The Spence Growth Option is continuing to progress, however the schedule is under review with first
production potentially a few months later than December 2020 as a result of the measures taken to facilitate social distancing protocols. First production is still expected to be in the 2021 financial year.
In March 2020, final shaft lining work at Jansen for two shafts was reduced to focus on one shaft at a time, with reduced crews. This reduction in activity
was taken as part of our COVID-19 response plan and was aligned with the Provincial and Federal Government of Canadas emergency measures for COVID-19. It reflects
a reduction in the number of contractors and in the need for out-of-Province workers on site. Timing for completion of the shafts continues to be under review. BHP will
continue to assess the impacts of COVID-19 and the temporary reduction in activity.
COVID-19 update on operations
At this time, among our global workforce of 72,000 people, BHP has had a small
number of confirmed cases of COVID-19, all of whom have either recovered or are recovering well. Our protocols have functioned effectively and there has not been any transmission from these individuals to co-workers.
BHP has taken action to help keep its people, their families and communities safe. Strict health and travel
guidelines have been put in place to reduce the spread of COVID-19. While each of our operated sites is different, these measures include:
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Reduced number of people at mine sites and other operational facilities to business critical employees and
contractors only.
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Changed rosters to reduce workforce movements. In addition, some
non-residential workers have temporarily relocated to the jurisdiction of operation to meet tighter border controls.
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Regular health screenings and temperature checks for workers, for example before boarding planes or buses and
when entering sites.
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Strong uptake of social distancing practices and changes to the way we travel to work, operate at work and run
accommodation camps including hygiene practices and deep cleaning to reduce the risk of transmission.
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Further information on the measures we have implemented is available at:
bhp.com/covid-19.
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We continue to monitor the situation and to update our measures based on
advice from country-specific health authorities and governments.
Our operations continue to run well. The changes we have put in place have resulted in
the deferral of non-critical activity. Our supply chains remain open and we have adequate supplies to operate and maintain critical equipment, with alternative suppliers identified for many of these.
Our financial position is strong. As at 31 December 2019(2), net debt was US$12.8 billion, at
the lower end of our target range, and cash and cash equivalents were US$14.3 billion. This strong position, combined with our low-cost operations, means our business is resilient and expected to generate
solid cash flow through the cycle.
We are in a differentiated position to be able to continue to provide regional jobs, products to customers and
payments to suppliers. In doing so, we can help underpin continued economic activity. We have accelerated payments to many of our suppliers and established funds to help support regional and Indigenous communities and health and community services.
We are committed to playing our part in the collective response to the COVID-19 pandemic.
Our strong position
allows us to continue to invest through the cycle and we have flexibility in our capital and exploration expenditure. We are reviewing our capital and exploration expenditure guidance for the 2021 financial year and it will be lower than the current
guidance of around US$8 billion. We will provide updated guidance with our full year Results Announcement to be released on 18 August 2020.
Marketing update(3)
Short term economic outlook
The global economy has been
dramatically impacted by COVID-19. Many major economies will contract heavily in the June 2020 quarter, including the United States (US), Europe and India. In contrast, China has moved from intensive viral
suppression to early indications of economic recovery. The majority of heavy industrial activity had restarted as of the end of March 2020, albeit with considerable variation across provinces and sectors. We note that the developed world in
aggregate may have tentatively passed the peak in new COVID-19 cases for wave one infections, while the developing world is unfortunately still in the escalation phase(4).
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BHP Operational Review for the nine months ended 31 March 2020
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