SEC Form 6-K filed by BHP Group Limited

Mike Henry

BHP Chief Executive Officer

Summary

Operational excellence

Financial performance

Record production at WAIO and Spence

Strong prices in key commodities

Total copper production increased 9% and is expected to increase a further 4% in FY25.¹

Unit cost guidance for FY24 is expected to be met at Escondida, WAIO and Spence, and revised unit cost guidance is expected to be met at BMA.

Portfolio

Decarbonisation

Executing our strategy

Progress on Scope 1, 2 and 3 emissions

FY25e v FY24

(actual)

Copper (kt)

Escondida (kt)

Pampa Norte (kt)ⁱ

Copper South Australia (kt)

Antamina (kt)

Carajás (kt)

Iron ore (Mt)

WAIO (Mt)

WAIO (100% basis) (Mt)

Samarco (Mt)

Metallurgical coal – BMA (Mt)ⁱⁱ

BMA (100% basis) (Mt)

Energy coal – NSWEC (Mt)

Nickel – Western Australia Nickel (kt)

Production guidance for FY24 and FY25 is for Spence only and excludes Cerro Colorado which produced 11 kt in FY24 before entering care and maintenance in December 2023.

FY24 production includes 5 Mt (10 Mt on a 100% basis) from Blackwater and Daunia mines until their divestment on 2 April 2024. Refer to production and sales report and metallurgical coal for further information.

H2 FY24

impactⁱ

(US$M)

Unit costs (at guidance FX)

Unit costs for FY24 are expected to be within the guidance range at Escondida, in the lower half of the revised guidance range at BMA, in the upper half of the guidance range at WAIO, and at the top end of the guidance range at Spence

-

Operating costs

Note: Average realised exchange rates for FY24 of AUD/USD 0.66 (guidance rate AUD/USD 0.67) and USD/CLP 907 (guidance rate USD/CLP 810).

-

Income statement

The Group’s adjusted effective tax rate for FY24 is expected to be around the midpoint of the guidance range of 30 – 35%

-

Taxation expense

Increase in closure and rehabilitation provision for closed sites (predominantly in Group and Unallocated)

~100

h Operating costs

Cash flow statement

Working capital movements largely relating to the timing of receivables

~150 – 350

h Operating cash flow

Cash tax paid

~3,350 – 3,450

i Operating cash flow

Dividends received from equity-accounted investments

~200

h Operating cash flow

Capital and exploration spend is expected to be approximately US$9.3 bn, below full year guidance of ~US$10 bn, primarily driven by favourable FX and cash preservation decisions at Western Australia Nickel

-

i Investing cash flow

Proceeds received from the sale of BHP’s 50% interest in the Blackwater and Daunia minesⁱⁱⁱ

~1,000

h Investing cash flow

Dividends paid to non-controlling interests

~800

i Financing cash flow

Payment of the H1 FY24 dividend

~3,600

i Financing cash flow

Exceptional items

Gain on sale of BHP’s 50% interest in the Blackwater and Daunia mines (after tax)

~650 – 750

Exceptional item

Impairment of Western Australia Nickel following the decision to temporarily suspend operations. See Nickel section for further information.

~300

Exceptional item

Financial impact on BHP Brasil of the Samarco dam failure is subject to ongoing work. See Iron ore section for further information on Samarco operations.

-

Exceptional item

Numbers are not tax effected, unless otherwise noted.

There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant, unless otherwise noted.

A US$50 m deposit was received during H1 FY24. For detail on future payments in relation to the divestment please refer to: BHP completes the divestment of Daunia and Blackwater.

Further information in Appendix 1

Detailed production and sales information for all operations in Appendix 2

Production

1,865 kt _9%

FY23 1,717 kt

FY25e 1,845 – 2,045 kt

Average realised price

US$3.98/lb _9%

FY23 US$3.65/lb

Total copper production increased 9% to 1,865 kt. Copper production for FY25 is expected to be between 1,845 and 2,045 kt.

Escondida _{1,125 kt 7% (100% basis)}

Increased production was primarily due to a higher concentrator feed grade of 0.88% (including grade of 0.99% achieved in Q4 FY24), up from 0.82% in FY23, as mining progressed into areas of higher-grade ore as planned following the implementation of measures to manage geotechnical events in FY23. This was partially offset by planned lower cathode production, as a result of prioritising concentrator throughput in prior years.

Production for FY25 is expected to be between 1,180 and 1,300 kt, driven by higher grades and throughput, and is expected to be weighted to the second half. Concentrator feed grade for FY25 is expected to be greater than 0.90%.

Pampa Norte _{266 kt 8%}

Copper South Australia _{322 kt 39%}

Other copper

Production

260 Mt _1%

FY23 257 Mt

FY25e 255 – 265.5 Mt

Average realised price

US$101.04/wmt _9%

FY23 US$92.54/wmt

Iron ore production increased 1% to a record 260 Mt. Production for FY25 is expected to be between 255 and 265.5 Mt.

WAIO _{255 Mt 1% | 287 Mt (100% basis)}

WAIO achieved another full year production record of 255 Mt (287 Mt on a 100% basis), reflecting strong supply chain performance with increased capacity unlocked by the Port Debottlenecking Project 1 (PDP1) and record production at South Flank. These more than offset the impacts of the continued tie-in activity for the Rail Technology Programme 1 (RTP1).

South Flank completed ramp up to full production capacity of 80 Mtpa (100% basis) in FY24 as planned, which contributed to WAIO achieving record lump sales for the year.

Following commissioning in December 2023, PDP1 has enabled higher production volumes and contributed to record sales for the year. Ramp up remains on track to be completed in CY24.

Production for FY25 is expected to be between 250 and 260 Mt (282 and 294 Mt on a 100% basis) as we ramp up the planned tie-in activities for RTP1.

Samarco _{4.7 Mt 5% | 9.5 Mt (100% basis)}

Production increased as a result of higher concentrator throughput. FY25 production is expected to be between 5 and 5.5 Mt. The second concentrator at Samarco is expected to come online during Q3 FY25, increasing production capacity to approximately 16 Mtpa (100% basis) of pellets once fully ramped up.

Coal

Metallurgical coal

Production

22.3 Mt _23%

FY23 29.0 Mt

FY25e 16.5 – 19 Mt

Average realised price

US$266.06/t _2%

FY23 US$271.05/t

BMA _{22.3 Mt 23% | 44.6 Mt (100% basis)}

Production decreased as a result of increased stripping to improve supply chain stability and restore depleted inventory positions which arose from extended weather impacts and labour constraints over recent years, and the divestment of Blackwater and Daunia on 2 April 2024. Production was also impacted by an extended longwall move and geotechnical faulting at Broadmeadow during H1 FY24, and the temporary suspension of operations following the fatality of a team member at Saraji.

Blackwater and Daunia produced 5 Mt (10 Mt on a 100% basis) in FY24 prior to their divestment.

Production for FY25 is expected to be between 16.5 and 19 Mt (33 and 38 Mt on a 100% basis) reflecting the divestment of Blackwater and Daunia and impact of elevated strip ratios as we continue to improve supply chain stability and re-establish raw coal inventory positions.

In the next five years, we expect to increase production to between 21.5 and 22.5 Mtpa (43 and 45 Mtpa on a 100% basis) once BMA is operating with sustainable inventory levels and strip ratios normalise.

Energy coal

Production

15.4 Mt _8%

FY23 14.2 Mt

FY25e 13 – 15 Mt

Average realised price

US$121.52/t _49%

FY23 US$236.51/t

NSWEC _{15.4 Mt 8%}

Production increased due to strong operating performance across the year as improved weather and labour availability enabled an uplift in truck productivity. This included 1.3 Mt to support regional coal-fired power stations in line with the NSW Government Market Price Emergency (Directions for Coal Mines) Notice (Directions). The Directions ceased on 1 July 2024, with the change in royalty rates for open cut mines increasing 2.6% points, from 8.2% to 10.8%.

Production for FY25 is expected to be between 13 and 15 Mt.

We continue to progress our plans to cease mining at the asset in FY30, including delivering on our progressive rehabilitation commitments during FY24.

81.6 kt _2%

FY23 80.0 kt

Average realised price

US$18,197/t _24%

FY23 US$24,021/t

Copper

Iron ore

505 kt _8%

Q3 FY24 466 kt

69 Mt _13%

Q3 FY24 61 Mt

Metallurgical coal

Energy coal

4.9 Mt _18%

Q3 FY24 6.0 Mt

Production decreased following the divestment of the Blackwater and Daunia mines on 2 April 2024. Production increased at the remaining operations as a result of improved truck productivity and favourable weather conditions.

3.8 Mt _10%

Q3 FY24 4.1 Mt

Nickel

23 kt _22%

Q3 FY24 19 kt

Higher production following prior period impacts from planned maintenance at the Kwinana Refinery and a severe weather event in March.

At the midpoint of total copper production guidance for FY25 of 1,845 – 2,045 kt

Copper (US$/lb)^ii,iii,iv

Iron ore (US$/wmt, FOB)^v

Metallurgical coal (US$/t)^vi

Hard coking coal (US$/t)^vii

Weak coking coal (US$/t)^vii

Thermal coal (US$/t)^vi,viii

Nickel metal (US$/t)^ix

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.

At 30 June 2024, the Group had 430 kt of outstanding copper sales that were revalued at a weighted average price of US$4.33/lb. The final price of these sales will be determined in FY25. 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.

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.

Sales from Carrapateena and Prominent Hill acquired through the purchase of OZL are included for Q4 FY24.

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 FY24 and Q4 FY24 were based on an average moisture rate of 6.7% and 6.9% respectively.

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.

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.

Export sales only. Includes thermal coal sales from metallurgical coal mines.

Relates to refined nickel metal only, excludes intermediate products and nickel sulphate.

Current

FY24 guidanceⁱ

Escondida unit cost (US$/lb)ⁱⁱ

Spence unit cost (US$/lb)

WAIO unit cost (US$/t)

BMA unit cost (US$/t)

FY24 unit cost guidance is based on exchange rates of AUD/USD 0.67 and USD/CLP 810.

Escondida unit costs for FY24 onwards exclude revenue-based government royalties.

Potash

complete

Potash

complete

Group production and sales summary

By commodity

Metals production is payable metal unless otherwise noted.

Throughout this report figures in italics indicate that this figure has been adjusted since it was previously reported.

Copper

Lead

Zinc

Gold

Silver

Uranium

Molybdenum

Iron ore

Metallurgical coal¹

Energy coal

Nickel

Cobalt

Production

Sales