Other
Nickel production
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Dec H19
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Dec Q19
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Dec H19
vs
Dec H18
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Dec Q19
vs
Dec Q18
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Dec Q19
vs
Sep Q19
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Nickel (kt)
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35.3
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13.7
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(11
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%)
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(24
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%)
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(37
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%)
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Nickel Nickel West production decreased by 11 per cent to 35 kt due to the major quadrennial maintenance
shutdowns at the Kwinana refinery and the Kalgoorlie smelter, as well as planned routine maintenance at the concentrators, in the December 2019 quarter. Guidance for the 2020 financial year remains unchanged, with production expected to be broadly
in line with the 2019 financial year.
Operations Services In Australia, Operations Services has now been deployed at 13 locations across
WAIO, Queensland Coal and NSWEC, with over 1,500 permanent jobs created. Deployments are successfully accelerating safety and productivity outcomes.
Potash project
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Project and ownership
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Investment
US$M
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Scope
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Progress
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Jansen Potash
(Canada)
100%
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2,700
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Investment to finish the excavation and lining of the production and service shafts, and to continue the installation of essential surface infrastructure and utilities.
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The project is 85% complete and within the approved budget. Final shaft lining work is continuing.
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Minerals exploration
Minerals exploration expenditure for the December 2019 half year was US$84 million, of which US$67 million was expensed. Greenfield minerals
exploration is predominantly focused on advancing copper targets within Chile, Ecuador, Mexico, Peru, Canada, South Australia and the south-west United States.
Consistent with our focus on copper, in November 2019, BHP increased its interest in SolGold Plc, the majority owner and operator of the Cascabel porphyry
copper-gold project in Ecuador, by 3.6 per cent to 14.7 per cent.
At Oak Dam in South Australia, the third phase of the drilling program
commenced in November 2019 and is expected to be completed in the June 2020 quarter. This follows encouraging results from the previous drilling phases, which confirmed high-grade mineralised intercepts of copper, with associated gold, uranium and
silver.
Variance analysis relates to the relative performance of BHP and/or its operations during the December 2019 half year compared with the December
2018 half year, 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 2019 financial year average realised prices.
The following footnotes apply to this Operational Review:
(1)
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2020 financial year unit cost guidance: Petroleum US$10.50-11.50/boe, Escondida US$1.20-1.35/lb, WAIO
US$13-14/t, Queensland Coal US$67-74/t and NSWEC US$55-61/t; based on exchange rates of AUD/USD 0.70 and USD/CLP 683.
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(2)
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Underlying EBIT and Underlying EBITDA are used to reflect the underlying performance of BHP. Underlying EBIT is
earnings before net finance costs, taxation and any exceptional items. Underlying EBITDA is Underlying EBIT before depreciation, amortisation and impairment.
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(3)
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Short-term facility of up to US$212 million includes US$2 million related to the decommissioning of
the Germano dam which will be offset against the Groups provision.
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(4)
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We were the apparent high bidder on 18 additional blocks: GB630, GB574, GB575, GB619, GB676, GB677, EB655,
EB656, EB701, GB762, GB805, GB806, GB851, GB852, GB895, GB672, GB716 and GB760.
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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 28 Subsidiaries in section 5.1 of BHPs 30 June 2019 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.
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BHP Operational Review for the half year ended 31 December 2019
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9
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