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BHP Group Limited Interim / Quarterly Report 2019

Oct 16, 2018

14787_rns_2018-10-16_4f203c30-a621-4370-bd99-43f4ee3c73d4.pdf

Interim / Quarterly Report

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Release Time IMMEDIATE Date 17 October 2018 Release Number 19/18

BHP OPERATIONAL REVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2018

  • Group copper equivalent production increased by 2% in the September 2018 quarter despite maintenance across a number of operations. Volumes for the 2019 financial year are expected to be broadly in line with last year[(1)] .

  • Full year production guidance remains unchanged for petroleum, iron ore, metallurgical coal and energy coal. Total copper production guidance reduced by approximately 3% to between 1,620 and 1,705 kt reflecting lower volumes now expected at Spence (electro-winning plant outage) and Olympic Dam (acid plant outage).

  • Unit cost guidance[(2)] maintained for all major assets for the 2019 financial year.

  • All major projects under development are tracking to plan.

  • In Petroleum, the Victoria-1 and Bongos-2 exploration wells in Trinidad and Tobago, and the Samurai-2 well in the US Gulf of Mexico, encountered hydrocarbons. A sidetrack of the Samurai-2 well is currently being drilling to further appraise the discovery.

  • Onshore US sale process is on track to be completed by the end of October 2018, with the Fayetteville transaction completed on 29 September 2018. The net proceeds from the sale of our Onshore US assets are expected to be returned to shareholders.

Production Sep Q18 vs Sep Q17 Sep Q18 commentary
Petroleum (MMboe) 33 (1%) Higher natural gas volumes at Trinidad and Tobago offset by natural field decline and
planned maintenance at Pyrenees.
Copper (kt) 409 1% Higher volumes at Escondida supported by the utilisation of the three concentrators,
offset by the impact of planned maintenance and a fire at Spence, and an acid plant
outage at Olympic Dam.
Iron ore (Mt) 61 10% Higher volumes at WAIO supported by record quarterly production at Jimblebar and
improved reliability across our rail network and port operations.
Metallurgical coal (Mt) 10 (2%) Record stripping and truck performance at BMA offset by the impact of planned
maintenance across both port and mine operations.
Energy coal (Mt) 7 (1%) Improved stripping fleet performance at New South Wales Energy Coal offset by lower
bypass coal and a higher average strip ratio.

BHP Chief Executive Officer, Andrew Mackenzie, said: “We delivered a two per cent increase in copper equivalent production despite maintenance at a number of our operations. We are on track to meet guidance for the 2019 financial year across our commodities, except copper where we have reduced production guidance slightly following outages at Olympic Dam in Australia and Spence in Chile. In petroleum, we have extended our exploration success and encountered hydrocarbons in three wells. The Onshore US sale process is progressing to plan and is expected to be completed by the end of October 2018.”

BHP Operational Review for the quarter ended 30 September 2018

1

Summary

Operational performance

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

Production
Sep Q18
Sep Q18
vs
Sep Q17
Sep Q18
vs
Jun Q18
Previous
FY19
guidance
Current
FY19
guidance
Continuing operations
Petroleum – Conventional (MMboe)
33
(1%)
15%
113 - 118
113 - 118		 Unchanged
Copper (kt)
409
1%
(12%)
1,675 - 1,770
1,620 - 1,705		 Reduced
Escondida (kt)
295
10%
(7%)
1,120 - 1,180
1,120 - 1,180		 Unchanged
Other copper(i)(kt)
114
(16%)
(23%)
555 - 590
500 - 525
Olympic Dam now 170 - 180 kt;
previously 200 - 220 kt
Spence now 160 - 175 kt;
previously 185 - 200 kt
Iron ore (Mt)
61
10%
(3%)
241 - 250
241 - 250
Unchanged
WAIO (100% basis) (Mt)
69
8%
(4%)
273 - 283
273 - 283
Unchanged
Metallurgical coal (Mt)
10
(2%)
(14%)
43 - 46
43 - 46
Unchanged
Energy coal (Mt)
7
(1%)
(26%)
28 - 29
28 - 29
Unchanged
Discontinued operations
Petroleum – Onshore US (MMboe)
20
16%
(2%)
Refer footnote(ii)

(i) Other copper comprises Pampa Norte (including Cerro Colorado production for the first half of the 2019 financial year), Olympic Dam and Antamina.

(ii) Given our announcement to exit Onshore US, no annual guidance for the 2019 financial year for these assets will be provided; however, until sale completion, we expect a production run rate broadly consistent with the second half of the 2018 financial year.

Major development projects

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

Corporate update

On 18 September 2018, BHP released its Economic Contribution Report which shows the Group’s direct economic contribution globally in the 2018 financial year was US$33.9 billion. This includes US$7.8 billion in taxes, royalties and other payments to governments. BHP’s adjusted effective tax rate in the 2018 financial year was 31.4 per cent. When royalties are included, the rate was 39.9 per cent.

BHP Operational Review for the quarter ended 30 September 2018

2

Petroleum

Production

Production
Sep Q18 Sep Q18
vs vs
Sep Q18 Sep Q17 Jun Q18
Crude oil, condensate and natural gas liquids (MMboe) 14 (7%) 4%
Natural gas (bcf) 112 5% 24%
Total petroleum production (MMboe) 33 (1%) 15%

Petroleum - Total Conventional petroleum production was broadly flat at 33 MMboe. Guidance for the 2019 financial year remains unchanged at between 113 and 118 MMboe.

Crude oil, condensate and natural gas liquids production declined by seven per cent to 14 MMboe due to natural field decline across the portfolio and a 70 day planned dry dock maintenance at Pyrenees, which was completed on schedule and budget in September 2018. This decline was partially offset by higher uptimes at our Gulf of Mexico assets.

Natural gas production increased by five per cent to 112 bcf, reflecting increased tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract. This was partially offset by natural field decline across the portfolio.

Projects

Capital Initial
Project and expenditure production
ownership **(US$m) ** target date Capacity Progress
North West Shelf Greater 216 CY19 To maintain LNG plant throughput from Ahead of schedule and budget. The
Western Flank-B the North West Shelf operations. overall project is 95% 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 31% complete.
23.9% (non-operator) barrels of crude oil per day.

Study work continues on the Atlantis Phase 3, Ruby and West Barracouta projects and they remain on track.

Petroleum exploration

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

Well Location Target Formation BHP Spud date Water depth Total well Status
age equity depth
Samurai-2 US Gulf of Oil Miocene 50% 16 April 2018 1,088 m 9,777 m Hydrocarbons encountered;
Mexico GC432 (Murphy plugged and abandoned
Operator)
Samurai-2 US Gulf of Oil Drilling 50% 25 August 2018 1,088 m 9,178 m Drilling ahead
ST01 Mexico GC476 ahead (Murphy
Operator)
Victoria-1 Trinidad & Gas Pleistocene/
65%		 12 June 2018 1,828 m 3,282 m Hydrocarbons encountered;
Tobago
Block TTDAA 5		 Pliocene (BHP
Operator)		 plugged and abandoned
Bongos-1 Trinidad & Gas Pliocene/ 70% 20 July 2018 1,909 m 2,469 m Plugged and abandoned due
Tobago
Block TTDAA 14		 Miocene (BHP
Operator)		 to mechanical failure
Bongos-2 Trinidad & Gas Pliocene/ 70% 22 July 2018 1,910 m 5,151 m Hydrocarbons encountered;
Tobago
Block TTDAA 14		 Miocene (BHP
Operator)		 plugged and abandoned
Concepcion-1 Trinidad & Gas Drilling 65% 30 September 1,721 m 1,817 m Drilling ahead
Tobago
Block TTDAA 5		 ahead (BHP
Operator)		 2018

BHP Operational Review for the quarter ended 30 September 2018

3

In the US Gulf of Mexico, the Samurai-2 exploration well encountered hydrocarbons in multiple horizons not previously observed by the Wildling-2 exploration well and was plugged and abandoned on 23 August 2018. A sidetrack of the Samurai-2 well commenced on 25 August 2018 to further appraise the discovery and is currently drilling ahead. In the Western US Gulf of Mexico, we commenced the acquisition of an Ocean Bottom Node seismic survey.

In Trinidad and Tobago, we continued with Phase 2 of our deepwater exploration drilling campaign. The Victoria-1 exploration well, which further assessed the commercial potential of the Magellan play in our Southern licence area in Trinidad and Tobago, encountered gas and was plugged and abandoned on 18 July 2018. Following the Victoria-1 well, the Bongos-1 exploration well was spud on 20 July 2018 and experienced mechanical difficulty shortly after spud. The Bongos-2 exploration well was spud on 22 July 2018 and encountered hydrocarbons. The Bongos-2 and Bongos-1 wells were plugged and abandoned on 23 September 2018 and 26 September 2018 respectively. Following the Bongos-2 well, the Concepcion-1 well was spud on 30 September 2018 to further test the Magellan play and is currently drilling ahead.

In Mexico, we expect to begin drilling the first appraisal well at Trion in the December 2018 quarter. In Australia, the final processed data of the Exmouth sub-basin 3D seismic data has been received.

A US$750 million exploration and appraisal program is being executed for the 2019 financial year. Petroleum exploration expenditure for the September 2018 quarter was US$133 million, of which US$55 million was expensed.

Onshore US – Discontinued operations

Following BHP’s sale of the Onshore US assets, as announced on 27 July 2018, these assets have been presented as discontinued operations. The effective date at which the right to economic profits transfers to the purchasers is 1 July 2018.

Onshore US production for the September 2018 quarter increased by 16 per cent to 20 MMboe as a result of additional wells put online in Haynesville, Permian and Eagle Ford. Drilling and development expenditure for the September 2018 quarter was US$299 million. Our operated rig count remained unchanged at five, with two rigs at Eagle Ford, two rigs at Permian and one at Haynesville. No annual guidance for the 2019 financial year for these assets will be provided; however until sale completion, we expect a production run rate broadly consistent with the second half of the 2018 financial year.

On 29 September 2018, BHP announced the completion of the sale of its Fayetteville Onshore US gas assets to a wholly owned subsidiary of Merit Energy Company. Completion of the sale of BHP’s interests in the Eagle Ford, Haynesville and Permian Onshore US oil and gas assets to BP America Production Company, a subsidiary of BP Plc, is expected to occur by the end of October 2018.

BHP Operational Review for the quarter ended 30 September 2018

4

Copper

Production

Production
Sep Q18 Sep Q18
vs vs
Sep Q18 Sep Q17 Jun Q18
Copper (kt) 409 1% (12%)
Zinc (t) 30,558 5% (15%)
Uranium oxide concentrate (t) 559 (36%) (50%)

Copper – Total copper production for the September 2018 quarter was broadly flat at 409 kt. Guidance for the 2019 financial year has been reduced to between 1,620 and 1,705 kt and reflects lower volumes at Spence and Olympic Dam.

Escondida copper production increased by 10 per cent to 295 kt driven by higher copper concentrate output. This is a result of the diversion of ore feed from sulphide leach to the three concentrators to maximise their utilisation, which offset the impact of expected lower copper grades and adverse weather conditions in the quarter. Guidance remains unchanged at between 1,120 and 1,180 kt in the 2019 financial year. During the period, we successfully completed negotiations with Escondida Union N°1 and signed a new collective agreement, effective for 36 months from 1 August 2018.

Pampa Norte copper production decreased by 25 per cent to 43 kt as a result of lower volumes from Spence. The decrease reflected a lower stacking rate in May and June 2018 as a result of planned maintenance, and a production outage following a fire at the electro-winning plant in September 2018. Production guidance for Spence has been reduced from between 185 and 200 kt to between 160 and 175 kt, with volumes weighted to the second half as a return to full capacity is expected during the December 2018 quarter. Since the fire, mining and stacking operations at Spence have continued, accumulating copper in the system, which will be recovered over the coming years as tankhouse capacity becomes available. On 19 June 2018, BHP entered into an agreement to sell Cerro Colorado to EMR Capital[(3)] . The transaction is expected to close during the December 2018 quarter, subject to financing and customary closing conditions. During the period, we successfully completed the advanced negotiation with Cerro Colorado Union N°1 (operators and maintenance), with the new agreement effective for 36 months from 1 September 2018.

Olympic Dam copper production decreased by 21 per cent to 33 kt as a result of an unplanned acid plant outage in August 2018. Surface operations remain suspended as remediation works continue on the gas converter, sulphur burner and waste heat boiler in the acid plant. Surface operations are expected to recommence at the end of October 2018 and ramp up to full capacity during November 2018. As a result, production guidance for the 2019 financial year has been reduced from between 200 and 220 kt to between 170 and 180 kt. Underground operations have been unaffected with total development of nine kilometres achieved in the September 2018 quarter and progression into the higher ore grade Southern Mine Area continuing.

Antamina copper production increased by three per cent to 37 kt due to higher head grades. Production guidance for the 2019 financial year remains unchanged at approximately 135 kt for copper and approximately 85 kt for zinc.

Projects

Projects
Capital Initial
Project and expenditure production
ownership **(US$m) ** target date Capacity Progress
Spence Growth Option 2,460 FY21 New 95 ktpd concentrator is expected On schedule and budget. The overall
(Chile) to increase Spence’s payable copper in project is 23% complete.
100% concentrate production by
approximately 185 ktpa in the first 10
years of operation and extend the
mining operations by more than 50
years.

BHP Operational Review for the quarter ended 30 September 2018

5

Iron Ore

Production

Production
Sep Q18 Sep Q18
vs vs
Sep Q18 Sep Q17 Jun Q18
Iron ore (kt) 61,391 10% (3%)

Iron ore – Total iron ore production increased by 10 per cent to 61 Mt or 69 Mt on a 100 per cent basis. Guidance for the 2019 financial year remains unchanged at between 241 and 250 Mt, or between 273 and 283 Mt on a 100 per cent basis.

At WAIO, increased volumes were supported by record production at Jimblebar and improved reliability across our rail network and port operations. As expected, production was lower than the June 2018 quarter as we optimised maintenance schedules across the supply chain and implemented a program of work to further improve port reliability and performance.

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

Projects

Projects
Capital Initial
Project and expenditure production
ownership **(US$m) ** target date Capacity Progress
South Flank 3,061 CY21 Sustaining iron ore mine to replace On schedule and budget. The overall
(Australia) production from the 80 Mtpa (100 per project is 15% complete.
85% cent basis) Yandi mine.
Coal
Production Sep Q18
vs
Jun Q18
(14%)
(26%)
Sep Q18
Sep Q18
vs
Sep Q17
Metallurgical coal (kt)
10,358
(2%)
Energy coal (kt)
6,640
(1%)

Metallurgical coal – Metallurgical coal production was down two per cent to 10 Mt. Guidance for the 2019 financial year remains unchanged at between 43 and 46 Mt, with volumes weighted to the second half of the year.

Queensland Coal production reflected planned maintenance across both port and mine operations. This was partially offset by record stripping and truck performance at BMA, utilisation of latent dragline capacity at Caval Ridge and higher wash-plant throughput at Poitrel following the purchase of the Red Mountain processing facility. The maintenance program of work is expected to continue through the December 2018 quarter. A longwall move at Broadmeadow is scheduled for the December 2018 quarter.

The Caval Ridge Southern Circuit project is progressing according to plan with the conveying of first coal expected in October 2018.

Energy coal – Energy coal production decreased by one per cent to 7 Mt. Guidance for the 2019 financial year is unchanged at approximately 28 to 29 Mt.

New South Wales Energy Coal production decreased by six per cent as improved stripping fleet performance was offset by lower bypass coal and a higher average strip ratio, consistent with the mine plan. Cerrejón production increased by six per cent as the prior quarter was impacted by adverse weather conditions.

BHP Operational Review for the quarter ended 30 September 2018

6

Other

Nickel production

Nickelproduction
Sep Q18 Sep Q18
vs vs
Sep Q18 Sep Q17 Jun Q18
Nickel (kt) 21.4 (8%) (16%)

Nickel – Nickel West production decreased by eight per cent to 21 kt. On 23 September 2018, operations at the Kalgoorlie smelter were suspended following a fire which caused damage to a localised area in the furnace building. The smelter returned to operation on 1 October 2018 and is expected to ramp up to full capacity from early November 2018. Planned maintenance at the Kwinana refinery was brought forward to align with the smelter outage and, as a result, production guidance for the 2019 financial year remains unchanged and is expected to be broadly in line with the 2018 financial year.

Potash project

Potashproject
Project and Investment
ownership (US$m) Scope Progress
Jansen Potash 2,700 Investment to finish the excavation and lining of The project is 81% complete and within the
(Canada) the production and service shafts, and to continue approved budget.
100% the installation of essential surface infrastructure
and utilities.

Minerals exploration

Minerals exploration expenditure for the September 2018 quarter was US$40 million, of which US$30 million was expensed. Greenfield minerals exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Peru, Canada, South Australia and the South-West United States. Consistent with our exploration focus on copper, in September 2018, BHP acquired an initial 6.1[(4)] per cent interest in SolGold Plc (SolGold), the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador. On 15 October 2018, BHP entered into an agreement to acquire an additional 100 million shares in SolGold, which would bring our total interest to approximately 11.2 per cent.

Variance analysis relates to the relative performance of BHP and/or its operations during the September 2018 quarter compared with the September 2017 quarter, 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 2018 financial year average realised prices.

The following footnotes apply to this Operational Review:

  • (1) Excludes production from Onshore US and Cerro Colorado.

  • (2) 2019 financial year unit cost guidance is based on exchange rates of AUD/USD 0.75 and USD/CLP 663.

  • (3) On 19 June 2018, BHP announced it has entered into an agreement to sell the Cerro Colorado copper mine in Chile to EMR Capital. The total cash consideration consist of US$230 million to be paid to BHP after the closing of the transaction, plus approximately US$40 million in proceeds from the post-closing sale of certain copper inventory, and a contingent payment of up to US$50 million to be paid in the future, depending upon copper price performance.

  • (4) As at 4 September 2018, BHP acquired a 6.1% interest in SolGold, which has been diluted to 6.0% as at 12 October 2018 as a result of the exercise of options by third parties.

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

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

BHP Operational Review for the quarter ended 30 September 2018

7

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BHP Operational Review for the quarter ended 30 September 2018

8

Production summary

Production summary
BHP
interest		 Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
~~Sep-17~~
~~Dec-17~~
~~Mar-18~~
~~Jun-18~~
~~Sep-18~~
Quarter ended		 Year to date
Sep
Sep
2018
2017
Petroleum (1)
Petroleum
Conventional
Crude oil, condensate and NGL (Mboe)
Natural gas (bcf)
Total (Mboe)
Onshore US - Discontinued Operations
Crude oil, condensate and NGL (Mboe)
Natural gas (bcf)
Total (Mboe)		 15,090
14,869
13,960
13,486
14,087
107.3
96.1
82.9
90.7
112.3
32,973
30,886
27,777
28,603
32,804
7,079
7,423
6,256
8,266
7,351
61.4
60.5
64.1
72.5
76.0
17,312
17,506
16,939
20,349
20,018		 14,087
15,090
112.3
107.3
32,804
32,973
7,351
7,079
76.0
61.4
20,018
17,312
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		 196.3
238.5
244.9
246.1
240.0
35.9
33.8
35.2
34.6
37.0
232.2
272.3
280.1
280.7
277.0
71.9
76.1
69.4
70.1
55.4
58.0
68.4
66.8
70.6
43.4
42.0
12.2
40.5
42.0
33.3
171.9
156.7
176.7
182.7
132.1
404.1
429.0
456.8
463.4
409.1
1,415
1,009
464
546
563
1,415
1,009
464
546
563
29,201
29,054
25,562
35,983
30,558
29,201
29,054
25,562
35,983
30,558
50,525
50,279
59,953
68,345
63,578
13,101
15,969
28,989
33,497
23,471
63,626
66,248
88,942
101,842
87,049
1,737
2,193
2,339
2,527
1,997
1,596
1,331
1,189
1,321
1,309
131
135
248
278
213
3,464
3,659
3,776
4,126
3,519
880
243
1,118
1,123
559
880
243
1,118
1,123
559
402
579
420
261
464
402
579
420
261
464		 240.0
196.3
37.0
35.9
277.0
232.2
55.4
71.9
43.4
58.0
33.3
42.0
132.1
171.9
409.1
404.1
563
1,415
563
1,415
30,558
29,201
30,558
29,201
63,578
50,525
23,471
13,101
87,049
63,626
1,997
1,737
1,309
1,596
213
131
3,519
3,464
559
880
559
880
464
402
464
402

BHP Operational Review for the quarter ended 30 September 2018

9

Production summary

Production summary
BHP
interest		 Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Year to date
Sep
Sep
2018
2017
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		 13,842
18,317
16,412
18,500
16,378
13,099
13,575
12,802
12,041
11,696
14,559
16,348
15,802
17,339
16,870
6,283
4,583
4,669
15,092
16,333
7,804
8,734
8,006
614
114
-
-
-
-
-
55,587
61,557
57,691
63,586
61,391		 16,378
13,842
11,696
13,099
16,870
14,559
16,333
6,283
114
7,804
-
-
61,391
55,587
Coal
Metallurgical coal
Production (kt) (7)
BMA
50%
BHP Mitsui Coal(8)
80%
Total
Energy coal
Production (kt)
Australia
100%
Colombia
33.3%
Total		 8,296
7,394
7,983
9,220
7,744
2,271
2,291
2,396
2,789
2,614
10,567
9,685
10,379
12,009
10,358
4,235
4,383
3,662
6,261
3,982
2,497
2,914
2,444
2,762
2,658
6,732
7,297
6,106
9,023
6,640		 7,744
8,296
2,614
2,271
10,358
10,567
3,982
4,235
2,658
2,497
6,640
6,732
Other
Nickel
Saleable production (kt)
Nickel West (9)
100%
Total
Cobalt
Saleable production (t)
Nickel West
100%
Total		 23.3
23.1
21.1
25.6
21.4
23.3
23.1
21.1
25.6
21.4
280
263
240
277
249
280
263
240
277
249		 21.4
23.3
21.4
23.3
249
280
249
280

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

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

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

(4) Includes Cerro Colorado and Spence.

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

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

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

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

(9) Production restated to include other nickel by-products.

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

BHP Operational Review for the quarter ended 30 September 2018

10

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Sep
Sep
2018
2017
Year to date
Petroleum - Conventional(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)
Trinidad/Tobago
Crude oil and condensate
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Other Americas (3) (4)
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)		 1,815
1,513
1,126
1,361
1,653
1,950
1,584
1,170
1,428
1,840
42.6
32.9
20.5
29.9
35.1
10.9
8.6
5.7
7.8
9.3
1,474
1,442
1,377
1,267
1,514
227
200
210
186
242
36.2
36.2
35.8
34.2
36.6
7.7
7.7
7.6
7.2
7.9
1,510
1,210
1,250
1,168
282
1.5
1.2
1.3
1.2
0.3
9
8
8
7
7
16.1
13.3
13.4
13.9
13.8
2.7
2.2
2.2
2.3
2.3
3,022
3,377
3,459
3,471
3,190
218
195
248
217
215
1.6
1.8
1.8
1.5
1.5
3.5
3.9
4.0
3.9
3.7
1,020
1,231
1,140
581
1,270
44
72
55
27
61
0.1
0.2
0.2
0.1
0.2
1.1
1.3
1.2
0.6
1.4
2,291
2,513
2,323
2,110
2,016
141
184
140
151
122
0.4
0.5
0.4
0.4
0.4
2.5
2.8
2.5
2.3
2.2
118
135
232
233
447
9.7
10.5
10.0
9.8
24.0
1.7
1.9
1.9
1.9
4.4
229
207
189
313
207
5
3
3
22
3
0.1
0.1
-
0.3
-
0.3
0.2
0.2
0.4
0.2
40
22
43
38
36
39
13
18
18
21
0.5
0.6
0.8
0.6
0.7
0.2
0.1
0.2
0.2
0.2
938
960
969
888
961
0.9
1.0
1.0
0.9
1.0		 1,653
1,815
1,840
1,950
35.1
42.6
9.3
10.9
1,514
1,474
242
227
36.6
36.2
7.9
7.7
282
1,510
0.3
1.5
7
9
13.8
16.1
2.3
2.7
3,190
3,022
215
218
1.5
1.6
3.7
3.5
1,270
1,020
61
44
0.2
0.1
1.4
1.1
2,016
2,291
122
141
0.4
0.4
2.2
2.5
447
118
24.0
9.7
4.4
1.7
207
229
3
5
-
0.1
0.2
0.3
36
40
21
39
0.7
0.5
0.2
0.2
961
938
1.0
0.9

BHP Operational Review for the quarter ended 30 September 2018

11

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Year to date
Sep
Sep
2018
2017
Petroleum - Onshore US - Discontinued Operations (1)(5)
Eagle Ford
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Permian
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Haynesville
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total petroleum products
(MMboe)
Fayetteville
Natural gas
(bcf)
Total petroleum products
(MMboe)		 3,457
3,720
2,838
3,826
3,256
1,856
2,100
1,555
1,767
1,919
13.8
14.4
12.6
13.9
13.8
7.6
8.2
6.5
7.9
7.5
1,179
1,142
1,398
1,903
1,478
587
460
465
770
687
4.5
3.6
4.1
6.4
4.8
2.5
2.2
2.5
3.7
3.0
-
1
-
-
11
-
-
-
-
-
21.5
22.0
28.7
33.1
39.0
3.6
3.7
4.8
5.5
6.5
21.6
20.5
18.7
19.1
18.4
3.6
3.4
3.1
3.2
3.1		 3,256
3,457
1,919
1,856
13.8
13.8
7.5
7.6
1,478
1,179
687
587
4.8
4.5
3.0
2.5
11
-
-
-
39.0
21.5
6.5
3.6
18.4
21.6
3.1
3.6
Petroleum - Total (1)
Conventional
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total
(Mboe)
Onshore US - Discontinued Operations(5)
Crude oil and condensate
(Mboe)
NGL
(Mboe)
Natural gas
(bcf)
Total
(Mboe)		 12,466
12,618
12,116
11,437
11,583
2,624
2,251
1,844
2,049
2,504
107.3
96.1
82.9
90.7
112.3
32,973
30,886
27,777
28,603
32,804
4,636
4,863
4,236
5,729
4,745
2,443
2,560
2,020
2,537
2,606
61.4
60.5
64.1
72.5
76.0
17,312
17,506
16,939
20,349
20,018		 11,583
12,466
2,504
2,624
112.3
107.3
32,804
32,973
4,745
4,636
2,606
2,443
76.0
61.4
20,018
17,312

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

(2) Other Australia includes Minerva and Macedon.

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

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

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

BHP Operational Review for the quarter ended 30 September 2018

12

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Sep
Sep
2018
2017
Year to date
Copper
Escondida, Chile (1)
Material mined
(kt)
104,867
101,371
103,385
106,788
107,260
Sulphide ore milled
(kt)
24,080
30,260
32,203
31,732
30,513
Average concentrator head grade
(%)
1.06%
0.98%
0.96%
0.96%
0.94%
Production ex mill
(kt)
204.2
245.7
252.6
253.6
241.9
Production
Payable copper
(kt)
196.3
238.5
244.9
246.1
240.0
Copper cathode (EW)
(kt)
71.9
76.1
69.4
70.1
55.4
- Oxide leach
(kt)
22.4
27.4
24.5
27.1
19.5
- Sulphide leach
(kt)
49.5
48.7
44.9
43.0
35.8
Total copper
(kt)
268.2
314.6
314.3
316.2
295.4
Payable gold concentrate
(troy oz)
50,525
50,279
59,953
68,345
63,578
Payable silver concentrate
(troy koz)
1,737
2,193
2,339
2,527
1,997
Sales
Payable copper
(kt)
195.1
236.7
228.3
260.3
216.5
Copper cathode (EW)
(kt)
61.6
84.1
61.7
80.9
53.2
Payable gold concentrate
(troy oz)
50,525
50,279
59,953
68,345
63,578
Payable silver concentrate
(troy koz)
1,737
2,193
2,339
2,527
1,997
(1) Shown on a 100% basis. BHP interest in saleable production is 57.5%.
Metals production is payable metal unless otherwise stated.		 107,260
104,867
30,513
24,080
0.94%
1.06%
241.9
204.2
240.0
196.3
55.4
71.9
19.5
22.4
35.8
49.5
295.4
268.2
63,578
50,525
1,997
1,737
216.5
195.1
53.2
61.6
63,578
50,525
1,997
1,737
Pampa Norte, Chile
Cerro Colorado
Material mined
(kt)
21,381
20,191
17,766
17,918
18,488
Ore milled
(kt)
3,951
4,611
4,905
4,833
4,802
Average copper grade
(%)
0.62%
0.59%
0.58%
0.58%
0.53%
Production
Copper cathode (EW)
(kt)
13.3
17.4
13.6
19.0
14.2
Sales
Copper cathode (EW)
(kt)
12.3
17.7
13.7
20.9
13.8
Spence
Material mined
(kt)
22,314
23,096
21,463
23,103
23,007
Ore milled
(kt)
5,375
4,919
5,144
4,009
5,642
Average copper grade
(%)
1.21%
1.18%
1.03%
1.11%
1.15%
Production
Copper cathode (EW)
(kt)
44.7
51.0
53.2
51.6
29.2
Sales
Copper cathode (EW)
(kt)
43.0
52.2
49.8
57.1
29.7		 18,488
21,381
4,802
3,951
0.53%
0.62%
14.2
13.3
13.8
12.3
23,007
22,314
5,642
5,375
1.15%
1.21%
29.2
44.7
29.7
43.0

BHP Operational Review for the quarter ended 30 September 2018

13

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Sep
Sep
2018
2017
Year to date
Copper (continued)
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%)
(kt)
Sulphide ore milled (100%)
(kt)
Average head grades
- Copper
(%)
- Zinc
(%)
Production
Payable copper
(kt)
Payable zinc
(t)
Payable silver
(troy koz)
Payable lead
(t)
Payable molybdenum
(t)
Sales
Payable copper
(kt)
Payable zinc
(t)
Payable silver
(troy koz)
Payable lead
(t)
Payable molybdenum
(t)		 59,216
59,125
58,085
59,002
62,470
12,822
13,098
12,166
12,973
13,197
0.94%
0.89%
1.01%
0.91%
0.96%
0.99%
0.93%
1.01%
1.19%
1.10%
35.9
33.8
35.2
34.6
37.0
29,201
29,054
25,562
35,983
30,558
1,596
1,331
1,189
1,321
1,309
1,415
1,009
464
546
563
402
579
420
261
464
31.9
37.0
32.1
36.6
33.6
25,224
30,340
26,456
33,088
31,822
1,475
1,470
1,052
1,311
1,193
1,624
972
859
595
612
168
693
500
388
208		 62,470
59,216
13,197
12,822
0.96%
0.94%
1.10%
0.99%
37.0
35.9
30,558
29,201
1,309
1,596
563
1,415
464
402
33.6
31.9
31,822
25,224
1,193
1,475
612
1,624
208
168
Olympic Dam, Australia
Material mined(1)
(kt)
Ore milled
(kt)
Average copper grade
(%)
Average uranium grade
(kg/t)
Production
Copper cathode (ER and EW)
(kt)
Uranium oxide concentrate
(t)
Refined gold
(troy oz)
Refined silver
(troy koz)
Sales
Copper cathode (ER and EW)
(kt)
Uranium oxide concentrate
(t)
Refined gold
(troy oz)
Refined silver
(troy koz)		 1,851
1,391
2,056
2,201
2,044
2,302
554
2,188
2,171
1,242
2.10%
2.22%
2.36%
2.12%
2.05%
0.55
0.58
0.71
0.69
0.62
42.0
12.2
40.5
42.0
33.3
880
243
1,118
1,123
559
13,101
15,969
28,989
33,497
23,471
131
135
248
278
213
31.6
24.3
36.8
46.0
33.9
680
338
509
1,230
765
22,435
17,999
20,715
35,714
21,145
219
118
202
307
216		 2,044
1,851
1,242
2,302
2.05%
2.10%
0.62
0.55
33.3
42.0
559
880
23,471
13,101
213
131
33.9
31.6
765
680
21,145
22,435
216
219

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

BHP Operational Review for the quarter ended 30 September 2018

14

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Year to date
Sep
Sep
2018
2017
n Ore
lbara, Australia
Production
Newman
(kt)
13,842
18,317
16,412
18,500
16,378
Area C Joint Venture
(kt)
13,099
13,575
12,802
12,041
11,696
Yandi Joint Venture
(kt)
14,559
16,348
15,802
17,339
16,870
Jimblebar(1)
(kt)
6,283
4,583
4,669
15,092
16,333
Wheelarra
(kt)
7,804
8,734
8,006
614
114
Total production
(kt)
55,587
61,557
57,691
63,586
61,391
Total production (100%)
(kt)
64,287
71,611
67,048
72,145
69,342
Sales
Lump
(kt)
13,896
15,145
13,993
15,173
15,014
Fines
(kt)
40,733
45,769
44,332
47,730
46,527
Total
(kt)
54,629
60,914
58,325
62,903
61,541
Total sales (100%)
(kt)
63,322
70,733
67,799
71,385
69,421
n ore production and sales are reported on a wet tonnes basis.		 16,378
13,842
11,696
13,099
16,870
14,559
16,333
6,283
114
7,804
61,391
55,587
69,342
64,287
15,014
13,896
46,527
40,733
61,541
54,629
69,421
63,322

Iron Ore

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

Pilbara, Australia

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

Samarco, Brazil[(1)]

Production (kt) - - - - Sales (kt) - 14 25 - - -

(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 quarter ended 30 September 2018

15

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Sep
Sep
2018
2017
Year to date
Coal
Queensland Coal
Production (1)
BMA
Blackwater
(kt)
Goonyella
(kt)
Peak Downs
(kt)
Saraji
(kt)
Daunia
(kt)
Caval Ridge
(kt)
Total BMA
(kt)
BHP Mitsui Coal
(2)
South Walker Creek
(kt)
Poitrel
(kt)
Total BHP Mitsui Coal
(kt)
Total Queensland Coal
(kt)
Sales
Coking coal
(kt)
Weak coking coal
(kt)
Thermal coal
(kt)
Total
(kt)
Coal production is reported on the basis of saleable product.		 1,985
1,470
1,384
1,849
1,704
1,639
1,369
2,314
2,639
1,989
1,602
1,367
1,723
1,658
1,131
1,414
1,198
1,240
1,201
1,111
662
718
547
629
620
994
1,272
775
1,244
1,189
8,296
7,394
7,983
9,220
7,744
1,400
1,524
1,490
1,615
1,505
871
767
906
1,174
1,109
2,271
2,291
2,396
2,789
2,614
10,567
9,685
10,379
12,009
10,358
7,934
6,341
7,177
8,489
7,356
3,150
2,816
2,598
2,866
2,813
102
173
168
85
141
11,186
9,330
9,943
11,440
10,310		 1,704
1,985
1,989
1,639
1,131
1,602
1,111
1,414
620
662
1,189
994
7,744
8,296
1,505
1,400
1,109
871
2,614
2,271
10,358
10,567
7,356
7,934
2,813
3,150
141
102
10,310
11,186

(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)
Sales
Export thermal coal
(kt)
Inland thermal coal
(kt)
Total
(kt)		 4,235
4,383
3,662
6,261
3,982
3,622
4,048
3,181
5,795
3,549
405
411
400
160
332
4,027
4,459
3,581
5,955
3,881		 3,982
4,235
3,549
3,622
332
405
3,881
4,027
Cerrejón, Colombia
Production
(kt)
Sales thermal coal - export
(kt)		 2,497
2,914
2,444
2,762
2,658
2,518
2,619
2,480
2,763
2,589		 2,658
2,497
2,589
2,518

BHP Operational Review for the quarter ended 30 September 2018

16

Production and sales report

Sep
Dec
Mar
Jun
Sep
2017
2017
2018
2018
2018
Quarter ended		 Sep
Sep
2018
2017
Year to date
Other
Nickel West, Australia
Mt Keith
Nickel concentrate
(kt)
Average nickel grade
(%)
Leinster
Nickel concentrate
(kt)
Average nickel grade
(%)
Saleable production
Refined nickel(1) (2)
(kt)
Intermediates and nickel by-products(1) (3)
(kt)
Total nickel (1)
(kt)
Cobalt
(t)
Sales
Refined nickel(1) (2)
(kt)
Intermediates and nickel by-products(1) (3)
(kt)
Total nickel (1)
(kt)
Cobalt
(t)
Nickel production is reported on the basis of saleable product		 54.4
49.8
44.9
55.6
50.2
20.5
20.3
21.3
18.8
18.9
78.7
87.6
54.7
78.4
78.8
9.3
8.8
9.3
9.8
8.4
16.0
17.7
19.2
18.5
19.8
7.3
5.4
1.9
7.1
1.6
23.3
23.1
21.1
25.6
21.4
280
263
240
277
249
16.3
17.7
19.5
17.5
19.3
5.0
6.9
2.5
6.3
2.2
21.2
24.6
21.9
23.8
21.5
280
263
240
277
249		 50.2
54.4
18.9
20.5
78.8
78.7
8.4
9.3
19.8
16.0
1.6
7.3
21.4
23.3
249
280
19.3
16.3
2.2
5.0
21.5
21.2
249
280

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

(2) High quality refined nickel metal, including briquettes and powder.

(3) Nickel contained in matte and by-product streams.

BHP Operational Review for the quarter ended 30 September 2018

17

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