,837
9,363
7,700
7,156
3,638
3,868
4,183
3,799
3,806
26.3
27.7
26.1
25.8
25.4
16.1
19.3
17.9
15.8
15.2
807
856
1,447
1,481
1,354
358
287
420
473
488
2.8
2.1
3.0
3.9
3.4
1.6
1.5
2.4
2.6
2.4
4
-
-
-
1
43.6
37.8
35.4
36.4
34.7
7.3
6.3
5.9
6.1
5.8		 3,267
5,102
3,398
3,673
62.6
52.1
17.1
17.5
2,785
2,896
462
566
68.8
70.3
14.7
15.2
(8)
473
(0.0)
0.5
4,427
4,010
4.4
4.0
22
28
31.0
29.4
5.2
4.9
7,894
7,915
509
542
3.6
4.0
9.0
9.1
1,236
1,267
64
63
0.2
0.2
1.3
1.4
6,462
7,032
505
531
1.5
1.6
7.2
7.8
14,856
15,158
7,605
7,059
51.2
54.8
31.0
31.4
2,835
1,408
961
720
7.3
5.8
5.0
3.1
1
20
71.1
89.3
11.9
14.9

BHP Billiton Operational Review for the half year ended 31 December 2015

13

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Petroleum (continued)(1)
Fayetteville (5)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Trinidad/Tobago
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Other Americas (4) (7)
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
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)		 37.6
32.3
31.9
32.1
30.9
6.3
5.4
5.3
5.4
5.2
227
196
562
242
185
7.8
7.2
9.1
7.6
7.4
1.5
1.4
2.1
1.5
1.4
500
348
348
361
360
25
14
11
12
16
0.2
0.2
0.1
0.2
0.2
0.6
0.4
0.4
0.4
0.4
77
64
76
59
74
7
7
83
(4)
27
1.4
1.1
1.0
1.0
1.0
0.3
0.3
0.3
0.2
0.3
1,050
975
912
916
922
1.1
1.0
0.9
0.9
0.9
33
27
25
23
19
6.3
5.4
4.9
4.2
3.7
1.1
0.9
0.8
0.7
0.6		 63.0
74.0
10.5
12.3
427
479
15.0
16.6
2.9
3.2
721
849
28
63
0.4
0.4
0.8
1.0
133
111
23
11
2.0
2.1
0.5
0.5
1,838
2,061
1.8
2.1
42
71
7.9
12.7
1.4
2.2
Total petroleum products
Crude oil and condensate
Onshore US
(Mboe)
Conventional
(Mboe)
Total
(Mboe)
NGL
Onshore US
(Mboe)
Conventional
(Mboe)
Total
(Mboe)
Natural gas
Onshore US
(bcf)
Conventional
(bcf)
Total
(bcf)		 8,909
11,693
10,810
9,181
8,511
15,845
13,683
13,516
14,443
14,803
24,754
25,376
24,326
23,624
23,314
3,996
4,155
4,603
4,272
4,294
2,413
1,767
2,243
2,816
2,173
6,409
5,922
6,846
7,088
6,467
110.3
99.9
96.4
98.2
94.4
84.1
81.6
95.4
104.6
88.4
194.4
181.5
191.8
202.8
182.8		 17,692
16,586
29,246
32,294
46,938
48,880
8,566
7,779
4,989
5,449
13,555
13,228
192.6
223.9
193.0
189.4
385.6
413.3

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

(2) Stybarrow ceased production on 26 June 2015.

(3) Other Australia includes Minerva and Macedon.

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

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

(6) Haynesville includes North Louisiana Conventional.

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

BHP Billiton Operational Review for the half year ended 31 December 2015

14

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Copper
Escondida, Chile (1)
Material mined
(kt)
103,750
91,139
96,337
110,067
109,200
Sulphide ore milled
(kt)
18,354
21,382
22,909
22,820
18,076
Average copper grade
(%)
1.45%
1.49%
1.32%
1.00%
0.99%
Production ex mill
(kt)
215.5
266.3
249.6
169.7
142.8
Production
Payable copper
(kt)
208.8
260.9
247.0
159.6
131.7
Copper cathode (EW)
(kt)
75.0
77.3
88.8
70.9
89.3
Payable gold concentrate
(troy oz)
12,710
21,265
25,554
23,805
17,889
Payable silver concentrate
(troy koz)
958
1,355
1,314
1,181
962
Sales
Payable copper
(kt)
203.2
269.6
243.0
157.6
123.8
Copper cathode (EW)
(kt)
79.8
64.9
101.4
63.8
101.1
Payable gold concentrate
(troy oz)
12,710
21,265
25,554
23,805
17,889
Payable silver concentrate
(troy koz)
958
1,355
1,314
1,181
962
(1) Shown on a 100% basis. BHP Billiton interest in saleable production is 57.5%.
Metals production is payable metal unless otherwise stated.		 219,267
197,224
40,896
39,005
1.00%
1.32%
312.5
421.0
291.3
408.2
160.2
144.3
41,694
34,690
2,143
2,117
281.4
406.5
164.9
143.9
41,694
34,690
2,143
2,118
Pampa Norte, Chile
Cerro Colorado
Material mined
(kt)
16,124
15,030
14,211
13,870
14,930
Ore milled
(kt)
4,446
4,501
4,798
4,703
4,856
Average copper grade
(%)
0.70%
0.68%
0.70%
0.64%
0.82%
Production
Copper cathode (EW)
(kt)
20.6
21.5
20.4
13.7
18.8
Sales
Copper cathode (EW)
(kt)
21.0
22.0
20.8
13.0
19.7
Spence
Material mined
(kt)
23,422
21,429
21,062
22,922
21,593
Ore milled
(kt)
4,560
3,783
4,082
4,919
5,146
Average copper grade
(%)
1.20%
1.06%
1.24%
1.41%
1.30%
Production
Copper cathode (EW)
(kt)
49.0
45.0
37.3
43.1
50.2
Sales
Copper cathode (EW)
(kt)
51.8
45.0
40.6
38.2
56.1		 28,800
31,641
9,559
8,635
0.73%
0.73%
32.5
36.3
32.7
41.0
44,515
47,660
10,065
8,969
1.35%
1.26%
93.3
89.1
94.3
88.7

BHP Billiton Operational Review for the half year ended 31 December 2015

15

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%)
(kt)
43,793
49,787
56,944
56,793
52,130
Sulphide ore milled (100%)
(kt)
13,594
12,880
14,831
14,300
14,184
Average head grades
- Copper
(%)
0.74%
0.79%
0.74%
0.88%
0.92%
- Zinc
(%)
0.66%
0.69%
0.56%
0.79%
0.55%
Production
Payable copper
(kt)
27.3
26.7
28.0
35.1
37.2
Payable zinc
(t)
16,271
13,571
15,857
20,597
16,454
Payable silver
(troy koz)
885
872
1,115
1,766
1,636
Payable lead
(t)
486
493
448
857
1,024
Payable molybdenum
(t)
75
151
206
92
232
Sales
Payable copper
(kt)
29.8
26.5
26.3
30.8
42.9
Payable zinc
(t)
21,459
15,545
13,645
18,747
20,423
Payable silver
(troy koz)
1,026
915
911
1,522
2,048
Payable lead
(t)
711
461
624
266
1,056
Payable molybdenum
(t)
90
163
157
156
138		 108,923
98,468
28,484
25,964
0.90%
0.77%
0.67%
0.75%
72.3
53.0
37,051
37,007
3,402
1,839
1,881
1,119
324
115
73.7
56.1
39,170
34,371
3,570
1,922
1,322
1,031
294
140
Olympic Dam, Australia
Material mined(1)
(kt)
2,667
2,186
1,773
2,357
2,372
Ore milled
(kt)
2,776
1,477
1,469
2,727
2,767
Average copper grade
(%)
1.70%
1.88%
1.97%
1.64%
2.22%
Average uranium grade
(kg/t)
0.52
0.56
0.62
0.60
0.62
Production
Copper cathode (ER and EW)
(kt)
43.0
28.6
13.7
54.9
57.4
Uranium oxide concentrate
(t)
1,076
607
595
1,161
1,386
Refined gold
(troy oz)
38,537
26,441
9,438
29,349
39,299
Refined silver
(troy koz)
243
172
55
246
265
Sales
Copper cathode (ER and EW)
(kt)
43.0
30.7
14.5
52.5
57.3
Uranium oxide concentrate
(t)
1,125
877
818
677
1,013
Refined gold
(troy oz)
34,938
31,938
9,064
25,598
39,168
Refined silver
(troy koz)
238
206
61
213
265		 4,729
5,359
5,494
4,982
1.93%
1.82%
0.61
0.56
112.3
82.2
2,547
1,942
68,648
68,901
511
497
109.8
82.1
1,690
1,973
64,766
65,645
478
465

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

BHP Billiton Operational Review for the half year ended 31 December 2015

16

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Iron Ore
Pilbara, Australia
Production
Newman
(kt)
16,012
14,916
16,062
18,006
17,003
Area C Joint Venture
(kt)
11,314
13,201
12,214
12,163
11,723
Yandi Joint Venture
(kt)
17,694
16,798
17,452
16,886
15,960
Jimblebar(1)
(kt)
2,813
4,513
5,462
3,262
4,852
Wheelarra
(kt)
4,755
5,965
5,159
7,259
5,757
Total production
(kt)
52,588
55,393
56,349
57,576
55,295
Total production (100%)
(kt)
61,371
64,372
65,330
67,161
64,197
Sales
Lump
(kt)
12,661
12,617
13,234
14,003
13,886
Fines
(kt)
41,185
42,635
43,430
43,587
40,917
Total
(kt)
53,846
55,252
56,664
57,590
54,803
Total sales (100%)
(kt)
62,848
64,201
65,703
67,177
63,625
(1) Shown on a 100% basis. BHP Billiton interest in saleable production is 85%.
Iron ore production and sales are reported on a wet tonnes basis.		 35,009
32,719
23,886
24,579
32,846
34,301
8,114
6,784
13,016
7,870
112,871
106,253
131,358
123,807
27,889
25,427
84,504
82,818
112,393
108,245
130,802
126,151
Samarco, Brazil
Production
(kt)
3,764
3,586
3,737
3,739
1,665
Sales
(kt)
4,151
2,876
3,627
3,531
2,425		 5,404
7,190
5,956
7,454

BHP Billiton Operational Review for the half year ended 31 December 2015

17

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Coal
Queensland Coal
Production (1)
BMA
Blackwater
(kt)
1,775
1,569
1,873
1,803
1,861
Goonyella
(kt)
2,350
1,951
2,065
1,868
1,941
Peak Downs
(kt)
1,235
1,263
1,469
1,164
1,323
Saraji
(kt)
1,257
1,033
1,194
1,037
1,000
Gregory Joint Venture
(kt)
994
607
885
707
609
Daunia
(kt)
617
489
649
698
616
Caval Ridge
(kt)
781
690
888
810
857
Total BMA
(kt)
9,009
7,602
9,023
8,087
8,207
BHP Billiton Mitsui Coal
(2)
South Walker Creek
(kt)
1,236
1,282
1,384
1,511
1,275
Poitrel
(kt)
892
775
986
836
916
Total BHP Billiton Mitsui Coal
(kt)
2,128
2,057
2,370
2,347
2,191
Total Queensland Coal
(kt)
11,137
9,659
11,393
10,434
10,398
Sales
Coking coal
(kt)
8,379
7,118
7,616
7,015
7,642
Weak coking coal
(kt)
2,670
2,720
2,850
3,246
2,695
Thermal coal
(kt)
171
182
375
86
290
Total
(kt)
11,220
10,020
10,841
10,347
10,627
Coal production is reported on the basis of saleable product.		 3,664
3,552
3,809
4,494
2,487
2,379
2,037
2,279
1,316
1,802
1,314
1,245
1,667
1,486
16,294
17,237
2,786
2,627
1,752
1,705
4,538
4,332
20,832
21,569
14,657
15,685
5,941
5,529
376
214
20,974
21,428

Coal Coal production is reported on the basis of saleable product.

(1) Production figures include some thermal coal.

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

Haju, Indonesia[(1)] Production (kt) - - -

15 87 102 -

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

New Mexico, USA
Production
Navajo Coal(1)
(kt)
San Juan Coal
(kt)
Total
(kt)
Sales thermal coal - local utility		 1,064
1,156
1,395
1,270
1,403
1,448
1,091
1,179
1,406
1,229
2,512
2,247
2,574
2,676
2,632
2,592
2,177
2,539
2,671
2,661		 2,673
2,307
2,635
2,895
5,308
5,202
5,332
5,315

(1) BHP Billiton completed the sale of Navajo Mine on 30 December 2013. As BHP Billiton will retain control of the mine until full consideration is received, production will continue to be reported by the Group.

NSW Energy Coal, Australia
Production
(kt)
Sales
Export thermal coal
(kt)
Inland thermal coal
(kt)
Total
(kt)		 4,608
5,252
5,086
4,644
4,277
4,625
4,897
4,550
4,130
5,081
228
337
286
253
229
4,853
5,234
4,836
4,383
5,310		 8,921
9,360
9,211
9,412
482
599
9,693
10,011
Cerrejón, Colombia
Production
(kt)
Sales thermal coal - export
(kt)		 3,003
2,975
2,944
2,527
2,628
2,732
3,005
2,766
2,853
2,565		 5,155
5,372
5,418
5,809

BHP Billiton Operational Review for the half year ended 31 December 2015

18

PRODUCTION AND SALES REPORT

DEC
MAR
JUN
SEP
DEC
2014
2015
2015
2015
2015
QUARTER ENDED		 YEAR TO DATE
DEC
DEC
2015
2014
Other
Nickel West, Australia
Production
Nickel contained in concentrate
(kt)
1.7
1.9
1.5
0.7
0.2
Nickel contained in finished matte
(kt)
5.5
6.1
3.9
5.0
2.6
Nickel metal
(kt)
16.5
13.9
13.9
16.4
12.4
Total nickel production
(kt)
23.7
21.9
19.3
22.1
15.2
Sales
Nickel contained in concentrate
(kt)
1.6
2.0
1.6
0.7
0.2
Nickel contained in finished matte
(kt)
7.4
6.4
4.4
4.2
3.7
Nickel metal
(kt)
17.5
13.5
15.7
15.6
12.1
Total nickel sales
(kt)
26.5
21.9
21.7
20.5
16.0
Nickel production is reported on the basis of saleable product		 0.9
3.9
7.6
14.6
28.8
30.2
37.3
48.7
0.9
3.7
7.9
14.0
27.7
29.4
36.5
47.1

BHP Billiton Operational Review for the half year ended 31 December 2015

19

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