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BHP Group Limited
BHP Group Limited ABN 49 004 028 077
Registered in Australia
Registered Office: Level 18, 171 Collins
Street Melbourne VIC 3000
Share code: BHG
ISIN: AU000000BHP4
18 October 2023
Operational review for the quarter ended 30 September 2023
We remain on track to deliver full year production and unit cost guidance at all assets.
First quarter operational performance was highlighted by a 11% uplift in copper production from the previous year. After completing a
typically busy quarter of planned maintenance particularly at our Australian assets, we are on track to achieve full year production and unit
cost guidance. BMA in particular was impacted by planned maintenance, an extended longwall move and low opening inventory following
drawdowns in the prior year.
Jansen Stage 1 in Canada is approximately one-third complete after a productive summer. In South Australia, we saw strong operational
performance in the first full quarter of production for the new province, as we bring our copper assets together and progress further
exploration drilling.
Mike Henry
BHP Chief Executive Officer
Summary
Operational performance Social value
On track to deliver production guidance Operational decarbonisation
FY24 production guidance remains unchanged. Copper BMA entered into a new renewable power purchase agreement
production increased 11%, including record quarterly production (PPA) which is expected to provide half the forecasted electricity
at Spence. BMA production was lower due to maintenance, an demand of BMA’s operations over five years from January 2026;
extended longwall move and low inventory. We also executed and we signed a memorandum of understanding (MoU) with
major planned maintenance across our Australian business. Toyota to reduce GHG emissions from light vehicles in Australia.
Large, long-life, low-cost assets Growth
3 Bt of iron ore shipped to China Progress in copper and potash provinces
In September, BHP recognised the shipment of 3 Bt of high- We saw strong underlying operational performance in the first full
quality iron ore to China. Since its initial investment over 30 years quarter of production from the newly-integrated Copper South
ago to the end of FY23, WAIO has delivered 15% average annual Australia, while our Jansen Stage 1 project remains on budget and
returns and, over the past decade, has increased production by on track to deliver first production by the end of CY26 (32%
>50% and lowered costs by >30%. complete).
FY24 YTD v Q1 FY24 v Current FY24
Production Q1 FY24 FY23 YTD Q4 FY23 guidance
Copper (kt) 457.0 11% (4%) 1,720 – 1,910
Escondida (kt) 273.3 8% (7%) 1,080 – 1,180 Unchanged
Pampa Norte (kt) 78.3 11% 14% 210 – 250i Unchanged
Copper South Australia (kt)ii 71.7 44% (6%) 310 – 340 Unchanged
Antamina (kt) 32.5 (12%) (11%) 120 – 140 Unchanged
Carajás (kt)ii 1.2 - (25%) - -
Iron ore (Mt) 63.2 (3%) (3%) 254 – 264.5
WAIO (Mt) 62.0 (3%) (3%) 250 – 260 Unchanged
WAIO (100% basis) (Mt) 69.4 (4%) (4%) 282 – 294 Unchanged
Samarco (Mt) 1.2 7% 1% 4 – 4.5 Unchanged
Metallurgical coal – BMA (Mt) 5.6 (16%) (34%) 28 – 31
BMA (100% basis) (Mt) 11.2 (16%) (34%) 56 – 62 Unchanged
Energy coal – NSWEC (Mt) 3.6 38% (24%) 13 – 15 Unchanged
Nickel – Nickel West (kt) 20.2 (2%) (8%) 77 – 87 Unchanged
i Production guidance for FY24 is for Spence only and excludes Cerro Colorado which is now expected to produce ~11 kt, up from previous guidance of
~9 kt, as it transitions to closure by 31 December 2023.
ii Q4 FY23 production volumes for the operations acquired from OZL are for the period of 1 May to 30 June 2023.
BHP | Operational review for the quarter ended 30 September 2023
Segment and asset performance | FY24 YTD v FY23 YTD
Copper
Production Total copper production increased by 11% to 457 kt. Guidance for FY24 remains
unchanged at between 1,720 and 1,910 kt.
457.0 kt 11%
Q1 FY23 410.1 kt Escondida 273 kt 8% (100% basis)
FY24e 1,720 – 1,910 kt Increased production was primarily due to higher concentrator feed grade of 0.85%,
compared to 0.83% in the September 2022 quarter. Concentrator feed grade is expected
to be between 0.85% and 0.90% during FY24. Guidance for FY24 remains unchanged at
Average realised price1,2
between 1,080 and 1,180 kt, with production expected to be weighted towards the second
US$3.63/lb 4% half of the year.
H2 FY23 US$3.80/lb Escondida successfully completed negotiations for a new collective agreement with the
Union N°2 of Supervisors, effective for 36 months from 1 October 2023.
Pampa Norte 78 kt 11%
Production at Spence increased 19% to a quarterly record of 69 kt, largely as a result of
improved concentrator performance and recoveries. The concentrator plant
modifications, which commenced in August 2022, are now expected to be completed in
FY24. Guidance for Spence remains unchanged at between 210 and 250 kt for FY24,
subject to the remediation of the previously identified anomalies in the Spence Tailings
Storage Facility.
Production at Cerro Colorado was 26% lower at 9 kt as it transitions towards closure by
the end of December 2023. Production for H1 FY24 is now expected to be ~11 kt, up from a
previous estimate of ~9 kt.
Copper South Australia 72 kt 44%
Production increased due to the additional 23 kt from Prominent Hill and Carrapateena.
Pleasingly, integration of the Olympic Dam, Prominent Hill and Carrapateena assets has
gone well, with strong operational performance and continued focus on safe and reliable
production, in particular at Olympic Dam (record material mined since FY15) and
Carrapateena (record development metres achieved in September). Planned maintenance
was completed across the province. In addition, we upgraded a conveyor at
Carrapateena, ahead of the planned commissioning of Crusher 2 in Q3 FY24.
Olympic Dam also delivered record gold production (for the second time in three
quarters) and gold sales in the quarter.
Production guidance remains unchanged at between 310 and 340 kt for FY24.
Exploration drilling continued beneath the Olympic Dam ore body with eight active drill
rigs and at Oak Dam with 10 operating drill rigs.
Other copper
Antamina copper production decreased by 12% to 33 kt reflecting planned lower copper
feed grades. Zinc production was 9% higher at 36 kt, reflecting higher grades. Copper
guidance of 120 to 140 kt and zinc guidance of between 85 and 105 kt remains unchanged
for FY24.
Carajás produced 1.2 kt of copper and 0.8 troy koz of gold. Operations were suspended in
August due to a geotechnical event, and are expected to recommence in Q2 FY24.
2
BHP | Operational review for the quarter ended 30 September 2023
Iron ore
Production Total iron ore production decreased by 3% to 63 Mt. Guidance for FY24 remains
unchanged at between 254 and 264.5 Mt.
63.2 Mt 3%
Q1 FY23 65.1 Mt WAIO 62 Mt 3% | 69 Mt (100% basis)
FY24e 254 – 264.5 Mt Production was lower due to tie-in activity for the Rail Technology Programme (RTP1), the
ongoing ramp up and maintenance at the Central Pilbara hub (South Flank and Mining
Area C), and the timing of track renewal maintenance.
Average realised price1
South Flank remains on track to ramp up to full production capacity of 80 Mtpa (100%
US$98.04/wmt 2% basis) by the end of FY24. The planned tie-in of the Port Debottlenecking Project (PDP1)
H2 FY23 US$99.88/wmt continues to progress and remains on track to be completed in CY24.
Guidance for FY24 remains unchanged at between 250 and 260 Mt (282 and 294 Mt on a
100% basis). We are building inventory at the mines while we complete planned
maintenance and with South Flank continuing to ramp up, volumes are expected to be
weighted to the second half.
Samarco 1.2 Mt 7% | 2.5 Mt (100% basis)
Production increased as a result of higher concentrator throughput. Guidance for FY24
remains unchanged at between 4 and 4.5 Mt.
Coal
Metallurgical coal
Production BMA 5.6 Mt 16% | 11.2 Mt (100% basis)
5.6 Mt 16% Lower production was due to planned wash plant maintenance at Goonyella, mining in
higher strip ratio areas, an extended longwall move at Broadmeadow, and a stoppage at
Q1 FY23 6.7 Mt
Peak Downs. This was partially offset by strong underlying truck productivity and favourable
FY24e 28 – 31 Mt weather conditions. BMA also opened the period with low inventory levels compared with
an inventory drawdown in the prior year due to wet weather.
1
Average realised price Guidance for FY24 remains unchanged at between 28 and 31 Mt (56 and 62 Mt on a 100%
basis). Planned wash plant maintenance at Peak Downs and Caval Ridge and the ramp up of
US$237.07/t 13%
Broadmeadow from the longwall move will continue into Q2. Once completed, we expect
H2 FY23 US$273.08/t underlying operating performance to deliver increased production in the second half.
In February 2023, we announced our intention to pursue options to divest the Daunia and
Blackwater mines together with our joint venture partner Mitsubishi Development Pty Ltd.
BHP confirms that Whitehaven Coal has been selected as the preferred bidder in the
divestment process.
Energy coal
Production NSWEC 3.6 Mt 38%
3.6 Mt 38% Production increased due to favourable weather conditions and eased labour constraints,
which enabled record annualised truck hours for the quarter. This was partially offset by
Q1 FY23 2.6 Mt
planned wash plant maintenance completed in August.
FY24e 13 – 15 Mt
Guidance for FY24 remains unchanged at between 13 and 15 Mt.
On 6 September 2023, the NSW Government announced a 2.6% point increase in coal
Average realised price1,3
royalties (from 8.2% to 10.8% for open cut mines), which will become effective from 1 July
US$125.66/t 20% 2024, coinciding with the end of the legislated period for the domestic reservation policy.
H2 FY23 US$157.21/t We have submitted a consent modification to mine beyond FY26 to closure in FY30, and
will take into consideration the increase to NSW royalties in the plans for closure.
3
BHP | Operational review for the quarter ended 30 September 2023
Group & Unallocated
Nickel
Production Nickel West 20.2 kt 2%
20.2 kt 2% Production decreased marginally in line with higher stripping activity at Mt Keith mining
operations.
Q1 FY23 20.7 kt
FY24e 77 – 87 kt
Guidance remains unchanged at between 77 and 87 kt for FY24. The refinery shutdown
planned for October 2023 will now largely be completed in February 2024, and as a
result production is expected to be relatively flat across the remainder of the year.
1
Average realised price
US$20,354/t 14%
H2 FY23 US$23,652/t
Quarterly performance | Q1 FY24 v Q4 FY23
Copper Iron ore
457.0 kt 4% Strong underlying operational 63.2 Mt 3% Lower production at WAIO as a result of
performance, including record quarterly planned equipment maintenance and
Q4 FY23 476.2 kt production at Spence, was offset by Q4 FY23 65.3 Mt the ongoing ramp-up of the Central
planned maintenance across Copper Pilbara hub, partially offset by favourable
South Australia and lower concentrator weather following Tropical Cyclone Ilsa
and stacking grades at Escondida. in the prior quarter.
Metallurgical coal Energy coal
5.6 Mt 34% The low opening inventory position 3.6 Mt 24% Lower volumes at NSWEC reflected
following drawdowns in Q4 FY23, along planned wash plant maintenance, and a
Q4 FY23 8.5 Mt with planned wash plant maintenance at Q4 FY23 4.8 Mt focus on additional stripping volumes
Blackwater and Goonyella, a higher strip which resulted in higher strip ratios.
ratio, a longer than planned longwall
move at Broadmeadow and an
unexpected stoppage at Peak Downs
resulted in lower volumes at BMA.
Nickel
20.2 kt 8% Lower volumes in line with higher
stripping activity at Mt Keith in the
Q4 FY23 22.0 kt quarter.
Further information in Appendix 1
Detailed production and sales information for all operations in Appendix 2
The following footnotes apply to this Operational Review:
1 Based on provisional, unaudited estimates. Prices exclude sales from equity accounted investments, third party product and internal sales, and represent
the weighted average of various sales terms (for example: FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional pricing and
finalisation adjustments.
2 Does not include sales from assets acquired through the purchase of OZL.
3 Export sales only. Includes thermal coal sales from metallurgical coal mines.
4
BHP | Operational review for the quarter ended 30 September 2023
Appendix 1
Average realised prices1
Q1 FY24 v
Q1 FY24 H2 FY23 H2 FY23
Copper (US$/lb)2 3.63 3.80 (4%)
Iron ore (US$/wmt, FOB) 98.04 99.88 (2%)
Metallurgical coal (US$/t) 237.07 273.08 (13%)
Hard coking coal (US$/t)3 242.52 276.22 (12%)
Weak coking coal (US$/t)3 190.74 250.38 (24%)
Thermal coal (US$/t)4 125.66 157.21 (20%)
Nickel metal (US$/t) 20,354 23,652 (14%)
1 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.
2 Does not include sales from assets acquired through the purchase of OZL.
3 Hard coking coal (HCC) refers generally to those metallurgical coals with a Coke Strength after Reaction (CSR) of 35 and above, which includes coals
across the spectrum from Premium Coking to Semi Hard Coking coals, while weak coking coal (WCC) refers generally to those metallurgical coals with a
CSR below 35.
4 Export sales only. Includes thermal coal sales from metallurgical coal mines.
Current year unit cost guidance
Current
FY24 guidance1
Escondida unit cost (US$/lb)2 1.40 – 1.70 Unchanged
Spence unit cost (US$/lb) 2.00 – 2.30 Unchanged
WAIO unit cost (US$/t) 17.40 – 18.90 Unchanged
BMA unit cost (US$/t) 95 – 105 Unchanged
1 FY24 unit cost guidance is based on exchange rates of AUD/USD 0.67 and USD/CLP 810.
2 Escondida unit costs for FY24 onwards exclude revenue-based government royalties.
Medium term guidance
Production Unit cost
guidance guidance1
Escondida2 1,200 – 1,300 kt US$1.30 – $1.60/lb3
Spence4 ~250 kt
WAIO (100% basis) >305 Mt 
