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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 18 January 2024
ISIN: AU000000BHP4
Operational review for the half year ended 31 December 2023
Strong H1 in copper, iron ore and energy coal. Challenging half in metallurgical coal.
Tragically, a team member from BEP Engineering & Maintenance, a contracting partner to BMA, was fatally injured in an incident at BMA’s
Saraji mine earlier this week. Our deepest sympathies are with their family, friends and colleagues at this difficult time. We are committed
to learning from this tragedy and investigations into the incident are underway.
Operationally, BHP has had a solid first half. WA Iron Ore production was up 5% quarter-on-quarter, while first half copper production rose
7% reflecting a record half at Spence and ongoing strong performance and additional tonnes at Copper South Australia. NSW Energy Coal
had its best first half in five years, while BMA had a tough six months following significant planned maintenance and low starting
inventories. At Nickel West, we are evaluating options to mitigate the impacts of the sharp fall in nickel prices.
We progressed our growth agenda during the quarter with ongoing construction of the Jansen mine in Canada and the sanction of Jansen
Stage 2, which doubles our planned potash production capacity. In South Australia, we successfully integrated our Copper SA business
and significant exploration drilling beneath Olympic Dam has identified attractive copper mineralisation above 1% grade along a 2 km
strike, with areas above 2%.
Mike Henry
BHP Chief Executive Officer
Summary
Operational performance Portfolio
Production guidance unchanged, except Enhancing the quality of our portfolio
at BMA
FY24 production guidance ranges remain unchanged for all We are investing in growth with the approval of US$4.9 bn in
assets, with the exception of BMA which has been lowered to Jansen Stage 2. We continued our strategic focus on higher
between 23 and 25 Mt (46 – 50 Mt at 100%) excl. Blackwater and quality metallurgical coal with the planned divestment of BMA’s
Daunia from the expected sale completion date of 2 April 2024. Blackwater and Daunia mines for cash consideration of up to
1
Copper production increased 7%, including a record quarter at US$4.1 bn (100% basis). We have undertaken ~62 km of
Carrapateena, and energy coal production increased 36%, with its exploratory drilling beneath Olympic Dam (OD Deeps), which has
FY24 production now expected to be in the upper end of the shown extensive mineralisation continuity, with attractive copper
guidance range. grades of above 1% along more than 2 km in strike and more than
1 km in depth. Results are included in Appendix 3.
Financial performance Leadership
Unit cost guidance Executive Leadership Team update
WAIO, Escondida and Spence are expected to be within their In December, we announced a number of changes to our
respective unit cost guidance ranges at FY24, with BMA unit cost Executive Leadership Team, effective 1 March 2024, including
guidance for FY24 increasing to between US$110/t and US$116/t that Catherine Raw will join BHP from SSE plc as Chief
as a result of the lowered production guidance. Development Officer effective 29 April 2024.
Production Quarter performance YTD performance FY24 production guidance
Q2 FY24 v Q1 FY24 v Q2 FY23 HY24 v HY23 Previous Current
Copper (kt) 437.4 (4%) 3% 894.4 7% 1,720 – 1,910 1,720 – 1,910
Escondida (kt) 254.6 (7%) (1%) 527.9 3% 1,080 – 1,180 1,080 – 1,180 Unchanged
Pampa Norte (kt) 59.8 (24%) (22%) 138.1 (6%) 210 – 250i 210 – 250i Unchanged
Copper South Australia (kt) 82.0 14% 51% 153.7 48% 310 – 340 310 – 340 Unchanged
Antamina (kt) 39.2 21% 11% 71.7 (1%) 120 – 140 120 – 140 Unchanged
Carajás (kt) 1.8 50% 3.0 - - -
Iron ore (Mt) 65.8 4% (2%) 129.0 (2%) 254 – 264.5 254 – 264.5
WAIO (Mt) 64.5 4% (2%) 126.5 (3%) 250 – 260 250 – 260 Unchanged
WAIO (100% basis) (Mt) 72.7 5% (2%) 142.1 (3%) 282 – 294 282 – 294 Unchanged
Samarco (Mt) 1.3 6% 19% 2.5 13% 4 – 4.5 4 – 4.5 Unchanged
Metallurgical coal – BMA (Mt) 5.7 2% (18%) 11.3 (17%) 28 – 31 23 – 25 Lowered
BMA (100% basis) (Mt) 11.4 2% (18%) 22.6 (17%) 56 – 62 46 – 50 Lowered
Energy coal – NSWEC (Mt) 3.9 7% 35% 7.5 36% 13 – 15 13 – 15 Upper end
Nickel – Nickel West (kt) 19.6 (3%) 11% 39.8 4% 77 – 87 77 – 87 Unchanged
i Production guidance for FY24 is for Spence only and excludes Cerro Colorado which produced 11 kt before ceasing production on 9 November 2023.
BHP | Operational review for the half year ended 31 December 2023
Summary of disclosures
BHP expects its financial results for the half year ended 31 December 2023 (HY24) to reflect certain items summarised in the
table below. The table does not provide a comprehensive list of all items impacting the period. The financial statements are
the subject of ongoing work that will not be finalised until the release of the financial results on 20 February 2024.
Accordingly, the information in the table below contains preliminary information that is subject to update and finalisation.
H1 impacti
Description (US$M) Classificationii
iii
Unit costs (at guidance FX)
At HY24, unit costs at WAIO and Escondida are expected to be within their respective guidance ranges,
while Spence is expected to be in the lower half of its guidance range. Unit costs at BMA are expected to be
substantially higher than the revised guidance range due to the lower volumes - Operating costs
For FY24, unit cost guidance for WAIO, Escondida and Spence remains unchanged. Unit cost guidance for
BMA has been increased to between US$110/t and US$116/t as a result of the decrease in expected
production, and excludes Blackwater and Daunia from the expected date of completion of the divestment - Operating costs
iii
Note: weaker Australian dollar and Chilean peso than guidance rates were realised in the period Refer footnote
Income statement
The Group’s adjusted effective tax rate for HY24 is expected to be in the lower half of the guidance range of
30 – 35% - Taxation expense
Cash flow statement
Working capital movements including net price impacts, closure and rehabilitation payments and other
movements ~1,500 – 1,700 ↓ Operating cash flow
Cash tax paid ~3,500 – 3,600 ↓ Operating cash flow
Dividends received from equity-accounted investments ~200 ↑ Operating cash flow
Dividends paid to non-controlling interests ~600 ↓ Financing cash flow
Payment of the H2 FY23 dividend ~4,000 ↓ Financing cash flow
Balance sheet
The Group’s net debt balance at 31 December 2023 is expected to be between $12.5 and $13.0 bn - Net debt
Exceptional items
Financial impact on BHP Brasil of the Samarco dam failure
The financial impact is expected to primarily relate to amortisation of discounting on the provision and the
impact of foreign exchange Refer footnoteiv Exceptional item
i Numbers are not tax effected, unless otherwise noted.
ii There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant, unless otherwise noted.
iii Average exchange rates for HY24 of AUD/USD 0.65 (guidance rate AUD/USD 0.67) and USD/CLP 874 (guidance rate USD/CLP 810).
iv Financial impact is the subject of ongoing work and is not yet finalised. See Iron ore section for further information on Samarco operations.
Further information in Appendix 1
Detailed production and sales information for all operations in Appendix 2
Detailed drilling results for Olympic Dam Deeps Appendix 3
2
BHP | Operational review for the half year ended 31 December 2023
Segment and asset performance | FY24 YTD v FY23 YTD
Copper
Production Total copper production increased by 7% to 894 kt. Copper guidance for FY24 remains
unchanged at between 1,720 and 1,910 kt.
894 kt 7%
HY23 834 kt
Escondida 528 kt 3% (100% basis)
FY24e 1,720 – 1,910 kt Increased production was primarily due to higher concentrator feed grade of 0.81%,
compared to 0.79% in HY23 and higher concentrator throughput. Concentrator feed
grade is expected to be between 0.85% and 0.90% for FY24. Production guidance for
Average realised price FY24 remains unchanged at between 1,080 and 1,180 kt.
US$3.66/lb 5% Pampa Norte 138 kt 6%
HY23 US$3.49/lb Production at Spence increased 4% to a half year record of 127 kt, driven by improved
concentrator throughput. Record concentrate production was partially offset by lower
cathode production, in line with an expected decline in stacked feed grade. The
concentrator plant modifications which commenced in August 2022 are expected to be
completed in FY24.
We approved an incremental US$570 m in sustaining capital to progress remediation of
previously identified anomalies in the Spence Tailings Storage Facility (TSF). These plans
have been developed with the Engineer of Record, Independent Tailings Review Board
and expert consultants. This is the first stage to remediate the TSF. Production guidance
for Spence for FY24 remains unchanged at between 210 and 250 kt and remains subject
to successful remediation of the TSF anomalies.
Cerro Colorado entered temporary care and maintenance in December 2023, after
producing 11 kt for the period.
Copper South Australia 154 kt 48%
Production increased by 51 kt due to the additional volumes from Prominent Hill and
Carrapateena. Successful integration of the Copper South Australia asset has resulted in
strong underlying operational performance, including record quarterly copper production
at Carrapateena in Q2. Strong smelter performance at Olympic Dam was supported by
increased transfers of concentrate from Prominent Hill for processing to higher margin
cathode. Olympic Dam also delivered record half year gold production and sales.
Production guidance for FY24 remains unchanged at between 310 and 340 kt.
Crusher 2 at Carrapateena remains on track to come online in Q3 FY24 and to ramp up in
Q4 FY24. We have also had continued success with exploration drilling across the asset.
Drilling to date beneath the known Olympic Dam ore body (OD Deeps) confirms attractive
mineralisation continuity at above 1% copper grade (refer to Appendix 3). At Oak Dam,
there are 12 active drill rigs (up from 10) and the accommodation camp is nearing
completion.
Other copper
At Antamina, copper production decreased by 1% to 72 kt, while zinc production was 10%
higher at 69 kt, both in line with planned concentrator feed grades. Production guidance
at Antamina remains unchanged for FY24 with expected copper production of between
120 to 140 kt and zinc production of between 85 and 105 kt.
Carajás produced 3.0 kt of copper and 2.1 troy koz of gold. Operations were stopped in
August due to a geotechnical event, and gradually restarted in October. In Q3 FY24
operations will continue to ramp back up with shipments also expected to resume.
3
BHP | Operational review for the half year ended 31 December 2023
Iron ore
Production Total iron ore production decreased by 2% to 129 Mt. Guidance for FY24 remains
unchanged at between 254 and 264.5 Mt.
129 Mt 2%
HY23 132 Mt
WAIO 126 Mt 3% | 142 Mt (100% basis)
FY24e 254 – 264.5 Mt
Lower production due to the continued tie-in activity for the Rail Technology Programme
(RTP1), and the impacts of the ongoing ramp up of the Central Pilbara hub (South Flank
and Mining Area C).
Average realised price South Flank is on track to ramp up to full production capacity of 80 Mtpa (100% basis) by
US$103.70/wmt 21% the end of FY24. The planned tie-in of the Port Debottlenecking Project (PDP1) is on track
to be completed in CY24, following commissioning on 7 December 2023.
HY23 US$85.46/wmt
Production guidance for FY24 remains unchanged at between 250 and 260 Mt (282 and
294 Mt on a 100% basis).
Samarco 2.5 Mt 13% | 5.1 Mt (100% basis)
Production increased as a result of higher concentrator throughput. Production guidance
for FY24 remains unchanged at between 4 and 4.5 Mt.
In December 2023, BHP Brasil approved up to US$925 m in further financial support for
the Renova Foundation. The funding is for CY24 and will be deducted from the Group’s
provision for the Samarco dam failure.
Coal
Metallurgical coal
Production BMA 11.3 Mt 17% | 22.6 Mt (100% basis)
11.3 Mt 17% On 15 January, a team member from BEP Engineering & Maintenance, a contracting
partner to BMA, was fatally injured in a vehicle incident at Saraji mine. Investigations are
HY23 13.6 Mt
underway and we are working closely with the relevant authorities. Operations at Saraji
FY24e 23 – 25 Mt were suspended and are expected to progressively restart over the coming days.
In the period, lower production was as a result of a significant increase in planned
maintenance across the asset, the extended longwall move, and geotechnical faulting
Average realised price
which impacted underground operations at Broadmeadow until early November.
US$266.43/t 1% Production was also impacted by an increase in prime stripping to improve value chain
stability following depleted inventory positions arising from extended weather impacts
HY23 US$268.73/t
and labour constraints over recent years.
Full year production guidance is now expected to be between 23 and 25 Mt (46 and 50 Mt
on a 100% basis). This guidance excludes Blackwater and Daunia from the date of
completion of the divestment which is expected to occur on 2 April 2024. This has been
lowered from 28 – 31 Mt (56 and 62 Mt on a 100% basis), inclusive of Blackwater and
Daunia.
4
BHP | Operational review for the half year ended 31 December 2023
Energy coal
Production NSWEC 7.5 Mt 36%
7.5 Mt 36% Increased production as a result of strong operating performance as eased labour
constraints and improved weather conditions enabled an uplift in truck productivity, with
HY23 5.5 Mt
record annualised truck hours for the half. Domestic sales under the NSW Government
FY24e 13 – 15 Mt Coal Market Price Emergency (Directions for Coal Mines) Notice commenced in Q4 FY23,
which resulted in a lower proportion of washed coal and contributed to the higher
volumes.
Average realised price
Production guidance for FY24 is expected to be at the upper end of the range of between
US$123.29/t 65% 13 and 15 Mt.
HY23 US$354.30/t We submitted a modification request to the NSW Government to extend mining approval
to 30 June 2030 in support of the 2030 closure plan. The modification submission went
on public exhibition for four weeks in November 2023. The approval process will continue
through FY24.
Group & Unallocated
Nickel
Production Nickel West 40 kt 4%
40 kt 4% Production increased due to improved performance, and a shorter shutdown period at the
Kalgoorlie Smelter offsetting downtime at the Kwinana Refinery.
HY23 38 kt
Production guidance remains unchanged at between 77 and 87 kt for FY24.
FY24e 77 – 87 kt
The nickel industry is undergoing a number of structural changes and is at a cyclical low
in realised pricing. Nickel West is not immune to these challenges. Operations are being
Average realised price actively optimised, and options are being evaluated to mitigate the impacts of the sharp
fall in nickel prices. Given the market conditions, a carrying value assessment of the
US$18,602/t 24% Group’s nickel assets is ongoing, and a further update will be provided with the release of
HY23 US$24,362/t the financial results on 20 February 2024.
Quarterly performance | Q2 FY24 v Q1 FY24
Copper Iron ore
437 kt 4% Lower concentrator grade at Escondida 66 Mt 4% Increased production at WAIO as a result
and concentrator throughput at Spence, of the Q1 impacts of the RTP1
Q1 FY24 457 kt partially offset by higher volumes at Q1 FY24 63 Mt integration, planned equipment
Copper South Australia following maintenance and Central Pilbara hub
planned maintenance in Q1. ramp up.
Metallurgical coal Energy coal
5.7 Mt 2% Production increased due to the lower 3.9 Mt 7% Higher production as a result of strong
planned wash plant maintenance, the performance across the value chain,
Q1 FY24 5.6 Mt ramp up of the longwall at Q1 FY24 3.6 Mt largely driven by strong Q1 stripping
Broadmeadow, and improved strip ratio. performance, and the opportune draw
This was partially offset by significantly down of raw coal.
increased rainfall.
Nickel
20 kt 3% Lower volumes due to downtime at the
Kwinana Refinery.
Q1 FY24 20 kt
The following footnotes apply to this Operational Review:
1 Prior year comparatives do not include production volumes for the operations acquired from OZL on 2 May 2023.
5
BHP | Operational review for the half year ended 31 December 2023
Appendix 1
Average realised prices1
Q2 FY24 v HY24 v HY24 v
Q2 FY24 HY24 Q1 FY24 H2 FY23 HY23
Copper (US$/lb)2,3,4 3.68 3.66 1% (4%) 5%
Iron ore (US$/wmt, FOB)5 109.47 103.70 12% 4% 21%
Metallurgical coal (US$/t)6 293.21 266.43 24% (2%) (1%)
Hard coking coal (US$/t)7 305.69 274.99 26% 0% 2%
7
Weak coking coal (US$/t) 214.26 204.55 12% (18%) (19%)
Thermal coal (US$/t)6,8 121.35 123.29 (3%) (22%) (65%)
Nickel metal (US$/t) 16,812 18,602 (17%) (21%) (24%)
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 At 31 December 2023, the Group had 356 kt of outstanding copper sales that were revalued at a weighted average price of US$3.87/lb. The final price of
these sales will be determined over the remainder of FY24. In addition, 342 kt of copper sales from FY23 were subject to a finalisation adjustment in the
current period. The displayed prices include the impact of these provisional pricing and finalisation adjustments.
3 The large majority of copper cathodes sales were linked to index price for quotation periods one month after month of shipment, and three to four months
after month of shipment for copper concentrates sales with price differentials applied for location and treatment costs.
4 Does not include sales from assets acquired through the purchase of OZL.
5 The large majority of iron ore shipments were linked to index pricing for the month of shipment, with price differentials predominantly a reflection of
market fundamentals and product quality. Iron ore sales for HY24 and Q2 FY24 were based on an average moisture rate of 6.7% (HY23: 6.8%).
6 The large majority of metallurgical coal and energy coal exports were linked to index pricing for the month of scheduled shipment or priced on the spot
market at fixed or index-linked prices, with price differentials reflecting product quality.
7 Hard coking coal (HCC) refers generally to those metallurgical coals with a Coke Strength after Reaction (CSR) of 35 and above, which includes coals
across the spectrum from Premium Coking to Semi Hard Coking coals, while weak coking coal (WCC) refers generally to those metallurgical coals with a
CSR below 35.
8 Export sales only. Includes thermal coal sales from metallurgical coal mines.
Current year unit cost guidance
Previous Current
FY24 guidance1 FY24 guidance1
Escondida unit cost (US$/lb)2 1.40 – 1.70 1.40 – 1.70 Unchanged
Spence unit cost (US$/lb) 2.00 – 2.30 2.00 – 2.30 Unchanged
WAIO unit cost (US$/t) 17.40 – 18.90 17.40 – 18.90 Unchanged
BMA unit cost (US$/t) 95 – 105 110 – 116 Increased
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 
