Try our mobile app
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
Exchange release
1 November 2023
BHP Annual General Meeting 2023 speeches and
presentation
The following documents are attached and will be presented at the 2023 Annual General Meeting of
BHP Group Limited to be held today:
1. Chair address
2. CEO address
In addition, the AGM presentation has been submitted to the FCA National Storage Mechanism and
will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
These documents can also be accessed via BHP’s website at bhp.com/agm
Authorised for release by Stefanie Wilkinson, Group Company Secretary.
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
Contacts
Media Investor Relations
media.relations@bhp.com investor.relations@bhp.com
Australia and Asia Australia and Asia
Gabrielle Notley John-Paul Santamaria
+61 411 071 715 +61 499 006 018
Europe, Middle East and Africa Europe, Middle East and Africa
Neil Burrows James Bell
+44 7786 661 683 +44 7961 636 432
Americas Americas
Renata Fernandaz Monica Nettleton
+56 9 8229 5357 +1 (416) 518-6293
BHP Group Limited
ABN 49 004 028 077
LEI WZE1WSENV6JSZFK0JC28
Registered in Australia
Level 18, 171 Collins Street
Melbourne
Victoria 3000 Australia
Tel: +61 1300 55 4757 Fax: +61 3 9609 3015
BHP Group is headquartered in Australia
bhp.com
BHP Group Limited AGM
1 November 2023
Ken Mackenzie, Chair
Welcome to everyone with us here in South Australia today and watching online.
Our results for the 2023 financial year demonstrate BHP’s focus on consistently executing
our strategy to deliver results.
Our operating performance and financial results were strong, and we made good progress
towards our social value targets and goals.
We believe our company is well positioned to continue to create value today, and for
decades to come. I’d like to take this opportunity to explain why, focusing on:
• Our approach to safety, culture and capability
• Our role in a sustainable global future
• Our strong, consistent performance and returns, and
• Our focus on social value
Safety and culture
At BHP, safety is our number one priority. The two tragic fatalities this year at Western
Australia Iron Ore and at Olympic Dam were stark reminders of the reason why safety must
always be our number one priority.
Our commitment to the goal of zero fatalities and serious injuries at BHP remains
unwavering. We are continuing to drive our safety culture to eliminate fatalities and serious
injuries.
This safety culture goes beyond operational safety and includes addressing sexual
harassment, racism and bullying in our workplace. We still have more work to do, but we are
making progress on our commitment to provide a safe, inclusive workplace culture where
everyone can bring the best of themselves to work.
Our role in a global future
Mining, and BHP, have a clear and undeniable role in the critical global energy transition
required for more sustainable development.
Metals and minerals produced from mining are essential for decarbonisation, the energy
transition and to meet the demands of a growing population, who are increasingly urbanised
and seeking a higher standard of living.
Over the last three years, we have made strategic decisions to reshape our portfolio to align
with these global megatrends.
We unified our corporate structure to provide greater strategic flexibility, we merged our
former petroleum business with Woodside to create a top 10 global independent energy
company, and we approved an investment of $5.7 billion US dollars to develop Stage 1 of
the Jansen project in Canada, with first production expected in late 2026.
And just yesterday, the Board approved a further investment of $4.9 billion US dollars for
Stage 2 of that project, which Mike will touch on shortly.
This deliberate reshaping of our portfolio, positions BHP to create value for today and into
the future. We now have a portfolio that stands to benefit from the increased demand
generated from the global megatrends playing out around us.
Our portfolio includes copper for renewable energy, nickel for electric vehicles, iron ore and
higher-quality metallurgical coal for the steel required to build decarbonisation and other new
infrastructure, and we’re moving into potash, which we expect to be vital for food security
and more sustainable farming to support a growing population.
Our recent portfolio changes continue this theme. We are consolidating our metallurgical
coal portfolio in Queensland to focus on the higher-quality metallurgical coals preferred by
our steelmaking customers.
Copper South Australia
And our successful acquisition of OZ Minerals in May this year adds complementary copper
and nickel assets and creates an exciting opportunity for BHP here in South Australia.
We are combining the Carrapateena and Prominent Hill mines acquired from OZ Minerals
with the Olympic Dam asset and Oak Dam project, to create a new copper province – which
we call Copper South Australia. This new copper province will unlock long-term value and
create significant synergies.
But it’s essential to understand – and I know Mike is going to talk about this shortly – that the
right conditions will need to be met for Copper South Australia to compete with other options
in our Capital Allocation Framework.
Beyond this available growth from our existing assets, we have four further levers to pursue
growth: technology and innovation, early-stage entry, exploration and mergers &
acquisitions. We are making good progress on each of these fronts. But it’s important to note
that we are not pursuing growth for growths sake, but to create value for shareholders.
Strong, consistent performance and returns
We use our Capital Allocation Framework to assess the most effective and efficient way to
deploy our capital. It is deeply embedded in our decision making, and is one of the reasons
we have been able to consistently deliver substantial shareholder returns and create
financial and social value for our partners and stakeholders.
FY23 highlights
In the 2023 Financial Year, we had earnings of more than $13 billion US dollars. These
results were delivered against a back drop of global uncertainty, weaker commodity prices
and inflationary pressures.
We also continued to produce strong margins and a consistently high baseline of cash flow.
Over the past decade, we have delivered average margins of 55 per cent and generated
average net operating cash flows of $20 billion US dollars per year. This stability is a
hallmark for BHP and demonstrates the quality of our portfolio and the consistency of our
returns, despite the cyclical volatility in the resources sector.
Using our Capital Allocation Framework, this year’s result has flowed through to a full year
dividend to shareholders of $1.70 US per share, fully franked, which was a 64 per cent
payout ratio. This was the third largest ordinary dividend in our history.
To put these results into context, over the last two years, BHP has been the largest dividend
payer globally across all sectors and the largest dividend payer on the ASX100.
In terms of total shareholder returns, over the past 5 years, our total shareholder return was
approximately 15% per annum, and includes delivering more than $50 billion US dollars in
cash dividends to our shareholders.
We also created significant financial value in the communities where we operate through
payments to suppliers, wages to our employees, contributions to communities and taxes and
royalties paid to governments. In the 2023 Financial Year, our total economic contribution
was over $54 billion US dollars. This includes $2.6 billion US dollars paid to local suppliers
who support our operations.
Social value
We are also continuing to deliver tangible outcomes in each of the six pillars of our social
value framework, which are focused on decarbonisation, the environment, Indigenous
partnerships, workforce, communities, and supply chains.
The work we do in these areas is vital to our business. Delivering social value can help us
become a partner of choice with customers, suppliers and communities.
Addressing operational greenhouse gas emissions is an important part of our commitment to
sustainability. We have a Scope 1 and 2 decarbonisation target of at least a 30% reduction
in our operational greenhouse gas emissions by the 2030 financial year compared with our
baseline 2020 financial year. In the 2023 Financial Year, we further reduced our operational
emissions by 11 per cent from the previous year, and we remain on track to achieve our
2030 target.
Our future progress towards greenhouse gas emissions reductions won’t be linear as we
look to grow our business, but we have a comprehensive plan that is underpinned by clear
actions that support emissions reduction now and through to the 2030 Financial Year.
Our relationships with Traditional Owners and other Indigenous partners are some of the
most important relationships to BHP. We operate on the traditional lands of Indigenous
peoples at many of our locations in Australia and around the world. We partner widely with
Indigenous communities and have long-term agreements with Traditional Owners and First
Nations partners.
These are critical relationships for BHP’s ability to start new projects, expand existing
projects, and to grow our business.
We recognise that we can contribute positively to the lives and aspirations of Indigenous
peoples and communities by providing opportunities for employment and supporting
Indigenous enterprises. This year we spent more than $330 million US dollars with
Indigenous suppliers globally. This is more than double last year’s figure.
We are the largest Indigenous employer in the Australian resources sector with over 8 per
cent Indigenous employment. In Chile, our Indigenous employment is close to 10 per cent
and at our Jansen Potash Project in Canada it is almost 8 per cent.
Finally, this year we published our Reconciliation Action Plan which we developed in
partnership with Traditional Owners. This was the sixth iteration of our Reconciliation Action
Plan since 2007. We remain committed to incorporating Indigenous perspectives and voices
into the way we operate and manage our business, and to working closely with Traditional
Owners.
Board and succession, and conclusion
Now, before I hand across to Mike Henry, I would again like to acknowledge and thank Terry
Bowen who will retire as a director at the conclusion of this meeting.
And I am pleased to confirm that Michelle Hinchliffe will step into the role of Chair of the Risk
and Audit Committee following Terry’s retirement. Michelle brings significant experience in
risk management and financial controls.
In closing, I believe that BHP is in a strong and exciting position.
It is a belief powered by the global megatrends – population growth, increased
urbanisation... and the energy transition which are all increasing demand for mineral
resources.
We’ve made a number of strategic portfolio and structural changes over the last three years.
And we are further positioning our portfolio to benefit from that demand.
We will continue to drive a culture of safe and reliable operations while maintaining rigorous
capital discipline– and we are making good progress on social value, which is vital for
sustainable long term shareholder returns.
Thank you for your continued support and for investing in the future of BHP.
It is now my pleasure to invite your CEO Mike Henry to speak with you.
Thank you.
Mike Henry, CEO
Thanks Ken, and thanks to everyone here with us in Adelaide today and watching online.
Safety
I will start with safety, and 2023 was a difficult year from a safety perspective for the
Company.
Tragically two of our colleagues lost their lives while on the job. This included a fatal incident
at the Olympic Dam asset here in South Australia.
Our thoughts remain with their families, friends and colleagues. These events underscore
the absolute importance of safety first. We remain resolute in our commitment to eliminating
fatalities and serious injuries across BHP.
Strong operational performance
Turning now to broader business performance, as you’ve just heard from Ken, this financial
year we delivered another strong set of results.
We met production guidance across all of our four commodities, and achieved record annual
production at Western Australia Iron Ore, Olympic Dam and Spence. We managed inflation
well.
We made a significant economic and social contribution to the regions where we operate,
and delivered US$8.6 billion cash back to shareholders in dividends.
We have continued to expand and execute our suite of growth options, and that includes
progressing projects, advancing studies, and exploring new prospects.
We continue to invest in technology, innovation and early-stage options.
And of course, we undertook the successful acquisition of OZ Minerals.
Operational performance
In terms of underlying operations, this year we demonstrated strong performance across the
business, thanks to the efforts of our more than 80,000 employees and contractors.
Now if I unpack that a bit…
Western Australia Iron Ore achieved record production volumes and remains the lowest cost
of the major iron ore producers. In fact, our iron ore operations generate around five US
dollars more per tonne in free cash flow than that reported by our largest competitor, and
when you multiply that by the hundreds of millions of tonnes we produce each year you get a
sense for the relative performance of this asset. We are ensuring we get maximum returns
for every dollar of shareholder capital invested in this business.
In Copper, Escondida’s production increased by five per cent, year-on-year. Unit costs
increased by 17 per cent, primarily driven by inflationary pressure. This was a solid outcome
in the context of what other producers are experiencing; however, we remain very focused
on mitigating the impacts of inflation.
We achieved record production at Spence following higher concentrator throughput, and at
Olympic Dam, with continued strong performance at our concentrator and smelter.
This disciplined operational performance has underpinned continued, strong returns to
shareholders. In fact, BHP was among the highest dividend payers globally in the 2022
calendar year, of any company in any sector.
Portfolio and growth
Of course our business isn’t just about today, it’s about delivering value for shareholders
long-term, so I do want to spend a few minutes on portfolio and growth.
The resources industry is cyclical, and commodity prices will always impact overall sector
profitability.
This cyclicality is a key reason why we seek to have assets that are low on the cost curve.
This ensures they are more resilient at all points in the cycle.
This allows us to focus even more intensely on managing the things within our control –
safety and productivity. It allows us to do all we can to maximise the returns from the assets
we operate and the capital we have invested in them.
We seek a portfolio of assets that is deliberately structured to take advantage of the
megatrends occurring across the globe.
We see potential for growth in those commodities essential to the needs of urbanisation,
decarbonisation, and a growing population, and we are making the investments needed to
unlock productivity, progress towards decarbonising our assets, and deliver growth.
We’re working hard to define the path forward for Escondida which is the world’s largest
copper mine and resource[1] and which is well-placed to be one of the most responsible
copper producers globally, given its transition to full renewable power and desalinated water
usage.
At WAIO, we produced 285 million tonnes of iron ore in FY23, progressing towards 305
million tonnes per annum, with studies into reaching 330 million tonnes underway. Iron ore is
essential for the steel needed for infrastructure for the energy transition and ongoing
urbanisation.
[1] On a contained metals and equity share basis
Significant growth opportunities ahead
We also have a significant, exciting growth path ahead of us in potash in Canada. Potash,
used in fertilisers, will be essential for food security and more sustainable farming, against
the backdrop of a growing global population.
We believe the long-term fundamentals for the potash market are compelling and they have
further improved since we sanctioned Jansen Stage 1. Stage 1 is now 32 per cent complete
– and remains on budget and ahead of its original schedule, with first production expected
late in the 2026 calendar year.
And just yesterday the Board approved the decision to invest US$4.9 billion into Jansen
Stage 2, underscoring our confidence in potash and marking the next phase of our growth in
Canada.
Stage 2 will help to transform Jansen into one of the world’s largest potash mines, doubling
production capacity to 8.5 Mtpa, and positioning BHP as one of the leaders in the global
potash industry.
And we’re able to deliver Stage 2 at a lower capital intensity because of the infrastructure
delivered in Stage 1.
Jansen is a world-class asset in an investment friendly jurisdiction. It will create value for
generations to come.
We have continued to increase our copper and nickel prospects globally. These interests
include Oak Dam in South Australia, Kabanga Nickel in Tanzania, and Ocelot in the United
States. They also include projects in Serbia and Peru, and the Filo del Sol project in
Argentina and Chile.
We are also consolidating our coal portfolio to focus on the higher quality metallurgical coals
that are increasingly preferred by our customers – most recently through the up to US$4.1
billion divestment of our Blackwater and Daunia mines, part of the BMA business, which we
expect to complete in the fourth quarter of FY24.
Creating potential for future growth
And of course, there’s OZ Minerals. Bringing OZ into BHP creates the potential for further
growth in the near and long term, in the newly aggregated copper province for BHP assets
here in South Australia.
We believe that with stable and competitive government policies in place in South Australia,
there will be a strong case for future capital investment in these assets relative to other
potential investment options in our portfolio.
I really do want to thank Premier Malinauskas and his government for the constructive way
we are working together towards delivering this shared objective.
Globally, the mining sector is at a crossroads. The energy transition and broader
decarbonisation efforts are expected to progressively shift demand growth towards future-
facing commodities. A massive wave of capital investment will be required to meet demand
for these minerals.
Within this environment of heightened global competition, Australia has a once-in-a-
generation opportunity to capture an outsized share of this investment flow, and enjoy the
far-reaching future economic and societal benefits it could deliver. However, we can only
succeed if we are willing and able to compete.
This will require government and industry to work together to improve the competitiveness of
Australia’s mining sector so that the nation can enjoy the future benefits this opportunity can
bring.
It’s against this backdrop that we are closely watching policy changes at the Australian
Federal Government level, some of which risks our national competitiveness.
In particular, BHP shares concerns of the broader business community that the Australian
Government’s Same Job Same Pay proposal will increase costs and reduce Australia’s
investment competitiveness at a time when competition for investment is fierce globally and
other nations are working to become more competitive and more attractive.
Prior to the last election, we were on the record as supporting the principle of focused
legislative reform to protect vulnerable and low paid workers. However, the Same Job Same
Pay bill goes well and truly beyond this. The proposed changes are not about ‘closing
loopholes’ but are the most significant and far-reaching changes to Australian workplace
relations since WorkChoices.
BHP strongly opposed the Same Job Same Pay bill not only because of the damage it
threatens to do to our business, but also for the hit it will have on Australia’s economy, to
Australian jobs and to Australia’s productivity and international competitiveness.
The bill could reduce the value of any potential growth plans for a copper province of BHP
assets here in South Australia by up to US$2 billion. And it risks directly impacting dividends
for the 17 million Australians who hold BHP shares directly, or indirectly via superannuation.
This is not just about BHP. These concerns are shared by businesses large and small
across the country, and getting these policies wrong risks impacting Australians’ retirement
savings.
A competitive labour market with strong links between labour costs and productivity is
essential to the long-term success of our industry and the Australian economy. We will
continue to engage the Australian Federal Government constructively, together with the
wider business community to highlight the negative impact of these policies.
Delivering strong social value
When it comes to growth, the opportunities that we’re able to access and develop cannot be
realised without delivering strong social value. Social value goes hand in hand with long term
shareholder value.
Our access to the best resources, markets, partners and talent is contingent on making a
positive contribution to society and building strong relationships with partners, local
communities, and First Nations peoples.
Our approach is disciplined and proactive, and it’s delivering tangible outcomes. This year
we:
• Reduced our operational greenhouse gas emissions by 11% from the year prior,
and we remain on track to achieve our 2030 target to reduce operational GHG
emissions by at least 30 per cent from FY2020 levels.
• We doubled our spend with Indigenous suppliers globally to more than US$330
million and here in Australia, we released our sixth Reconciliation Action Plan which
was recognised with ‘Elevate’ status by Reconciliation Australia.
• And we further advanced female employee participation to more than 35 per cent
globally – more than double from 2016 when we set our aspirational goal to achieve
gender balance in our employee workforce by the end of FY2025.
Social value is fundamental to our success and future competitiveness and is an important
point of differentiation from our competitors.
Creating value now, and into the future
Before I conclude, I’d like to echo Ken’s thanks to Terry Bowen for his extensive
contributions to the Board and the company. Terry has brought a wealth of experience and
insight over his time with BHP, and I wish him the best in his future ventures.
At BHP we’re focused on creating value now, and into the future. We think and plan in
decades.
By 2050 the global population is projected to be around 10 billion, about two-thirds of whom
will live in urban areas. These global citizens will quite rightly be seeking to improve their
standard of living – raising demand for housing, better food, consumer goods, cars,
infrastructure, power and utilities.
These factors, together with the energy transition, are very metals and minerals intensive.
The two to four-fold increase in demand we expect for key BHP commodities over the next
three decades, versus the three decades past, presents both challenge and opportunity.
BHP will continue to plan strategically, responsibly, and consistently in seeking to help meet
that demand.
We will maintain our focus on operational performance, delivery, and growth. We will remain
disciplined in capital allocation, as we create value and generate returns.
I am confident in the strength of our company, now and into the future, and greatly
appreciate your ongoing support.
Thank you.
