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BHP Group Limited — Interim / Quarterly Report 2019
Apr 16, 2019
14787_rns_2019-04-16_28bf009f-b805-4b76-820e-0ea7b3d7c957.pdf
Interim / Quarterly Report
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Release Time IMMEDIATE Date 17 April 2019 Release Number 09/19
BHP OPERATIONAL REVIEW FOR THE NINE MONTHS ENDED 31 MARCH 2019
-
Production guidance for the 2019 financial year remains unchanged for petroleum, copper, metallurgical coal and energy coal. Iron ore production guidance decreased to between 265 and 270 Mt (100% basis), reflecting impacts of Tropical Cyclone Veronica.
-
Group copper equivalent production[(1)] was broadly unchanged over the nine months ended March 2019, with volumes for the full year also expected to be in line with last year.
-
Full year unit costs for Petroleum, Escondida and Queensland Coal are expected to be in line with guidance[(2)] . Unit costs for Western Australia Iron Ore are now expected to be below US$15 per tonne[(2)] , reflecting impacts of Tropical Cyclone Veronica. Unit costs for New South Wales Energy Coal are now expected to be approximately US$51 per tonne[(2)] , following changes to the mine plan.
-
All major projects under development are tracking to plan.
-
In Petroleum, the Atlantis Phase 3 project in the US Gulf of Mexico was approved and the Bélé-1 exploration well in Trinidad and Tobago encountered hydrocarbons (drilling still in progress) during the quarter.
| Production | Mar YTD19 | Mar Q19 | Mar Q19 commentary |
|---|---|---|---|
| (vs Mar YTD18) | (vs Dec Q18) | ||
| Petroleum | 92 | 29 | Lower seasonal gas sales at Bass Strait partially offset by higher Trinidad and |
| (MMboe)(1) | (0%) | (-5%) | Tobago volumes following maintenance in the previous quarter. |
| Copper (kt) | 1,245 | 420 | Increased production from Olympic Dam as surface operations returned to full |
| (-3%) | (+1%) | capacity following acid plant outage in August 2018, offset by impact of expected | |
| lower copper grades at Escondida. | |||
| Iron ore (Mt) | 175 | 56 | Volumes at Western Australia Iron Ore (WAIO) reflected the impact of Tropical |
| (0%) | (-3%) | Cyclone Veronica. | |
| Metallurgical coal | 31 | 10 | A solid underlying operating performance at Queensland Coal was offset by the |
| (Mt) | (0%) | (-4%) | impacts of wet weather. |
| Energy coal (Mt) | 20 | 7 | Increased production at New South Wales Energy Coal (NSWEC) was offset by the |
| (0%) | (+1%) | impact of adverse weather at Cerrejón. |
BHP Chief Executive Officer, Andrew Mackenzie, said: “During the March 2019 quarter, we had a strong operational performance despite weather impacts across Australia and Chile. We approved Atlantis Phase 3 and now have five major projects under development. Those projects, our work on transformation, technology and culture, and our successful petroleum and copper exploration and appraisal programs will grow value and returns for years to come.”
BHP Operational Review for the nine months ended 31 March 2019
1
Summary
Operational performance
Production and guidance are summarised below.
| Mar YTD19 | Mar Q19 | Mar Q19 | Previous | Current | ||||
|---|---|---|---|---|---|---|---|---|
| Mar | Mar | vs | vs | vs | FY19 | FY19 | ||
| Production | YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | guidance | guidance | |
| Petroleum (MMboe) | 92 | 29 | 0% |
3% | (5%) | 113 - 118 | 113 - 118 | Upper end of range |
| Copper (kt) | 1,245 | 420 | (3%) | (8%) | 1% | 1,645 - 1,740 | 1,645 - 1,740 | Unchanged |
| Escondida | 848 | 268 | (6%) |
(15%) | (6%) | 1,120 - 1,180 | 1,120 - 1,180 | Lower end of range |
| Other copper(i) | 397 | 152 | 1% | 7% | 15% | 525 - 560 | 525 - 560 | Olympic Dam: |
| Lower end of range | ||||||||
| Iron ore(ii)(Mt) | 175 | 56 | 0% | (3%) | (3%) | 241 - 250 | 235 - 239 | Lowered due to |
| Tropical Cyclone | ||||||||
| Veronica | ||||||||
| WAIO (100% basis) | 198 | 64 | (2%) | (5%) | (3%) | 273 - 283 | 265 - 270 | As above |
| Metallurgical coal (Mt) | 31 | 10 | 0% | (5%) | (4%) | 43 - 46 | 43 - 46 | Unchanged |
| Queensland Coal (100% basis) | 54 | 17 | (1%) | (5%) | (3%) | 75 - 81 | 75 - 81 | Unchanged |
| Energy coal (Mt) | 20 | 7 | 0% |
11% | 1% | 28 - 29 | 28 - 29 | Unchanged |
| NSWEC | 13 | 5 | 5% | 24% | 6% | 18 - 19 | 18 - 19 | Unchanged |
| Cerrejón | 7 | 2 | (8%) | (10%) | (7%) | 10 | 10 | Unchanged |
(i) Other copper comprises Pampa Norte, Olympic Dam and Antamina.
(ii) Increase in BHP’s share of volumes reflects the expiry of the Wheelarra Joint Venture sublease in March 2018, with control of the sublease area reverted to the Jimblebar Joint Venture, which is accounted for on a consolidated basis with minority interest adjustments.
Major development projects
During the March 2019 quarter, the BHP Board approved US$696 million (BHP share) in capital expenditure for the Atlantis Phase 3 project in the US Gulf of Mexico.
At the end of March 2019, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$11.1 billion over the life of the projects.
Petroleum
Production
| Production | |||||
|---|---|---|---|---|---|
| Mar YTD19 | Mar Q19 | Mar Q19 | |||
| Mar | Mar | vs | vs | vs | |
| YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | |
| Crude oil, condensate and natural gas liquids (MMboe) | 42 | 13 | (5%) | (5%) | (9%) |
| Natural gas (bcf) | 299 | 93 | 4% | 12% | (1%) |
| Total petroleum production (MMboe) | 92 | 29 | 0% | 3% | (5%) |
Petroleum - Total petroleum production was flat at 92 MMboe. Guidance for the 2019 financial year remains unchanged at between 113 and 118 MMboe, with volumes expected to be towards the upper end of the guidance range.
Crude oil, condensate and natural gas liquids production decreased by five per cent to 42 MMboe due to natural field decline across the portfolio and a 70 day planned dry dock maintenance program at Pyrenees completed during the September 2018 quarter. This decline was partially offset by higher uptimes at our Gulf of Mexico assets and stronger field performance in Atlantis.
Natural gas production increased by four per cent to 299 bcf, reflecting increased tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract and higher uptime at North West Shelf. This was partially offset by planned maintenance at Trinidad and Tobago in the December 2018 quarter, the impact of Tropical Cyclone Veronica and natural field decline across the portfolio.
BHP Operational Review for the nine months ended 31 March 2019
2
| Projects | |
|---|---|
| Project and ownership Capital expenditure **US$M ** |
Initial production target date Capacity Progress |
| Mad Dog Phase 2 (US Gulf of Mexico) 23.9% (non-operator) 2,154 |
CY22 New floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day. On schedule and budget. The overall project is 46% complete. |
| Atlantis Phase 3 (US Gulf of Mexico) 44% (non-operator) 696 |
CY20 New subsea production system that will tie back to the existing Atlantis facility, with capacity to produce up to 38,000 gross barrels of oil equivalent per day. Project approved on 13 February 2019. |
On 13 February 2019, the BHP Board approved the development of the Atlantis Phase 3 project in the US Gulf of Mexico. The project includes a subsea tie back of eight new production wells and is expected to increase production by an estimated 38 Mboe/d (100 per cent basis) at its peak. This decision follows sanction by BP (the operator).
The Bass Strait West Barracouta project is tracking to plan and study work continues on the Ruby project in Trinidad and Tobago with an investment decision expected during the 2019 calendar year.
Petroleum exploration
Exploration and appraisal wells drilled during the March 2019 quarter are summarised below.
| Well | Location | Target | Formation | BHP |
Spud date | Water depth | Total well | Status |
|---|---|---|---|---|---|---|---|---|
| age | equity | depth | ||||||
| Trion-2DEL | Mexico | Oil | Eocene | 60% (BHP | 15 November | 2,379 m | 4,659 m | Hydrocarbons encountered; |
| Block AE-0093 | Operator) | 2018 | Plugged and abandoned | |||||
| Trion-2DEL | Mexico | Oil | Eocene | 60% (BHP | 4 January 2019 | 2,379 m | 5,002 m | Hydrocarbons encountered; |
| ST01 | Block AE-0093 | Operator) | Plugged and abandoned | |||||
| Bélé-1 | Trinidad & | Gas | Pliocene | 70% (BHP | 2 March 2019 | 2,102 m | 3,693 m | Hydrocarbons encountered; |
| Tobago Block | Operator) | Drilling ahead | ||||||
| 23(a) |
In Mexico, we spud the Trion-2DEL appraisal well in November 2018 and encountered oil in line with expectations. This was followed by a downdip sidetrack which encountered oil and water, as predicted, further appraising the field and delineating the resource. Following the recent encouraging results in the Trion block, an additional appraisal well (3DEL), to further delineate the scale and characterisation of the resource, has been approved and is expected to be drilled in the second half of the 2019 calendar year.
The Deepwater Invictus rig mobilised to Trinidad and Tobago for Phase 3 of our deepwater drilling campaign. This includes three wells testing three prospects in our Northern licences around the Bongos discovery. Bélé-1, the first of these wells, was spud on 2 March 2019 and encountered hydrocarbons. Drilling is still in progress and our assessment is ongoing.
In the US Gulf of Mexico, following the Samurai-2 discovery in 2018, Murphy, the Operator, has commenced preFEED activities. In the Western US Gulf of Mexico, our Ocean Bottom Node[(3)] seismic acquisition survey and node recovery has been completed. This will be incorporated into our ongoing analysis which we will continue to progress over the next 24 months.
Petroleum exploration expenditure for the nine months ended March 2019 was US$438 million, of which US$215 million was expensed. A US$750 million exploration and appraisal program is being executed for the 2019 financial year.
BHP Operational Review for the nine months ended 31 March 2019
3
Copper
Production
| Production | |||||
|---|---|---|---|---|---|
| Mar YTD19 | Mar Q19 | Mar Q19 | |||
| Mar | Mar | vs | vs | vs | |
| YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | |
| Copper (kt) | 1,245 | 420 | (3%) | (8%) | 1% |
| Zinc (t) | 75,643 | 20,848 | (10%) | (18%) | (14%) |
| Uranium (t) | 2,590 | 1,106 | 16% | (1%) | 19% |
Copper – Total copper production decreased by three per cent to 1,245 kt. Guidance for the 2019 financial year remains unchanged at between 1,645 and 1,740 kt.
Escondida copper production decreased by six per cent to 848 kt as expected lower copper grades were partly offset by record concentrator throughput. Production guidance remains unchanged at between 1,120 and 1,180 kt for the 2019 financial year, with volumes expected to be towards the lower end of the range.
Pampa Norte copper production decreased by 11 per cent to 172 kt and reflects planned maintenance and a production outage at Spence following a fire at the electro-winning plant in September 2018, and the impact of heavy rainfall in northern Chile in February 2019 at both Spence and Cerro Colorado. This was partially offset by record ore milled at both operations after implementing maintenance improvement initiatives. Production guidance at Spence and Cerro Colorado remains unchanged for the 2019 financial year, at between 160 and 175 kt and 60 and 70 kt respectively.
Olympic Dam copper production increased by 22 per cent to 115 kt as a result of the major smelter maintenance campaign in the prior period, which was partially offset by an unplanned acid plant outage in August 2018. Following completion of the acid plant remediation works, surface operations ramped up between October 2018 and February 2019. Production guidance remains unchanged at between 170 and 180 kt for the 2019 financial year, with volumes expected to be towards the lower end of the guidance range.
Antamina copper production increased by five per cent to 110 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 47% 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 nine months ended 31 March 2019
4
Iron Ore
Production
| Production | |||||
|---|---|---|---|---|---|
| Mar YTD19 | Mar Q19 | Mar Q19 | |||
| Mar | Mar | vs | vs | vs | |
| YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | |
| Iron ore (kt) | 175,343 | 56,117 | 0% | (3%) | (3%) |
Iron ore – Total iron ore production was broadly unchanged at 175 Mt (198 Mt on a 100 per cent basis). Production guidance for the 2019 financial year has been reduced to between 235 and 239 Mt, or 265 and 270 Mt on a 100 per cent basis, reflecting a 6 to 8 Mt impact from Tropical Cyclone Veronica. As a result, full year unit costs are now expected to be below US$15 per tonne, an increase from previous guidance of less than US$14 per tonne, due to the lower volumes, direct costs of remediation, increased demurrage, rehandle to manage stockyards and opportune maintenance at the mines during port downtime. In addition, private royalties are also expected to be higher as a function of higher iron ore prices.
At WAIO, volumes reflected record production at Jimblebar and the impact from the Mt Whaleback fire in the prior period. This was offset by the impacts of planned maintenance in the September 2018 quarter, a train derailment on 5 November 2018 and Tropical Cyclone Veronica in March 2019. While our facilities did not sustain major damage as a result of the cyclone, the port ramp up was slowed by localised flooding, processing wet material and equipment assessments.
Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.
Projects
| Projects | ||||
|---|---|---|---|---|
| Capital | Initial | |||
| Project and | expenditure | production | ||
| ownership | **US$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 29% complete. | ||
| 85% | cent basis) Yandi mine. |
BHP Operational Review for the nine months ended 31 March 2019
5
Coal
Production
| Production | |||||
|---|---|---|---|---|---|
| Mar YTD19 | Mar Q19 | Mar Q19 | |||
| Mar | Mar | vs | vs | vs | |
| YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | |
| Metallurgical coal (kt) | 30,507 | 9,877 | 0% | (5%) | (4%) |
| Energy coal (kt) | 20,058 | 6,751 | 0% | 11% | 1% |
Metallurgical coal – Metallurgical coal production was broadly flat at 31 Mt (54 Mt on a 100 per cent basis). Guidance for the 2019 financial year remains unchanged at between 43 and 46 Mt (75 and 81 Mt on a 100 per cent basis).
At Queensland Coal, increased yields at South Walker Creek and higher wash-plant throughput at Poitrel following the purchase of the Red Mountain processing facility supported record production at BMC. Despite record stripping, BMA’s production decreased slightly due to the scheduled longwall move at Broadmeadow in the December 2018 quarter and unfavourable weather impacts in the March 2019 quarter.
On 27 March 2019, BMA completed the sale of the Gregory Crinum Mine to Sojitz Corporation.
Energy coal – Energy coal production was broadly flat at 20 Mt. Guidance for the 2019 financial year remains unchanged at approximately 28 to 29 Mt.
New South Wales Energy Coal production increased five per cent supported by record stripping performance. Production guidance remains unchanged at between 18 and 19 Mt for the 2019 financial year. However, following optimisation of the mine plan through the construction of Multiple Elevated Roadways (MERs) which will reduce future cycle times, the focus on higher quality products and challenges with labour hire attraction and retention, unit costs for New South Wales Energy Coal are now expected to be approximately US$51 per tonne, an increase from previous guidance of between US$43 and US$48 per tonne. Ongoing labour hire challenges are being addressed, including through the initial deployment of BHP Operations Services in the June 2019 quarter.
Cerrejón production decreased by eight per cent due to adverse weather and its impacts on mine sequencing. Production guidance remains unchanged at approximately 10 Mt for the 2019 financial year.
Other
Nickel production
| Nickelproduction | |||||
|---|---|---|---|---|---|
| Mar YTD19 | Mar Q19 | Mar Q19 | |||
| Mar | Mar | vs | vs | vs | |
| YTD19 | Q19 | Mar YTD18 | Mar Q18 | Dec Q18 | |
| Nickel (kt) | 58.7 | 19.2 | (13%) | (9%) | 6% |
Nickel – Nickel West production decreased by 13 per cent to 59 kt as operations were suspended following a fire at the Kalgoorlie smelter in September 2018. The smelter returned to operation on 1 October 2018, with final repairs and ramp up completed in the March 2019 quarter. Production guidance for the 2019 financial year remains unchanged and is expected to be broadly in line with the 2018 financial year.
Potash project
| Potashproject | |||
|---|---|---|---|
| Project and | Investment | ||
| ownership | US$M | Scope | Progress |
| Jansen Potash | 2,700 | Investment to finish the excavation and lining of | The project is 83% complete and within the |
| (Canada) | the production and service shafts, and to continue | approved budget. The main activity for the | |
| 100% | the installation of essential surface infrastructure | quarter remained centred on removing the | |
| and utilities. | boring equipment from both shafts. |
BHP Operational Review for the nine months ended 31 March 2019
6
Minerals exploration
Minerals exploration expenditure for the nine months ended March 2019 was US$122 million, of which US$84 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.
During March 2019, BHP signed a non-binding letter of intent with Luminex for an earn-in and joint venture agreement on Luminex’s Tarqui 1 and 2 mining concessions in Ecuador. Negotiations to complete a binding agreement will be undertaken over the next two months.
On 15 April 2019, BHP secured a five per cent interest in Midland Exploration Inc., which has copper exploration tenements in Canada.
Following identification in November 2018 of a potential iron oxide, copper and gold (IOCG) mineralised system at Oak Dam, 65 kilometres to the south east of Olympic Dam, BHP has commenced a further drilling program to define the extent of mineralisation.
Variance analysis relates to the relative performance of BHP and/or its operations during the nine months ended March 2019 compared with the nine months ended March 2018, unless otherwise noted. Production volumes, sales volumes and capital and exploration expenditure from subsidiaries are reported on a 100 per cent basis; production and sales volumes from equity accounted investments and other operations are reported on a proportionate consolidation basis. Numbers presented may not add up precisely to the totals provided due to rounding. Copper equivalent production based on 2018 financial year average realised prices.
The following footnotes apply to this Operational Review:
-
(1) Excludes production from Onshore US.
-
(2) 2019 financial year unit cost guidance: Petroleum <US$11/boe, Escondida <US$1.15/lb, WAIO <US$15/t, Queensland Coal US$68-72/t and NSWEC US$51/t; based on exchange rates of AUD/USD 0.75 and USD/CLP 663.
-
(3) WGOM OBN 2018 Seismic Permit is OCS Permit T18-010.
The following abbreviations may have been used throughout this report: barrels (bbl); billion cubic feet (bcf); cost and freight (CFR); cost, insurance and freight (CIF); dry metric tonne unit (dmtu); free on board (FOB); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km); metre (m); million barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); ounces (oz); pounds (lb); thousand barrels of oil equivalent (Mboe); thousand barrels of oil equivalent per day (Mboe/d); thousand ounces (koz); thousand standard cubic feet (Mscf); thousand tonnes (kt); thousand tonnes per annum (ktpa); thousand tonnes per day (ktpd); tonnes (t); and wet metric tonnes (wmt).
In this release, the terms ‘BHP’, ‘Group’, ‘BHP Group’, ‘we’, ‘us’, ‘our’ and ourselves’ are used to refer to BHP Group Limited, BHP Group plc and, except where the context otherwise requires, their respective subsidiaries as defined in note 27 ‘Subsidiaries’ in section 5.1 of BHP’s 30 June 2018 Annual Report and Form 20-F, unless stated otherwise. Notwithstanding that this release may include production, financial and other information from non-operated assets, non-operated assets are not included in the BHP Group and, as a result, statements regarding our operations, assets and values apply only to our operated assets unless stated otherwise.
BHP Operational Review for the nine months ended 31 March 2019
7
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BHP Operational Review for the nine months ended 31 March 2019
8
Production summary
| Production summary | ||
|---|---|---|
| BHP interest |
Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 ~~Mar-18~~ ~~Jun-18~~ ~~Sep-18~~ ~~Dec-18~~ ~~Mar-19~~ Quarter ended |
Year to date |
| Mar Mar 2019 2018 |
||
| Petroleum (1) | ||
| Petroleum Conventional Crude oil, condensate and NGL (Mboe) Natural gas (bcf) Total (Mboe) |
13,960 13,486 14,087 14,497 13,236 82.9 90.7 112.3 93.9 92.9 27,777 28,603 32,804 30,147 28,719 |
41,820 43,919 299.1 286.3 |
| 91,670 91,636 |
||
| 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 |
244.9 246.1 240.0 212.6 205.4 35.2 34.6 37.0 38.3 34.5 280.1 280.7 277.0 250.9 239.9 69.4 70.1 55.4 71.9 62.4 66.8 70.6 43.4 61.8 67.2 40.5 42.0 33.3 31.6 50.2 176.7 182.7 132.1 165.3 179.8 456.8 463.4 409.1 416.2 419.7 464 546 563 600 456 464 546 563 600 456 25,562 35,983 30,558 24,237 20,848 25,562 35,983 30,558 24,237 20,848 59,953 68,345 63,578 73,726 73,998 28,989 33,497 23,471 17,856 28,609 88,942 101,842 87,049 91,582 102,607 2,339 2,527 1,997 2,570 2,189 1,189 1,321 1,309 1,178 1,062 248 278 213 212 230 3,776 4,126 3,519 3,960 3,481 1,118 1,123 555 929 1,106 1,118 1,123 555 929 1,106 420 261 464 417 82 420 261 464 417 82 |
658.0 679.7 109.8 104.9 |
| 767.8 784.6 |
||
| 189.7 217.4 172.4 193.2 115.1 94.7 |
||
| 477.2 505.3 |
||
| 1,245.0 1,289.9 |
||
| 1,619 2,888 |
||
| 1,619 2,888 |
||
| 75,643 83,817 |
||
| 75,643 83,817 |
||
| 211,302 160,757 69,936 58,059 |
||
| 281,238 218,816 |
||
| 6,756 6,269 3,549 4,116 655 514 |
||
| 10,960 10,899 |
||
| 2,590 2,241 |
||
| 2,590 2,241 |
||
| 963 1,401 |
||
| 963 1,401 |
BHP Operational Review for the nine months ended 31 March 2019
9
Production summary
| Production summary | ||
|---|---|---|
| BHP interest |
Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Year to date |
| Mar Mar 2019 2018 |
||
| 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 |
16,412 18,500 16,378 17,578 15,608 12,802 12,041 11,696 10,280 11,627 15,802 17,339 16,870 15,627 15,214 4,669 15,092 16,333 14,320 13,658 8,006 614 114 30 10 - - - - - 57,691 63,586 61,391 57,835 56,117 |
49,564 48,571 33,603 39,476 47,711 46,709 44,311 15,535 154 24,544 - - |
| 175,343 174,835 |
||
| Coal | ||
| Metallurgical coal Production (kt) (7) BMA 50% BHP Mitsui Coal(8) 80% Total Energy coal Production (kt) Australia 100% Colombia 33.3% Total |
7,983 9,220 7,744 7,694 7,608 2,396 2,789 2,614 2,578 2,269 10,379 12,009 10,358 10,272 9,877 3,662 6,261 3,982 4,311 4,552 2,444 2,762 2,658 2,356 2,199 6,106 9,023 6,640 6,667 6,751 |
23,046 23,673 7,461 6,958 |
| 30,507 30,631 |
||
| 12,845 12,280 7,213 7,855 |
||
| 20,058 20,135 |
||
| Other | ||
| Nickel Saleable production (kt) Nickel West (9) 100% Total Cobalt Saleable production (t) Nickel West 100% Total |
21.1 25.6 21.4 18.1 19.2 21.1 25.6 21.4 18.1 19.2 240 277 249 154 194 240 277 249 154 194 |
58.7 67.4 |
| 58.7 67.4 |
||
| 597 783 |
||
| 597 783 |
(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 nine months ended 31 March 2019
10
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 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(5) Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total petroleum products (MMboe) Algeria Crude oil and condensate (Mboe) Total petroleum products (MMboe) |
1,126 1,361 1,653 1,401 893 1,170 1,428 1,840 1,447 849 20.5 29.9 35.1 25.2 21.0 5.7 7.8 9.3 7.0 5.2 1,377 1,267 1,514 1,520 1,431 210 186 242 206 193 35.8 34.2 36.6 37.5 36.6 7.6 7.2 7.9 8.0 7.7 1,250 1,168 282 1,101 940 1.3 1.2 0.3 1.1 0.9 8 7 7 8 6 13.4 13.9 13.8 13.9 13.0 2.2 2.3 2.3 2.3 2.2 3,459 3,471 3,190 3,802 3,888 248 217 215 268 275 1.8 1.5 1.5 1.9 2.0 4.0 3.9 3.7 4.4 4.5 1,140 581 1,270 1,158 1,258 55 27 61 54 58 0.2 0.1 0.2 0.2 0.2 1.2 0.6 1.4 1.2 1.3 2,323 2,110 2,016 2,024 1,881 140 151 122 121 112 0.4 0.4 0.4 0.4 0.4 2.5 2.3 2.2 2.2 2.1 232 233 447 200 284 10.0 9.8 24.0 14.0 19.5 1.9 1.9 4.4 2.5 3.5 189 313 207 218 284 3 22 3 4 18 - 0.3 - 0.1 0.2 0.2 0.4 0.2 0.2 0.3 43 38 36 36 - 18 18 21 21 - 0.8 0.6 0.7 0.7 - 0.2 0.2 0.2 0.2 - 969 888 961 908 866 1.0 0.9 1.0 0.9 0.9 |
3,947 4,454 4,136 4,704 81.3 96.0 21.6 25.2 4,465 4,293 641 637 110.7 108.2 23.6 23.0 2,323 3,970 2.3 4.0 21 25 40.7 42.8 6.8 7.2 10,880 9,858 758 661 5.4 5.2 12.5 11.4 3,686 3,391 173 171 0.6 0.5 4.0 3.6 5,921 7,127 355 465 1.2 1.3 6.5 7.8 931 485 57.5 30.2 10.5 5.5 709 625 25 11 0.3 0.2 0.8 0.7 72 105 42 70 1.4 1.9 0.3 0.5 2,735 2,867 2.7 2.9 |
BHP Operational Review for the nine months ended 31 March 2019
11
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Year to date | |
|---|---|---|
| Mar Mar 2019 2018 |
||
| Petroleum - Total (1) | ||
| Conventional Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total (Mboe) |
12,116 11,437 11,583 12,376 11,731 1,844 2,049 2,504 2,121 1,505 82.9 90.7 112.3 93.9 92.9 27,777 28,603 32,804 30,147 28,719 |
35,690 37,200 6,130 6,719 299.1 286.3 |
| 91,670 91,636 |
(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) BHP completed the sale of its interest in the Bruce and Keith oil and gas fields on 30 November 2018. The sale has an effective date of 1 January 2018.
BHP Operational Review for the nine months ended 31 March 2019
12
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 Year to date |
|
|---|---|---|
| Copper | ||
| Escondida, Chile (1) Material mined (kt) 103,385 106,788 107,260 105,580 103,936 Sulphide ore milled (kt) 32,203 31,732 30,513 30,507 32,027 Average concentrator head grade (%) 0.96% 0.96% 0.94% 0.87% 0.82% Production ex mill (kt) 252.6 253.6 241.9 219.9 216.9 Production Payable copper (kt) 244.9 246.1 240.0 212.6 205.4 Copper cathode (EW) (kt) 69.4 70.1 55.4 71.9 62.4 - Oxide leach (kt) 24.5 27.1 19.5 23.4 20.9 - Sulphide leach (kt) 44.9 43.0 35.8 48.5 41.5 Total copper (kt) 314.3 316.2 295.4 284.5 267.8 Payable gold concentrate (troy oz) 59,953 68,345 63,578 73,726 73,998 Payable silver concentrate (troy koz) 2,339 2,527 1,997 2,570 2,189 Sales Payable copper (kt) 228.3 260.3 216.5 229.2 212.0 Copper cathode (EW) (kt) 61.7 80.9 53.2 72.3 56.6 Payable gold concentrate (troy oz) 59,953 68,345 63,578 73,726 73,999 Payable silver concentrate (troy koz) 2,339 2,527 1,997 2,570 2,189 (1) Shown on a 100% basis. BHP interest in saleable production is 57.5%. Metals production is payable metal unless otherwise stated. |
316,776 309,623 93,047 86,543 0.88% 0.99% 678.7 702.5 658.0 679.7 189.7 217.4 63.8 74.3 125.8 143.1 847.7 897.1 211,302 160,757 6,756 6,269 657.7 660.1 182.1 207.4 211,303 160,757 6,756 6,269 |
|
| Pampa Norte, Chile Cerro Colorado Material mined (kt) 17,766 17,918 18,488 19,875 15,561 Ore milled (kt) 4,905 4,833 4,802 5,069 4,277 Average copper grade (%) 0.58% 0.58% 0.53% 0.62% 0.63% Production Copper cathode (EW) (kt) 13.6 19.0 14.2 19.4 18.2 Sales Copper cathode (EW) (kt) 13.7 20.9 13.8 19.0 15.5 Spence Material mined (kt) 21,463 23,103 23,007 21,661 18,632 Ore milled (kt) 5,144 4,009 5,642 5,428 4,376 Average copper grade (%) 1.03% 1.11% 1.21% 1.10% 1.03% Production Copper cathode (EW) (kt) 53.2 51.6 29.2 42.4 49.0 Sales Copper cathode (EW) (kt) 49.8 57.1 29.7 39.1 46.1 |
53,924 59,338 14,148 13,467 0.59% 0.60% 51.8 44.3 48.3 43.7 63,300 66,873 15,446 15,438 1.12% 1.14% 120.6 148.9 114.9 145.0 |
BHP Operational Review for the nine months ended 31 March 2019
13
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 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) |
58,085 59,002 62,470 62,850 57,900 12,166 12,973 13,197 12,912 11,466 1.01% 0.91% 0.96% 1.02% 1.04% 1.01% 1.19% 1.10% 0.85% 0.87% 35.2 34.6 37.0 38.3 34.5 25,562 35,983 30,558 24,237 20,848 1,189 1,321 1,309 1,178 1,062 464 546 563 600 456 420 261 464 417 82 32.1 36.6 33.6 40.7 33.3 26,456 33,088 31,822 26,072 20,595 1,052 1,311 1,193 1,236 1,027 859 595 612 649 749 500 388 208 535 256 |
183,220 176,426 37,575 38,086 1.01% 0.95% 0.94% 0.98% 109.8 104.9 75,643 83,817 3,549 4,116 1,619 2,888 963 1,401 107.6 101.0 78,489 82,020 3,456 3,997 2,010 3,455 999 1,361 |
| 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) Payable uranium (t) Refined gold (troy oz) Refined silver (troy koz) Sales Copper cathode (ER and EW) (kt) Payable uranium (t) Refined gold (troy oz) Refined silver (troy koz) |
2,056 2,201 2,044 2,434 2,191 2,188 2,171 1,242 2,157 2,371 2.36% 2.12% 2.05% 2.10% 2.22% 0.71 0.69 0.62 0.62 0.65 40.5 42.0 33.3 31.6 50.2 1,118 1,123 555 929 1,106 28,989 33,497 23,471 17,856 28,609 248 278 213 212 230 36.8 46.0 33.9 26.6 47.4 509 1,230 765 828 375 20,715 35,714 21,145 17,812 27,574 202 307 216 177 241 |
6,669 5,298 5,770 5,044 2.14% 2.23% 0.63 0.62 115.1 94.7 2,590 2,241 69,936 58,059 655 514 107.9 92.7 1,968 1,527 66,531 61,149 634 539 |
(1) Material mined refers to run of mine ore mined and hoisted.
BHP Operational Review for the nine months ended 31 March 2019
14
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Year to date | |
|---|---|---|
| Mar Mar 2019 2018 |
||
| n Ore | ||
| lbara, Australia Production Newman (kt) 16,412 18,500 16,378 17,578 15,608 Area C Joint Venture (kt) 12,802 12,041 11,696 10,280 11,627 Yandi Joint Venture (kt) 15,802 17,339 16,870 15,627 15,214 Jimblebar(1) (kt) 4,669 15,092 16,333 14,320 13,658 Wheelarra (kt) 8,006 614 114 30 10 Total production (kt) 57,691 63,586 61,391 57,835 56,117 Total production (100%) (kt) 67,048 72,145 69,342 65,515 63,609 Sales Lump (kt) 13,993 15,173 15,014 14,020 13,603 Fines (kt) 44,332 47,730 46,527 44,059 41,981 Total (kt) 58,325 62,903 61,541 58,079 55,584 Total sales (100%) (kt) 67,799 71,385 69,421 65,758 62,853 n ore production and sales are reported on a wet tonnes basis. |
49,564 48,571 33,603 39,476 47,711 46,709 44,311 15,535 154 24,544 |
|
| 175,343 174,835 |
||
| 198,466 202,946 |
||
| 42,637 43,034 132,567 130,834 |
||
| 175,204 173,868 |
||
| 198,032 201,854 |
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) 25 - - 10 10 39
(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 nine months ended 31 March 2019
15
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 Year to date |
|
|---|---|---|
| Coal | ||
| Queensland Coal Production (1) BMA Blackwater (kt) 1,384 1,849 1,704 1,680 1,484 Goonyella (kt) 2,314 2,639 1,989 1,813 2,141 Peak Downs (kt) 1,723 1,658 1,131 1,685 1,468 Saraji (kt) 1,240 1,201 1,111 1,288 1,250 Daunia (kt) 547 629 620 419 470 Caval Ridge (kt) 775 1,244 1,189 809 795 Total BMA (kt) 7,983 9,220 7,744 7,694 7,608 Total BMA (100%) (kt) 15,966 18,440 15,488 15,388 15,216 BHP Mitsui Coal (2) South Walker Creek (kt) 1,490 1,615 1,505 1,636 1,429 Poitrel (kt) 906 1,174 1,109 942 840 Total BHP Mitsui Coal (kt) 2,396 2,789 2,614 2,578 2,269 Total Queensland Coal (kt) 10,379 12,009 10,358 10,272 9,877 Total Queensland Coal (100%) (kt) 18,362 21,229 18,102 17,966 17,485 Sales Coking coal (kt) 7,177 8,489 7,356 7,514 7,221 Weak coking coal (kt) 2,598 2,866 2,813 3,058 3,282 Thermal coal (kt) 168 85 141 157 379 Total (kt) 9,943 11,440 10,310 10,729 10,882 Total (100%) (kt) 17,658 20,162 18,102 18,818 19,176 (1) Production figures include some thermal coal. (2) Shown on a 100% basis. BHP interest in saleable production is 80%. Coal production is reported on the basis of saleable product. |
4,868 4,839 5,943 5,322 4,284 4,692 3,649 3,852 1,509 1,927 2,793 3,041 23,046 23,673 46,092 47,346 4,570 4,414 2,891 2,544 7,461 6,958 30,507 30,631 53,553 54,304 22,091 21,452 9,153 8,564 677 443 31,921 30,459 56,096 53,921 |
|
| NSW Energy Coal, Australia Production (kt) Sales Export thermal coal (kt) Inland thermal coal (kt) Total (kt) |
3,662 6,261 3,982 4,311 4,552 3,181 5,795 3,549 4,809 3,529 400 160 332 393 302 3,581 5,955 3,881 5,202 3,831 |
12,845 12,280 11,887 10,851 1,027 1,216 12,914 12,067 |
| Cerrejón, Colombia Production (kt) Sales thermal coal - export (kt) |
2,444 2,762 2,658 2,356 2,199 2,480 2,763 2,589 2,297 2,200 |
7,213 7,855 7,086 7,617 |
BHP Operational Review for the nine months ended 31 March 2019
16
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 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 by-products (t) Sales Refined nickel(1) (2) (kt) Intermediates and nickel by-products(1) (3) (kt) Total nickel (1) (kt) Cobalt by-products (t) Nickel production is reported on the basis of saleable product |
44.9 55.6 50.2 44.9 52.5 21.3 18.8 18.9 19.8 19.2 54.7 78.4 78.8 65.3 51.8 9.3 9.8 8.4 8.4 9.3 19.2 18.5 19.8 16.3 17.6 1.9 7.1 1.6 1.8 1.6 21.1 25.6 21.4 18.1 19.2 240 277 249 154 194 19.5 17.5 19.3 17.3 17.9 2.5 6.3 2.2 2.1 0.1 21.9 23.8 21.5 19.4 18.0 240 277 249 154 194 |
147.6 149.1 57.9 62.1 195.9 221.0 26.1 27.4 53.7 52.9 5.0 14.5 58.7 67.4 597 783 - - 54.5 53.5 4.4 14.3 58.9 67.8 597 783 |
(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 nine months ended 31 March 2019
17
Production and sales report
| Mar Jun Sep Dec Mar 2018 2018 2018 2018 2019 Quarter ended |
Mar Mar 2019 2018 Year to date |
|
|---|---|---|
| Onshore US - Discontinued operations (1)(2) | ||
| Eagle Ford (3) Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total petroleum products (MMboe) Permian(3) Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total petroleum products (MMboe) Haynesville(3) Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total petroleum products (MMboe) Fayetteville(4) Natural gas (bcf) Total petroleum products (MMboe) |
2,838 3,826 3,256 1,035 - 1,555 1,767 1,919 614 - 12.6 13.9 13.8 4.3 - 6.5 7.9 7.5 2.4 - 1,398 1,903 1,478 631 - 465 770 687 284 - 4.1 6.4 4.8 1.9 - 2.5 3.7 3.0 1.2 - - - 11 - - - - - - - 28.7 33.1 39.0 13.9 - 4.8 5.5 6.5 2.3 - 18.7 19.1 18.6 - - 3.1 3.2 3.1 - - |
4,291 10,015 2,533 5,511 18.1 40.8 9.8 22.3 2,109 3,719 971 1,512 6.7 12.2 4.2 7.3 11 1 - - 52.9 72.2 8.8 12.0 18.6 60.8 3.1 10.1 |
| Onshore US Crude oil and condensate (Mboe) NGL (Mboe) Natural gas (bcf) Total (Mboe) |
4,236 5,729 4,745 1,666 - 2,020 2,537 2,606 898 - 64.1 72.5 76.2 20.1 - 16,939 20,349 20,051 5,914 - |
6,411 13,735 3,504 7,023 96.3 186.0 25,965 51,758 |
(1) Total boe conversions are based on 6 bcf of natural gas equals 1 MMboe. Negative production figures represent finalisation adjustments.
(2) Volumes are net of mineral holder royalties.
(3) BHP completed the sale of its interests in the Eagle Ford, Haynesville and Permian assets on 31 October 2018.
(4) BHP completed the sale of its Fayetteville assets on 28 September 2018.
BHP Operational Review for the nine months ended 31 March 2019
18