6-K 1 d41932d6k.htm FORM 6-K Form 6-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

October 20, 2020

 

 

 

BHP GROUP LIMITED

(ABN 49 004 028 077)

(Exact name of Registrant as specified in its charter)

 

VICTORIA, AUSTRALIA

(Jurisdiction of incorporation or organisation)

 

171 COLLINS STREET, MELBOURNE,

VICTORIA 3000 AUSTRALIA

(Address of principal executive offices)

  

BHP GROUP PLC

(REG. NO. 3196209)

(Exact name of Registrant as specified in its charter)

 

ENGLAND AND WALES

(Jurisdiction of incorporation or organisation)

 

NOVA SOUTH, 160 VICTORIA STREET

LONDON, SW1E 5LB

UNITED KINGDOM

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:  

☒ Form 20-F    ☐ Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

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NEWS RELEASE    LOGO

 

Release Time        

   IMMEDIATE

Date

   20 October 2020

Release Number

   19/20

BHP OPERATIONAL REVIEW FOR THE QUARTER ENDED 30 SEPTEMBER 2020

Note: All guidance is subject to further potential impacts from COVID-19 during the 2021 financial year.

 

 

We continue to safely operate through the COVID-19 pandemic and deliver strong outcomes.

 

 

Group copper equivalent production increased by 2% in the September 2020 quarter following strong performances in metallurgical coal and iron ore, with record production achieved at Jimblebar.

 

 

All production and unit cost guidance (based on exchange rates of AUD/USD 0.70 and USD/CLP 769) remains unchanged for the 2021 financial year, except for Cerrejón production guidance which is under review due to an ongoing strike.

 

 

Our major projects under development in petroleum, copper and iron ore are tracking well. Atlantis Phase 3 achieved first production in July 2020, ahead of schedule and on budget. First production from the Spence Growth Option is expected between December 2020 and March 2021. The Jansen Stage 1 project remains on track for final investment decision in the middle of the 2021 calendar year. As a result of COVID-19 delays and the earlier challenges encountered on lining the shafts, we have approved incremental funding for completion of the current shaft lining project.

 

 

In petroleum, we have agreed to acquire an additional 28% interest in Shenzi, a tier one asset with optionality, at an attractive price. This transaction is consistent with our strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets.

 

 

In copper exploration, the third phase of the drilling program at Oak Dam in South Australia delivered encouraging results, with further high grade mineralised intercepts of copper, with associated gold, uranium and silver confirmed. The project will now move to planning for early stage design evaluation and commencement of resource definition drilling in the first half of the 2021 calendar year.

 

Production

   Sep YTD20
(vs Sep YTD19)
    Sep Q20
(vs Jun Q20)
   

Sep Q20 vs Jun Q20 commentary

Petroleum (MMboe)

    
27
(9
 
%) 
   
27
1
 
  Increased volumes due to first production from Atlantis Phase 3 and higher seasonal demand at Bass Strait, partially offset by lower volumes at Shenzi due to planned maintenance, the impact of Tropical Storm Laura in the Gulf of Mexico and weather impacts at North West Shelf.

Copper (kt)

    
413
(4
 
%) 
   
413
0
 
  Strong concentrator throughput at Escondida, higher production at Olympic Dam due to strong smelter performance and recovery of production at Antamina following a six-week COVID-19 related stoppage in June 2020 quarter, offset by lower cathode production at Escondida due to COVID-19 impacts and Pampa Norte due to planned maintenance at Spence.

Iron ore (Mt)

    
66
8
 
   
66
(1
 
%) 
  Record quarterly production at Jimblebar and strong supply chain performance, offset by the impact from planned major car dumper maintenance.

Metallurgical coal (Mt)

    
10
4
 
   
10
(17
 
%) 
  Record truck and shovel stripping performance more than offset by the impact of significant planned wash plant maintenance activities.

Energy coal (Mt)

    
5
(17
 
%) 
   
5
(18
 
%) 
  Sustained strong truck productivity at NSWEC offset by the impact of mining higher strip ratio areas, as expected. Increased volumes at Cerrejón following a temporary shutdown in response to COVID-19 in the previous quarter.

Nickel (kt)

    
22
3
 
   
22
(7
 
%) 
  Lower production due to planned annual maintenance at the Kwinana refinery and Kalgoorlie smelter.

 

 

BHP Operational Review for the quarter ended 30 September 2020    1


Summary

BHP Chief Executive Officer, Mike Henry:

“BHP has started the new financial year with a strong first quarter of safety and production performance. Group production rose two per cent from a year ago driven by solid results in metallurgical coal and iron ore, our major growth projects made good progress, and we secured more options in copper, nickel and oil.

While our copper operations in South America continue to be impacted by COVID-19 preventative measures, we achieved strong concentrator throughput at Escondida and expect first production from the Spence Growth Option before the end of March 2021. In Australia, Olympic Dam delivered its best quarterly production in the past five years and we are on track for first production from South Flank in the middle of the 2021 calendar year.

In petroleum, we have entered an agreement to increase our interest in the tier one Shenzi asset while delivering first production from Atlantis Phase 3 ahead of schedule and within budget. In copper, we secured an option agreement in the Northern Territory in Australia and saw further promising exploration results from Oak Dam. We bolstered our nickel options with an exploration alliance in Canada and completion of the Honeymoon Well acquisition.

With a period of uncertainty to navigate, our efforts to be safer, more reliable and lower cost are as important as ever. We are alive to the challenges ahead but we look forward with confidence in our people and our strategy.”

Operational performance

Production and guidance are summarised below.

Note: All guidance is subject to further potential impacts from COVID-19 during the 2021 financial year.

 

Production

  Sep Q20     Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
    Previous FY21
guidance
    Current FY21
guidance
       

Petroleum (MMboe)

    27       (9 %)      1     95 - 102       95 - 102       Unchanged  

Copper (kt)

    413       (4 %)      0     1,480 - 1,645       1,480 - 1,645    

Escondida (kt)

    285       (3 %)      (3 %)      940 - 1,030       940 - 1,030       Unchanged  

Pampa Norte (kt)

    43       (33 %)      (22 %)      240 - 270       240 - 270       Unchanged  

Olympic Dam (kt)

    52       47     8     180 - 205       180 - 205       Unchanged  

Antamina (kt)

    35       (8 %)      94     120 - 140       120 - 140       Unchanged  

Iron ore (Mt)

    66       8     (1 %)      244 - 253       244 - 253    

WAIO (100% basis) (Mt)

    74       7     (2 %)      276 - 286       276 - 286       Unchanged  

Metallurgical coal (Mt)

    10       4     (17 %)      40 - 44       40 - 44    

Queensland Coal (100% basis) (Mt)

    17       5     (18 %)      71 - 77       71 - 77       Unchanged  

Energy coal (Mt)

    5       (17 %)      (18 %)      22 - 24       Under review    

NSWEC (Mt)

    4       1     (26 %)      15 - 17       15 - 17       Unchanged  

Cerrejón (Mt)

    1       (49 %)      35     ~7       Under review    

Nickel (kt)

    22       3     (7 %)      85 - 95       85 - 95       Unchanged  

Major development projects

During the September 2020 quarter, Atlantis Phase 3 achieved first production ahead of schedule and on budget. Given this, the progress of Atlantis Phase 3 will not be reported in future Operational Reviews.

The Jansen Stage 1 project in Canada is expected to be presented to the BHP Board for Final Investment Decision in the middle of the 2021 calendar year. As a consequence of the challenges encountered earlier with placement of the shaft lining and then the more recent impacts from our COVID-19 response plan, the Board has approved additional funding of US$272 million for the completion of the shafts, resulting in a total budget of US$3.0 billion (previously US$2.7 billion). Jansen Stage 1 remains well positioned with attractive medium to longer-term commodity fundamentals, and is set to be a high-margin, low-cost, long-life asset, with multiple, basin-wide, expansion

 

 

BHP Operational Review for the quarter ended 30 September 2020    2


opportunities. As always, we will be disciplined about our entry into the market and it must pass our strict Capital Allocation Framework tests.

At the end of the September 2020 quarter, BHP had five major projects under development in petroleum, copper, iron ore and potash, with a combined budget of US$10.9 billion over the life of the projects.

Corporate update

On 10 September 2020, BHP released its Climate Change Report, which provided an update on its progress on climate action, new climate commitments, and how it integrates climate change into corporate strategy and portfolio decisions.

Over the last month BHP has reduced gross debt by a total of US$2.9 billion. On 17 September 2020, BHP successfully concluded its US$1.9 billion multi-currency hybrid repurchase program. The program was funded from surplus cash, and will reduce future interest costs while also reducing the Group’s gross debt balance. The hybrid repurchase program was strongly value accretive due to the reduction in interest costs associated with the hybrids being higher than the premium paid to acquire the hybrids over par value. This premium over par value generated an upfront accounting loss of approximately US$250 million (pre-tax), which will be reported in net finance costs in the December 2020 half year. On 19 October 2020, BHP redeemed the US$1.0 billion of 6.250 per cent hybrid notes at par on their first call date, also using surplus cash. BHP remains in a strong liquidity position.

On 25 September 2020, BHP exercised the first, one-year extension option under the Group’s US$5.5 billion revolving credit facility, which has extended the maturity date of the facility to 10 October 2025 at no additional cost.

On 13 October 2020, BHP and the First Nations Heritage Protection Alliance announced they have jointly agreed a path forward to enhance the influence and voice of Traditional Owners in relation to heritage protection.

Good progress is continuing to be made with 12th Federal Court of Belo Horizonte in Brazil which is seeking to expedite the remediation process related to the Fundão dam failure, with recent judicial decisions regarding financial assistance and compensation of impacted persons, as well as oversight of other reparation programs. On 30 September 2020, the Federal and the Minas Gerais State Public Prosecutors’ Offices and the Federal, the Minas Gerais and the Espírito Santo State Public Defenders’ Offices filed a request to the 12th Federal Court of Belo Horizonte for immediate resumption of the public civil action filed in 2016. This claim had been suspended under a Governance Agreement ratified on 8 August 2018, in which BHP Brasil, Samarco and Vale established a process to renegotiate the environmental and socio-economic programs over two years to progress settlement of the R$155 billion (approximately US$28 billion) Federal Public Prosecution Office claim. BHP, Samarco and Vale consider the resumption request without merit, given that there was no default of obligations under the Governance Agreement. BHP, Samarco and Vale remain committed to supporting the Renova Foundation and its work to progress the remediation and compensatory programs to restore the environment and re-establish communities affected by the Samarco tragedy.

 

 

BHP Operational Review for the quarter ended 30 September 2020    3


Petroleum

Production

 

     Sep Q20      Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
 

Crude oil, condensate and natural gas liquids (MMboe)

     12        (8 %)      1

Natural gas (bcf)

     91        (9 %)      1

Total petroleum production (MMboe)

     27        (9 %)      1

Petroleum – Total petroleum production decreased by nine per cent to 27 MMboe.

Crude oil, condensate and natural gas liquids production declined by eight per cent to 12 MMboe. This reflects natural field decline across the portfolio and the impacts of tie-in and commissioning activities at Atlantis, which was partially offset with the earlier than scheduled achievement of first production from the Phase 3 project.

Natural gas production decreased by nine per cent to 91 bcf, reflecting a decrease in tax barrels at Trinidad and Tobago in accordance with the terms of our Production Sharing Contract, end-of-field life at Minerva in the September 2019 quarter, lower domestic gas sales at Bass Strait and North West Shelf and natural field decline across the portfolio. This decline was partially offset by higher domestic gas sales at Macedon.

Production in the December 2020 quarter is expected to reflect tie-in activity for the Trinidad and Tobago Ruby project and impacts from Hurricane Delta in the Gulf of Mexico, with the potential risk of further impacts given the higher than average active hurricane season in the Gulf of Mexico.    

On 6 October 2020, BHP signed a Membership Interest Purchase and Sale Agreement with Hess Corporation to acquire an additional 28 per cent working interest in Shenzi for US$505 million (subject to customary pre and post-closing adjustments). The acquisition is consistent with our strategy of targeting counter-cyclical acquisitions in high-quality producing or near producing assets, and will bring BHP’s working interest to 72 per cent. The effective date of the transaction is 1 July 2020 with an expected close by December 2020, subject to the satisfaction or waiver of customary and transaction-specific conditions.

Total petroleum production guidance for the 2021 financial year remains unchanged at between 95 and 102 MMboe. This will be updated to reflect the additional production from Shenzi once the transaction is closed and the impact of potential further weather events in the Gulf of Mexico during the December 2020 quarter.

Projects

 

Project and
ownership

   Capital
expenditure
US$M
     Initial
production
target date
    

Capacity

  

Progress

Atlantis Phase 3

(US Gulf of Mexico)

44% (non-operator)

     696       
Achieved in
CY20
 
 
   New subsea production system that will tie back to the existing Atlantis facility, with capacity to produce up to 38,000 gross barrels of oil equivalent per day.    First production achieved in July 2020, ahead of schedule and on budget. The drilling and completion activities of the remaining wells will continue to be progressed as part of planned asset activities.

Ruby

(Trinidad & Tobago)

68.46% (operator)

     283        CY21      Five production wells tied back into existing operated processing facilities, with capacity to produce up to 16,000 gross barrels of oil per day and 80 million gross standard cubic feet of natural gas per day.    On schedule and budget. The project is 39% complete.

Mad Dog Phase 2

(US Gulf of Mexico)

23.9% (non-operator)

     2,154        CY22      New floating production facility with the capacity to produce up to 140,000 gross barrels of crude oil per day.    On schedule and budget. The project is 80% complete.

The Bass Strait West Barracouta project is on schedule and budget, and is expected to achieve first production in the 2021 calendar year.

 

 

BHP Operational Review for the quarter ended 30 September 2020    4


Petroleum exploration

Exploration and appraisal wells drilled during the September 2020 quarter are summarised below.

 

Well

  

Location

  

Target

  

Formation
age

  

BHP equity

  

Spud date

   Water
depth
  

Total well
depth

  

Status

Broadside-1

   Trinidad & Tobago Block 3    Oil    Miocene    65% (BHP Operator)    20 August 2020    2,019 m    8,142 m(1)    Drilling ahead(1)

In Trinidad and Tobago, the Deepwater Invictus rig is drilling ahead on the Broadside-1 exploration well in the Southern licence.

In the US Gulf of Mexico, following Lease Sale 254, Blocks AC36, AC80 and AC81 in the western Gulf of Mexico were awarded in July 2020.

In the Gippsland Basin, we participated in a multi-client 3D seismic survey (non-operated)(2) that successfully completed in the September 2020 quarter. Evaluation of the data is ongoing.

Petroleum exploration expenditure for the September 2020 quarter was US$108 million, of which US$60 million was expensed. An approximately US$450 million exploration and appraisal program is being executed for the 2021 financial year.

 

 

BHP Operational Review for the quarter ended 30 September 2020    5


Copper

Production

 

     Sep Q20      Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
 

Copper (kt)

     413        (4 %)      0

Zinc (t)

     34,398        68     150

Uranium (t)

     874        (7 %)      (14 %) 

Copper – Total copper production decreased by four per cent to 413 kt. Guidance for the 2021 financial year remains unchanged at between 1,480 and 1,645 kt.

For the September 2020 quarter, our Chilean assets operated with a reduction in their operational workforces of approximately 30 per cent (versus approximately 35 per cent in the June 2020 quarter) as a result of the comprehensive plan we have implemented for COVID-19. Our workforce are expected to remain at similar levels during the December 2020 quarter.

Escondida copper production decreased by three per cent to 285 kt, with continued strong concentrator throughput of 378 ktpd offset by lower cathode production. The operating environment remains challenging, with a high degree of uncertainty about the continued impacts from COVID-19 and expected absenteeism levels. Guidance for the 2021 financial year remains unchanged at between 940 and 1,030 kt, and reflects a decline in the copper grade of concentrator feed of approximately four per cent, and the need to continue to balance mine development and production requirements with processing capacity. Production is also likely to be affected in the 2022 financial year as a result of the COVID-19 impact of a reduced operational workforce leading to lower material movement in the 2021 financial year. Guidance of an annual average of 1.2 Mt of copper production over the next five years remains unchanged.

Escondida’s Collective Agreement with Union N°2 of Supervisors and Staff expired on 30 September 2020. On 16 October 2020, Escondida successfully completed negotiations with Union N°2 of Supervisors and Staff and signed a new Collective Agreement, effective for 36 months from 1 October 2020.

Pampa Norte copper production decreased by 33 per cent to 43 kt, largely due to planned maintenance at Spence and the impact of a reduced operational workforce due to COVID-19 preventative measures. Guidance for the 2021 financial year remains unchanged at between 240 and 270 kt, and reflects the start-up of the Spence Growth Option, partially offset by expected grade decline of approximately seven per cent. Cerro Colorado is progressing in accordance with its plan to reduce throughput and costs to achieve improved cash returns and ensure viable mining operations for the remaining period of its current environmental licence, which expires at the end of the 2023 calendar year.

Olympic Dam copper production increased 47 per cent to 52 kt, the highest quarterly rate since the December 2015 quarter, supported by improved underground mine productivity and strong smelter performance. The physical replacement and commissioning of the refinery crane is scheduled to be completed in the March 2021 quarter. Guidance for the 2021 financial year remains unchanged at between 180 and 205 kt.

Antamina copper production decreased by eight per cent to 35 kt and zinc production increased by 68 per cent to 34 kt, reflecting lower copper head grades and higher zinc head grades, as well as the impacts of operating with a reduced workforce due to COVID-19 preventative measures. While operations have ramped up following a six-week COVID-19 related shutdown during the June 2020 quarter, Antamina continues to operate with a reduced workforce, which will impact material mined in the 2021 financial year. Guidance remains unchanged for the 2021 financial year, with copper production of between 120 and 140 kt, and zinc production of between 140 and 160 kt.

 

 

BHP Operational Review for the quarter ended 30 September 2020    6


Projects

 

Project and
ownership

  

Capital
expenditure
US$M

  

Initial
production
target date

  

Capacity

  

Progress

Spence Growth Option

(Chile)

100%

   2,460    FY21    New 95 ktpd concentrator is expected to increase payable copper in concentrate production by ~185 ktpa in the first 10 years of operation and extend the mining operations by more than 50 years.    On budget. First production is expected between December 2020 and March 2021. The overall project is 97% complete.

The Spence Growth Option is on track to achieve first production between December 2020 and March 2021. The commissioning of the desalination plant and capitalisation of the associated US$600 million lease (approximate) is on track to occur in the first half of the 2021 financial year.

At Olympic Dam, we continue to study options for expansion. Following more than 400 km of underground drilling associated with the Brownfield Expansion (BFX) project studies, we have improved knowledge of the ore body’s variability. This has provided challenges for the economics of the BFX project, and we have decided the optimal way forward for now is through targeted debottlenecking investments, plant upgrades and modernisation of our infrastructure. We will continue to study longer-term options for growth. Over the next two years, our focus will remain on completing our asset integrity program. This will underpin more stable operations and expected copper production of more than 200 ktpa. The long-term opportunity for Olympic Dam is unchanged, with our enhanced understanding of the resource in the Southern Mine Area and the promising results from Oak Dam providing strong foundations for unlocking the full growth potential of this asset.

 

 

BHP Operational Review for the quarter ended 30 September 2020    7


Iron Ore

Production

 

     Sep Q20      Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
 

Iron ore production (kt)

     66,040        8     (1 %) 

Iron ore – Total iron ore production increased by eight per cent to 66 Mt (74 Mt on a 100 per cent basis). Guidance for the 2021 financial year remains unchanged at between 244 and 253 Mt (276 and 286 Mt on a 100 per cent basis).

WAIO achieved higher volumes reflecting record production at Jimblebar and strong performance across the supply chain. An uplift in car dumper reliability and performance has been enabled by the BHP Operating System and improved maintenance strategies. The ongoing program to improve productivity and provide a stable base for our tightly coupled supply chain has progressed well with the completion of a planned major maintenance campaign on car dumper three during the September 2020 quarter. Production in the December 2020 quarter is expected to be impacted by Mining Area C and South Flank major tie-in activity, and maintenance on car dumper four, scheduled to align with the tie-in activity.

Mining and processing operations at Samarco remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015. Restart can occur when the filtration system is complete and Samarco has met all necessary safety requirements, and will be subject to final approval by Samarco’s shareholders.

Projects

 

Project and
ownership

   Capital
expenditure
US$M
    

Initial
production
target date

  

Capacity

  

Progress

South Flank (Australia)

85%

     3,061      Mid-CY21    Sustaining iron ore mine to replace production from the 80 Mtpa (100 per cent basis) Yandi mine.    On schedule and budget. The overall project is 84% complete.

BHP and the Banjima people have established a Heritage Advisory Council to provide input into mine planning at South Flank. The consultation process continues in parallel with our construction program at South Flank, which remains on schedule.

 

 

BHP Operational Review for the quarter ended 30 September 2020    8


Coal

Production

 

     Sep Q20      Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
 

Metallurgical coal (kt)

     9,690        4     (17 %) 

Energy coal (kt)

     4,662        (17 %)      (18 %) 

Metallurgical coal – Metallurgical coal production increased four per cent to 10 Mt (17 Mt on a 100 per cent basis). Guidance for the 2021 financial year remains unchanged at between 40 and 44 Mt (71 and 77 Mt on a 100 per cent basis), although we are monitoring for any potential impacts from restrictions on coal imports into China. With Blackwater back at full capacity at the end of the September 2020 quarter, volumes will be weighted to the second half of the financial year.

At Queensland Coal, strong underlying operational performance, including record truck and shovel stripping, was partially offset by planned major wash plant shutdowns at Blackwater, Goonyella, Saraji and Caval Ridge. Blackwater, Queensland Coal’s largest mine, was back at full capacity by the end of September 2020, following recovery from significant wet weather impacts in the March 2020 quarter.

Energy coal – Energy coal production decreased by 17 per cent to 5 Mt. Guidance for the 2021 financial year is under review due to the ongoing strike at Cerrejón.

NSWEC production was broadly unchanged at 4 Mt with significantly improved truck productivity offset by a higher average strip ratio. Guidance for the 2021 financial year remains unchanged at between 15 and 17 Mt, although we are monitoring for any potential impacts from restrictions on coal imports into China. As a result of tropical cyclones in south-eastern Asia, several shipments were delayed until early October 2020.

Cerrejón production decreased by 49 per cent to 1 Mt predominantly due to a strike that started on 31 August 2020. Guidance for the 2021 financial year of approximately 7 Mt is under review.

 

 

BHP Operational Review for the quarter ended 30 September 2020    9


Other

Nickel production

 

     Sep Q20      Sep Q20
vs
Sep Q19
    Sep Q20
vs
Jun Q20
 

Nickel (kt)

     22.2        3     (7 %) 

Nickel – Nickel West production increased by three per cent to 22 kt, reflecting improved operational stability and strong performance from the new mines. Planned biannual maintenance at the Kalgoorlie Smelter and Kwinana Refinery was completed during the September 2020 quarter. Guidance for the 2021 financial year remains unchanged at between 85 and 95 kt.

Operations Services – The Operations Services team continues to grow, with over 3,300 permanent jobs now created in Australia, successfully accelerating safety, productivity and efficiency outcomes across WAIO, Queensland Coal and NSWEC. In October 2020, BHP committed 2,500 additional apprenticeship and traineeship positions which will be made available through the first two BHP FutureFit academies in Mackay in Queensland and Perth in Western Australia, over the next five years.

Potash project

 

Project and
ownership

   Investment
US$M
    

Scope

  

Progress

Jansen Potash

(Canada)

100%

     2,972      Investment to finish the excavation and lining of the production and service shafts, and to continue the installation of essential surface infrastructure and utilities.    Budget revised to fund the completion of the shafts. The project is 86% complete(i).

 

(i)

Project percentage completion rebased on US$2,972 million revised budget (previously US$2,700 million).

Following delays to completion of the shafts as a result of initial challenges with placement of the shaft lining, since rectified, and impacts from our COVID-19 response plan, the budget to fund the completion of the shafts has been increased by US$272 million in October 2020. The revised budget for the current scope of work is now US$3.0 billion.

Minerals exploration

Minerals exploration expenditure for the September 2020 quarter was US$44 million, of which US$27 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.

At Oak Dam in South Australia, the third phase of the exploration drilling program continues to deliver encouraging results. Further high grade mineralised intercepts of copper, with associated gold, uranium and silver, were confirmed. Multiple intervals ranging between 0.24 and 4.20 per cent copper were identified by laboratory assay results from 12 of the 14 drill holes, totalling 21,543 metres. For further details refer to Appendix 1. The exploration project will now be transferred to the Minerals Australia Planning and Technical team for assessment, and next stage resource definition drilling to inform future design is expected to commence in the first half of the 2021 calendar year.

In August 2020, BHP signed an agreement with Midland Exploration to undertake a nickel exploration alliance in north-eastern Quebec, Canada. The main objective of this agreement is to identify, test and develop high quality exploration targets towards the discovery of new significant nickel deposits.

In September 2020, BHP entered into an Option Agreement with Encounter Resources covering the 4,500 km2 prospective Elliott Copper Project in the Northern Territory, Australia. It provides BHP with the right, following the completion of a jointly designed validation program, to enter an earn-in and joint venture agreement to earn up to 75 per cent interest in Elliott by spending up to A$22 million over 10 years.

BHP’s acquisition of the Honeymoon Well tenements and a 50 per cent interest in the Albion Downs North and Jericho exploration joint ventures was also completed in September 2020. The Honeymoon Well increases Nickel West’s position in one of the world’s major Nickel sulphide provinces and the exploration joint ventures provide us with new access to prospective tenements. Several deposits are under consideration and are expected to be included in Nickel West long term plans in the future.    

 

 

BHP Operational Review for the quarter ended 30 September 2020    10


Variance analysis relates to the relative performance of BHP and/or its operations during the September 2020 quarter compared with the September 2019 quarter, 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 2020 financial year average realised prices.

The following footnotes apply to this Operational Review:

 

(1)

Well depth and status as at 30 September 2020.

(2)

Non-operated CGG, EP:4619.

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 barrels of oil per day (MMbpd); 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’, the ‘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 29 ‘Subsidiaries’ in section 5.1 of BHP’s 30 June 2020 Annual Report and Form 20-F,. Those terms do not include non-operated assets. 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. Our non-operated assets include Antamina, Cerrejón, Samarco, Atlantis, Mad Dog, Bass Strait and North West Shelf. BHP Group cautions against undue reliance on any forward-looking statement or guidance in this release, particularly in light of the current economic climate and significant volatility, uncertainty and disruption arising in connection with COVID-19. These forward looking statements are based on information available as at the date of this release and are not guarantees or predictions of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control and which may cause actual results to differ materially from those expressed in the statements contained in this release.

 

 

BHP Operational Review for the quarter ended 30 September 2020    11


Further information on BHP can be found at: bhp.com

Authorised for lodgement by:

Caroline Cox

Group General Counsel and Company Secretary

 

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BHP Operational Review for the quarter ended 30 September 2020    12


Production summary

 

                                                      
    

BHP
interest

    Quarter ended      Year to date  
  Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Petroleum (1)

                      

Petroleum

                      

Production

                      

Crude oil, condensate and NGL (Mboe)

       12,507        13,412        11,589        11,355        11,507        11,507        12,507  

Natural gas (bcf)

       100.4        88.7        80.7        89.8        90.9        90.9        100.4  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total (Mboe)

       29,240        28,195        25,039        26,322        26,657        26,657        29,240  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Copper (2)

                      

Copper

                      

Payable metal in concentrate (kt)

                      

Escondida (3)

     57.5     237.0        240.3        220.1        228.5        236.7        236.7        237.0  

Antamina

     33.8     37.6        36.2        32.9        17.8        34.6        34.6        37.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       274.6        276.5        253.0        246.3        271.3        271.3        274.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cathode (kt)

                      

Escondida (3)

     57.5     55.9        68.4        69.6        65.5        47.9        47.9        55.9  

Pampa Norte (4)

     100     63.9        60.0        64.3        54.5        42.5        42.5        63.9  

Olympic Dam

     100     35.1        50.5        38.4        47.6        51.5        51.5        35.1  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       154.9        178.9        172.3        167.6        141.9        141.9        154.9  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                      
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total copper (kt)

       429.5        455.4        425.3        413.9        413.2        413.2        429.5  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Lead

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     405        383        621        262        690        690        405  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       405        383        621        262        690        690        405  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Zinc

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     20,454        22,483        31,789        13,736        34,398        34,398        20,454  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       20,454        22,483        31,789        13,736        34,398        34,398        20,454  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Gold

                      

Payable metal in concentrate (troy oz)

                      

Escondida (3)

     57.5     48,801        49,209        35,990        43,422        42,332        42,332        48,801  

Olympic Dam (refined gold)

     100     43,205        35,382        33,235        34,150        36,608        36,608        43,205  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       92,006        84,591        69,225        77,572        78,940        78,940        92,006  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Silver

                      

Payable metal in concentrate (troy koz)

                      

Escondida (3)

     57.5     1,626        1,798        1,390        1,599        1,580        1,580        1,626  

Antamina

     33.8     1,101        1,173        1,216        626        1,326        1,326        1,101  

Olympic Dam (refined silver)

     100     245        203        241        295        157        157        245  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       2,972        3,174        2,847        2,520        3,063        3,063        2,972  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Uranium

                      

Payable metal in concentrate (t)

                      

Olympic Dam

     100     937        949        776        1,016        874        874        937  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       937        949        776        1,016        874        874        937  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Molybdenum

                      

Payable metal in concentrate (t)

                      

Antamina

     33.8     405        527        491        243        284        284        405  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       405        527        491        243        284        284        405  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the quarter ended 30 September 2020    13


Production summary

 

                                                      
    

BHP
interest

    Quarter ended      Year to date  
  Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Iron Ore

                      

Iron Ore

                      

Production (kt) (5)

                      

Newman

     85     16,316        15,766        16,449        17,110        16,410        16,410        16,316  

Area C Joint Venture

     85     12,620        12,727        12,179        13,973        11,889        11,889        12,620  

Yandi Joint Venture

     85     17,827        14,857        17,491        19,087        17,666        17,666        17,827  

Jimblebar (6)

     85     14,239        17,045        13,911        16,559        20,075        20,075        14,239  

Wheelarra

     85     3        —          —          —          —          —          3  

Samarco

     50     —          —          —          —          —          —          —    
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       61,005        60,395        60,030        66,729        66,040        66,040        61,005  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Coal

                      

Metallurgical coal

                      

Production (kt) (7)

                      

BMA

     50     6,905        8,723        6,869        9,078        7,365        7,365        6,905  

BHP Mitsui Coal (8)

     80     2,453        2,201        2,353        2,536        2,325        2,325        2,453  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       9,358        10,924        9,222        11,614        9,690        9,690        9,358  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Energy coal

                      

Production (kt)

                      

Australia

     100     3,592        3,763        3,810        4,887        3,624        3,624        3,592  

Colombia

     33.3     2,055        2,315        1,978        767        1,038        1,038        2,055  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       5,647        6,078        5,788        5,654        4,662        4,662        5,647  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other

                      

Nickel

                      

Saleable production (kt)

                      

Nickel West (9)

     100     21.6        13.7        20.9        23.9        22.2        22.2        21.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       21.6        13.7        20.9        23.9        22.2        22.2        21.6  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt

                      

Saleable production (t)

                      

Nickel West

     100     211        120        132        312        238        238        211  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

       211        120        132        312        238        238        211  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

LPG and ethane are reported as natural gas liquids (NGL). Product-specific conversions are made and NGL is reported in barrels of oil equivalent (boe). Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe.

(2)

Metal production is reported on the basis of payable metal.

(3)

Shown on a 100% basis. BHP interest in saleable production is 57.5%.

(4)

Includes Cerro Colorado and Spence.

(5)

Iron ore production is reported on a wet tonnes basis.

(6)

Shown on a 100% basis. BHP interest in saleable production is 85%.

(7)

Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.

(8)

Shown on a 100% basis. BHP interest in saleable production is 80%.

(9)

Production restated to include other nickel by-products.

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

 

 

BHP Operational Review for the quarter ended 30 September 2020    14


Production and sales report

 

                                                     
          Quarter ended      Year to date  
        Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Petroleum (1)

                       

Bass Strait

                       

Crude oil and condensate

   (Mboe)      1,409        1,427        926        1,231        1,305        1,305        1,409  

NGL

   (Mboe)      1,810        1,405        958        1,493        1,660        1,660        1,810  

Natural gas

   (bcf)      36.6        27.8        18.4        28.1        34.1        34.1        36.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      9,319        7,465        4,957        7,408        8,648        8,648        9,319  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

North West Shelf

                       

Crude oil and condensate

   (Mboe)      1,337        1,376        1,266        1,260        1,215        1,215        1,337  

NGL

   (Mboe)      202        200        191        203        162        162        202  

Natural gas

   (bcf)      32.1        32.9        35.0        35.2        29.6        29.6        32.1  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      6,889        7,059        7,287        7,334        6,310        6,310        6,889  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Pyrenees

                       

Crude oil and condensate

   (Mboe)      979        934        917        971        837        837        979  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      979        934        917        971        837        837        979  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Australia (2)

                       

Crude oil and condensate

   (Mboe)      8        1        1        1        1        1        8  

Natural gas

   (bcf)      12.0        11.4        11.2        11.9        12.7        12.7        12.0  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      2,008        1,901        1,874        1,987        2,118        2,118        2,008  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Atlantis (3)

                       

Crude oil and condensate

   (Mboe)      2,759        3,525        2,769        2,223        2,421        2,421        2,759  

NGL

   (Mboe)      192        245        178        54        154        154        192  

Natural gas

   (bcf)      1.4        1.8        1.3        1.1        1.2        1.2        1.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      3,184        4,070        3,170        2,456        2,775        2,775        3,184  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Mad Dog (3)

                       

Crude oil and condensate

   (Mboe)      1,096        1,202        1,272        1,297        1,211        1,211        1,096  

NGL

   (Mboe)      49        52        55        33        48        48        49  

Natural gas

   (bcf)      0.2        0.2        0.2        0.3        0.2        0.2        0.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      1,178        1,287        1,355        1,374        1,292        1,292        1,178  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Shenzi (3)

                       

Crude oil and condensate

   (Mboe)      1,345        1,671        1,645        1,584        1,395        1,395        1,345  

NGL

   (Mboe)      70        94        94        40        71        71        70  

Natural gas

   (bcf)      0.2        0.3        0.3        0.4        0.3        0.3        0.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      1,448        1,815        1,791        1,686        1,516        1,516        1,448  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Trinidad/Tobago

                       

Crude oil and condensate

   (Mboe)      175        166        97        72        102        102        175  

Natural gas

   (bcf)      17.9        14.2        14.0        12.8        12.8        12.8        17.9  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      3,158        2,533        2,427        2,201        2,235        2,235        3,158  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other Americas (3) (4)

                       

Crude oil and condensate

   (Mboe)      185        230        344        198        212        212        185  

NGL

   (Mboe)      2        4        22        5        2        2        2  

Natural gas

   (bcf)      —          0.1        0.3        —          —          —          —    
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      187        251        412        209        214        214        187  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Algeria

                       

Crude oil and condensate

   (Mboe)      889        880        854        690        711        711        889  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total petroleum products

   (Mboe)      889        880        854        690        711        711        889  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

 

BHP Operational Review for the quarter ended 30 September 2020    15


Production and sales report

 

                                                     
          Quarter ended      Year to date  
        Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Petroleum (1)

                       

Total production

                       

Crude oil and condensate

   (Mboe)      10,182        11,412        10,091        9,527        9,410        9,410        10,182  

NGL

   (Mboe)      2,325        2,000        1,498        1,828        2,097        2,097        2,325  

Natural gas

   (bcf)      100.4        88.7        80.7        89.8        90.9        90.9        100.4  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (Mboe)      29,240        28,195        25,039        26,322        26,657        26,657        29,240  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Total boe conversions are based on 6 bcf of natural gas equals 1,000 Mboe. Negative production figures represent finalisation adjustments.

(2)

Other Australia includes Minerva and Macedon. Minerva ceased production in September 2019.

(3)

Gulf of Mexico volumes are net of royalties.

(4)

Other Americas includes Neptune, Genesis and Overriding Royalty Interest.

 

 

BHP Operational Review for the quarter ended 30 September 2020    16


Production and sales report

 

 
          Quarter ended     Year to date  
          Sep
2019
    Dec
2019
    Mar
2020
    Jun
2020
    Sep
2020
    Sep
2020
    Sep
2019
 

Copper

 

Metals production is payable metal unless otherwise stated.

 

Escondida, Chile (1)

                 

Material mined

   (kt)      101,026       100,057       107,268       75,062       83,357       83,357       101,026  

Sulphide ore milled

   (kt)      33,956       33,659       33,440       34,755       34,733       34,733       33,956  

Average concentrator head grade

   (%)      0.86     0.87     0.82     0.81     0.85     0.85     0.86

Production ex mill

   (kt)      245.0       246.1       230.0       236.8       243.9       243.9       245.0  

Production

                 

Payable copper

   (kt)      237.0       240.3       220.1       228.5       236.7       236.7       237.0  

Copper cathode (EW)

   (kt)      55.9       68.4       69.6       65.5       47.9       47.9       55.9  

- Oxide leach

   (kt)      21.9       28.3       29.3       26.8       15.3       15.3       21.9  

- Sulphide leach

   (kt)      34.1       40.1       40.2       38.7       32.6       32.6       34.1  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total copper

   (kt)      292.9       308.7       289.7       294.0       284.6       284.6       292.9  
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Payable gold concentrate

   (troy oz)      48,801       49,209       35,990       43,422       42,332       42,332       48,801  

Payable silver concentrate

   (troy koz)      1,626       1,798       1,390       1,599       1,580       1,580       1,626  

Sales

                 

Payable copper

   (kt)      222.2       248.3       212.0       221.0       237.1       237.1       222.2  

Copper cathode (EW)

   (kt)      52.3       70.6       65.9       72.1       46.5       46.5       52.3  

Payable gold concentrate

   (troy oz)      48,801       49,209       35,990       43,422       42,332       42,332       48,801  

Payable silver concentrate

   (troy koz)      1,626       1,798       1,390       1,599       1,580       1,580       1,626  

(1)   Shown on a 100% basis. BHP interest in saleable production is 57.5%.

    

Pampa Norte, Chile

                 

Cerro Colorado

                 

Material mined

   (kt)      15,071       18,102       18,710       15,734       12,618       12,618       15,071  

Ore milled

   (kt)      3,995       5,009       4,574       4,553       4,036       4,036       3,995  

Average copper grade

   (%)      0.54     0.57     0.54     0.60     0.66     0.66     0.54

Production

                 

Copper cathode (EW)

   (kt)      16.4       13.8       20.4       16.9       15.8       15.8       16.4  

Sales

                 

Copper cathode (EW)

   (kt)      14.5       15.8       18.3       18.7       14.6       14.6       14.5  

Spence

                 

Material mined

   (kt)      21,040       23,132       23,304       24,082       18,260       18,260       21,040  

Ore milled

   (kt)      5,635       5,133       5,191       2,829       4,408       4,408       5,635  

Average copper grade

   (%)      0.95     0.90     0.87     0.95     1.10     1.10     0.95

Production

                 

Copper cathode (EW)

   (kt)      47.5       46.2       43.9       37.6       26.7       26.7       47.5  

Sales

                 

Copper cathode (EW)

   (kt)      46.7       44.3       44.8       41.0       24.1       24.1       46.7  

 

 

BHP Operational Review for the quarter ended 30 September 2020    17


Production and sales report

 

 
          Quarter ended     Year to date  
          Sep
2019
    Dec
2019
    Mar
2020
    Jun
2020
    Sep
2020
    Sep
2020
    Sep
2019
 

Copper (continued)

 

Metals production is payable metal unless otherwise stated.

 

Antamina, Peru

                 

Material mined (100%)

   (kt)      59,299       63,224       52,872       13,975       45,458       45,458       59,299  

Sulphide ore milled (100%)

   (kt)      13,121       13,637       12,906       6,736       13,202       13,202       13,121  

Average head grades

                 

- Copper

   (%)      0.99     0.96     0.88     0.91     0.94     0.94     0.99

- Zinc

   (%)      0.80     0.82     1.09     1.02     1.30     1.30     0.80

Production

                 

Payable copper

   (kt)      37.6       36.2       32.9       17.8       34.6       34.6       37.6  

Payable zinc

   (t)      20,454       22,483       31,789       13,736       34,398       34,398       20,454  

Payable silver

   (troy koz)      1,101       1,173       1,216       626       1,326       1,326       1,101  

Payable lead

   (t)      405       383       621       262       690       690       405  

Payable molybdenum

   (t)      405       527       491       243       284       284       405  

Sales

                 

Payable copper

   (kt)      33.1       43.6       30.8       18.2       33.8       33.8       33.1  

Payable zinc

   (t)      20,196       23,808       31,007       11,680       32,769       32,769       20,196  

Payable silver

   (troy koz)      954       1,396       815       581       1,310       1,310       954  

Payable lead

   (t)      844       432       151       188       748       748       844  

Payable molybdenum

   (t)      173       400       531       223       392       392       173  

Olympic Dam, Australia

                 

Material mined (1)

   (kt)      2,477       2,347       1,920       1,928       2,203       2,203       2,477  

Ore milled

   (kt)      2,200       2,153       2,178       2,416       2,443       2,443       2,200  

Average copper grade

   (%)      2.31     2.36     2.31     2.17     2.03     2.03     2.31

Average uranium grade

   (kg/t)      0.65       0.71       0.69       0.60       0.53       0.53       0.65  

Production

                 

Copper cathode (ER and EW)

   (kt)      35.1       50.5       38.4       47.6       51.5       51.5       35.1  

Payable uranium

   (t)      937       949       776       1,016       874       874       937  

Refined gold

   (troy oz)      43,205       35,382       33,235       34,150       36,608       36,608       43,205  

Refined silver

   (troy koz)      245       203       241       295       157       157       245  

Sales

                 

Copper cathode (ER and EW)

   (kt)      32.1       49.0       41.4       48.5       49.5       49.5       32.1  

Payable uranium

   (t)      778       638       702       1,293       859       859       778  

Refined gold

   (troy oz)      40,073       36,507       36,956       37,743       36,054       36,054       40,073  

Refined silver

   (troy koz)      250       202       259       270       222       222       250  

(1)   Material mined refers to run of mine ore mined and hoisted.

    

 

 

BHP Operational Review for the quarter ended 30 September 2020    18


Production and sales report

 

 
          Quarter ended      Year to date  
          Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Iron Ore

 

Iron ore production and sales are reported on a wet tonnes basis.

 

Pilbara, Australia

                       

Production

                       

Newman

   (kt)      16,316        15,766        16,449        17,110        16,410        16,410        16,316  

Area C Joint Venture

   (kt)      12,620        12,727        12,179        13,973        11,889        11,889        12,620  

Yandi Joint Venture

   (kt)      17,827        14,857        17,491        19,087        17,666        17,666        17,827  

Jimblebar (1)

   (kt)      14,239        17,045        13,911        16,559        20,075        20,075        14,239  

Wheelarra

   (kt)      3        —          —          —          —          —          3  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production

   (kt)      61,005        60,395        60,030        66,729        66,040        66,040        61,005  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total production (100%)

   (kt)      69,257        68,044        68,168        75,589        74,152        74,152        69,257  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

Lump

   (kt)      14,785        15,982        15,617        17,252        17,056        17,056        14,785  

Fines

   (kt)      45,509        45,785        44,764        50,904        48,390        48,390        45,509  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      60,294        61,767        60,381        68,156        65,446        65,446        60,294  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total sales (100%)

   (kt)      68,291        69,481        68,439        77,048        73,355        73,355        68,291  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)   Shown on a 100% basis. BHP interest in saleable production is 85%.

    

Samarco, Brazil (1)

                       

Production

   (kt)      —          —          —          —          —          —          —    

Sales

   (kt)      —          —          —          —          —          —          —    

(1)   Mining and processing operations remain suspended following the failure of the Fundão tailings dam and Santarém water dam on 5 November 2015.

    

 

 

BHP Operational Review for the quarter ended 30 September 2020    19


Production and sales report

 

 
          Quarter ended      Year to date  
          Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Coal

 

Coal production is reported on the basis of saleable product.

 

Queensland Coal

                       

Production (1)

                       

BMA

                       

Blackwater

   (kt)      1,045        1,734        1,063        1,703        1,184        1,184        1,045  

Goonyella

   (kt)      1,489        2,662        1,963        2,651        2,312        2,312        1,489  

Peak Downs

   (kt)      1,423        1,386        1,339        1,635        1,487        1,487        1,423  

Saraji

   (kt)      1,214        1,325        1,025        1,399        817        817        1,214  

Daunia

   (kt)      556        579        447        588        490        490        556  

Caval Ridge

   (kt)      1,178        1,037        1,032        1,102        1,075        1,075        1,178  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA

   (kt)      6,905        8,723        6,869        9,078        7,365        7,365        6,905  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BMA (100%)

   (kt)      13,810        17,446        13,738        18,156        14,730        14,730        13,810  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                       

South Walker Creek

   (kt)      1,378        1,196        1,577        1,264        1,238        1,238        1,378  

Poitrel

   (kt)      1,075        1,005        776        1,272        1,087        1,087        1,075  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total BHP Mitsui Coal

   (kt)      2,453        2,201        2,353        2,536        2,325        2,325        2,453  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                       
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

   (kt)      9,358        10,924        9,222        11,614        9,690        9,690        9,358  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal (100%)

   (kt)      16,263        19,647        16,091        20,692        17,055        17,055        16,263  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Sales

                       

BMA

                       

Coking coal

   (kt)      6,558        7,179        6,417        7,547        6,187        6,187        6,558  

Weak coking coal

   (kt)      634        971        644        1,040        977        977        634  

Thermal coal

   (kt)      94        30        224        183        58        58        94  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      7,286        8,180        7,285        8,770        7,222        7,222        7,286  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

BHP Mitsui Coal (2)

                       

Coking coal

   (kt)      741        596        667        778        671        671        741  

Weak coking coal

   (kt)      1,832        1,504        1,691        1,756        1,545        1,545        1,832  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      2,573        2,100        2,358        2,534        2,216        2,216        2,573  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
                       
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal

   (kt)      9,859        10,280        9,643        11,304        9,438        9,438        9,859  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Queensland Coal (100%)

   (kt)      17,145        18,459        16,928        20,074        16,660        16,660        17,145  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1)   Production figures include some thermal coal.

(2)   Shown on a 100% basis. BHP interest in saleable production is 80%.

    

    

NSW Energy Coal, Australia

                       

Production

   (kt)      3,592        3,763        3,810        4,887        3,624        3,624        3,592  

Sales

                       

Export thermal coal

   (kt)      3,075        3,952        3,403        4,871        3,168        3,168        3,075  

Inland thermal coal

   (kt)      567        —          —          —          —          —          567  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   (kt)      3,642        3,952        3,403        4,871        3,168        3,168        3,642  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cerrejón, Colombia

                       

Production

   (kt)      2,055        2,315        1,978        767        1,038        1,038        2,055  

Sales thermal coal - export

   (kt)      2,069        2,261        2,028        1,143        994        994        2,069  

 

 

BHP Operational Review for the quarter ended 30 September 2020    20


Production and sales report

 

 
          Quarter ended      Year to date  
          Sep
2019
     Dec
2019
     Mar
2020
     Jun
2020
     Sep
2020
     Sep
2020
     Sep
2019
 

Other

 

Nickel production is reported on the basis of saleable product

 

Nickel West, Australia

                       

Mt Keith

                       

Nickel concentrate

   (kt)      43.7        31.5        42.8        60.2        64.4        64.4        43.7  

Average nickel grade

   (%)      18.3        17.3        15.8        16.5        15.8        15.8        18.3  

Leinster

                       

Nickel concentrate

   (kt)      67.2        56.6        57.8        72.0        66.2        66.2        67.2  

Average nickel grade

   (%)      10.0        8.6        9.8        10.2        9.0        9.0        10.0  

Saleable production

                       

Refined nickel (1) (2)

   (kt)      17.4        11.1        16.6        20.5        17.3        17.3        17.4  

Intermediates and nickel by-products (1) (3)

   (kt)      4.2        2.6        4.3        3.4        4.9        4.9        4.2  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)      21.6        13.7        20.9        23.9        22.2        22.2        21.6  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)      211        120        132        312        238        238        211  

Sales

                       

Refined nickel (1) (2)

   (kt)      17.0        10.6        16.8        19.7        17.1        17.1        17.0  

Intermediates and nickel by-products (1) (3)

   (kt)      5.7        2.7        2.9        4.2        4.6        4.6        5.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total nickel (1)

   (kt)      22.7        13.3        19.7        23.9        21.7        21.7        22.7  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Cobalt by-products

   (t)      212        131        132        312        238        238        212  

 

(1)

Production and sales restated to include other nickel by-products.

(2)

High quality refined nickel metal, including briquettes and powder.

(3)

Nickel contained in matte and by-product streams.

 

 

BHP Operational Review for the quarter ended 30 September 2020    21


Appendix 1

Project Status Update

Between November 2019 and June 2020, a 14 diamond hole follow-up program totalling 21,542.5 metres was completed at Oak Dam, located 65 kilometres to the south east of BHP’s operations at Olympic Dam in South Australia (Figure 1). Figure 2 describes the location of the phase three new drilling and Figure 3 shows the new drilling on cross sections.

Laboratory assay results confirm further mineralised intercepts of copper with associated gold, uranium and silver metals, as per the table below, with further detail included within this appendix.

Table 1: Summary of laboratory assay results showing mineralised intercepts of copper with associated gold, uranium and silver.

 

Hole ID

   From      To      Length(i)
m
     Cu
%
     Au
g/t
     U3O8
ppm
     Ag
g/t
 

AD27W4

     1243        1392        149        1.30        0.62        265        4.10  

including

     1281        1299        18        2.01        0.69        318        5.11  

AD29W1

     1734        1854        120        0.95        0.47        222        2.50  

including

     1789        1821        32        2.00        1.05        365        5.65  

AD30W1

     1190        1502        312        2.14        0.55        390        3.14  

including

     1343        1502        159        2.57        0.69        550        3.50  

AD30W3

     1609        1803        194        0.81        0.25        327        1.06  

AD31

     1398        1568        170        0.62        0.09        39        1.06  

AD31W1

     1194        1252        58        0.38        0.07        25        2.44  

AD31W2

     1140        1333        193        0.87        0.09        27        2.67  

AD32

     1529        1643        114        1.64        0.58        214        4.66  

including

     1566        1643        77        1.95        0.67        250        5.18  

AD32W1

     1664        1733        69        1.19        0.38        143        3.14  

AD32W2

     2008        2323        315        1.05        0.56        252        2.94  

including

     2008        2066        58        2.49        1.21        398        9.48  

AD33

     1055        1174        119        1.17        0.12        140        4.37  

including

     1056        1112        56        1.84        0.14        203        5.79  

 

(i)

Not true widths.

Geology and Mineralisation

Phase three drilling continues to confirm IOCG-style alteration and mineralisation described previously (BHP Copper Exploration Update(1) dated 27 November 2018 and BHP Operational Review dated 17 October 2019(2)), with a core of barren hematite-quartz breccias approximately central to the gravity anomaly, surrounded by high-grade chalcocite and bornite mineralisation, which grades outwards to more dominant chalcopyrite and pyrite mineralisation, towards the contact with the host rocks. The simplified geology is shown in three representative cross sections in Figure 3.

Further Work

BHP continues to evaluate the results reported to date to inform the next phase of work expected to begin in the first half of the 2021 calendar year.

 

(1)

https://www.bhp.com/media-and-insights/news-releases/2018/11/bhp-copper-exploration-program-update

(2)

https://www.bhp.com/-/media/documents/media/reports-and-presentations/
2019/191017_bhpoperationalreviewforthequarterended30september2019.pdf?la=en

 

 

BHP Operational Review for the quarter ended 30 September 2020    22


Figure 1: Location map of project within EL 5941.

 

LOGO

Table 2: Drill hole collar locations and depths in Geocentric Datum of Australia (GDA 94, zone 53).

 

Hole ID

   Type    Easting
(m)
     Northing
(m)
     RL
(m)
     Starting depth
(m)
     Ending depth
(m)
 

AD27W4

   wedge      710821        6571048        167        552        2176.1  

AD29

   parent      710694        6570517        167        0        1107.7  

AD29W1

   wedge      710694        6570517        167        550        2130.9  

AD30

   parent (abandoned)      710109        6571733        183        0        800.3  

AD30W1

   parent (redrill)      710109        6571733        183        598        1843.1  

AD30W2

   wedge      710109        6571733        183        728        1887.6  

AD30W3

   wedge      710109        6571733        183        706.5        2074.3  

AD31

   parent      712168        6571875        148        0        2350.1  

AD31W1

   wedge      712168        6571875        148        745        2227.3  

AD31W2

   wedge      712168        6571875        148        701.3        2273.2  

AD32

   parent      709850        6571142        183        0        2287.1  

AD32W1

   wedge      709850        6571142        183        731.4        2503.4  

AD32W2

   wedge      709850        6571142        183        700        2470.3  

AD33

   parent      710650        6572596        168        0        1423.3  

 

 

BHP Operational Review for the quarter ended 30 September 2020    23


Figure 2: Drill hole traces projected to surface and cross section locations displayed on high resolution ground gravity.

 

LOGO

Figure 3: Representative cross-sections showing simplified geology and down hole Cu assays.

 

LOGO

 

 

BHP Operational Review for the quarter ended 30 September 2020    24


Table 3: Length and density weighted mineralised intercepts for phase three drilling reported as apparent (down hole) widths. The complete breakdown of each reported intersection is shown and includes high and low grade intervals to demonstrate grade. Intervals with assays not reported here have <0.2% Cu. Reported mineralised intervals contain no more than ten consecutive meters of <0.2% Cu.

 

Hole ID

     From        To        Length
m
       Cu
%
       Au
g/t
       U3O8
ppm
       Ag
g/t
       SG  

AD31

       1196          1278          82          0.50          0.06          48          1.09          2.78  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1330          1358          28          0.98          0.16          53          1.38          3.10  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1398          1621          223          0.54          0.08          41          0.91          2.88  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1398          1568          170          0.62          0.09          39          1.06          2.90  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1568          1621          53          0.32          0.05          49          0.53          2.85  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1965          2073          108          0.32          0.09          189          2.98          3.21  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2308          2324          16          1.15          0.12          50          1.14          2.98  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD31W1

       1194          1252          58          0.38          0.07          25          2.44          2.82  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1194          1224          30          0.49          0.09          17          3.33          2.78  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1224          1252          28          0.26          0.06          33          1.51          2.87  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1278          1360          82          0.44          0.06          30          1.24          2.89  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1372          1400          28          0.27          0.03          17          0.73          2.79  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1410          1446          36          0.36          0.06          19          1.38          2.80  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD32

       1529          1643          114          1.64          0.58          214          4.66          3.19  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1529          1566          37          0.94          0.37          134          3.50          3.02  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1566          1643          77          1.95          0.67          250          5.18          3.27  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1986          2102          116          0.93          0.36          226          1.68          3.72  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1986          2010          24          2.15          0.77          394          3.80          3.93  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2010          2068          58          0.71          0.29          221          1.08          3.84  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2068          2102          34          0.36          0.16          97          1.09          3.37  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD30W1

       1190          1502          312          2.14          0.55          390          3.14          3.65  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1190          1328          138          1.73          0.41          196          2.94          3.35  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1303          1328          25          2.44          0.77          360          4.07          3.71  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1328          1343          15          0.42          0.16          141          0.17          3.01  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1343          1502          159          2.57          0.69          550          3.50          3.96  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1343          1398          55          4.20          0.95          622          6.22          4.27  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1412          1424          12          4.06          0.55          2089          6.55          4.14  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1438          1464          26          2.79          0.55          430          3.15          4.10  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1568          1624          56          0.41          0.43          54          3.45          2.90  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1706          1772          66          0.32          0.02          26          0.46          2.94  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD32W1

       1664          1733          69          1.19          0.38          143          3.14          3.02  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1664          1697          33          0.88          0.46          120          2.95          3.00  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1697          1719          22          1.75          0.24          187          3.74          3.05  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1719          1733          14          1.01          0.39          126          2.63          3.03  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1836          1851          15          1.06          0.84          422          1.08          2.95  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2020          2048          28          1.63          0.19          286          2.44          3.32  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 2022          2037          15          2.49          0.20          233          4.36          3.21  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2060          2070          10          0.50          0.13          149          0.15          3.31  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2084          2297          213          0.72          0.20          108          0.95          3.24  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2084          2144          60          0.41          0.16          162          0.40          3.21  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2144          2297          153          0.85          0.24          115          1.39          3.25  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 2173          2201          28          1.48          0.34          89          3.14          3.26  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2384          2419          35          0.98          0.48          196          1.56          3.58  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

 

BHP Operational Review for the quarter ended 30 September 2020    25


Hole ID

     From        To        Length
m
       Cu
%
       Au
g/t
       U3O8
ppm
       Ag
g/t
       SG  

AD30W3

       1083          1133          50          0.61          0.01          16          2.23          2.87  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1256          1278          22          0.86          0.34          71          3.29          3.12  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1609          1803          194          0.81          0.25          327          1.06          3.45  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1826          1849          23          0.31          0.05          39          0.12          2.79  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1878          1910          32          0.63          0.27          60          1.30          2.99  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD31W2

       1140          1333          193          0.87          0.09          27          2.67          2.88  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1364          1423          59          0.51          0.10          85          1.09          3.09  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1510          1695          185          0.54          0.08          45          6.61          2.93  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1844          1911          67          0.28          0.06          38          0.64          2.92  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD32W2

       1459          1590          131          1.33          0.48          146          4.52          3.24  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1459          1552          93          1.65          0.57          206          4.83          3.32  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1476          1544          68          1.81          0.60          218          4.27          3.33  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1501          1544          43          2.04          0.65          247          4.79          3.38  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1552          1590          38          0.50          0.17          85          2.11          3.04  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1619          1704          85          1.24          0.52          264          3.46          3.06  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2008          2323          315          1.05          0.56          252          2.94          3.50  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2008          2066          58          2.49          1.21          398          9.48          3.82  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2066          2147          81          0.99          0.43          377          2.46          3.42  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2147          2323          176          0.54          0.38          141          0.76          3.42  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2349          2365          16          1.12          0.34          192          2.44          3.49  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD29W1

       821          2025          1204          0.43          0.19          107          2.30          3.40  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       821          835          14          1.36          0.13          407          5.32          3.25  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       835          988          153          0.39          0.06          104          1.21          3.65  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1010          1041          31          0.43          0.03          106          16.10          3.54  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1099          1111          12          0.61          0.07          31          5.97          3.33  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1378          1421          43          0.43          0.44          116          3.16          3.17  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1479          1708          229          0.66          0.25          158          1.23          3.63  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1663          1708          45          0.93          0.28          242          0.72          3.98  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1734          1854          120          0.95          0.47          222          2.50          3.71  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       inc. 1789          1821          32          2.00          1.05          365          5.65          3.78  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1881          1951          70          0.38          0.42          116          1.95          3.29  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1979          2025          46          0.48          0.56          161          0.81          3.17  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD27W4

       1243          1392          149          1.30          0.62          265          4.10          3.47  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1243          1262          19          1.94          0.82          242          7.89          3.69  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1262          1281          19          1.03          0.51          233          2.83          3.77  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1281          1299          18          2.01          0.69          318          5.11          3.64  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1299          1330          31          1.57          0.49          316          5.12          3.52  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1330          1392          62          0.80          0.64          239          2.34          3.25  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1431          1492          61          0.67          0.32          90          2.52          3.12  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1502          1581          79          0.31          0.14          59          0.75          3.22  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1502          1527          25          0.45          0.24          74          1.33          3.33  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1527          1581          54          0.24          0.09          52          0.46          3.16  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1596          1712          116          0.45          0.36          226          2.07          3.15  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1596          1667          71          0.30          0.22          102          1.30          3.09  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1667          1683          16          1.12          0.67          807          4.98          3.46  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1683          1712          29          0.39          0.50          171          2.16          3.12  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

 

 

BHP Operational Review for the quarter ended 30 September 2020    26


Hole ID

     From        To        Length
m
       Cu
%
       Au
g/t
       U3O8
ppm
       Ag
g/t
       SG  

AD27W4

       1765          2037          272          0.82          0.24          125          1.24          3.67  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1765          1921          156          0.52          0.24          125          1.24          3.47  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1921          2009          88          1.35          0.68          304          3.02          4.06  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2009          2037          28          0.56          0.48          171          0.74          3.52  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       2098          2169          71          0.43          1.10          145          1.02          3.29  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

AD33

       1055          1174          119          1.17          0.12          140          4.37          3.13  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1055          1112          57          1.82          0.14          201          5.76          3.10  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1112          1174          62          0.58          0.14          203          5.79          3.16  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 
       1195          1205          10          0.43          0.01          132          2.54          3.20  
    

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

      

 

 

 

Drilling Techniques

 

 

All drilling was diamond drilling from surface.

 

 

Parent holes were collared in HWT to a depth of 6m and continued in PQ until the Tregalona Shale unit in the post mineral cover (between 100 m and 150 m downhole depth). From the Tregalona Shale, drilling continued in HQ to the depth chosen to begin navigational drilling. Navigational drilling was completed on the parent hole (and subsequent wedges) to setup for one to two wedges off parents AD29, AD31, AD30 and AD32. AD27W4 was wedged off AD27 parent hole from the previous drilling campaign. AD33 was drilled from surface without navigational drilling.

 

 

Directional surveys using a north-seeking gyroscope were completed on each hole inside the NQ2 rods.

Location of data points

 

 

All drill hole collar locations (historic and recent) have been surveyed with Trimble R8s and manually entered into acQuire database.

 

 

All coordinates provided are measured and provided in Geocentric Datum of Australia 1994 (GDA94 Zone 53).

Geological Logging

 

 

100% of new drill holes were logged in qualitative detail for the basement rocks.

 

 

The following observations were recorded: lithology composition and texture, alteration minerals and sulphide distribution.

 

 

Structural measurements have been recorded from orientated core measuring alpha and beta angles of structures of interest.

 

 

Core was photographed both wet and dry.

 

 

Geotechnical logging for rock-quality designation, micro-defects and rock classification commenced during the phase three drilling program.

Sampling Techniques

 

 

Sample recoveries are visually estimated to be >97%.

 

 

Sample loss is not considered material to reported grades.

 

 

Diamond core was split by core saw, with half the core submitted for assay and the other half stored in trays at Olympic Dam. Samples are submitted as 1 m or 2 m intervals.

 

 

Specific gravity measurements were taken for all assayed samples.

 

 

6-8 kg samples were submitted to an analytical laboratory for final drying, staged crushing to 2 mm, splitting to approximately 3 kg portion, followed by pulverisation to 90% passing 75 micron particle size pulp.

 

 

Duplicate samples were collected at each preparation stage where a reduction in sample mass occurred.

 

 

BHP Operational Review for the quarter ended 30 September 2020    27


Quality of assay data and laboratory tests

 

 

All samples were submitted to Intertek/Genalysis Laboratory in Adelaide.

 

 

All new drill holes reported here were analysed for Cu, Ag, As, Bi, Co, Zn, Ni, Pb, Al, Ca, Cr, Fe, K, Mg, Mn, Na, P, Sc, Si, Ti, V, Ba, Mo, Sb, Sr, U, Y, Zr, Au, S, Ce, La, using 3-acid digest, total fusion, fire assay and induction furnace digestions followed by ICP-OES/MS or infrared methods.

 

 

Three acid digestion followed by ICP-OES/MS was used to measure Cu, Ag, As, Co, Zn, Ni, Pb.

 

 

Lithium borate fusion followed by ICP-OES/MS was to measure Al, Ca, Bi, Cr, Fe, K, Mg, Mn, Na, P, Sc, Si, Ti, V, Ba, Mo, Sb, Sr, U, Y, Zr.

 

 

Comparative analysis between four and three acid digest methods, for a reduced suite of thirty-three elements, demonstrates that equally accurate and representative geochemistry and characterisation of the mineral system, was possible compared to the four acid digest method and sixty-three element suite, reported previously (BHP Exploration Results Update dated 27 November 2018).

 

 

25 g fire assay with an ICP-OES finish was used to measure Au.

 

 

Induction furnace combustion followed by infrared analyser was used to measure C and S.

 

 

Quality control samples consisted of duplicates (1:25), analytical blanks (1:50) and certified standards (1:25). QC results reviewed when results are received, all performed within acceptable accuracy and precision limits.

Verification of sampling and assaying

 

 

Significant intersections were validated via visual re-inspection of drill core, followed up by optical microscopy by BHP personnel not involved with the initial geological logging of the drill core. There has been no adjustments to the assay data that is electronically uploaded to the database from the commercial laboratory.

 

 

All drill hole data is managed internally using computerised geological logging, a comprehensive SQL server relational database, and strict validation rules.

 

 

The database has a security model which requires user access to have supervisor approval. The database is backed up regularly by standard backup procedures.

 

 

No twinned holes have been drilled.

Sample security

 

 

A reconciliation is completed between the sampling request and drilling plods to ensure that any lost core is accurately recorded prior to sampling. Sample numbers are automatically generated directly from the database once the sampling request is visually validated against the drill core. Laboratory sample receipt is recorded in the database. The laboratory reconciles samples received against samples requested on the assay request sheet.

Audits or reviews

 

 

The drill hole database is structured and controlled in the same way as the Olympic Dam database which has been independently audited.

Orientation of data in relation to geological structure

 

 

Mineralisation at this stage is still not well defined as per the irregular nature in IOCG-type deposits.

 

 

New holes have been angled approximately northwest-southeast to east-west, drilled from outside of the centre of the hydrothermal system, aiming to test the eastern and western contacts with the host rock.

Data aggregation methods

 

 

All intersections are length and density weighted represented in apparent (downhole) widths, true widths of intersections are unknown.

 

 

There is insufficient drilling to provide any mineral inventory estimate (including Exploration Target).

 

 

BHP Operational Review for the quarter ended 30 September 2020    28


Mineral tenement and land tenure status

 

 

The project is located within the Exploration Licence 5941 (EL5941), 100% owned by BHP.

 

 

EL5941 was successfully renewed in February 2019 within the current five year term, which expires on 21 February 2022, when a subsequent application will be lodged.

 

 

EL5941 is in ‘good standing’ with recent historic minimum expenditure met or exceeded.

Exploration done by other parties

 

 

The project has a long exploration history, dating back to 1976 by Western Mining Corporation and BHP.

 

 

All drilling information prior to 2018 has not been through the same quality control and processes described in this release and uncertainties exist in respect to the survey (dip, azimuth).

 

 

Historic drill holes have been re-sampled using the same methodologies and processes as the 2018 drill holes.

‘The information in the report to which this statement is attached that relates to Exploration Results is based on information compiled by Dr Kathy Ehrig, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy (FAusIMM(CP)). Dr Ehrig is a full-time employee of BHP. Dr Ehrig has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Dr Ehrig consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.’

 

 

BHP Operational Review for the quarter ended 30 September 2020    29


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

      BHP Group Limited and BHP Group Plc
Date: October 20, 2020     By:  

/s/ Caroline Cox

    Name:   Caroline Cox
    Title:   Group General Counsel & Company Secretary