17 October 2024

Operational review for the quarter ended 30 September 2024

Strong operational performance with increased copper, iron ore and coal production.

"BHP had a strong start to the 2025 financial year, with production up across all major commodities for the quarter. Copper production was up 4% due to higher grade and recoveries at Escondida, and WAIO production was up 3% as we unlocked capacity by completing the debottlenecking work at the port.

We are also seeing signs of stabilisation in our steelmaking coal business with production up 20% in the quarter, excluding the recently divested Blackwater and Daunia mines.

We added to our copper growth prospects in the quarter, announcing a proposed 50/50 joint venture in Argentina with Lundin Mining to advance what we consider to be one of the most significant global copper discoveries in decades.

In Canada, our Jansen Stage 1 potash project is 58% complete after a productive summer period with first production scheduled in around two years.

China has announced a series of monetary easing policies in an effort to support economic growth, and has indicated more significant fiscal stimulus is on the horizon. Upcoming stimulus is likely to focus on relieving local debt, stabilising the property market and bolstering business confidence."

Mike Henry

BHP Chief Executive Officer

Summary

Operational excellence	Social value
On track to meet FY25 production guidance	Climate Transition Action Plan
Strong operational performance with copper production increasing 4% driven by higher concentrator feed grades and recoveries at Escondida. Production at WAIO increased 2% following commissioning of the Port Debottlenecking Project (PDP1) and completion of the South Flank ramp up.	We released our second Climate Transition Action Plan (CTAP) which lays out our climate strategy and GHG emissions goals and targets, and provides an in depth view of our plans and how we're progressing against them. The CTAP will be put to a shareholder advisory vote at our upcoming AGM on 30 October 2024. We also announced collaborations with India's JSW Steel and Carbon Clean and Steel Authority of India to support decarbonisation technology in steelmaking.
Portfolio	Outlook
Increased exposure to copper	Copper outlook supports growth pipeline
In July, we agreed to jointly acquire Filo Corp. with Lundin Mining through a Canadian plan of arrangement. In September, the Filo Corp shareholders approved the plan of arrangement. We also agreed to form a 50/50 joint venture with Lundin Mining to consolidate and advance the Filo del Sol and Josemaria copper projects. We expect the transaction to complete in Q3 FY25, subject to regulatory approvals.	We published our outlook for the copper market, including copper demand, copper supply and long-term copper pricing. We expect copper demand to grow by 70% by 2050, as a result of traditional economic growth, electrification and the energy transition, and digital infrastructure (including data centres). We will be hosting an investor site visit to our Chilean copper assets in November 2024 to outline our attractive organic copper growth pipeline in the region.
Production		Quarter performance			Production guidance
		Q1 FY25	v Q4 FY24	v Q1 FY24	Current FY25 guidance
Copper (kt)		476.3	(6%)	4%	1,845 - 2,045
Escondida (kt)		304.2	(2%)	11%	1,180 - 1,300	Unchanged
Pampa Norte (kt)i		60.1	(9%)	(23%)i	240 - 270i	Unchanged
Copper South Australia (kt)		73.4	(18%)	2%	310 - 340	Unchanged
Antamina (kt)		36.3	(5%)	12%	115 - 135	Unchanged
Carajás (kt)		2.3	10%	10%	-	-
Iron ore (Mt)		64.6	(7%)	2%	255 - 265.5
WAIO (Mt)		63.4	(7%)	2%	250 - 260	Unchanged
WAIO (100% basis) (Mt)		71.6	(7%)	3%	282 - 294	Unchanged
Samarco (Mt)		1.3	23%	4%	5 - 5.5	Unchanged
Steelmaking coal - BMA (Mt)		4.5	(8%)	(19%)ii	16.5 - 19
BMA (100% basis) (Mt)		9.0	(8%)	(19%)ii	33 - 38	Unchanged
Energy coal - NSWEC (Mt)		3.7	(2%)	2%	13 - 15	Unchanged
Nickel - Western Australia Nickel (kt)		19.6	(15%)	(3%)	-	-

i         Q1 FY24 includes 9.5 kt from Cerro Colorado which entered care and maintenance in December 2023. Excluding these volumes, Q1 FY25 production decreased 13%. Production guidance for FY25 is for Spence only. Refer to production and sales report and copper for further information.

ii        Q1 FY24 production includes 1.8 Mt (3.7 Mt on a 100% basis) from Blackwater and Daunia mines which were divested on 2 April 2024. Excluding these volumes, Q1 FY25 production increased 20%. Refer to production and sales report and steelmaking coal for further information.

 

Further information in Appendix 1 Detailed production and sales information for all operations in Appendix 2

 

 

 

 

 

 

BHP | Operational review for the year ended 30 September 2024

Segment and asset performance | FY25 YTD v FY24 YTD

Copper

Production 476 kt Up 4% Q1 FY24 457 kt FY25e 1,845 - 2,045 kt   Average realised price US$4.24/lb Up 17% Q1 FY24 US$3.63/lb

Total copper production increased 4% to 476 kt. Copper production guidance for FY25 remains unchanged at between 1,845 and 2,045 kt. Escondida 304 kt Up 11% (100% basis) Increased production primarily due to a higher concentrator feed grade of 1.00% (Q1 FY24: 0.85%) and higher recoveries as mining progressed into areas of higher-grade ore as planned. This was partially offset by planned lower cathode production, as the integration of the FullSaL project continued. The project remains on track for first production later in FY25. A new collective agreement with Union N°1 of Operators and Maintainers was signed and became effective for 36 months from 2 August 2024. The associated industrial action did not have a material impact on production during the quarter as a result of mitigating actions taken by management, including mine resequencing and prioritisation of ore movement. During Q1 FY25, one access ramp into the PL1 high grade mining area was impacted by geotechnical instability. We utilised alternative access ramps and completed stabilisation works, and as a result no material production impacts are expected. Production guidance for FY25 remains unchanged at between 1,180 and 1,300 kt, weighted to the second half. Concentrator feed grade for FY25 is expected to remain above 0.90%. Pampa Norte 60 kt Down 23% Spence production decreased 13% as expected, as a result of lower cathode production in line with an expected decline in stacked feed grade and planned quarterly maintenance at the concentrator. Concentrator feed grade and recoveries are in line with prior periods. Production guidance for Spence remains unchanged at between 240 and 270 kt for FY25. Cerro Colorado remains in temporary care and maintenance (having contributed 9.5 kt in Q1 FY24). Copper South Australia 73 kt Up 2% Higher production primarily driven by strong underlying operational performance, particularly at Carrapateena following the commissioning of Crusher 2 in Q3 FY24 which has enabled higher productivity from the sub-level cave and resulted in an increase in ore mined and milled. We also completed planned major maintenance at Olympic Dam on the hoist and underground materials handling system, and annual planned maintenance at the refinery. Production was lower at Prominent Hill due to minor pit geotechnical instability and ventilation constraints which impacted trucking capacity and ore mined, both of which have since been rectified. Production guidance for FY25 remains unchanged at between 310 and 340 kt, weighted to the second half. Other copper At Antamina, copper production increased 12% to 36 kt as a result of higher ore grade and recoveries, partially offset by planned lower concentrator throughput. Zinc production was 46% lower at 19 kt, as a result of planned lower feed grades. FY25 copper production guidance of between 115 and 135 kt and zinc production guidance of between 90 and 110 kt remain unchanged. Carajás produced 2.3 kt of copper and 1.7 troy koz of gold.

 

 

 

 

 

 

 

 

 

 

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BHP | Operational review for the year ended 30 September 2024

Iron ore

Production 65 Mt Up 2% Q1 FY24 63 Mt FY25e 255 - 265.5 Mt   Average realised price US$80.10/wmt Down 18% Q1 FY24 US$98.04/wmt

Iron ore production increased 2% to 65 Mt. Production guidance for FY25 remains unchanged at between 255 and 265.5 Mt. WAIO 63.4 Mt Up 2% | 71.6 Mt (100% basis) Production increased as a result of strong supply chain performance with increased capacity unlocked by PDP1. Higher volumes were delivered from the Central Pilbara hub (South Flank and Mining Area C) following the completion of South Flank ramp up in FY24. We continue to progress the multi-year Rail Technology Program (RTP1), with tie-in activity increasing in FY25. Production guidance for FY25 remains unchanged at between 250 and 260 Mt (282 and 294 Mt on a 100% basis). Samarco 1.3 Mt Up 4% | 2.6 Mt (100% basis)] Production increased due to early resumption of Pelletizing Plant No. 4 enabling improved performance. Production guidance for FY25 remains unchanged at between 5 and 5.5 Mt. The second concentrator at Samarco is expected to come online during Q3 FY25, which will increase production capacity to ~16 Mtpa of pellets (100% basis) once fully ramped up, which is expected to be by the end of FY26. BHP Brasil, Samarco and Vale have been engaging in negotiations with the Brazilian State and Federal Governments and other public entities to seek a settlement of obligations under the Framework Agreement, the Federal Public Prosecution Office Claim, and other claims by government entities relating to the Samarco dam failure. Those negotiations are ongoing. BHP Group Limited and BHP Group (UK) Limited are defendants to a group action claim in the English High Court, brought by over 600,000 claimants seeking damages in relation to the Fundão Dam failure in 2015. The liability hearing for the group action will begin on 21 October 2024.

Coal

Steelmaking coal

Production 4.5 Mt Down 19% Q1 FY24 5.6 Mt FY25e 16.5 - 19 Mt   Average realised price US$214.86/t Down 9% Q1 FY24 US$237.07/t

BMA 4.5 Mt Down 19% | 9 Mt (100% basis) Production increased 20% (excluding 1.8 Mt from Blackwater and Daunia in Q1 FY24), due to increased stripping enabled by improved truck productivity as well as Q1 FY24 being impacted by the extended longwall move at Broadmeadow. We maintain our focus on restoring value chain stability, with an increase in raw coal inventory, which will continue into CY26. During the quarter we completed planned maintenance at Goonyella Riverside and Hay Point Coal Terminal, and commenced a longwall move at Broadmeadow. Production guidance for FY25 remains unchanged at between 16.5 and 19 Mt (33 and 38 Mt on a 100% basis).

 

 

 

 

 

 

 

 

 

 

 

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BHP | Operational review for the year ended 30 September 2024

Energy coal

Production 3.7 Mt Up 2% Q1 FY24 3.6 Mt FY25e 13 - 15 Mt   Average realised price US$124.32/t Down 1% Q1 FY24 US$125.66/t

NSWEC 3.7 Mt Up 2% Production increased 2%, including a higher proportion of washed coal in line with our strategy of prioritising higher quality coals. This was enabled by a drawdown of inventory to offset the impacts of reduced truck availability and unfavourable weather conditions. Production guidance for FY25 remains unchanged at between 13 and 15 Mt.  The modification to extend mining consent to 30 June 2030 is currently being assessed by the NSW Government with an outcome anticipated in Q3 FY25.

Group & Unallocated

Nickel

Production 19.6 kt Down 3% Q1 FY24 20.2 kt   Average realised price US$16,359/t Down 20% Q1 FY24 US$20,354/t

Western Australia Nickel 19.6 kt Down 3% Production decreased as we commenced the temporary suspension of operations at Nickel West. Operations will be suspended from October 2024 and handover activities will be completed by December 2024.  We continue to support the workforce through this transition period and have made redeployment offers to a large portion of our frontline employees. We expect costs to remain elevated during the transition to suspension in the first half and we plan to invest ~US$300 m per annum beginning in January 2025 to preserve optionality for a potential restart. No production guidance has been provided for FY25.

Quarterly performance | Q1 FY25 v Q4 FY24

Copper		Iron ore
476 kt Down 6% Q4 FY24 505 kt	Lower production due to planned maintenance, in particular across Copper SA, lower concentrator throughput and production across leaching at Escondida due to mine sequencing, and planned lower grades at Spence.	65 Mt Down 7% Q4 FY24 69 Mt	Lower production at WAIO as a result of planned equipment maintenance and increased RTP1 tie-in activity.
Steelmaking coal		Energy coal
4.5 Mt Down 8% Q4 FY24 4.9 Mt	Lower production as a result of the ramp down and commencement of the longwall move at Broadmeadow in Q1 FY25, and higher yield and lower strip ratio in the prior quarter as a result of mine sequencing.	3.7 Mt Down 2% Q4 FY24 3.8 Mt	Slightly lower production due to operational challenges from truck availability and wet weather, partially offset by a drawdown of inventory.
Nickel
19.6 kt Down 15% Q4 FY24 23.0 kt	Lower production as transition of operations to temporary suspension commenced.

 

 

 

 

 

 

 

 

 

 

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BHP | Operational review for the year ended 30 September 2024

Appendix 1

Average realised pricesⁱ

	Quarter
	Q1 FY25	v Q4 FY24	v Q1 FY24
Copper (US$/lb)ii	4.24	(7%)	17%
Iron ore (US$/wmt, FOB)	80.10	(12%)	(18%)
Steelmaking coal (US$/t)iii	214.86	(12%)	(9%)
Thermal coal (US$/t)iv	124.32	1%	(1%)
Nickel metal (US$/t)v	16,359	(11%)	(20%)

i         Based on provisional, unaudited estimates. Prices exclude sales from equity accounted investments, third party product and internal sales, and represent the weighted average of various sales terms (for example: FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional pricing and finalisation adjustments.

ii        Sales from Carrapateena and Prominent Hill acquired through the purchase of OZL are included from Q4 FY24.

iii       From FY25, steelmaking coal refers to hard coking coal which is generally those steelmaking coals with a Coke Strength after Reaction (CSR) of 35 and above, and includes coals across the spectrum from Premium Coking to Semi Hard Coking coals. Comparative periods include impacts from weak coking coal, which refers generally to those steelmaking coals with a CSR below 35, which were sold by Blackwater and Daunia mines, divested on 2 April 2024.

iv       Export sales only. Includes thermal coal sales from steelmaking coal mines.

v        Relates to refined nickel metal only, excludes intermediate products and nickel sulphate.

Current year unit cost guidance

	Current
Unit cost	FY25 guidancei
Escondida (US$/lb)	1.30 - 1.60	Unchanged
Spence (US$/lb)	2.00 - 2.30	Unchanged
Copper South Australia (US$/lb)	1.30 - 1.80ii	Unchanged
WAIO (US$/t)	18.00 - 19.50	Unchanged
BMA (US$/t)	112 - 124	Unchanged

i         FY25 unit cost guidance is based on exchange rates of AUD/USD 0.66 and USD/CLP 842.

Ii        Calculated using the following assumptions for by-products: gold US$2,000/oz, and uranium US$80/lb

Medium term guidanceⁱ

	Production	Unit cost
	guidance	guidanceii
Escondidaiii	900 - 1,000 ktpa	US$1.50 - 1.80/lb
Spence	~250 ktpa	US$2.05 - 2.35/lb
WAIO (100% basis)	>305 Mtpa
BMA (100% basis)	43 - 45 Mtpa

i         Medium term refers to a five year time horizon unless otherwise noted.                      

ii        Unit cost guidance is based on exchange rates of AUD/USD 0.66 and USD/CLP 842.

iii       Medium term refers to FY27 onwards. Production for FY25 and FY26 are expected to average between 1,200 and 1,300 kt.

Major projects

Commodity	Project and ownership	Project scope / capacity	Capital expenditure US$M	First production target date	Progress
Potash	Jansen Stage 1 (Canada) 100%	Design, engineering and construction of an underground potash mine and surface infrastructure, with capacity to produce 4.15 Mtpa.	5,723	End-CY26	Project is 58% complete
Potash	Jansen Stage 2 (Canada) 100%	Development of additional mining districts, completion of the second shaft hoist infrastructure, expansion of processing facilities and addition of rail cars to facilitate production of an incremental 4.36 Mtpa.	4,859	FY29	Project is 4% complete

The operating expenditure related to Potash for FY25 is expected to be ~US$300 m.

Exploration

Minerals exploration and evaluation expenditure was US$104 m for Q1 FY25 (Q1 FY24: US$105 m) of which US$91 m was expensed (Q1 FY24: US$93 m).

 

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BHP | Operational review for the year ended 30 September 2024

Appendix 2

NEWS RELEASE
17 October 2024
BHP OPERATIONAL REVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2024
Production and sales summary (Excel version)
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