ANNUAL
REPORT
2024
Bringing people and
resources together to
build a better world
“Our project pipeline and focus
on continuous improvement in
existing operations leave us well
poised for growth across our
four commodity pillars of copper,
potash, iron ore and steelmaking
coal in the decades ahead.”
Mike Henry
Chief Executive Officer
A resource
mix for today.
Critical for
the future.
Mt Whaleback, Newman,
Western Australia
Copper
Nickel
Potash
Coal
Cover photo
Iron ore
2024
Annual
Reporting
Suite
ANNUAL
REPORT
2024
Bringing people and
resources together to
build a better world
ECONOMIC
CONTRIBUTION
REPORT
2024
Bringing people and
resources together to
build a better world
Bringing people and
resources together to
build a better world
MODERN
SLAVERY
STATEMENT
2024
CLIMATE TRANSITION
ACTION PLAN
2024
Bringing people and
resources together to
build a better world
Annual
Report
2024
Economic
Contribution
Report 2024
Modern
Slavery
Statement
2024
Climate
Transition
Action Plan
2024
Operational
performance
Strategy
Risk
Governance
Climate action
Sustainability
People and
community
Financial
performance
BHP’s Annual Reporting Suite 2024
BHP Annual Report 2024
Overview
Our performance highlights
2
Chair’s review
4
Chief Executive Officer’s review
5
Governance
Corporate Governance Statement
98
Directors’ Report
112
Remuneration Report
115
Financial Statements
Consolidated Financial Statements
132
Notes to the Financial Statements
139
Additional Information
1
Information on
mining operations
205
2
Financial information
summary
216
3
Financial information
by commodity
217
4
Production
219
5
Major projects
221
6
Mineral Resources
and Ore Reserves
222
7
People – Performance
data
234
8
Legal proceedings
235
9
Shareholder information
238
10
Glossary
245
Operating and Financial Review
1
Why BHP
6
1.1 Where we operate
8
1.2 Our portfolio
10
2
What differentiates us
12
3
Positioning for growth 14
Chief Financial
Officer’s review
16
4
Financial review
17
4.1 Group overview
17
4.2 Key performance
indicators
17
4.3 Financial results
18
4.4 Debt and sources
of liquidity
20
5
Our assets
22
5.1 Minerals Australia
22
Western Australia
Iron Ore
22
BHP Mitsubishi Alliance
23
New South Wales
Energy Coal
24
Western Australia Nickel
24
5.2 Copper South Australia
25
5.3 Minerals Americas
26
Escondida
26
Pampa Norte
26
Jansen potash project
27
Non-operated minerals
joint ventures
27
Antamina
27
Resolution Copper
27
Samarco
28
5.4 Commercial
28
6
Sustainability
29
6.1 Safety
29
6.2 Our sustainability
approach
30
6.3 Sustainability
governance
31
6.4 Material sustainability
topics for reporting
32
6.5 2030 goals
34
6.6 People
36
6.7 Health
40
6.8 Ethics and business
conduct
41
6.9 Climate change
43
6.10 Environment and nature
60
6.11 Community
66
6.12 Indigenous peoples
68
6.13 EY Assurance Report
71
7
Samarco
72
8
How we manage risk
73
8.1 Risk factors
74
9
Performance by
commodity
83
9.1 Copper
83
9.2 Iron Ore
84
9.3 Coal
84
9.4 Other assets
85
9.5 Impact of changes to
commodity prices
85
10
Non-IFRS financial
information
86
10.1 Definition and calculation
of non-IFRS financial
information
95
10.2 Definition and calculation
of principal factors
96
11
Other information
97
Company details
refer to OFR 11.1
Forward-looking
statements refer
to OFR 11.2
Contents
1
Operating and Financial Review
Overview
Additional Information
Financial Statements
Governance
Contents
Our performance highlights
Operational
Highest copper production
in over 15 years
Highest production in four years at
Escondida, record production at Spence and
Carrapateena, and successful integration at
Copper South Australia.
Refining our steelmaking
coal portfolio
Successfully completed the sale of
Blackwater and Daunia, further focusing our
portfolio on higher-quality steelmaking coal.
Jansen potash project
tracking to plan
Jansen Stage 1 more than 50 per cent
complete. We are on track to be a major
global producer of potash by the end of
the decade.
Production record at WAIO
Second consecutive year of record iron
ore production at WAIO, through ongoing
incremental supply chain improvements.
Social value
1. For more information on the calculation of this metric and on our GHG emissions targets and goals refer to OFR 6.9.
Indigenous
partnerships
Operational greenhouse gas (GHG) emissions
(Scopes 1 and 2 emissions)
1% on FY2023
but remain on track to meet our medium-term target
by FY20301
Decarbonisation
Record Indigenous procurement spend
US$609 m
up 83% on FY2023
2
BHP Annual Report 2024
Financial
Dividend per share
146USc
FY2023 170USc
Underlying earnings per share
269.5USc
FY2023 265.0USc
Total payments to governments
US$11.2 bn
FY2023 US$13.8 bn
Profit from operations
US$17.5 bn
FY2023 US$22.9 bn
Area under nature-positive management practices2
83 k hectares
up 3,295 hectares since FY2023
Healthy
environment
Total economic contribution³
US$49.2 bn
We contributed US$41.5 bn to suppliers, community and
social investments, employees and governments during
the year. This was 84% of our total economic contribution.
Thriving, empowered
communities
2. For more information on this metric and our nature-related goals and targets refer to OFR 6.10.
3. For more information on our total economic contribution, refer to the BHP Economic Contribution Report 2024.
3
Operating and Financial Review
Additional Information
Financial Statements
Governance
Contents
Overview
Our social value highlights in FY2024 included the completion of all
our FY2024 Australian Reconciliation Action Plan targets and reforms,
US$137 million in voluntary social investment including community and
environmental initiatives and continued progress towards reducing our
operational greenhouse gas emissions.
Our Climate Transition Action Plan 2024 provides an update on our climate
change strategy and our progress and plans in relation to our greenhouse
gas emissions goals and targets. Our plan shows we are serious about
addressing the impacts of climate change from our business while
continuing to provide strong shareholder returns. At the Annual General
Meeting this year there will be a ‘Say on climate’ vote and I recommend
you vote in favour of our Climate Transition Action Plan 2024.
Board updates
Our structured Board renewal process continued in FY2024. Ross McEwan
joined the Board as a Non-executive Director on 3 April 2024. Ross has
significant experience in the financial services industry with deep expertise
in capital allocation, risk management and value creation in complex
regulatory environments. Don Lindsay also joined the Board as a Non-
executive Director on 1 May 2024 and brings over 40 years of global
experience in the resources sector and investment banking, including in
mining and resource development, financial markets, growth and value
creation. In April 2024, Ian Cockerill retired from the Board and in October
2023, Terry Bowen also retired from the Board. We benefited greatly from
Ian’s and Terry’s extensive experience and I would like to thank them for their
contribution and commitment to BHP during their time with us.
Outlook
In recent decades, we have seen global economies and supply chains
come together and support sustained economic development. Today, we
are seeing more turbulence, tension and polarisation in the geopolitical
landscape. We expect economic conditions to remain challenging in
FY2025 as geopolitical issues continue to create volatility and impact
global markets, security and trade.
Despite these challenges, I am optimistic about our future.
We have a world-class portfolio of large, long-life and high-quality assets
which stands to benefit from the global changes shaping our world. We have
a clear focus on being the best operator in the resources sector, being
disciplined in capital management through our Capital Allocation Framework
and having a differentiated approach to creating social value. We have a
culture that is committed to safety, productivity and continuous improvement
and we are working to make our workforce more inclusive and diverse.
I am confident BHP is well positioned to continue to create sustainable
long-term value for shareholders and for our partners and stakeholders in
the year ahead.
Thank you for your continued support.
Ken MacKenzie
Chair
Chair’s review
Dear Shareholders,
I am pleased to provide BHP’s Annual Report for FY2024.
Our operational and financial performance was strong in FY2024,
and we made solid progress against our social value and sustainability
commitments. It is more than four years since we began the
strategic transformation of BHP’s portfolio towards future-facing
commodities and the world has changed markedly in that time.
Thank you for the trust you have given us through this period.
Today, BHP has a portfolio of world-class assets focused on products
that are critical to the future. A portfolio positioned for growth, yet
resilient and able to withstand volatility. A product mix that can
continue to deliver financial and social value over the long term.
However, FY2024 was overshadowed by a fatality. We are deeply saddened
that Luke O’Brien, a team member working with one of our contracting
partners at BHP Mitsubishi Alliance (BMA), was fatally injured in January in a
vehicle incident at the Saraji mine in Queensland. Our heartfelt thoughts and
condolences go to Luke’s family and friends. Safety is our top priority and
our commitment to zero fatalities and serious injuries at BHP is unwavering.
Our strategic priorities
During FY2024 I had the pleasure of meeting with our people, Indigenous
partners, suppliers and other stakeholders at our global sites and offices.
These discussions reinforced that our ongoing commitment to the
priorities of safety, culture and capability, capital discipline, the continued
development of our world-class portfolio and social value continue to be
the right focus areas for BHP.
Safe, inclusive and productive workplaces
Our commitment to safety includes eliminating sexual harassment, racism
and bullying in our workplaces. We are determined to eliminate these
unequivocally unacceptable behaviours.
We know diverse and inclusive teams are safer and more productive.
We achieved a 1.9 percentage point year-on-year increase in female
employee participation in FY2024 to 37.1 per cent by year end. We also
made progress towards our Indigenous employment targets, including
Indigenous employee participation reaching 10.1 per cent in Chile and
11.2 per cent in Canada by year end. We have more work to do, but we
are making progress on our commitment to provide a safe and inclusive
workplace culture.
Positioned for success
BHP, and mining, have a clear and undeniable role to provide the metals
and minerals the world needs for more sustainable development.
The global trends shaping our future are interconnected, unstoppable and
bring with them new challenges and opportunities for our sector. A growing
and increasingly urbanised population seeking a higher standard of living
will require vast amounts of metals and minerals. That demand will only be
amplified by the energy transition.
We are continuing to position our portfolio to align with these trends.
Iron ore for steel to build cities and renewables infrastructure,
steelmaking coal for the blast furnace process for making steel, copper
for electrification, nickel for electric vehicle batteries and potash for food
security and more sustainable land.
Delivering value
BHP’s strong operational performance and disciplined approach to
capital allocation has seen the Board determine dividends totaling
US$7.4 billion to shareholders for the year. This will take the total amount
of cash dividends returned to you since 1 July 2021 to over $US42 billion
including the FY2024 final dividend.
We continued to make significant contributions to the communities where
we operate through employment, community partnerships, payments to
local suppliers, and taxes and royalties paid to governments. Our total
global economic contribution was US$49.2 billion in FY2024.
Creating social value is vital to our business and goes hand in hand with
long-term sustainable shareholder value. In FY2024, we delivered tangible
progress in each of the six pillars of our social framework which are
focused on decarbonisation, the environment, Indigenous partnerships,
workforce, communities, and supply chains.
Social value is interwoven into our strategic decision-making through our
social value framework, which helps us to meet the world’s demand for
resources more sustainably, with more renewable energy, less fresh water
use and less disruption.
Today, BHP has a portfolio
of world-class assets focused
on products that are critical
to the future. A portfolio
positioned for growth,
yet resilient and able
to withstand volatility.
A product mix that can
continue to deliver
financial and social
value over the long term.”
4
BHP Annual Report 2024
Dear Shareholders,
At BHP, we work to bring people and resources together to build a better
world, and we continued to make solid progress on this in FY2024.
The tragic loss of a coworker at Saraji in January in a light vehicle incident
underscored why safety must remain our first priority. Following an
investigation, we have identified improvement areas for Saraji and BMA
and work is underway to implement these. We must eliminate fatalities and
serious injuries at our operations.
It was a year of strong overall business performance at BHP. By executing
our strategy, we outperformed our competitors in key areas. We achieved
an annual production record at Western Australia Iron Ore (WAIO),
where we also widened our lead as the world’s lowest-cost iron ore
producer. We delivered record production at copper assets Spence
and Carrapateena, and the highest copper production in four years
at Escondida – the world’s largest copper mine. This growth helped
us achieve an underlying attributable profit of US$13.7 billion. We will
distribute dividends totaling 146 US cents per share for the year.
Poised for growth
We continued to advance growth options in the commodities the world
needs to meet the demands of the energy transition and population growth.
We believe we have the balance sheet, technical and operational capability
that will be needed to unlock new supply for the decades to come.
Construction of our Jansen potash project in Canada is ahead of the
original schedule and first production is expected in just over two years.
We have approved Jansen Stage 2, which will make BHP one of the
leading players in the global potash industry by the end of the decade.
We have strengthened our position in copper. The integration of
Prominent Hill and Carrapateena with Olympic Dam has delivered
greater-than-expected synergies. We are exploring options to grow Copper
South Australia’s production beyond 500 kilotonnes per annum (ktpa) of
copper, with further potential up to 650 ktpa. In July 2024, we increased our
early-stage copper options by agreeing to acquire a 50 per cent interest
in the Filo del Sol and Josemaria projects with Lundin Mining in Argentina
and Chile. If approved, this will give us the opportunity to advance one of
the most significant copper discoveries globally in recent decades.
Our project pipeline and focus on continuous improvement in existing
operations leave us well poised for growth across our four commodity pillars
of copper, potash, iron ore and steelmaking coal in the decades ahead.
Winning strategy
Our actions in FY2024 are consistent with our winning strategy, founded
on the three strategic pillars of safety and sustainability, exceptional
performance and winning portfolio. In a cyclical industry, the stability of our
operations and financial performance reflects the resilience and durability
of our business.
The creation of social value is integral to our strategy and the delivery of
long-term shareholder value. When we create social value, we build our
case as the preferred partner for communities, we gain access to more
opportunities, and we attract the best talent.
In the financial year, we increased Indigenous employment globally and
boosted supplier spend with Indigenous businesses by 83 per cent to more
than US$600 million. This was part of a broader 9 per cent increase to
US$3.3 billion in supplier spend by BHP-operated businesses to more than
2,600 small, local and Indigenous businesses. This not only benefits our
operations, but provides crucial support for jobs, businesses and families
in regional communities surrounding them.
We made further progress on our operational decarbonisation plans and
remain on track to meet our operational GHG emissions target of at least
a 30 per cent reduction by FY2030 against an FY2020 baseline.
Refining our portfolio
We continue to focus on building a portfolio of world-class assets in
attractive commodities in stable jurisdictions.
We refined our steelmaking coal portfolio in Queensland with the sale of
the Daunia and Blackwater mines by our joint venture BMA. This strategic
shift positions BMA well for the forecasted strong demand for higher-
quality steelmaking coal. Following the transaction, around 90 per cent of
our steelmaking coals are high-grade products attracting premium pricing.
In July 2024, we made the difficult but necessary decision to transition
Western Australia Nickel into a period of temporary suspension.
This reflected significant global oversupply of nickel, which we expect
will continue until the end of the decade. We have offered redeployment
to all frontline workers in other parts of BHP and will continue to support
impacted host communities in a range of ways, including through our
Chief Executive Officer’s review
A$20 million Community Fund. We will continue to invest approximately
US$300 million per annum in our Western Australia Nickel facilities to
enable a potential re-start if the global nickel market outlook improves.
We will review the decision by February 2027.
Our people and culture differentiate us
Our strong performance in FY2024 is a testament to our more than 90,000
employees and contractors who work hard to build a better BHP every
day. They are empowered to do so by the BHP Operating System and we
continue to build an inclusive and diverse culture with a performance edge.
During the year we refreshed Our Values, which set the tone for our
culture. Our Values comprise three simple statements. First and foremost,
we must always ‘Do what’s right’ – operating safely and with integrity are
non-negotiable. We also need to constantly ‘Seek better ways’ – listening
to others, seeking out new ideas, and improving on today. And finally,
we must always strive to ‘Make a difference’, which applies not only to
the company and the team, but also to the individual. Every day we have
the opportunity to have a positive impact on performance, those around
us, and the world. Our Values help guide everything we do at BHP.
They reflect both what we stand for and who we aspire to be.
Innovation and technology
BHP is well placed to capitalise on the opportunities afforded by artificial
intelligence (AI) and advanced data analytics given our large-scale,
repeatable processes, and vast amounts of data. We are already starting
to see benefits. The application of AI at our Escondida processing plants
has helped save more than three gigalitres of water – and 118-gigawatt
hours of energy – since FY2022. Machine learning has assisted in the
discovery of new copper deposits in Australia and the United States.
Through our Xplor and BHP Ventures programs we continue to seek new
partnerships and access to game-changing technologies and insight to
help drive sustainable growth for the decades ahead.
In great shape
BHP finished FY2024 in an excellent position. We are well placed to
benefit from the significant global changes happening around us. We have
strategic clarity and exposure to the right commodities. We continue to
build on our excellence in operations and discipline in our capital allocation.
We hold resilient, long-term assets with substantial optionality. This allows
us to make smart choices about how and where we use our balance sheet
to fund growth and generate value.
As we look to FY2025, we will continue to execute our strategy to create
value for our shareholders, community partners and stakeholders, now and
into the future.
Thank you for your continued support.
Mike Henry
Chief Executive Officer
We continued to advance
growth options in the
commodities the world needs
to meet the demands of the
energy transition and
population growth.
We believe we have the balance
sheet, technical and operational
capability that will be needed
to unlock new supply for the
decades to come.”
5
Operating and Financial Review
Additional Information
Financial Statements
Governance
Contents
Overview
1 Why BHP
Exploration and acquisition
We seek to add high-quality Tier 1 interests
through our exploration activities and
early‑stage entry and acquisition options.
Closure and rehabilitation
We consider closure and rehabilitation
throughout the asset lifecycle to help
minimise our impact and optimise
post-closure value for all stakeholders
and partners.
Process and logistics
We process and refine ore and seek to
safely manage waste. Our objective is to
efficiently and sustainably transport our
products to customers.
Development and mining
We strive to achieve the industry’s best
performance in safety, operational
excellence, project management and
allocation of capital.
Sales, marketing and procurement
We maximise value through our centralised
marketing and procurement organisations,
commercial expertise, understanding of markets
and customer and supplier relationships.
We will responsibly manage the
most resilient long-term portfolio
of assets, in highly attractive
commodities, and will grow
value through being excellent
at operations, discovering and
developing resources, acquiring
the right assets and options, and
capital allocation.
Through our differentiated
approach to social value, we will
be a trusted partner who creates
value for all stakeholders.
Our strategy
6
BHP Annual Report 2024
The world needs essential metals and minerals to be
produced by companies who set and uphold high ESG standards,
who run their operations safely and efficiently, and who allocate
capital in a consistent and disciplined way. These are the companies
that will succeed. This is BHP.
Our capabilities, track record, scale and the unique way we work through the BHP Operating System enable a culture
of continuous improvement.
We aim to grow value for our shareholders, partners and stakeholders through our portfolio of large long‑life quality assets in attractive
commodities and through our focus on social value, which is integral to how we operate.
BHP is positioned to benefit from the changes shaping our planet now and for decades to come as demand for our commodities grows.
Our products are vital
Population growth, urbanisation and improving living standards are global
trends that underpin strong demand for the commodities we produce.
Demand for essential commodities is expected to increase as the world
seeks to decarbonise.
Iron ore is needed for making steel to build cities and renewables
infrastructure. Steelmaking coal is needed for the blast furnace process
for making steel. Copper is vital for electrification. Nickel can be used in
electric vehicle batteries. Potash can help with food security and more
sustainable land use.
Scale is important
As new large low-cost ore bodies become harder to find and develop, the
scale and quality of our assets set us apart. We have some of the largest
resources and lowest-cost assets in the world.
One of our biggest growth levers is productivity and unlocking more
value from our existing assets. We seek to improve productivity through
the capabilities of our people and culture of continuous improvement
driven through the BHP Operating System, and the use of technology
and innovation to extract more from what we do every day and more from
our resources.
The scale of our assets provides multiple growth options. We are seeking
to produce more iron ore in Western Australia. We are working to improve
productivity at our steelmaking coal operations in Queensland. We are
advancing multiple growth options in copper in Chile and our recently
established copper province in South Australia. We have sanctioned the
second stage of our Jansen potash project in Canada, which will eventually
double its expected annual production.
For more information refer to OFR 5
Social value is embedded in everything we do
We are committed to social value: our positive contribution to society. It is
vital for our future and a consideration in the strategic decisions we make.
Social value underpins stable operations, reduces risk and opens doors
to opportunities, partnerships, talent and capital. Delivering social value
will help us to continue to generate long-term value for all partners and
stakeholders, including shareholders.
For more information refer to OFR 6.2 to 6.5
We do what we say
BHP has a track record of doing what we say we will do. We continue to
plan strategically, responsibly, consistently, with a clear focus on being
the best operator, being disciplined in capital allocation and continuing to
generate value and returns for stakeholders.
In a cyclical industry, we have delivered an underlying EBITDA profit
margin of over 50 per cent for eight-consecutive years. We have generated
net operating cash flows of over US$15 billion for all but one of the past
15 years. This stability is our hallmark – achieved through robust capital
management and consistent operational performance.
Including the final dividend for FY2024 declared, we will have distributed
more than US$42 billion in total in cash dividends to shareholders since
1 July 2021. This includes US$7.4 billion in cash dividends for FY2024.
Our total economic contribution in FY2024 was US$49.2 billion.
This includes contributions to suppliers, wages and benefits for more than
90,000 employees and contractors, dividends, taxes and royalties, and
voluntary investment in projects in the communities where we operate.
For more information refer to OFR 4 and the
BHP Economic Contribution Report 2024 available at
bhp.com/ECR2024
The future is clear
Key commodities we produce or are positioning to produce are vital for
a better world and can help address global challenges, such as climate
change and food security.
We are continuing to build an inclusive and diverse workforce of
talented people. We have a strong balance sheet and industry‑leading
operational capability underpinned by the BHP Operating System
and our technical Centres of Excellence.
Our track record, long-term stability and commitment
to social value and sustainability set us apart.
This combination will help us achieve our aim of
growing value more consistently for our partners
and stakeholders and drive attractive
returns and long-term value for
our shareholders.
Why BHP
7
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
London
Gurgaon
Singapore
Perth
Adelaide
Melbourne
Brisbane
Kuala Lumpur
Manila
Shanghai
Tokyo
Western Australia Iron Ore
Western Australia Nickel
BHP Mitsubishi Alliance
NSW Energy Coal
1 Why BHP continued
Australia
Western Australia
Iron Ore5
BHP Mitsubishi
Alliance5
NSW Energy
Coal6
Copper South
Australia7
Western Australia
Nickel8
Production
254.9 Mt
22.3 Mt9
15.4 Mt
322.0 kt
81.6 kt
Revenue (US$)
27.8 bn
5.9 bn
1.9 bn
4.1 bn
1.5 bn
Underlying EBITDA (US$)
19.0 bn
1.9 bn
0.5 bn
1.6 bn
(0.3) bn
1. This includes contribution to suppliers, wages and benefits for employees and contractors,
dividends, taxes and royalties, and voluntary social investment. For more information refer
to the Economic Contribution Report 2024.
2. For more information refer to the Economic Contribution Report 2024.
3. Based on a ‘point-in-time’ snapshot of employees as at 30 June 2024, including
employees on extended absence. Contractor data is collected from internal organisation
systems and averaged for a 10-month period, July 2023 to April 2024. Figures reported
do not include employees and contractors of BHP Billiton Mitsubishi Alliance Blackwater
and Daunia operations, sold to Whitehaven Coal during FY2024, and employees and
contractors of the operations in Brazil that were acquired as part of the OZ Minerals
acquisition completed during FY2023.
4. Rest of the world includes consolidation adjustments related to intra-group transactions.
5. Shown on a BHP share basis.
6. Includes Newcastle Coal Infrastructure Group (NCIG), which is an equity accounted
investment and its financial information presented above, with the exception of net operating
assets, reflects BHP Group’s share. Total Coal statutory result excludes contribution related to
NCIG until future profits exceed accumulated losses.
7. Includes Olympic Dam, Prominent Hill and Carrapateena.
8. Includes Nickel West and West Musgrave project.
1.1 Where we operate
Total economic contribution1 (US$)
No. of employees and contractors3
Payments to suppliers2 (US$)
Total payments to governments2 (US$)
Facts at a glance FY2024
Global total
$49.2 bn
Australia
34.7 bn
Chile
9.4 bn
Canada
1.4 bn
Rest of the world
3.7 bn
Global total
91,587
Australia
49,892
Chile
33,213
Canada
2,022
Rest of the world
6,460
Global total
$25.3 bn
Australia
14.5 bn
Chile
7.0 bn
Canada
1.3 bn
Rest of the world
2.4 bn
Global total
$11.2 bn
Australia
9.5 bn
Chile
1.5 bn
Canada
29 m
Rest of the world4
256 m
Copper South Australia
8
BHP Annual Report 2024
Samarco
Carajás
Tucson
Belo Horizonte
Antamina
Pampa Norte
Escondida
Jansen Potash
Resolution Copper
Iquique
Santiago
Saskatoon
Toronto
Washington
Quito
Lima
FY2024 production
Non-operated
joint venture
BHP principal
office locations
Chile
Escondida
Pampa Norte12
Production
1125.3 kt
265.6 kt
Revenue (US$)
10.0 bn
2.4 bn
Underlying EBITDA (US$)
5.8 bn
0.9 bn
Copper
1,865 kt
Iron ore
259.7 Mt
Coal
37.7 Mt10
Nickel
81.6 kt
Potash11
(in development
– planned capital
spend shown)
~US$10.6 bn
9. Reflects the contribution of the Blackwater and Daunia mines to 2 April 2024, the date on
which BMA’s owners completed its divestment.
10. BHP’s attributable coal production for the year, being 50 per cent of BMA’s steelmaking
coal production (22.3 Mt) and 100 per cent of New South Wales Energy Coal production
(15.4 Mt).
11. In October 2023, BHP approved US$4.9 billion in capital expenditure for Jansen Stage 2.
First potash production from Jansen Stage 1, which has approved capital expenditure of
US$5.7 billion, is expected in late CY2026.
12. Includes Spence and Cerro Colorado.
We continue to deliver value
for all our stakeholders.
BHP’s total direct economic
contribution in FY2024 was
US$49.2 billion.”
Vandita Pant
Chief Financial Officer
Antofagasta
9
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
1 Why BHP continued
1.2 Our portfolio
A resource mix for today – and for the future
We have copper, which is used in electrification. Iron ore, which is essential for
making steel needed for construction, including renewables infrastructure. Our
higher-quality steelmaking coal is used in the blast furnace process for making
steel. Nickel can be used in electric vehicle batteries. We are on track to be a major
global producer of potash by the end of the decade. Potash is used in fertilisers
to assist with food security for a growing population and more sustainable land
use. Among our by‑products, we are a major producer of uranium and gold.
1. Largest copper mineral resources on a contained metal basis, equity share. Peers include: Anglo American, Antofagasta, Codelco, First Quantum Minerals, Freeport, Glencore, Rio Tinto,
Southern Copper and Teck. Source peers: Wood Mackenzie Ltd, Q2 2023. Source BHP data: BHP Annual Report 2024.
2. Based on published unit costs of major iron ore producers as reported at 30 June 2024. There may be differences in the manner that third parties calculate or report unit costs data
compared to BHP, which means third-party data may not be comparable with our data.
Iron ore
Nickel
Nickel West production in FY2024 was in line
with the prior year.
On 11 July 2024, we announced Western Australia
Nickel, comprising the Nickel West operations
and West Musgrave project would be temporarily
suspended from October 2024. We intend to
review this decision by February 2027.
The decision to temporarily suspend Western
Australia Nickel reflects oversupply in the global
nickel market. Forward consensus nickel prices
over the next half of the decade have fallen
sharply reflecting strong growth of alternative
low-cost nickel supply.
During the temporary suspension, BHP will
continue to support our workforce and local
communities. BHP will invest approximately
US$300 million per annum following completion
of a transition period to support a potential
re-start of Western Australia Nickel.
The transition period commenced in July 2024.
Operations will be suspended in October
2024 and handover activities for temporary
suspension are expected to be completed by
December 2024.
For more information refer to
OFR 5.1
Temporary suspension announced
81.6 kt
2% on FY2023
In July 2024, we agreed to acquire a 50 per
cent interest in the Filo del Sol and Josemaria
copper projects in Argentina and Chile with
Lundin Mining. If approved, this will give us
the opportunity to jointly advance an emerging
copper district with world-class potential.
For more information refer to
OFR 5.2 and 5.3
Highest production in over 15 years
1.86 Mt
9% on FY2023
Copper
We hold the world’s largest copper mineral
resources.1 We are using technical innovation,
such as new flotation technology, to help lower
energy costs and unlock value. We continue to
pursue our strategy to increase our exposure
to future-facing commodities, including copper,
through exploration, acquisition and early-stage
options. Our copper production rose 9 per cent
in FY2024 to the highest in more than 15 years.
Escondida in Chile is the world’s largest copper
mine. It increased production by 7 per cent in
FY2024 compared to FY2023, to 1.12 million
tonnes (Mt) (100 per cent basis). This was
primarily due to a higher concentrator feed
grade as mining progressed into areas of
higher-grade ore as planned following the
implementation of measures to manage
geotechnical events in FY2023. Spence in Chile
delivered another year of record production,
up 6 per cent to 255 kilotonnes (kt). We are
exploring a range of growth options across our
Chilean copper assets, including a potential new
concentrator at Escondida and the application
of leaching technologies at Spence and
Cerro Colorado.
We have established a significant resource base
at Copper South Australia by adding Olympic
Dam with Carrapateena and Prominent Hill
from our OZ Minerals acquisition in FY2023.
The successful integration of the former
OZ Minerals assets has delivered increased
production and exceeded our annualised
synergies planned at the time of the acquisition
of OZ Minerals. This has been through actions
such as the processing of Prominent Hill and
Carrapateena concentrate at Olympic Dam
into higher-margin cathode and refined gold,
resulting in annual records for cathode and
gold production at Olympic Dam. Copper South
Australia production was 322 kt in FY2024,
including record production at Carrapateena.
We’re progressing growth options at Copper
South Australia, where our aspiration is to grow
copper production to beyond 500 kt per year.
Given the gold, silver and uranium co-products,
this would be equivalent to over 700 kt per
annum copper equivalent. We had exploration
success in South Australia in FY2024 with OD
Deeps, delivering greater than two kilometres
in strike and more than one kilometre in depth
at over 1 per cent copper grade and an Inferred
Mineral Resource declaration at Oak Dam.
10
BHP Annual Report 2024
Potash
We are developing one of the world’s largest
potash mines in Canada. The Jansen potash
project will increase our product diversification,
customer base and operating footprint, and
expand our business into a future growth market.
The US$5.7 billion Jansen Stage 1 project is
ahead of the original schedule and was over
50 per cent complete by the end of FY2024.
First production from Jansen Stage 1 is expected
in late CY2026, followed by a two-year ramp‑up
period. In October 2023, we announced an
additional investment of US$4.9 billion for Jansen
Stage 2, which will increase Jansen’s total planned
potash production capacity to ~8.5 Mtpa. We have
commenced execution of Jansen Stage 2.
Transitioning directly from Jansen Stage 1
to Jansen Stage 2 during the construction
period will bring operational benefits, including
leveraging the experience of our integrated
project team and continued use of our existing
suppliers and contractors.
We are on track to be a major global producer of
potash by the end of the decade. Longer term,
Jansen has the potential for two additional
expansions to reach an ultimate production
capacity of 16 to 17 Mtpa (subject to studies
and approvals).
For more information refer to
OFR 5.3
3. For CY2023, the GHG emissions intensity of our production of our commodities is estimated to rank in the first quartile for our iron ore, copper and steelmaking coal mines, and the second
quartile for our nickel operations (ahead of all Indonesian-based operations) of global mining operations analysed by CRU. This analysis is based on CY2023 data from CRU (as CRU data
is prepared on a calendar year basis), and includes CRU’s assumptions and estimates of BHP’s operations. We transitioned to using CRU (rather than Skarn Associates) for this analysis
in FY2024 as part of an annual vendor assessment and selection process. For more information on how the GHG emission intensity for our iron ore and steelmaking coal mines has been
calculated and compared refer to the BHP ESG Standards and Databook 2024 available at bhp.com/climate.
Major global producer by the end of the decade
US$10.6 bn
Total approved capital expenditure through Jansen
Stage 1 and Jansen Stage 2
Western Australia Iron Ore (WAIO) is
the lowest-cost major iron ore producer
globally2 and has one of the lowest
greenhouse gas (GHG) emission
production intensities of benchmarked iron
ore operations.3
WAIO delivered a second-consecutive
full‑year production record of
287 Mt (255 Mt BHP share), reflecting
strong supply chain performance with
increased capacity unlocked by the
Port Debottlenecking Project 1 and
increased production from South Flank, our
newest and most technologically advanced
mine. These more than offset the impacts
of the continued tie-in activity for the Rail
Technology Programme 1. South Flank
ramped up to full production capacity of
80 million tonnes per annum (Mtpa)
(100 per cent basis) on schedule
during FY2024.
We continue to invest in improvements
in our rail and port operations and are
assessing options to grow our WAIO
production up to 330 Mtpa if market
conditions warrant. These options
include optimal mine and infrastructure
configurations and potentially increased
ore beneficiation. We expect to complete
these studies in CY2025.
For more information refer to
OFR 5.1
Second consecutive full-year
production record
260 Mt
1% on FY2023
Steelmaking coal
Focusing on higher-quality product
22.3 Mt
23% on FY2023
We continue to focus our steelmaking coal
operations in Queensland on higher-quality
product and have one of the lowest GHG
emission production intensities of benchmarked
export steelmaking coal mines.3 In a challenging
year for BMA, production decreased from the
prior year as a result of increased stripping
to improve supply chain stability and restore
depleted inventory positions, which arose from
extended weather impacts and labour constraints
over recent years, and the divestment of
Blackwater and Daunia on 2 April 2024.
We believe a wholesale shift away from the
blast furnace process for steelmaking is
decades in the future. We also believe higher-
quality steelmaking coals have potential for
greater upside for quality premiums. This is
because we believe steelmakers will seek
to operate their blast furnaces with stronger,
higher-performance steelmaking coal to lower
overall coal consumption and, over time, to
improve blast furnace process performance
when implementing future GHG emission
reduction technologies.
On 2 April 2024, BHP and its joint venture
partner, Mitsubishi Development Pty Ltd,
completed the sale of the Blackwater and
Daunia mines to Whitehaven Coal for
up to US$4.1 billion (100 per cent basis).
Following the sale, around 90 per cent of BMA’s
products will be sold by reference to the Platts
PLV HCC FOB Qld index, the highest quality
steelmaking coal index, up from 64 per cent
prior to the transaction.
For more information refer to
OFR 5.1
11
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
2 What differentiates us
BHP’s ability to deliver differentiates us from our competitors.
We do what we say we will do. This has created stability in
our historical performance that has been a hallmark of BHP
for more than a decade.
There are many factors that underpin this historic stability, each of which is
vital. It’s the unique combination of these factors that sets us apart.
Our people
We have more than 90,000 employees and contractors globally. We strive
to offer an engaging and supportive workplace, which empowers our
people to find safer and more productive ways of working. We do this by
providing the tools and opportunities in our working environment to allow
our people to perform at their best. Our people are empowered daily in
their work by the BHP Operating System.
Our Values
Our Values set the tone for our culture, a unique part of our
competitive advantage. They are a declaration of what we stand for.
They guide our decision-making, reinforce our culture and ensure all
our people are steering in the same direction, delivering on our purpose.
In FY2024, Our Values were refreshed to:
Do what’s
right
Seek better
ways
Make a
difference
A sustainable future
starts with safety
and integrity, building
trust with those
around us
Listening to learn
and inspiring
challenge is how we
drive progress
The accountability to
act, create value and
have impact is on
each of us, every day
Our Values help our people move quickly and deliberately when we
encounter challenges and opportunities.
Health and safety
Fatalities
1
FY2023: 2
Total recordable
injury frequency rate1
4.7
5% from CY2023
High-potential injury
frequency rate
36%
from FY2023
Workers exposed to our most material
occupational exposures of diesel
particulate matter (DPM), respirable
silica and coal mine dust
Female employee participation
37.1%
at the end of FY2024.
1.9 percentage points since the end of FY2023 and on
track to meet our aspirational goal of a gender-balanced employee workforce
globally by the end of CY2025
Indigenous employee participation2
Australia3
8.3%
8.6% at 30 June 2023
Chile4
10.1%
9.7% at 30 June 2023
Canada5
11.2%
7.7% at 30 June 2023
BHP Operating System
The BHP Operating System (BOS) is our unique overarching management
system that enables the right culture, routines, behaviours and leadership
to deliver stable operating excellence and leading safety performance.
It provides us with a competitive edge.
BOS drives continuous improvement through the application of BOS tools
and practices. It makes improvement central to everyone’s role, allowing
people to work on the system, not just in it.
BOS helps us continuously focus on leadership development, capability and
engagement, and creates better-planned, more stable work processes.
Aligning around our strategy, operating philosophy and principles
for decision-making will make us an even better company – one that
focuses on safety, leads the sector, generates strong returns for our
shareholders, and meets the expectations of our partners, communities
and other stakeholders.
We have deployed BOS across our business.
How BOS works
Three principles underpin BOS and guide how we
think and behave at BHP
Our people know their work and how to
improve it – they need to be given the right
conditions to excel.
Our ambition is 100% safety for our people,
100% value for our customers, 0% wasted
expense or effort – our efforts for improvement
never stop.
We must know who our customer is and
become obsessed with meeting their needs –
delivering exactly what they need, at the right time
and at the appropriate levels of quality and cost.
Serve our
customer
Pursue operating
perfection
Empower
our people
Exceptional performance
Operating and financial strength
The strength of our portfolio, our operating excellence and financial rigour
from our disciplined application of the Capital Allocation Framework (CAF)
enables us to deliver strong and consistent returns. We achieved net
operating cash flow of US$20.7 billion in FY2024. Our net operating cash
flow has been more than US$15 billion for all but one of the past 15 years.
In FY2024, through our CAF, we kept our balance sheet strong, delivered
growth and returns for our shareholders, made progress towards our social
value and GHG emission reduction objectives and prioritised capital to
maintain reliable operations.
Operational excellence
Our strong results in FY2024 were driven by performance and discipline
at our operations, which overall performed well. We achieved production
guidance across all commodities in FY2024, with steelmaking coal
achieving the upper end of its revised production guidance. This included
record annual production at WAIO, Spence and Carrapateena, record
cathode and gold production at Olympic Dam, and the highest production
in four years at Escondida.
Our focus on cost discipline helped us manage inflationary pressures
effectively. We experienced a global inflation rate of around 4 per cent,
particularly in relation to labour. Our cost discipline allowed us to mitigate
these ongoing cost pressures with unit costs around 2.9 per cent higher
across our major assets. We met unit cost guidance at Escondida, WAIO
and Spence, and revised unit cost guidance at BMA. WAIO extended its lead
over competitors as the lowest cost major iron ore producer globally.
For mining companies, cost differentiation is becoming even more
pronounced. General inflation and labour are expected to continue to
put upwards pressure on costs. The costs of decarbonisation are also
expected to be inflationary and will disproportionately impact companies
with higher GHG emissions intensity. As such, while the marginal cost of
mining production is clearly higher than in the past; in the medium term
there are signs it could go higher.
Technology and innovation
The use of technology and our focus on innovation, together with
BOS, have helped accelerate continuous improvement – from the
introduction of advanced technologies designed to improve safety and
increase productivity of our operated assets, to reducing water and
energy consumption.
1. Combined employee and contractor frequency per 1 million hours worked.
2. Point in time data at 30 June 2024.
3. Participation in Minerals Australia operations in Australia. FY2023 figure does not include
OZ Minerals.
4. Participation in Minerals Americas operations in Chile.
5. Participation in Jansen potash project and operation employees in Canada.
46%
from FY2023
For more information refer to OFR 6.1 and 6.8
12
BHP Annual Report 2024
Technology is a key lever for BHP and has been used to:
– support the maintenance of safe, predictable and productive operations
– drive productivity improvements, with an emphasis on automation and
real-time, data-driven insights and decision-making
– unlock the next stage of value growth potential, such as by realising
greater margins at our existing operations and enabling the discovery of
new assets
– improve sustainability outcomes through innovation
– help drive inclusion and diversity, such as remote operations and
decision support tools that make roles more accessible to a wider range
of people
The advanced use of next generation technologies, such as artificial
intelligence (AI) and cloud and data analytics, are supporting quicker
and more efficient resource recovery, more safely and more sustainably.
They are also helping lift performance through operational improvements.
Examples of how BHP used AI in FY2024 include:
– A digital tool at Escondida used AI to increase revenue by
US$18.9 million in FY2024 by enabling drill and blast teams to select
a more optimal blasting pattern design. The technology also helps
to mitigate coarse ore restrictions at Escondida’s semi-autogenous
grinding (SAG) mills by improving post-blasting fragmentation. We will
use this tool at Spence to assist with stabilising its SAG mill performance
and increase its productivity.
– Next generation improvements to the Process Area Set Point
Optimisation (PASPO) were rolled out across BMA sites in FY2024 to
increase production of on-specification steelmaking coal, increasing
revenue by US$15.5 million. For example, the Caval Ridge team
identified an opportunity to increase yield by reducing density variation
while keeping train product ash on specification.
We upgraded our global technology system 1SAP ERP to S/4HANA in
FY2024. The modernisation of this core global platform is critical to our
operations, as it is used to:
– pay our people and suppliers
– sell and deliver our products
– better maintain our equipment
– accurately report our financial results to the market
– above all, enable us to operate more safely, efficiently and reliably
Social value
We are committed to social value and sustainability and are making
progress in more responsibly providing commodities the world needs
to develop and decarbonise. We believe this commitment can help us
become a partner of choice with communities, governments, suppliers
and our customers. We seek to be a valued partner with the communities
where we operate and the Indigenous peoples we interact with.
In FY2024, we continued to refine our approach to social value. We have
provided progress on our 2030 goals through our 2030 social value scorecard.
For more information on our 2030 social value scorecard
refer to OFR 6.5
Through our commitment to sustainability, we seek to reduce the impact of
our operational activities. We have set a long-term goal to achieve net zero
operational GHG emissions (Scopes 1 and 2 emissions from our operated
assets) by CY2050. We also have a long-term goal of net zero Scope 3
GHG emissions by CY2050. Achievement of this Scope 3 goal is uncertain,
particularly given the challenges of a net zero pathway for our customers in
steelmaking, and we cannot ensure the outcome alone.
We manage our operational decarbonisation projects across our operated
assets through our CAF to help us use our capital effectively.
We are also working with our suppliers and customers to support their
efforts to reduce GHG emissions. For example, during FY2024 we signed
a framework agreement with Rio Tinto and BlueScope to investigate
the development of an ironmaking electric smelting furnace pilot plant
using Pilbara iron ores that have been pre-processed into direct reduced
iron. This process route could open a pathway to an alternative to the
conventional blast furnace method of steelmaking with the potential to
reduce GHG emissions intensity by 85 per cent and meet near zero
emission steelmaking benchmarks.1
For more information on our GHG emission goals and targets
refer to OFR 6.9
We have set goals in areas such as environment and water stewardship.
To meet the FY2024 short-term milestone for the Healthy environment pillar
of our social value scorecard, we have developed a Group-level framework
for nature-positive plans to achieve our 2030 Healthy environment goal
(BHP Healthy environment goal roadmap).2 Our 2030 Healthy environment
goal is to create nature-positive3 outcomes by having at least 30 per cent of
the land and water we steward4 at the end of FY2030 under conservation,
restoration or regenerative practices.
At 30 June 2024, we had 83,012 hectares or 1.62 per cent5 of the land and
water we steward4,6 under nature-positive management practices.7
For more information refer to OFR 6.5
Financial excellence
We use our Capital Allocation Framework (CAF) to assess the most effective and efficient way to deploy capital. Since the CAF’s introduction in
FY2016, we have balanced reinvestment in our business with cash returns to shareholders. Our CAF promotes discipline in all capital decisions.
Operating productivity
Net operating cash flow
Maintenance capital
Strong balance sheet
Minimum 50% payout ratio dividend
Capital productivity
Debt reduction
Additional dividends
Buy-backs
Organic development
Acquisitions/divestments
Excess cash flow
50
Maximise value and returns
1. Based on direct reduced iron electric smelting furnace route (using renewable or other low to zero GHG emissions power). Estimated reduction in GHG emissions intensity is calculated
relative to a baseline reference of 2.2 tonnes of CO2-e per tonne of crude steel, as sourced from IEA Iron and Steel Technology Roadmap (October 2020). For more information refer to our
Value chain GHG emissions – Hydrogen reduction and electric smelting of BHP ores case study on page 26 of our Climate Transition Action Plan 2024, available at bhp.com/CTAP2024.
2. The BHP Healthy environment goal roadmap is intended to apply to our operated assets in Australia, Chile and Canada. Due to the acquisition of OZ Minerals and prioritisation of
activities based on risks and impacts, Carrapateena, Prominent Hill, West Musgrave and legacy assets are currently out of scope for the roadmap; with the exception of West Musgrave,
these assets are planned to be incorporated into the roadmap in FY2025. Incorporation of West Musgrave into the BHP Healthy environment goal roadmap will be reviewed following the
decision to temporarily suspend the Western Australia Nickel operations.
3. Nature-positive is defined by the TNFD Glossary version 1.0 as ‘A high-level goal and concept describing a future state of nature (e.g. biodiversity, ecosystem services and natural
capital), which is greater than the current state’. We understand it includes land and water management practices that halt and reverse nature loss – that is, supporting healthy, functioning
ecosystems. BHP intends to review this definition in FY2025, in light of the recently revised TNFD Glossary version 2.0 (June 2024) definition of nature-positive.
4. This excludes areas we hold under greenfield exploration licences (or equivalent tenements), which are outside the area of influence of our existing mine operations. 30 per cent will be
calculated based on the areas of land and water that we steward at the end of FY2030.
5. 1.62 per cent is calculated based on the areas of land and water that we stewarded (excluding areas we hold under greenfield exploration licences (or equivalent tenements) and subject
to footnote 6) at 30 June 2024 – which was approximately 5,125,935 hectares; an increase of approximately 18,750 hectares compared to approximately 5,107,185 hectares at
30 June 2023. For more information on the restatement of FY023 figures refer to OFR 6.10.
6. While some of the land related to the Daunia and Blackwater mines is pending transfer following BMA’s divestment of these mines on 2 April 2024, these areas are no longer under BMA’s
control or operated for BMA’s benefit so have been excluded from the areas of land and water we stewarded at 30 June 2024.
7. Nature-positive management practices refer to an area under stewardship that has a formal management plan that includes conservation, restoration or regenerative practices. For more
information refer to the BHP ESG Standards and Databook 2024, available at bhp.com/ESGStandards2024.
13
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
3 Positioning for growth
With our clear strategy and our laser-like focus on creating
and sustaining the right portfolio of the best assets in attractive
commodities with enhanced growth optionality, BHP is well
placed to capitalise on the changes shaping our world. As the
global population grows and urbanises and the world pursues
decarbonisation and electrification, we are positioning our
portfolio and pursuing multiple growth options to increase our
exposure to these megatrends.
Unlocking growth at our assets
One of our biggest near-term growth levers is from improving productivity
at our existing assets and unlocking more of their potential.
WAIO was designed with an initial capacity of 240 Mtpa. In FY2024 it
produced a record 287 Mt (100 per cent basis). We are implementing
initiatives to grow WAIO production to more than 305 Mtpa over the
medium term. This is expected to be through South Flank, which reached
full production capacity in FY2024, the continued debottlenecking of
our port and rail systems, the rollout of autonomous haulage trucks, and
ongoing productivity enhancements. We are studying options to further
grow annual production up to 330 Mt over the medium to long term, with
these studies expected to be completed in CY2025.
Escondida has significant resource potential and we are progressing a
range of studies, including potentially replacing the original Los Colorados
concentrator. We are also looking at different leaching technologies that
could help us extract more copper while potentially using less energy
and water, reduce or eliminate the need for tailings dams, and enable
production of cathode-finished product that does not require smelting.
Growing our position in potash
Potash is a fertiliser and enables more efficient and sustainable farming.
With the world’s population continuing to grow and rising concerns around
food security and land use, potash is a future-facing commodity that
presents opportunities for growth.
At the end of FY2024, Jansen Stage 1 was tracking ahead of the original
schedule and more than 50 per cent complete. Production is expected
to commence in late CY2026, followed by a two-year ramp-up period.
When Jansen Stage 1 reaches full production, planned production will be
approximately 4.15 Mtpa.
During FY2024, BHP approved Jansen Stage 2, which will double
planned production to around 8.5 Mtpa at full capacity. Jansen Stage 2
is an important milestone that underscores our confidence in potash and
marks the next phase of BHP’s growth in Canada. We believe Jansen will
deliver long-term value for shareholders and the local community, and will
position BHP as one of the leaders in the global potash industry. We have
commenced execution of Jansen Stage 2, with first production expected
in FY2029.
Copper South Australia: Consolidating a significant
resource base
We have established a significant resource base at Copper South Australia
by combining OZ Minerals’ two South Australian mines, Prominent Hill and
Carrapateena, with Olympic Dam and the Oak Dam deposit.
With Copper South Australia, we are focused on developing an asset
with greater scale and simplicity. Copper South Australia produced 322 kt
of copper in FY2024 and we are pursuing potential pathways to expand
this to more than 500 kilotonnes per annum (ktpa) through increases in
mine production rates and improved mining methods, the expansion of
smelting and refining capacity, the application of BOS, the development of
exploration assets and greater by-product production.
Exploration efforts progressed at the Oak Dam copper deposit located
65 kilometres southeast of Olympic Dam and at OD Deeps, which is
below Olympic Dam. The Copper South Australia province is expected to
produce copper, gold and uranium oxide for decades to come.
For more information refer to OFR 5.2
Creating and accelerating longer-term options
BHP Ventures
BHP Ventures is our dedicated venture capital unit. It looks for game-
changing technologies via emerging companies to help drive ongoing and
more sustainable growth within BHP and provides us with a portfolio of
new growth options for the decades ahead.
BHP Ventures complements the innovation already underway within BHP
by forging new partnerships and creating fresh opportunities to strengthen
our portfolio and support the decarbonisation of our operated assets and
decarbonisation opportunities in our value chain.
For our partners, BHP Ventures provides an opportunity to collaborate
with us.
New investments in FY2024 included SiTration, which is developing a
silicon membrane-based technology for metal extraction, and ZwitterCo,
which is developing membrane solutions for the treatment of water.
BHP continued to support existing portfolio companies Boston Metal and
Electra through technical knowledge exchanges and the supply of iron ores
for testing in relation to technologies that have potential to contribute to our
Scope 3 emissions medium-term goal for steelmaking and our long-term
net zero goal. BHP also continued to test early-stage leaching technologies
from Jetti Resources and Ceibo as part of broader copper leaching studies.
Think & Act Differently
Think & Act Differently is BHP’s internal team set up to find and accelerate
the best mining technology solutions to support our ambitions to deliver
commodities the world needs in new ways. It is focused on opening
new and accelerated pathways to market through partnerships, rapid
experimentation and systems thinking. It aims to de-risk a portfolio of over
100 initiatives, from small scale experiments to on-site demonstrations.
We are seeking to advance technologies that can unlock resource growth,
particularly relating to copper, and build capability across the mining value
chain to find new ways to understand ore bodies and responsibly extract
and process resources. Current areas of work include leaching, ore body
knowledge and accelerated minerals recovery.
BHP Exploration
During FY2024, we advanced our global programs focusing on
early-stage exploration opportunities in Australia, Canada, Chile,
Peru, Sweden, Serbia and the United States. This effort involved concept
evaluation work through prospect testing.
We fully integrated the OZ Minerals exploration portfolio, significantly
expanding our land holdings and enabling us to develop an important
province in South Australia with significant copper potential.
In Canada, we continued our partnership with Midland Exploration Inc.
through our prospect generation exploration alliance.
In the United States, we entered an alliance with Ivanhoe Electric Inc., with
BHP to provide initial funding of US$15 million over three years to explore
for copper and other critical minerals across areas of interest in Arizona,
New Mexico and Utah.
In Australia, we commenced a partnership with Red Ox Copper Pty Ltd,
exploring for copper in Northern Queensland.
In Europe, we acquired Ragnar Metals Sweden AB for A$9.8 million,
gaining ownership of the Tullsta nickel project. Similarly, we entered into
early-stage exploration alliances with Kingsrose Mining Ltd across areas of
interest in Finland and Norway, and with Tutume Metals in Botswana.
Also in FY2024, we withdrew from the Elliott Farm-in and joint venture
agreement with Encounter Resources Limited in Australia.
14
BHP Annual Report 2024
Growth through exploration, focused on copper and nickel
BHP Xplor
BHP Xplor, launched in FY2023, is a global accelerator program designed to support early-stage mineral exploration companies in finding critical resources
needed for the energy transition. Its aim is to identify and nurture the next generation of explorers, empowering them to fast track their geologic concepts for
potential long-term partnership. The program supports technical, business and operational facets to equip participant companies with the necessary tools
and guidance to become investment ready.
To date, agreements have been concluded with three companies from the inaugural FY2023 cohort for follow-on investment, due to their region of interest,
potential technical opportunity, team capability and strategic alignment. In FY2024, six companies were chosen from a pool of over 500 applications to take
part in this year’s program. These companies were East Star Resources Plc, Hamelin Gold Ltd, Pallas Resources Ltd, Longreach Mineral Exploration Pty
Ltd, Equivest Metals Oy and Cobre Ltd. They have concluded their six-month program and follow-on investment discussions have started. Applications for
the FY2025 Xplor program opened in August 2024.
Exploration expenditure
Our resource assessment exploration expenditure increased by
31 per cent in FY2024 to US$333 million, while our greenfield
expenditure increased by 31 per cent to US$124 million. Expenditure on
resources assessment and greenfield exploration over the last three
financial years is set out below.
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Greenfield exploration
124
95
77
Resources assessment
333
255
179
Total metals exploration
and assessment
457
350
256
Exploration expense
Exploration expense represents that portion of exploration expenditure
that is not capitalised in accordance with our accounting policies, as set
out in Financial Statements note 11 ‘Property, plant and equipment’.
Exploration expense for each segment over the last three financial years
is set out below.
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Exploration expense
Copper
213
145
85
Iron Ore
41
52
54
Coal
3
6
6
Group and
unallocated items1,2
152
91
54
Total Group
409
294
199
1. Group and unallocated items includes functions, other unallocated operations including
Potash, Western Australia Nickel (which comprises the Nickel West operations and,
following the OZ Minerals Ltd (OZL) acquisition on 2 May 2023, the West Musgrave
project), legacy assets and consolidation adjustments.
2. Includes US$10 million of exploration expenditure previously capitalised, written off as
impaired (included in depreciation and amortisation) (FY2023: US$ nil; FY2022: US$ nil).
Sweden, Norway
Serbia
Canada
United States
Ecuador
Peru
Chile
Tanzania
Australia
London
Toronto
Santiago
Tucson
Nickel exploration regions
Exploration regional office
Copper exploration regions
BHP exploration regions
Saskatoon
Adelaide
Perth
Lima
and Finland
Botswana
15
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Having been with BHP for more than eight
years, as Chief Commercial Officer and before
that as Group Treasurer and Head of Europe,
it’s unquestionably clear to
me that our incredible
assets, winning strategy,
Capital Allocation
Framework (CAF) and
superior operational
capability truly set
BHP apart from its
competitors.”
Chief Financial Officer’s review
In iron ore, we delivered record volumes. WAIO has been the lowest cost
iron ore producer globally for over four years now and this year further
extended its lead. This exceptional cost performance allows the business
to generate strong cash flows. We invested US$1.2 billion sustaining
capital to support our medium-term goal of producing >305 Mtpa, and
we are assessing options to grow production up to 330 Mtpa if market
conditions warrant.
In potash, we approved an investment of US$4.9 billion for Jansen Stage 2,
which when combined with Jansen Stage 1, will increase our total planned
potash production capacity to ~8.5 Mtpa, representing ~10 per cent of the
estimated market when fully ramped up. Jansen Stage 1 is progressing
well, and is over 50 per cent complete.
During the year we recognised a US$2.7 billion impairment of our Western
Australia Nickel operations and a US$3.8 billion charge related to the
Samarco dam failure. These exceptional items were partially offset by a
US$0.7 bn (post-tax) gain on disposal of the Blackwater and Daunia mines.
Ensuring shareholders continue to benefit from our consistent and reliable
performance, we’ve announced a final dividend of 74 US cents per share.
Together with the shareholder dividend for the first half of 72 US cents
per share, the total cash dividend to shareholders for FY2024 will be
US$7.4 billion, which represents a 54 per cent payout ratio.
Looking forward, we expect to increase our capital and exploration
expenditure as we unlock productivity, decarbonise our assets, and
deliver growth in future-facing commodities. We expect to spend around
US$10 billion on capital and exploration in FY2025. The majority of this
will be directed to improvement and growth, as we progress Jansen, our
Chilean and South Australia copper assets and growth in the Pilbara.
We have a disciplined approach to capital allocation, which ensures we
invest for value. Our resilient balance sheet and the financial discipline
embedded through our CAF, provide us the financial strength and the
flexibility to fund our growth and deliver healthy returns to shareholders.
We continue to deliver value for all our stakeholders. BHP’s total direct
economic contribution in FY2024 was US$49.2 billion. This includes
payments to suppliers, wages and benefits for more than 90,000
employees and contractors, dividends, taxes, royalties and voluntary
investment in social projects across the communities where we operate.
In FY2024, our tax, royalty and other payments to governments totaled
US$11.2 billion. During the last decade, we paid US$95.1 billion
globally in taxes, royalties and other payments, including approximately
A$107.1 billion in Australia. Our global adjusted effective tax rate in FY2024
was 32.5 per cent. Once royalties are included, our FY2024 rate increases
to 41.7 per cent.
We are proud of our financial and operational performance and the
value we have continued to generate for our shareholders, partners and
other stakeholders.
Thank you for your continued support.
Vandita Pant
Chief Financial Officer
Dear Shareholders,
I am pleased to report on BHP’s FY2024 financial results.
Firstly, I want to say that it is a privilege and an honour to have been
appointed your Chief Financial Officer in March, and to continue the great
work of my predecessor David Lamont. Having been with BHP for more
than eight years, as Chief Commercial Officer and before that as Group
Treasurer and Head of Europe, it’s unquestionably clear to me that our
incredible assets, winning strategy, Capital Allocation Framework (CAF)
and superior operational capability truly set BHP apart from its competitors.
BHP delivered another strong set of results in FY2024, enabled by
the continued disciplined execution of our strategy. Our underlying
attributable profit was 2 per cent higher at US$13.7 billion due to solid
operational performance and higher commodity prices in key commodities.
Underlying EBITDA increased by 4 per cent to US$29 billion and
underlying EBITDA margin remained at 54 per cent, the eighth consecutive
year we have achieved a margin greater than 50 per cent – significantly
ahead of our nearest competitors. Our return on capital employed, at
27 per cent, was also very strong.
We performed well in areas within our control. Production volumes were
in line with last year, and our operational excellence, productivity initiatives
and cost discipline allowed us to mitigate the effects of inflation. While we
experienced a global inflation rate of 4 per cent, predominantly driven by
higher labour costs, unit costs across our major assets increased less
than 3 per cent, and we met our original unit cost guidance for all assets
except BMA.
This year we generated more than US$20 billion of net operating cash
flows which allowed us to reduce net debt to US$9.1 billion, invest in our
business and maintain healthy returns to shareholders. We have consistently
delivered a high baseline of cash flow, having generated net operating
cash flows above US$15 billion for all but one of the past 15 years. We’ve
achieved this due to the quality of our portfolio and our focus on operational
excellence and cost discipline – despite market and operating conditions
varying greatly over these years. This stability is a hallmark of BHP.
We invested US$9.3 billion in line with our CAF. This included
US$5.9 billion in organic development, of which ~US$2.7 billion
was on copper projects and ~US$1.1 billion at Jansen, together with
~US$0.5 billion of exploration spend primarily at Copper South Australia;
and US$3.0 billion of maintenance and decarbonisation expenditure.
In copper, we delivered a second consecutive year of 9 per cent production
growth, and expect to deliver a further 4 per cent increase in FY2025.
During the year we narrowed 20 project studies across Chile to four main
pathways across existing and new facilities. At Spence, concentrator plant
modifications were completed and are delivering expected improvements
in throughput and recovery. In Copper South Australia, the successful
integration of Prominent Hill and Carrapateena has resulted in us exceeding
the annualised synergies planned for FY2024 at the time of the OZ
Minerals acquisition, and we are executing a number of exciting growth and
exploration projects.
Our total economic contribution
US$49.2 bn
FY2023: US$54.2 bn
Total payments to governments
US$11.2 bn
FY2023: US$13.8 bn
Shareholder dividends per share
146USc
FY2023: 170USc
Underlying return on capital employed
27.2%
FY2023: 28.8%
16
BHP Annual Report 2024
4 Financial review
4.1 Group overview
We prepare our Consolidated Financial Statements in accordance with
International Financial Reporting Standards (IFRS), as issued by the
International Accounting Standards Board. We publish our Consolidated
Financial Statements in US dollars. All Consolidated Income Statement,
Consolidated Balance Sheet and Consolidated Cash Flow Statement
information below has been derived from audited Consolidated
Financial Statements.
For more information refer to Financial Statements
We use various non-IFRS financial information to reflect our underlying
performance. Non-IFRS financial information is not defined or specified
under the requirements of IFRS, however is derived from the Group’s
Consolidated Financial Statements prepared in accordance with IFRS.
Non-IFRS financial information is consistent with how management reviews
financial performance of the Group with the Board and the investment
community. OFR 10 ‘Non-IFRS financial information’ includes our non-
IFRS financial information and OFR 10.1 ‘Definition and calculation of
non-IFRS financial information’ outlines why we believe non-IFRS financial
information is useful and the relevant calculation methodology. We believe
non-IFRS financial information provides useful information, however it
should not be considered as an indication of, or as a substitute for, statutory
measures as an indicator of actual operating performance (such as profit
or net operating cash flow) or any other measure of financial performance
or position presented in accordance with IFRS, or as a measure of a
company’s profitability, liquidity or financial position.
4.2 Key performance indicators
Our key performance indicators (KPIs) enable us to measure our
development and financial performance. These KPIs are used to assess
performance of our people throughout the Group.
For information on our approach to performance and reward refer to
Remuneration Report
For information on our overall approach to executive remuneration,
including remuneration policies and remuneration outcomes refer to
Remuneration Report
Following BHP’s sale of the Onshore US assets in FY2019 and
subsequently the merger of our Petroleum business with Woodside
in FY2022, the contribution of these assets to the Group’s results
is presented as Discontinued operations. Footnotes to tables and
infographics indicate whether data presented in OFR 4.2 is inclusive or
exclusive of Petroleum assets. Details of the contribution of the Petroleum
assets to the Group’s results are disclosed in Financial Statements note 28
‘Discontinued operations’.
Summary of financial measures
Year ended 30 June
US$M
2024
2023
Consolidated Income Statement (Financial Statements 1.1)
Revenue
55,658
53,817
Profit/(loss) after taxation from Continuing operations
9,601
14,324
Profit/(loss) after taxation from Continuing and Discontinued operations attributable to BHP shareholders
7,897
12,921
Dividends per ordinary share – paid during the period (US cents)
152.0
265.0
Dividends per ordinary share – determined in respect of the period (US cents)
146.0
170.0
Basic earnings/(loss) per ordinary share (US cents)
155.8
255.2
Consolidated Balance Sheet (Financial Statements 1.3)
Total assets
102,362
101,296
Net assets
49,120
48,530
Consolidated Cash Flow Statement (Financial Statements 1.4)
Net operating cash flows
20,665
18,701
Capital and exploration and evaluation expenditure
9,273
7,083
Other financial information (OFR 10)
Net debt
9,120
11,166
Underlying attributable profit
13,660
13,420
Underlying EBITDA
29,016
27,956
Underlying basic earnings per share (US cents)
269.5
265.0
Underlying return on capital employed (per cent)
27.2
28.8
1. Includes data for Continuing and Discontinued operations for the financial years being reported.
2. Excludes data from Discontinued operations for the financial years being reported.
3. For more information on non-IFRS financial information refer to OFR 10.
Underlying attributable profit1,3
US$ billion
Underlying EBITDA2,3
US$ billion
Net operating cash flows1
US$ billion
Underlying return on
capital employed1,3
Per cent
0
15
10
5
20
25
FY2020 FY2021
FY2023
FY2022
FY2024
9.1
17.1
23.8
13.4
13.7
0
30
20
10
40
50
FY2020 FY2021
FY2023
FY2022
FY2024
19.9
35.1
40.6
28.0
29.0
0
21
14
7
28
35
FY2020 FY2021
FY2023
FY2022
FY2024
15.7
27.2
32.2
18.7
20.7
0
30
20
10
40
50
FY2020 FY2021
FY2023
FY2022
FY2024
16.9
32.5
48.7
28.8
27.2
17
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
4 Financial review continued
Reconciling our financial results to our key performance indicators
Profit
Earnings
Cash
Returns
Measure
Profit after taxation
from Continuing and
Discontinued operations
US$M
9,601
Profit after taxation
from Continuing and
Discontinued operations
US$M
9,601
Net operating cash
flows from Continuing
operations
US$M
20,665
Profit after taxation from
Continuing and Discontinued
operations
US$M
9,601
Made
up of
Profit after taxation
Profit after taxation
Cash generated by the Group’s
consolidated operations, after
dividends received, interest,
proceeds and settlements of cash
management related instruments,
taxation and royalty-related
taxation. It excludes cash flows
relating to investing and financing
activities.
Profit after taxation
Adjusted
for
Exceptional items
before taxation
Tax effect of
exceptional items
Exceptional items
after tax attributable
to non-controlling
interests
Exceptional items
attributable to
BHP shareholders
Profit after taxation
attributable to
non-controlling
interests
6,600
(837)
−
5,763
(1,704)
Exceptional items
before taxation
Tax effect of
exceptional items
Depreciation and
amortisation excluding
exceptional items
Impairments of property,
plant and equipment,
financial assets and
intangibles excluding
exceptional items
Net finance costs excluding
exceptional items
Taxation expense excluding
exceptional items
6,600
(837)
5,295
90
983
7,284
Exceptional items after taxation
Net finance costs excluding
exceptional items
Income tax expense on net
finance costs
Profit after taxation excluding net
finance costs and exceptional
items
Net Assets at the beginning
of period
Net Debt at the beginning
of period
Capital employed at the beginning
of period
Net Assets at the end of period
Net Debt at the end of period
Capital employed at the
end of period
Average capital employed
48,530
11,166
49,120
9,120
5,763
983
(303)
16,044
59,696
58,240
58,968
To reach
our KPIs
Underlying attributable profit 13,660
Underlying EBITDA
29,016
Net operating cash flows 20,665
Underlying return on capital employed
27.2%
Why do we
use it?
Underlying attributable profit allows
the comparability of underlying
financial performance by excluding
the impacts of exceptional items.
Underlying EBITDA is used to
help assess current operational
profitability excluding the impacts
of sunk costs (i.e. depreciation from
initial investment). It is a measure
that management uses internally
to assess the performance of
the Group’s segments and make
decisions on the allocation of
resources.
Net operating cash flows
provide insights into how we are
managing costs and increasing
productivity across BHP.
Underlying return on capital employed is an
indicator of the Group’s capital efficiency. It
is provided on an underlying basis to allow
comparability of underlying financial performance
by excluding the impacts of exceptional items.
4.3 Financial results
The following table provides more information on the revenue and expenses of the Group in FY2024.
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Continuing operations
Revenue1
55,658
53,817
65,098
Other income
1,285
394
1,398
Expenses excluding net finance costs
(36,750)
(31,873)
(32,371)
(Loss)/profit from equity accounted investments, related impairments and expenses
(2,656)
594
(19)
Profit from operations
17,537
22,932
34,106
Net finance costs
(1,489)
(1,531)
(969)
Total taxation expense
(6,447)
(7,077)
(10,737)
Profit after taxation from Continuing operations
9,601
14,324
22,400
Discontinued operations
Profit/(loss) after taxation from Discontinued operations
–
–
10,655
Profit after taxation from Continuing and Discontinued operations
9,601
14,324
33,055
Attributable to non-controlling interests
1,704
1,403
2,155
Attributable to BHP shareholders
7,897
12,921
30,900
1. Includes the sale of third-party products.
18
BHP Annual Report 2024
Profit after taxation attributable to BHP shareholders decreased from
US$12.9 billion in FY2023 to US$7.9 billion in FY2024. Attributable profit
of US$7.9 billion includes an exceptional loss of US$5.8 billion (after
tax), compared to an Attributable profit of US$12.9 billion, including
an exceptional loss of US$0.5 billion (after tax) in the prior period.
The FY2024 exceptional loss includes a US$2.7 billion non-cash (after tax)
impairment at Western Australia Nickel (WAN) due to oversupply in the
global nickel market that has seen a sharp decline in forward nickel prices
in the short to medium term, escalation in capital costs, and changes to
development plans including the Group’s decision, announced on 11 July
2024, to temporarily suspend Nickel West operations and the West
Musgrave project at WAN. The FY2024 exceptional loss also includes
US$3.8 billion (after tax) relating to Samarco dam failure impacts, partially
offset by the gain on divestment of Blackwater and Daunia coal assets of
US$0.7 billion (after tax).
For more information on Exceptional items refer to
Financial Statements note 3 ‘Exceptional items’
Revenue of US$55.7 billion increased by US$1.8 billion, or 3 per cent from
FY2023. This increase was mainly due to higher average realised prices for
iron ore and copper combined with higher sales volumes, partially offset by
lower average realised prices for thermal coal and nickel.
Higher sales volumes were achieved at WAIO supported by record
production reflecting strong supply chain performance, at Copper SA from
the successful integration of OZ Minerals (OZL) following the acquisition in
FY2023, at Escondida due to higher concentrator feed grade and at New
South Wales Energy Coal (NSWEC) from improved weather and labour
availability. These were partially offset by lower sales volumes at BMA as
a result of increased stripping to improve supply chain stability and restore
depleted inventory positions which arose from extended weather impacts
and labour constraints over recent years, and the divestment of Blackwater
and Daunia on 2 April 2024.
For information on our average realised prices
and production of our commodities refer to OFR 9
Other income of US$1.3 billion increased by US$0.9 billion, or 226 per cent
from FY2023 primarily due to the divestment of Blackwater and Daunia.
Total expenses excluding net finance costs of US$36.8 billion
increased by US$4.9 billion, or 15 per cent from FY2023. This primarily
reflected a higher impairment expense of US$3.8 billion of WAN due
to the deterioration in the short and medium-term outlook for nickel.
Higher external contractor services expenses of US$1.0 billion was mainly
due to the full-year contribution of Prominent Hill and Carrapateena
since their acquisition in FY2023, impacts of inflation across the Group,
additional tailings work at Spence, higher maintenance at Escondida
and higher stripping and contractor costs in line with higher volumes
at NSWEC.
Loss from equity accounted investments, related impairments and expenses
of US$2.7 billion increased by US$3.3 billion from a profit of US$0.6 billion
in FY2023 predominantly reflects the change in the assessment of the
estimated costs to resolve all aspects of the Federal Public Prosecution
Office Claim and the Framework Agreement obligations.
For more information on the total impact of the Samarco dam failure
provision and impairment charges connected with equity accounted
investments refer to Financial Statements note 3 ‘Exceptional items’
and Financial Statements note 13 ‘Impairment of non-current
assets’ respectively
Net finance costs of US$1.5 billion were in line with FY2023 primarily
driven by higher market interest rates, offset by a reduction in closure and
rehabilitation provision discounting due to lower global inflation rates and
higher capitalised interest mainly at Potash.
For more information on net finance costs refer to
Financial Statements note 23 ‘Net finance costs’
Total taxation expense of US$6.4 billion decreased by US$0.6 billion, or
9 per cent from FY2023 primarily due to a tax benefit of US$1.1 billion in
relation to the impairment of WAN partially offset by higher tax in line with
higher profits from higher average realised prices.
For more information on income tax expense refer to
Financial Statements note 6 ‘Income tax expense’
Principal factors that affect Underlying EBITDA
The following table and commentary describe the impact of the principal factors¹ that affected Underlying EBITDA for FY2024 compared with FY2023.
US$M
Year ended 30 June 2023
27,956
Net price impact:
Change in sales prices
1,476
Higher average realised prices for iron ore and copper partially offset by lower average realised prices for
thermal coal and nickel.
Price-linked costs
108
Lower coal and nickel royalties largely offset by higher iron ore royalties in line with price movements.
1,584
Change in volumes
10
Higher sales volumes were achieved at WAIO supported by record production reflecting strong supply
chain performance including record production at South Flank following ramp up to full capacity in FY2024,
at Escondida due to higher concentrator feed grade and at NSWEC from improved weather and labour
availability. These were offset by lower sales volumes at BMA as a result of increased stripping to improve
supply chain stability and restore depleted inventory positions, which arose from extended weather impacts
and labour constraints over recent years.
Change in controllable cash costs
Operating cash costs
(655) Higher costs at WAIO primarily as we ramped up South Flank and increased production, at NSWEC from
higher stripping and contractor costs to support higher production, at Escondida reflecting higher maintenance
and at WAN due to increased third-party ore purchases following delivery issues in FY2023.
Exploration and business development
(118) Higher exploration spend for drilling activities at Oak Dam at Copper SA.
(773)
Change in other costs:
Exchange rates
253
Impact of movements in the Australian dollar and Chilean peso against the US dollar.
Inflation
(686) Impact of inflation on the Group’s cost base.
Fuel, energy, and consumable
price movements
487
Predominantly lower diesel and acid prices.
Non-cash
(301)
One-off items
316
Primarily non recurrence of FY2023 review of employee allowances and entitlements, and OZL acquisition costs.
69
Ceased and sold operations
(510) Lower contribution from the Blackwater and Daunia mines related to divestment in April 2024.
New and acquired operations
528
At Copper SA from the successful integration of OZL following the acquisition in FY2023.
Other items
152
Includes increased profit from Antamina driven by higher average copper realised prices and VAT refund
received in relation to previously divested Petroleum operations.
Year ended 30 June 2024
29,016
1. For information on the method of calculation of the principal factors that affect Underlying EBITDA refer to OFR 10.2.
19
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
4 Financial review continued
Cash flow
The following table provides a summary of the Consolidated Cash Flow Statement contained in Financial Statements 1.4, excluding the impact of foreign
currency exchange rate changes on cash and cash equivalents.
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Net operating cash flows from Continuing operations
20,665
18,701
29,285
Net operating cash flows from Discontinued operations
–
–
2,889
Net operating cash flows
20,665
18,701
32,174
Net investing cash flows from Continuing operations
(8,762)
(13,065)
(4,973)
Net investing cash flows from Discontinued operations
–
–
(904)
Net cash completion payment on merger of Petroleum with Woodside
–
–
(683)
Cash and cash equivalents disposed on merger of Petroleum with Woodside
–
–
(399)
Net investing cash flows
(8,762)
(13,065)
(6,959)
Net financing cash flows from Continuing operations
(11,669)
(10,315)
(22,734)
Net financing cash flows from Discontinued operations
–
–
(33)
Net financing cash flows
(11,669)
(10,315)
(22,767)
Net increase/(decrease) in cash and cash equivalents
234
(4,679)
2,448
Net increase/(decrease) in cash and cash equivalents from Continuing operations
234
(4,679)
1,578
Net increase in cash and cash equivalents from Discontinued operations
–
–
1,952
Net cash completion payment on merger of Petroleum with Woodside
–
–
(683)
Cash and cash equivalents disposed on merger of Petroleum with Woodside
–
–
(399)
Net operating cash inflows from Continuing operations of US$20.7 billion increased by US$2.0 billion. This is primarily due to lower tax and royalty
related taxation finalisation payments in FY2024 relating to FY2023 profits, compared to payments in FY2023 relating to FY2022 profits.
Net investing cash outflows from Continuing operations of US$8.8 billion decreased by US$4.3 billion. This decrease primarily reflects the non-
recurrence of the US$5.9 billion acquisition of OZL completed in FY2023 in conjunction with the proceeds received in FY2024 related to the divestment
of BHP’s interest in Blackwater and Daunia coal operations to Whitehaven Coal of US$1.1 billion, partially offset by higher capital expenditure of
US$2.1 billion including for Jansen and West Musgrave.
For more information on exceptional items relating to the divestment of Blackwater and Daunia and a breakdown of capital and exploration expenditure
on a commodity basis refer to Financial Statements note 3 ‘Exceptional items’ and OFR 9 respectively
Net financing cash outflows from Continuing operations of US$11.7 billion increased by US$1.4 billion. This increase reflects a net movement in
repayments/proceeds of interest bearing liabilities of US$7.1 billion mainly due to the repayment of the OZL acquisition facility in FY2024 (US$5.0 billion)
and higher other bond issuances compared to FY2023. These were partially offset by lower dividends paid to BHP shareholders of US$5.6 billion.
For more information refer to Financial Statements note 21 ‘Net debt’
Underlying return on capital employed (ROCE) of 27.2 per cent decreased by 1.6 percentage points (FY2023: 19.9 percentage point decrease)
reflecting an increase in average capital employed attributable to the impact of the OZL acquisition in FY2023. Reductions in capital employed related to
the impairment of WAN and the divestment of Blackwater and Daunia are largely offset by capital expenditure in the period.
For more information on ROCE refer to OFR 10
4.4 Debt and sources of liquidity
Our policies on debt and liquidity management have the following objectives:
– a strong balance sheet through the cycle
– diversification of funding sources
– maintain borrowings and excess cash predominantly in US dollars
Interest bearing liabilities, net debt and gearing
At the end of FY2024, Interest bearing liabilities were US$20.7 billion (FY2023: US$22.3 billion) and Cash and cash equivalents were US$12.5 billion
(FY2023: US$12.4 billion). This resulted in Net debt of US$9.1 billion, which represented a decrease of US$2.0 billion compared with the Net debt
position at 30 June 2023. The reduction is primarily due to US$20.7 billion operating cash flows generated combined with US$1.1 billion proceeds from
the divestment of the Blackwater and Daunia mines, which were partially offset by capital and exploration expenditure of US$9.3 billion and dividend
payments of US$9.1 billion. Gearing, which is the ratio of Net debt to Net debt plus Net assets, was 15.7 per cent at 30 June 2024, compared with
18.7 per cent at 30 June 2023.
For more information on Net debt and gearing refer to Financial Statements note 21 ‘Net debt’ and OFR 10
During FY2024, gross debt decreased by US$1.6 billion to US$20.7 billion as at 30 June 2024. The decrease reflects the repayment of the US$5.0 billion
OZL acquisition facility in September 2023 combined with the repayment of US$734 million of 3.85 per cent USD senior notes that matured in September
2023 and €560 million of EUR senior notes that matured in May 2024, largely offset by the issuance of US$4.75 billion of US bonds in September 2023.
At the subsidiary level, Escondida repaid US$0.3 billion of debt and received proceeds from debt of US$0.4 billion in the period.
20
BHP Annual Report 2024
Funding sources
In September 2023, the Group issued five tranches of USD bonds comprising US$850 million 5.25 per cent bonds due CY2026, US$700 million
5.1 per cent bonds due CY2028, US$900 million 5.25 per cent bonds due CY2030, US$1.5 billion 5.25 per cent bonds due CY2033 and US$800 million
5.5 per cent bonds due CY2053. The USD bonds were issued by BHP Billiton Finance (USA) Limited, a wholly‑owned finance subsidiary of BHP Group
Limited, and are fully and unconditionally guaranteed by BHP Group Limited.
Our Group-level borrowing facilities are not subject to financial covenants. Certain specific financing facilities in relation to specific assets are the subject
of financial covenants that vary from facility to facility, but this would be considered normal for such facilities.
In addition to the Group’s uncommitted debt issuance programs, we hold the following committed standby facility:
Facility
available
2024
US$M
Drawn
2024
US$M
Undrawn
2024
US$M
Facility
available
2023
US$M
Drawn
2023
US$M
Undrawn
2023
US$M
Revolving credit facility1
5,500
–
5,500
5,500
–
5,500
Total financing facility
5,500
–
5,500
5,500
–
5,500
1. The facility is due to mature on 10 October 2026. The committed US$5.5 billion revolving credit facility operates as a back-stop to the Group’s uncommitted commercial paper program.
The combined amount drawn under the facility or as commercial paper will not exceed US$5.5 billion. As at 30 June 2024, US$ nil commercial paper was drawn (FY2023: US$ nil),
therefore US$5.5 billion of committed facility was available to use (FY2023: US$5.5 billion). A commitment fee is payable on the undrawn balance and interest is payable on any drawn
balance comprising a reference rate plus a margin. The agreed margins are typical for a credit facility extended to a company with the Group’s credit rating.
For more information on the maturity profile of our debt obligations and details of our standby and support
agreements refer to Financial Statements note 24 ‘Financial risk management’
Information in relation to our material off-balance sheet arrangements, principally contingent liabilities, commitments for capital
expenditure and commitments under leases at 30 June 2024 is provided in Financial Statements note 11 ‘Property, plant and
equipment’, Financial Statements note 22 ‘Leases’ and Financial Statements note 34 ‘Contingent liabilities’, respectively
In our opinion, working capital is sufficient for our present requirements. The Group’s Moody’s credit rating has remained at A1/P-1 outlook stable (long-
term/short-term). The Group’s S&P Global rating has remained at A-/A-1 outlook stable (long-term/short-term). Credit ratings are forward-looking opinions
on credit risk. Moody’s and S&P Global’s credit ratings express the opinion of each agency on the ability and willingness of BHP to meet its financial
obligations in full and on time. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction or
withdrawal at any time by an assigning rating agency. Any credit rating should be evaluated independently of any other information.
The following table expands on the Net debt position, to provide more information on the cash and non-cash movements in FY2024.
Year ended 30 June
2024
US$M
2023
US$M
Net debt at the beginning of the period
(11,166)
(333)
Net operating cash flows
20,665
18,701
Net investing cash flows
(8,762)
(13,065)
Net financing cash flows
(11,669)
(10,315)
Net increase/(decrease) in cash and cash equivalents from Continuing and Discontinued operations
234
(4,679)
Carrying value of interest bearing liability net repayments/(proceeds)
2,236
(4,893)
Carrying value of debt related instruments settlements/(proceeds)
321
677
Carrying value of cash management related instruments (proceeds)/settlements
(361)
(331)
Fair value change on hedged loans1
214
803
Fair value change on hedged derivatives1
(188)
(691)
Foreign currency exchange rate changes on cash and cash equivalents
(159)
(134)
Lease additions (excluding leases associated with index-linked freight contracts)
(429)
(472)
Acquisition of subsidiaries and operations2
–
(1,111)
Divestment of subsidiaries and operations3
60
–
Other
118
(2)
Non-cash movements
(384)
(1,607)
Net debt at the end of the period
(9,120)
(11,166)
1. The Group hedges against the volatility in both exchange and interest rates on debt, and also exchange rates on cash, with associated movements in derivatives reported in Other financial
assets/liabilities as effective hedged derivatives (cross currency and interest rate swaps), in accordance with accounting standards. For more information refer to Financial Statements
note 24 ‘Financial risk management’.
2. US$1,111 million of Interest bearing liabilities were acquired on 2 May 2023 as part of the acquisition of OZL. Excludes US$104 million cash acquired which is included in Net investing
cash flows.
3. Relates to leases disposed of as part of the Blackwater and Daunia mines divestment completed on 2 April 2024. Refer to Financial Statements note 3 ‘Exceptional items’ for
further information.
Dividends
Our dividend policy provides for a minimum 50 per cent payout of Underlying attributable profit (Continuing operations) at every reporting period.
The minimum dividend payment for the second half of FY2024 was US$0.70 per share. The Board determined to pay an additional amount of US$0.04
per share, taking the final dividend to US$0.74 per share (US$3.8 billion). In total, cash dividends of US$7.4 billion (US$1.46 per share) have been
determined for FY2024.
21
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
5.1 Minerals Australia
Minerals Australia includes operated assets in Western Australia, Queensland and New South Wales, focused on
iron ore, steelmaking coal, nickel and energy coal. The commodities produced by our Minerals Australia assets are
transported by rail and road to port and exported to our global customers or by rail to domestic customers.
5 Our assets
Western Australia Iron Ore
Overview
Western Australia Iron Ore (WAIO) is an integrated system of four
processing hubs and five open-cut operational mines in the Pilbara region
of northern Western Australia, connected by more than 1,000 kilometres of
rail infrastructure and port facilities.
WAIO’s Pilbara reserve base is relatively concentrated, allowing
development through integrated mining hubs connected to the mines and
satellite orebodies by conveyors or spur lines. This approach seeks to
maximise the value of installed infrastructure by using the same processing
plant and rail infrastructure for several orebodies.
Ore is crushed, beneficiated (where necessary) and blended at the
processing hubs – Mt Newman operations (which has our beneficiation
plant), Yandi, Mining Area C (our largest operating iron ore hub processing
ore from Area C and South Flank) and Jimblebar – to create lump and fines
products that are transported along the Port Hedland–Mt Newman rail line
to the Finucane Island and Nelson Point port facilities at Port Hedland.
There are four main WAIO joint ventures (JVs): Mt Newman JV, Yandi JV,
Mt Goldsworthy JV (which includes the South Flank mining area) and
Jimblebar JV. BHP’s interest in each is 85 per cent, with Mitsui and
ITOCHU owning the remaining 15 per cent. The joint ventures are
unincorporated, except Jimblebar JV.
BHP, along with Mitsui, ITOCHU and POSCO are also participants in the
POSMAC JV. BHP’s interest in POSMAC is 65 per cent. The ore from the
POSMAC JV is sold to the Mt Goldsworthy JV.
All ore is transported on the Mt Newman JV and Mt Goldsworthy JV
rail lines. The Nelson Point port facility is owned by the Mt Newman JV
and the Finucane Island facility is owned by the Mt Goldsworthy JV.
On 7 September 2021, BHP received regulatory approval to increase
our export capacity at WAIO’s Port Hedland operations, in stages, up to
330 million tonnes per annum (Mtpa) (100 per cent basis). We are currently
studying expansion alternatives for growth up to 330 Mtpa with the
feasibility study expected to be completed in CY2025.
Our near-term focus remains on stable production of 290 Mtpa of iron ore.
Successful tie-in of capital projects, including the port debottlenecking
project, is expected to enable growth in excess of 305 Mtpa in the
medium term.
Key developments in FY2024
WAIO achieved record production of 255 million tonnes (Mt) (253 Mt
FY2023) or 287 Mt (285 Mt FY2023) on a 100 per cent basis, reflecting
strong supply chain performance with increased capacity unlocked by the
Port Debottlenecking Project 1 and increased production at South Flank.
South Flank completed ramp up to full production capacity of 80 Mtpa
(100 per cent basis) in FY2024 as planned, which contributed to WAIO
achieving record lump sales for the year.
Autonomous haulage deployment continues as planned.
The Shiploader Automation Project has continued to progress with the
automation completed on two shiploaders and the third shiploader nearing
completion. Together with autonomous haulage rollouts at South Flank and
Newman West, these initiatives are expected to deliver safety, production
and cost improvements as well as new job and development opportunities.
The Port Debottlenecking Project 1 was commissioned in December 2023
and has enabled higher production volumes and contributed to record
sales volumes in FY2024. The project remains on track to be completed
in CY2024.
In February 2024, BHP approved US$943 million in capital expenditure
for the development of the Western Ridge Crusher Project. This project
is expected to deliver an average of 25 Mtpa providing around 12 years
of product for WAIO to replace part of the production from depleting
orebodies around Newman. First ore is targeted in CY2026.
Iron ore
In FY2024, WAIO achieved record spend with Traditional Owners and
Indigenous businesses representing a 69 per cent increase on the
previous year to A$465 million of which A$237 million was spent with
68 Traditional Owner businesses.
Marble Bar
Orebody 18
Newman
Newman
East
Yandi
Mining Area C
South Flank
Newman West
Jimblebar
Port Hedland –
Newman Rail Line
Goldsworthy
Rail Line
Chichester
Deviation
Finucane Island
Karratha
Great
Northern
Highway
Yarrie
Goldsworthy
South Hedland
Karijini
National
Park
Nelson Point
Port Hedland
Rail
Western
Australia
Existing
operations
Non-operational
mines
Port
Western
Australia
Iron Ore
22
BHP Annual Report 2024
BHP Mitsubishi Alliance
Overview
BHP Mitsubishi Alliance (BMA) (BHP ownership: 50 per cent) operates
five steelmaking coal mines – Goonyella Riverside, Broadmeadow,
Peak Downs, Saraji and Caval Ridge in the Bowen Basin, Queensland.
BMA’s mines are open cut, except for the Broadmeadow underground
longwall operation. BMA has access to infrastructure, including a modern,
multi‑user rail network, and owns and operates its own coal-loading
terminal at Hay Point, near Mackay.
Key developments in FY2024
BMA production of 22.3 Mt (44.6 Mt on a 100 per cent basis) decreased
from the prior year as a result of increased stripping to improve supply
chain stability and restore depleted inventory positions, which arose from
extended weather impacts and labour constraints over recent years, and
the divestment of Blackwater and Daunia on 2 April 2024. Production was
also impacted by an extended longwall move and geotechnical faulting
at Broadmeadow during H1 FY2024, and the temporary suspension
of operations following the fatality of a team member at Saraji.
Blackwater and Daunia produced 5 Mt (10 Mt on a 100 per cent basis)
in FY2024 prior to their divestment.
In April 2024, BMA’s owners, BHP and Mitsubishi Development, divested
the Daunia and Blackwater mines to Whitehaven Coal, an ASX-listed
company. Whitehaven Coal paid a combined US$2.0 billion cash
consideration on completion plus a preliminary completion adjustment
of US$44.1 million for working capital and other agreed adjustments
(100 per cent interest basis). The total consideration for the transaction
includes earnout and adjustments and may be up to US$4.1 billion plus
the final completion adjustment amount.
Goonyella continued to safely increase autonomous productivity and
ultra-class truck fleet performance in FY2024 – delivering an annualised
production hours increase of 7 per cent, contributing to a 6 per cent
increase in truck and shovel stripping volumes at Goonyella Riverside, as
we’ve continued to adapt and unlock the efficiencies of the system.
In October 2023, BMA successfully commissioned a replacement berth
structure and shiploader at Hay Point Coal Terminal resulting in improved
resilience for significant weather and major cyclone events and enabling
the port’s future and long-term capability.
BMA operations largely lie within the Native Title Determination area
of the Barada Barna people. BMA has been working closely with the
Barada Barna Aboriginal Corporation (BBAC) to negotiate a project‑wide
Indigenous Land Use Agreement. The agreement was approved and
signed by BBAC and BMA and is expected to be approved by the
Queensland Government in early FY2025. This agreement demonstrates
a refreshed approach to agreement structures and establishes a process
to obtain and maintain Free Prior and Informed Consent (FPIC) across
the life of the operation. It provides a fit-for-purpose benefits package
intended to provide intergenerational benefit for Barada Barna people
through financial compensation, provision of housing, as well as in the
areas of employment, education and contracting opportunities.
Coal
Collinsville
Mackay
Bowen
BMA Hay Point
Coal Terminal
Peak Downs
Dysart
Saraji
Moranbah
Broadmeadow
Goonyella
Riverside
Caval
Ridge
Queensland,
Australia
BMA Mine
Rail
BMA Terminal
BHP Mitsubishi
Alliance (BMA)
23
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
5 Our assets continued
Western Australia Nickel
Overview
Nickel West (BHP ownership: 100 per cent) is a fully integrated nickel
business located in Western Australia, with three streams of concentrate.
It comprises open-cut and underground mines, concentrators, a smelter
and refinery. Nickel West owns the majority of tenements hosting Nickel
Sulphide Mineral Resources in the Agnew-Wiluna belt, Western Australia.
Disseminated sulphide ore is mined at the Mt Keith open-pit operation and
Mt Keith Satellite mine (Yakabindie) and crushed and processed on-site
to produce nickel concentrate. Nickel sulphide ore is mined at the Cliffs
and Leinster underground mines and processed through a concentrator
and dryer at Leinster. A concentrator plant in Kambalda processes ore and
concentrate purchased from third parties.
The three streams feed the Kalgoorlie nickel smelter, which uses a flash
furnace to produce nickel matte. The Kwinana nickel refinery then turns
this into nickel powder, briquettes and nickel sulphate.
The West Musgrave Project (BHP ownership: 100 per cent; acquired as
part of OZ Minerals) is a greenfield nickel and copper project located on
Ngaanyatjarra Country in the West Musgrave Ranges of Western Australia,
approximately 1,300 kilometres northeast of Perth and 1,400 kilometres
northwest of Adelaide, near the intersection of the borders of Western
Australia, South Australia and the Northern Territory.
Key developments in FY2024
On 11 July 2024, BHP announced Western Australia Nickel would
be temporarily suspended from October 2024. We intend to review
the decision to temporarily suspend Western Australia Nickel by
February 2027.
The decision to temporarily suspend Western Australia Nickel follows
oversupply in the global nickel market. Forward consensus nickel prices
over the next half of the decade have fallen sharply reflecting strong growth
of alternative low-cost nickel supply.
Nickel
Mt Keith
West
Musgrave
Cliffs
Leinster
Mt Keith Satellite
(Yakabindie)
Albany
Ravensthorpe
Kambalda
Concentrator
Newman
Fremantle
Geraldton
Perth
Kwinana Refinery
Kalgoorlie Smelter
Western
Australia
Nickel West
Port
Highway
Western Australia
Nickel
New South Wales Energy Coal
Overview
New South Wales Energy Coal (NSWEC) (BHP ownership: 100 per cent)
comprises the Mt Arthur Coal open-cut energy coal mine in the Hunter
Valley. It has access to infrastructure in the Hunter Region, including a
multi-user rail network and coal loading terminal access at the Port of
Newcastle through Newcastle Coal Infrastructure Group (BHP ownership:
28 per cent) and Port Waratah Coal Services.
On 16 June 2022, we announced we would retain NSWEC in our portfolio,
seek the relevant approvals to continue mining beyond the current consent
that expires at the end of FY2026 and proceed with a managed process to
cease mining at the asset by the end of FY2030. Continuation of mining to
the end of FY2030 is intended to provide the time to work with our people
and the local community on an equitable change and transition approach
as well as the time to plan and execute the necessary works to deliver a
positive legacy from BHP mining in the Hunter Valley.
Key developments in FY2024
Production increased due to strong operating performance across the year
as improved weather and labour availability conditions enabled an uplift in
truck productivity and record annualised truck hours. We also supported
regional coal-fired power stations by delivering 1.3 Mt in line with New
South Wales Government Coal Directions (Directions). The Directions
ceased on 1 July 2024, with the change in royalty rates for open-cut mines
increasing 2.6 percentage points, from 8.2 per cent to 10.8 per cent.
In FY2024, we renegotiated a contract with Thiess Mining Services for six
years to provide contract mining services at the Mt Arthur South Operation.
The application to continue mining for an additional four years from
FY2026 to FY2030 was lodged with the New South Wales Government in
September 2023 and is currently under assessment, with a determination
expected in the first half of CY2025.
BHP will invest approximately US$300 million (A$450 million) per annum
following completion of a transition period to support a potential re-start
of Western Australia Nickel. The transition period commenced in July
2024. Operations will be suspended in October 2024 and handover
activities for temporary suspension will be completed by December 2024.
We will continue to support our workforce and local communities during
the temporary suspension, including the establishment of a A$20 million
Community Fund.
We continue to progress plans to cease mining at the asset in FY2030,
which includes the completion of progressive rehabilitation commitments
during FY2024. We undertook significant engagement with our workforce
and community in FY2024 as we worked to consider alternate mine land
re-use outcomes for the site.
Newcastle
Maitland
Singleton
Cessnock
Quirindi
Gunnedah
Tamworth
Mt Arthur
Muswellbrook
NSW,
Australia
NSWEC
Port
Rail
NSW Energy
Coal
24
BHP Annual Report 2024
Overview
The Olympic Dam Mine (BHP ownership: 100 per cent) is one of the
world’s most significant deposits of copper, gold, silver and uranium,
located on Kokatha Country in the Gawler Craton, South Australia.
It comprises underground mining and surface operations and is a fully
integrated processing facility from ore to metal.
Ore mined underground via sub-level open stoping is hauled by an
automated train system to crushing, storage and ore hoisting facilities or
trucked directly to the surface.
Olympic Dam has a fully integrated metallurgical complex with a grinding
and concentrating circuit, a hydrometallurgical plant incorporating solvent
extraction circuits for copper and uranium, a copper smelter, a copper
refinery, including an electro-refinery and an electrowinning-refinery,
and a recovery circuit for precious metals.
Carrapateena (BHP ownership: 100 per cent; acquired as part of
OZ Minerals) is an underground copper, gold and silver mine located on
Kokatha Country in the Gawler Craton, South Australia, approximately
180 kilometres by road southeast of Olympic Dam and 160 kilometres
north of Port Augusta. Underground mining at Carrapateena is by
sub‑level caving. Conventional crushing, grinding and flotation produces
copper concentrate.
Prominent Hill (BHP ownership: 100 per cent; acquired as part of
OZ Minerals) is an underground copper, gold and silver mine located
on Antakirinja Matu-Yankunytjatjara Country in the Gawler Craton, South
Australia, 200 kilometres northwest of Olympic Dam. Prominent Hill
was first developed as an open-pit mine, however, mining activities
have progressed underground via sub-level open stoping since 2012.
Conventional crushing, grinding and flotation produce copper concentrate.
The Oak Dam Project (BHP ownership: 100 per cent) is a greenfield
copper, gold, silver and uranium deposit located on Kokatha Country in the
Gawler Craton, South Australia.
Key developments in FY2024
Copper South Australia achieved production of 322 kilotonnes (kt) of
payable copper, gold production of 370 thousand troy ounces (ktoz) and
3.6 kt of uranium.
Olympic Dam achieved a record cathode production outcome under
BHP operatorship of 216 kt, primarily driven by record mine and smelter
performance. Record ore mined was achieved at 10.8 Mt (10.6 Mt FY2014)
and record concentrate smelted was achieved at 508.9 kt (507.9 kt
FY2023). Strong smelter performance at Olympic Dam was supported by
12.6 kt of concentrate transfers from Prominent Hill and Carrapateena, for
processing to higher margin cathode. Record gold bullion production was
also delivered in FY2024 at 207 ktoz (186 ktoz FY2023).
The Olympic Dam underground mine continues to develop further into the
Southern Mine Area, with approximately 70 per cent of total ore production
currently from this part of the mine. Average copper grade remained
strong at 2.01 per cent. The short-term focus is on optimising operational
performance and debottlenecking existing facilities to further improve
production performance.
Copper
5.2 Copper South Australia
Copper South Australia comprises surface processing and underground mining operations in one of the world’s most
significant copper, gold, silver and uranium basins. Copper South Australia was formed following our acquisition of OZ
Minerals in May 2023 and refers to Olympic Dam, and Carrapateena and Prominent Hill operations, which were acquired
from OZ minerals, and the Oak Dam exploration project. The underground mining and conventional crushing operations of
Carrapateena and Prominent Hill produce copper concentrate and are located in close proximity to the mining and integrated
crushing, grinding, concentrating, smelting and refining operations of Olympic Dam, which produces copper cathode, gold
and silver bullion, and uranium oxide concentrate. The commodities produced by Copper South Australia are transported by
road and rail to our domestic customers and via the Adelaide and Whyalla ports to be exported to our global customers.
Resource drilling at Oak Dam continued, with up to 12 deep directional
diamond drill rigs on the exploration licence, informing an Inferred Mineral
Resource declaration. Drilling at OD Deeps in FY2024 was executed
through up to 11 diamond rigs that explored beneath the Iron Oxide Copper
Gold (IOCG) orebody at Olympic Dam. Results from this drilling were
released as part of the Q2 FY2024 BHP Operational Review.
Carrapateena achieved a record production outcome of 68 kt of payable
copper production (60 kt in FY2023). Crusher Station 2 was successfully
commissioned in Q3 FY2024 enabling higher productivity from the
sub‑level cave and record ore mined of 5.2 Mt in FY2024 (4.6 Mt FY2023)
enabled milling throughput to increase to record rates of 5.2 Mt (4.7 Mt in
FY2023). The bottom half of the Carrapateena orebody is being developed
into a block cave, with the aim of unlocking the mine’s potential to be a
multigenerational, low quartile cash cost producing operation and progress
continued in FY2024 with the development of the decline below the current
sub-level cave.
In FY2024, Prominent Hill produced 50 kt of payable copper (54 kt in
FY2023). Record ore to surface production was achieved at 4.5 Mt
(4.4 Mt in FY2023) as development of the underground mine progresses,
supported by record underground development of 17.2 kilometres
(14.7 kilometres in FY2023). The Prominent Hill Operations Expansion
to extend mine life and increase copper production continues works
to construct and commission the 6.5 Mtpa ore capacity Wira Shaft.
Shaft works advanced and the shaft sink is approximately 35 per cent
complete at a current depth of approximately 450 metres.
A funding agreement with the South Australian Government was
signed in Q3 FY2024 for a study on the Northern Water Supply Project.
Infrastructure South Australia will be undertaking the study for construction
of a multi-user coastal desalination plant in the Upper Spencer Gulf to
reduce reliance on the Great Artesian Basin.
Prominent Hill
Olympic Dam
Oak Dam
Carrapateena
~180km
~180km
Existing
operations
Project
Transmission
line
South Australia
Copper South
Australia
25
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
5 Our assets continued
Escondida
Overview
Escondida (BHP ownership: 57.5 per cent), located in the Atacama
Desert in northern Chile, is a leading producer of copper concentrate
and cathodes, with by-products including gold and silver.
Escondida’s two pits feed three concentrator plants, as well as two
leaching operations (oxide and sulphide).
Key developments in FY2024
Escondida copper production increased by 7 per cent to 1,125 kt primarily
due to higher concentrator feed grade of 0.88 per cent, up from 0.82 per
cent in FY2023, as mining progressed into areas of higher-grade ore as
planned following the implementation of measures to manage geotechnical
events in FY2023. This was partially offset by planned lower cathode
production, as a result of prioritising concentrator throughput in prior years.
Deployment of autonomous trucks began in the Escondida Norte pit in the
second half of FY2024 and will ramp up to approximately 50 autonomous
trucks over the next three years.
In FY2024, the largest capacity cable-powered shovel available in the
market commenced operations at Escondida, the first in Latin America
and third in the world. This and further planned high-capacity shovel
deployments will unlock further efficiency in the truck loading process
enabling incremental system performance and lower unit cost.
Escondida successfully completed negotiations for a new collective
agreement with the Union N°1 of Operators and Maintainers, effective for
36 months from 2 August 2024.
Pampa Norte
Overview
Pampa Norte (BHP ownership: 100 per cent) consists of two assets in the
Atacama Desert in northern Chile – Spence and Cerro Colorado.
Spence produces copper cathodes and copper concentrate, with
by‑products including gold, silver and molybdenum.
Cerro Colorado produced copper cathodes up until the asset entered
temporary care and maintenance in December 2023.
Key developments in FY2024
Spence copper production increased by 6 per cent to 255 kt (240 kt
FY2023), driven by improved concentrator performance and feed grades.
Record concentrate production was partially offset by lower cathode
production, in line with an expected decline in stacked feed grade.
In March 2024, Spence achieved fully autonomous mine haulage
operations (ahead of the Q4 FY2024 target date) and has deployed a
total of 33 autonomous trucks.
The concentrator plant modification, which commenced in August 2022,
was completed in June 2024.
In December 2023, Spence achieved gender balance across its total
workforce and leadership roles ahead of BHP’s aspirational goal to
achieve a minimum of 40 per cent female representation by the end of
FY2025. During FY2024, Spence successfully completed negotiations
for a new collective agreement with Union 2 of Supervisors, effective for
36 months from 1 December 2023 and with Union 1 of Operators and
Maintainers effective for 36 months from 1 June 2024.
As disclosed in the Q2 FY2024 Operational Review, changes to the
original Spence tailings storage facility (TSF) design were approved
and are currently in execution. As we progress execution, we continue
to closely monitor the previously identified anomalies to ensure safe
Copper
5.3 Minerals Americas
The Minerals Americas asset group includes operated assets, projects and interests in non-operated joint ventures
in Canada, Chile, Peru, the United States and Brazil.
Our operated assets in the Americas are Escondida and Pampa Norte, which are open-cut mines that produce copper
concentrate and copper cathodes, and the Jansen potash project in Canada. The non-operated assets in the Minerals
Americas portfolio are open-cut mines that produce copper (Antamina) and iron ore (Samarco), and the Resolution
Copper Project in the United States. The commodities produced by our Minerals Americas assets are transported
to port by pipeline, rail or road and exported to customers around the world. In July 2024, we agreed to acquire a
50 per cent interest in the Filo del Sol and Josemaria copper projects in Argentina and Chile with Lundin Mining. If
approved, this will give us the opportunity to jointly advance an emerging copper district with world-class potential.
CHILE
BOLIVIA
ARGENTINA
PERU
Iquique
Pacific
Ocean
Tocopilla
Antofagasta
Mejillones
Calama
Pica
Spence
Minera Escondida
Cerro
Colorado
Mine
Chile
Bolivia
Escondida and
Pampa Norte
operational conditions, and studies are ongoing to assess whether further
works are required. Production guidance at Spence remains subject to
the remediation of the TSF anomalies.
Cerro Colorado transitioned to temporary closure in December 2023, after
producing 11 kt in the period. We are assessing the application of novel
leaching technologies to utilise latent capacity and allow for a potential
restart of operations early next decade.
26
BHP Annual Report 2024
Potash
Non-operated minerals joint ventures
Antamina
Overview
Antamina (BHP ownership: 33.75 per cent), located in north central Peru,
is a large, low-cost copper and zinc mine with by-products including
molybdenum and silver. Antamina is operated independently by Compañía
Minera Antamina S.A.
Key developments in FY2024
Antamina copper production increased by 4 per cent to 144 kt (BHP share)
as a result of record concentrator throughput offsetting lower planned
feed grades. Zinc production was 17 per cent lower at 103 kt (BHP share)
reflecting planned lower feed grades.
In FY2024, Peruvian authorities approved Antamina’s Modification of the
Environmental Impact Assessment (MEIA), extending the life of Antamina
from CY2028 to CY2036.
Resolution Copper
Overview
Resolution Copper (BHP ownership: 45 per cent), located in the US State
of Arizona, is one of the largest undeveloped copper projects in the
world and has the potential to become one of the largest copper
producers in North America. Resolution Copper is operated by Rio Tinto
(55 per cent ownership).
Key developments in FY2024
During FY2024, Resolution Copper continued the engineering and
permitting phase of the project. The project is subject to a Final
Environmental Impact Statement (FEIS), which is a federal permitting
process led by the US Forest Service. The US Forest Service published
a FEIS in January 2021, which was rescinded in March 2021 to allow
additional environmental analysis and consultation with Native American
Tribes. The US Forest Service has indicated there is no timeline for
republication of the FEIS, which is subject to three lawsuits filed against
the US Forest Service on behalf of Native American Tribe members and
non-government organisations. Resolution Copper has publicly stated
its commitment to deepening ongoing engagement with Native American
Tribes and other stakeholders while collaborating to create shared value
Copper
Regina
Stalwart
Young
Holdfast
Melville
Wolverine
Burr
Boulder
Moose Jaw
Yorkton
Jansen
Saskatoon
Prince Albert
BHP project
BHP mineral
leases
Saskatchewan,
Canada
Jansen
potash project
Jansen potash project
Overview
The Jansen potash project (BHP ownership: 100 per cent) is located about
140 kilometres east of Saskatoon, Canada.
Jansen’s large resource provides the opportunity to develop the project
in stages, with Jansen Stage 1 (Jansen S1) expected to produce
approximately 4.15 Mt of potash per annum on completion, and first
production is expected in late CY2026. Approval of the 4.36 Mtpa Jansen
Stage 2 (Jansen S2) has increased planned production to approximately
8.5 Mtpa, with further brownfield expansions up to 8 Mtpa (approximately
4 Mtpa per stage).
BHP holds mineral leases covering around 9,600 square kilometres in the
Saskatchewan potash basin.
Key developments in FY2024
Jansen S1 is ahead of the original schedule and was 52 per cent complete
as at 30 June 2024. During FY2024, we successfully commissioned
Jansen’s permanent power substation, while also advancing steelwork
and equipment installation for surface and underground. Port construction
transitioned from ground improvement to civil and concrete works.
In October 2023, BHP approved an investment of US$4.9 billion for
Jansen S2, following completion of the feasibility study, in line with plan.
Execution of Jansen S2 commenced and is expected to take approximately
six years, with first production targeted for FY2029, followed by a
three-year ramp-up period.
Punta
Lobitos
Huarmey
Lima
Huari
Huaraz
San Marcos
Antamina
mine
Huari
Province,
Ancash,
Peru
Antamina mine
Pipeline
Port
Antamina
Phoenix
Tucson
USA
MEXICO
Oak Flat
Resolution Copper
Mica Mountain
Mt Graham
Turkey Creek
East Clear Creek
Tangle Creek
Cave Creek
Appleton Ranch
Dripping Springs
Kitt Peak
Mt Lemmon
Resolution Copper
Arizona,
USA
Highway
Resolution Copper
opportunities. As part of the permitting process, the US Government has
continued to consult with Native American Tribes resulting in the identification
of mitigation strategies for cultural heritage areas in the project area.
27
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
5 Our assets continued
5.4 Commercial
BHP’s Commercial function seeks to maximise commercial
and social value while minimising costs across the end-to-end
supply chain. The function is organised around core activities
in our value chain, supported by risk governance and analytics.
Sales and Marketing
The Sales and Marketing team connects BHP to the market through
commercial expertise, sales and operations planning, customer insights
and proactive risk management. It presents a single face to market across
multiple assets, with a view to realising maximum value and supporting
sustainability initiatives in our value chain.
Maritime and Supply Chain Excellence
The Maritime and Supply Chain Excellence team manages BHP’s
enterprise-wide maritime transportation strategy and the chartering of
ocean freight to meet BHP’s inbound and outbound transportation needs.
It focuses on supply chain excellence and sourcing cost-efficient marine
freight in addition to engaging within the maritime ecosystem with a view to
uplifting overall safety standards in the industry, promoting seafarer welfare
and supporting GHG emissions intensity reduction initiatives. It also seeks
to manage supply chain risk by vetting the safety performance of the
ships loading BHP cargo and partnering with reliable vessel owners with
excellent operational and safety standards.
Procurement
Our global Procurement team connects asset teams and suppliers to
procure the goods and services used by our projects, operated assets and
functions globally. Procurement partners with our suppliers to optimise
safety, equipment performance, reduce operating costs, optimise working
capital and generate social value. Through innovation, we work with our
suppliers to support opportunities to reduce the GHG emissions intensity
of inbound goods and services and the operational GHG emissions of our
operated assets. Procurement manages supply chain risk, fosters supplier
innovation and looks to develop positive and enduring relationships with
global suppliers and local businesses in the communities where we operate.
Market Analysis and Economics
Our Market Analysis and Economics team develops BHP’s proprietary
view on the outlook for commodity demand and prices, as well as our input
costs, the world economy and financial markets, and the potential impact of
climate change in those contexts. The team works with our Procurement,
Maritime and Sales and Marketing sub-functions to help optimise end-to-
end commercial value and with the Portfolio Strategy and Development
and External Affairs functions to identify and respond to long-run strategic
changes in our operating environment.
Global Business Services
The Global Business Services team integrates repeatable process activity
across the Group into a single shared services operation. With the BHP
Operating System and process transformation capabilities at its core, the
team has the mandate to aggregate, operate and improve end-to-end
processes on behalf of assets and functions to drive operational excellence.
Iron ore
Non-operated minerals joint venture
Samarco
Overview
Samarco (BHP ownership: 50 per cent) comprises a mine and three
concentrators located in the Brazilian state of Minas Gerais, and four
pellet plants and a port located in Anchieta in the state of Espírito Santo.
Three 400-kilometre pipelines connect the mine site to the pelletising
facilities. Samarco is operated independently by Samarco Mineração
S.A. Samarco’s main product is iron ore pellets, which are independently
marketed by Samarco and sold to customers around the world.
Samarco’s operations were suspended in November 2015 after the Fundão
dam failure. Since resuming operations in December 2020, 80 per cent
of the tailings generated are filtrated and dry stacked, and 20 per cent
are deposited in a confined pit enabling Samarco to operate without a
conventional tailings dam structure.
Key developments in FY2024
Samarco increased iron ore pellets and ore fines production in FY2024
by 5 per cent to 4.7 Mt (BHP share). Samarco is currently operating at
31 per cent of its total 26 Mtpa (100 per cent basis) production capacity
and has shipped more than 29 Mt (100 per cent basis) of pellets and fines
since the resumption of operations in December 2020. In June 2023,
Samarco Board of Directors approved investment to increase production
to approximately 60 per cent of its full capacity through restarting the
second concentrator and third pelletising plant, expanding the existing
filtration plant and increasing the mine fleet. Project execution is on track
with first production expected in early CY2025.
In December 2023, Samarco completed a restructure of its debts
under the Judicial Reorganisation process, which included payments
to employees and suppliers and the issue of new unsecured debt to
Samarco’s financial creditors. The restructure provides Samarco with a
stable financial position to continue to rebuild its operations and strengthen
its ability to meet its remediation and compensation obligations related
to the Fundão dam failure. This also benefits neighbouring communities
through job creation, investment and taxes.
Belo
Horizonte
(Main offices)
Nova Era –
Antônio Dias
(Guilman-Amorim
hydroelectric plant)
Mining Lease
Muniz Freire
(Muniz Freire
hydroelectric
plant)
Mariana –
Ouro Preto
(Germano
operational unit)
Anchieta
(Operational
unit and ocean
terminal at
Ponta Uba)
Vitória
(Sales office)
Minas Gerais,
Espírito Santo,
Brazil
Samarco
1st pipeline
2nd pipeline
3rd pipeline
Pipeline 2
operational;
pipelines 1 and 3
non-operational
Samarco
Samarco has been progressively decommissioning its upstream tailings dam
structures in accordance with Brazilian legislation. Decommissioning works
for the smaller of the two tailings dams, the Germano Pit dam, were completed
during FY2023 and formally approved by state authorities in FY2024.
The progressive decommissioning of the remaining upstream tailings dam
structure, the Germano Main dam, is on track for completion by FY2029.
These structures have been certified as stable by independent third parties
and are compliant with local stability and monitoring requirements. In addition,
Samarco is now fully compliant with the Global Industry Standards on Tailings
Management (GISTM) requirements. Samarco is continuing broader studies
to review solutions to operate without tailings dams beyond FY2030.
For more information on the Fundão dam failure
and the response refer to OFR 7
28
BHP Annual Report 2024
6 Sustainability
Sustainability is key to our purpose of bringing people
and resources together to build a better world and is core
to our strategy.
For more information on BHP’s approach to and definition of
sustainability refer to OFR 6 and Additional information 10.4
6.1 Safety
Protecting the safety and wellbeing of our workforce and the communities
where we operate is of the highest importance at BHP and is underpinned
by Our Values.
In January 2024, a valued contracting colleague, Luke O’Brien, was fatally
injured at our BMA Coal operations in Queensland in a vehicle-related
event. The investigation findings were shared internally with relevant
stakeholders to broaden and inform operational learning and improvement.
Our investigation into the previous year’s fatal event, involving Nathan
Scholz at Olympic Dam, is being finalised while external review processes
are ongoing.
These tragic events reinforce the need to continue to deepen our
understanding of the causes of fatal incidents so we can strengthen our
controls. We continue to focus proactively on integrating safety in the way
work is performed through our BHP Operating System (BOS) and strive to
improve the quality of our global Field Leadership Program and uplift safety
leadership capability across our organisation.
We believe a positive workplace culture built on care and trust will enable
us to understand more about the work conditions that increase risk to our
workforce and influence how work is executed. We also believe learning
from those who perform the work and are closest to the risks gives us
greater insight into how we can improve fatal risk control verification.
This approach recognises that work is complex due to the interactions that
occur between people, equipment/tools, processes, systems and culture,
and how they influence one another can impact safety outcomes.
Leaders play an instrumental role in shaping our organisation’s culture.
Our General Managers Integrated Leadership Forum is an example of how
we are growing organisational capability and embedding BOS principles.
The forum promotes strong safety leadership discussions, reinforcing ‘felt
leadership’, collaboration and connection as we seek better ways to learn
and improve together.
Our safety performance
In FY2024 we recorded:1
– one fatal incident involving a vehicle, where a valued colleague
undertaking contract work lost their life
– a 36 per cent decrease in the high-potential injury frequency rate from
FY2023. The highest number of events with the potential for one or
more fatalities was related to vehicle and mobile equipment incidents.
We closely monitor high-potential injury trends and focus on identifying
the contributing factors and influencing conditions to help inform fatality
risk control improvements
– a 5 per cent increase in total recordable injury frequency (TRIF) from
FY2023. The highest number of recordable injuries related to slips, trips
and falls for employees and contractors. The second-highest number
of injuries for employees related to being hit by a moving object and for
contractors related to being caught between objects
– an increase in field leadership activities compared to FY2023
performance, at a frequency rate of 9,868 activities per million hours
worked with over 1.8 million activities completed. We understand the
importance and value of sustaining the quality of these engagements
and we continue to promote coaching, a key element of our scheduled
work routines, as an important tool for achieving this. The field
leadership coaching rate was 42 per cent for Layered Audits and Critical
Control Observations, remaining on par with the previous year
This section includes FY2024 safety data and information relating to
the former OZ Minerals operations that form part of our Copper South
Australia asset and the West Musgrave Project (acquired as part of
BHP’s acquisition of OZ Minerals on 2 May 2023) unless expressly
stated otherwise.
Performance data – workforce health and safety for FY20241
High-potential injuries
Year ended 30 June
2024
2023
2022
2021
High-potential injuries
21
30
24
33
Employees
Contractors
High-potential injury frequency2
0.03
0.02
Total recordable injury frequency (per million hours worked)
Year ended 30 June
2024
2023
2022
2021
Total recordable injury frequency3
4.7
4.5
4.1
3.8
Employees
Contractors
Total recordable injury frequency2
1.05
0.89
1. Prior year data (FY2021 to FY2023) excludes former OZ Minerals assets (acquired 2 May
2023) and divested operations as follows: BHP Mitsui Coal (sale completed on 3 May
2022) and BHP’s oil and gas portfolio (merger with Woodside completed on 1 June 2022).
Divested BMA assets, Daunia and Blackwater (divested on 2 April 2024) are included in
FY2024 data up until the date of divestment.
2. Employee and contractor frequency per 200,000 hours worked.
3. Combined employee and contractor frequency per 1 million hours worked.
As we learn year on year, we continue to look for opportunities to improve
the application of the following programs and systems as outlined in the
sections below:
– Fatality Elimination Program – asset-based fatality risk control
implementation plans aimed at eliminating fatalities at our operations
by having effective controls in place
– Field Leadership – enabling a culture of care, standard setting and
supporting risk control verification
– Contractor Management – helping to protect the health and safety of our
contractors is an important element of asset-based health and safety
management systems
Fatality Elimination Program
It is paramount that we continue to learn, improve and focus on
opportunities to verify and strengthen our critical risk control framework
to more effectively manage and prevent fatality risks.
We developed and introduced the Fatality Elimination Program (FEL)
program in 2020. The FEL program requires our assets to implement
fatal risk controls across their respective material safety risk profiles.
The FEL program remains a high priority across BHP, with an intended
completion of asset FEL control implementation plans in FY2025.
Asset implementation plan progress against the FEL program is measured
and tracked by the Executive Leadership Team and BHP scorecard to
ensure visibility at the highest level. Post FY2025, ongoing asset control
implementation and improvements will be managed via the existing risk
evaluation process.
We will continue to evolve our approach to safety risk management and
our understanding of what conditions and factors influence the cause of
incidents and the verification and validation of fatal risk controls.
In FY2024:
– On average, assets achieved over 90 per cent compliance for
FEL program controls implemented according to the plan for this
financial year.
– We continued implementation of the five‑year fatality elimination
roadmap, including the recommended sequencing of strengthened
controls based on effort, cost and near-miss reduction impact.
– We continued to undertake data analysis and insights into our high-
potential near-miss and actual events, moving from three-monthly to
six-monthly reviews, to identify more meaningful themes over a longer
sampling period. This included a continued focus on the relevant risks,
controls and conditions that may increase the likelihood of incidents.
29
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
– We identified ongoing FEL program fatal risk control verification and
improvement opportunities via regional-focused assurance activities.
– We continued to review the Fatal Risk Control Management Framework
to improve how we manage single-fatality occupational safety risk, with
vehicle and mobile equipment remaining our highest risk. This ongoing
work involves deepening our organisational understanding of risk and
what causes incidents, improved performance standards and the quality
of our fatal risk control verification and assurance programs.
Field Leadership Program
Leaders spending time in the field fosters a culture of care, which helps
to maintain safe operations. Our global Field Leadership Program
encourages the workforce to provide feedback to their leaders about safety
issues and concerns, and may also include sharing insights into safer ways
of working. It involves leaders having quality two-way conversations with
workers in the field and drives a common approach to improving health,
safety and environment (HSE) performance. The program helps verify
that critical safety controls are in place, being applied and are effective in
managing risks that have the potential to result in fatalities.
The global field leadership tools include Layered Audits, Critical Control
Observations, Planned Task Confirmations and Take Time Talks, and are
supported by coaching routines.
In FY2024 we continued to:
– improve the quality of field leadership activities by increasing training
and coaching, and delivering field leadership engagements across all
levels of the organisation
– conduct field leadership activities to support the verification of risks that
have the potential to result in injuries or illnesses and fatalities across
our operated assets
– embed the global field leadership procedure, which is designed
to increase the effectiveness of field leadership activities across
the business
Contractor management
Our commitment to safety includes helping to protect the many thousands
of contractors who represent a significant part of our total workforce.
Our approach to contractor management is intended to make it safer and
easier for contractors to work with us and designed to support an inclusive,
respectful and caring workplace culture. We have an asset-focused
approach to contractor management, with our contract owners playing a
significant role in helping us improve our partnerships with BHP service
providers. Contract owners work collaboratively with contractors to deliver
work safely under the conditions of their contract and in accordance with
our mandatory minimum requirements for contractor management and the
respective asset safety management plans and systems.
In FY2024 we:
– simplified our mandatory minimum requirements for contractor
management under an asset-focused model
– undertook internal assurance and audit activities at an asset level
– Transitioned the Integrated Contractor Management (ICM) project,
which included facilitating contractor mobilisation to an asset-led model
For more information on safety refer to bhp.com/safety
6.2 Our sustainability approach
The way we produce our commodities and how we responsibly manage
our sustainability-related impacts is critical to our future. Our stakeholders
and partners are increasingly focused on our sustainability performance
and use it as a key metric in assessing BHP and our industry.
We define our approach to sustainability through our purpose and
Our Values, which are governed through our Global Standards.
These standards describe our mandatory minimum performance
requirements and provide the foundation for sustainability performance
at our operated assets and in our functions.
Our social value framework expands on and deepens our long-standing
commitment to sustainability.
For information on our approach to social value, including the
aspirational goals and associated metrics we have set for ourselves,
refer to OFR 6.5
For information on our governance of sustainability, including the
FY2024 improvement project for our internal Group-wide standards,
refer to OFR 6.3
There are a number of voluntary global sustainability frameworks,
standards, benchmarks and initiatives that we seek to comply with.
We continue to report against the Global Reporting Initiative (GRI)
Standards, the Sustainability Accounting Standards Board (SASB) Mining
and Metals Standards and the recommendations of the Taskforce on
Climate-related Financial Disclosures (TCFD) in addition to engaging
on consultations relating to the International Sustainability Standards
Board (ISSB) standards. During FY2024, the trend towards mandatory
sustainability-related reporting frameworks increased, and we continue to
monitor these developments for their potential application to BHP, including
the proposed Australian Sustainability Reporting Standards (ASRS),
the EU Corporate Sustainability Reporting Directive (CSRD) and the EU
Corporate Sustainability Due Diligence Directive (CSDDD).
For information on our engagement with climate-specific regulatory
developments refer to OFR 6.9
In FY2024, we continued our commitment to a number of responsible
production and sourcing standards, which require self-assessment and
third-party verification of management systems and performance at an
asset, operation or facility level. These standards, such as the International
Council on Mining and Metals (ICMM) Performance Expectations,
Towards Sustainable Mining and the Copper Mark, require disclosure
of our performance against detailed requirements across a broad range
of sustainability topics.
Details of the voluntary sustainability standards that we have reported
against for FY2024 are set out in the BHP ESG Standards and
Databook 2024.
The BHP ESG Standards and Databook 2024 is available
at bhp.com/ESGStandards2024
Our Modern Slavery Statement 2024 is prepared under the Australian
Modern Slavery Act 2018 and UK Modern Slavery Act 2015 and outlines
our management of modern slavery risks. In May 2024, BHP Canada Inc.
published its first modern slavery statement under Canada’s newly enacted
Fighting Against Forced Labour and Child Labour in Supply Chains Act for
the financial year 1 July 2022 to 30 June 2023.
The BHP Group Modern Slavery Statement 2024 is available at
bhp.com/MSS2024
Treatment of former OZ Minerals and divestment of
Daunia and Blackwater coal mines
This Report includes FY2024 sustainability-related data and information
relating to the former OZ Minerals operations that form part of our Copper
South Australia asset and the West Musgrave Project (acquired as part
of BHP’s acquisition of OZ Minerals on 2 May 2023), unless expressly
stated otherwise in the relevant section. Prior year sustainability-related
data and information has not been adjusted and restated unless expressly
stated otherwise. Former OZ Minerals Brazil sustainability-related data
and information has been excluded from this Report unless otherwise
expressly stated. Where OZ Minerals Brazil data is included as required to
meet legal and regulatory requirements or as necessary to meet applicable
voluntary standards and benchmarks, that data has been prepared in
accordance with former OZ Minerals standards due to ongoing strategic
review of these assets by BHP.
This Report includes sustainability-related data and information relating
to BMA’s Daunia and Blackwater coal mines up to completion of their
divestment on 2 April 2024, unless expressly stated otherwise in the
relevant section.
30
BHP Annual Report 2024
6.3 Sustainability governance
The BHP Board has oversight of our sustainability approach and
performance and is supported by each of its Committees.
For information on BHP’s governance structure, including the
work of the Board and each Committee refer to the Corporate
Governance Statement
For information on the governance of climate change refer to
OFR 6.9 and the BHP Climate Transition Action Plan 2024
available at bhp.com/CTAP2024
During FY2024, we launched our new Global Controlled Documents suite
following an improvement project to streamline the mandatory minimum
performance requirements set in our internal Group-wide standards.
This included updates across the suite of sustainability-related Global
Standards (previously Our Requirements standards) relating to Climate
Change, Environment, Community and Indigenous Peoples and the
introduction of a new Social Value and Sustainability Global Standard.
These improvements seek to make our requirements and our ways of
working easier for our people to understand and apply.
External versions of key sustainability-related elements of these
Global Standards are available at bhp.com/about/operating-ethically/
corporate-governance
Our management-level Sustainability and ESG Steering Committee
(ESG SteerCo) undertakes review of a range of cross-functional and
strategic issues relating to key sustainability and ESG topics. Issues under
the remit of the ESG SteerCo are driven by regular assessment of
materiality and relative priority and determined in line with BHP’s social
value framework pillars. In FY2024, the membership of the ESG SteerCo
included the Chief Legal, Governance and External Affairs Officer, the
Chief Operations Officer, the Chief Commercial Officer, the Chief Financial
Officer and the Presidents of Minerals Americas and Minerals Australia
from the Executive Leadership Team (ELT) as well as sustainability and
ESG leaders within BHP. Matters considered by the ESG SteerCo may
also be subject to review or approval by the ELT and the Board or its
Committees, in accordance with their remits.
The ESG SteerCo met four times during FY2024. They discussed topics
including our community and human rights impact and opportunity
assessments, nature-positive plans to support progress against our 2030
Healthy environment goal, environmental performance, sustainability
standards strategy and implementation, and preparation of our Climate
Transition Action Plan 2024.
Our approach to sustainability
Our purpose underpins
everything we do
and is central to our
sustainability approach.
Through our purpose, Our Values,
strategy and operating model,
we set the direction for the way
we do business. We build strong
foundations through meeting
our compliance obligations and
operating within our social licence.
We manage this through our Global
Standards, which set the mandatory
minimum performance standards for
BHP, our ongoing opportunity and
threat management and meeting
the sustainability standards that
we commit to.
Safe, inclusive and future-ready workforce
Decarbonisation
Indigenous partnerships
Responsible supply chains
Healthy environment
Thriving, empowered communities
Building on strong foundations, we aspire to create social value for
society that is purposeful, proactive, mutually beneficial and respectful.
In June 2022, we launched our social value framework, focused on
the six pillars of Decarbonisation, Healthy environment, Indigenous
partnerships, Safe, inclusive and future-ready workforce, Thriving,
empowered communities and Responsible supply chains.
Each pillar is anchored to an aspirational 2030 goal and
underpinned by a set of metrics to measure performance
and milestones to track progress:
To bring people and
resources together
to build a better world
Purpose led
Strong foundations
Social value
31
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
6.4 Material topics for sustainability reporting
Annual sustainability materiality assessment
Each year we determine which sustainability topics are considered most
material to our business, partners and stakeholders for the purpose of
our sustainability-related reporting (which may differ from the materiality
standards applied by other reporting regimes) by undertaking an impact
materiality assessment in alignment with the recommendations of the GRI.
These topics are referred to as our material sustainability topics. The findings
of this assessment help us determine the information our stakeholders are
seeking and therefore the material sustainability topics for disclosure in
OFR 6. In FY2024 we have consolidated the material topics within OFR 6
compared to FY2023 and we have reported on value chain sustainability and
tailings storage facilities within OFR 6.4, sexual harassment within OFR 6.6,
and digital security and data privacy within OFR 8.1.
Our materiality assessment considers our potential and actual positive and
negative impacts by an assessment of a broad range of inputs, including
BHP’s material risk profile (refer to OFR 8), information recorded in our
internal event management system, our social value framework, topics
raised at our Annual General Meeting (AGM) and industry standards
and guidance. Our assessment aims to capture our external partners’
and stakeholders’ perspectives through incorporating consideration of
issues raised at our AGM and investor roundtables, industry sustainability
standards and guidance, sustainability-related regulatory focus areas, and
relevant media articles about our impacts. Sustainability-related impacts
can arise from our direct operational activities, such as managing tailings
storage facilities, or result from activities within our value chain, such
as procuring goods and services from our suppliers. We aim to address
this in our materiality assessment by considering a broad range of inputs
and perspectives. Our material sustainability topics are reviewed by the
Sustainability Committee annually.
For more information on our materiality assessment for sustainability
reporting refer to bhp.com/sustainability
The material sustainability topics identified in this assessment are shown
against our social value pillars, as illustrated in the table on page 33
together with the sections of OFR 6 that address these topics and the most
relevant risk factors as described in OFR 8.1, and are largely consistent
with FY2023.
For more information on the process by which we identify and manage
risk at BHP and our risk factors, which include sustainability-related
risks, refer to OFR 8
Respecting human rights
We recognise we have the potential to cause, contribute to or be directly
linked to human rights impacts through our operations and supply chain
primarily relating to workplace health and safety, labour rights, activities of
security providers, land access and use, water and sanitation, community
wellbeing, and Indigenous peoples’ rights relating to culture, identity,
traditions and customs.
Our Human Rights Policy Statement and relevant standards outline our
commitment and approach to respecting human rights and the principles
by which we conduct our human rights due diligence. This involves taking
a rights-based approach for our own operations and for modern slavery-
related risks in our supply chain to identify and assess actual and potential
impacts, considering how impacts may affect people, integrating and
acting upon the findings, monitoring effectiveness, and communicating
how actual and potential impacts are addressed.
In FY2023, BHP developed and commenced implementation of a globally
consistent methodology for our community and human rights impact and
opportunity assessments (CHRIOAs), which identified potential impacts
and risks to local communities where we operate. The methodology design
incorporated consideration of relevant human rights in accordance with
our Human Rights Policy Statement, views from our stakeholders and the
United Nation Guiding Principles on Business and Human Rights (UNGPs)
approach to identifying and prioritising salient human rights issues.
During FY2024 an external human rights expert reviewed the approach
and provided feedback on the CHRIOA process to further strengthen our
approach to identifying potential human rights impacts which we will seek
to incorporate in FY2025. The methodology is described in more detail in
OFR 6.11.
Responsible sourcing and
production standards performance
We recognise there are sustainability-related opportunities and impacts
across our value chain. BHP has voluntarily committed to the adoption of
a set of external standards for the responsible production and sourcing of
minerals and metals, as outlined in OFR 6.2. Our performance is assured
against these standards by an independent third party and this allows us
to more transparently demonstrate to our stakeholders our intent to be a
responsible actor within the mining and metals industry and within global
value chains for our products. This also helps us align with sustainability-
related requirements set out by national mining associations, industry
associations, commodity exchanges and relevant emerging regulations.
Relevant Australian operated assets continued to progress implementation
of the Towards Sustainable Mining framework, as part of the three-year
implementation phase and in preparation for public reporting by the end
of CY2025.
Our Escondida and Spence operations in Chile and Olympic Dam operations
in Australia were previously assured against The Copper Mark Criteria
Guide (reference 24 January 2020) and continue work to prepare for their
next assessments. The Copper Mark is a voluntary assurance framework
that independently assesses participants against 32 performance criteria
across environmental, social and governance dimensions.
During FY2024, Escondida, Spence, Olympic Dam and Nickel West (which
produced brands listed on the London Metal Exchange (LME)) successfully
completed third-party verification for the FY2023 period against the Joint
Due Diligence Standard (JDDS) as an OECD-aligned and LME-approved
standard. For Escondida, Spence and Olympic Dam, JDDS certificates were
issued under the broader Copper Mark certification while Nickel West was
issued a standalone JDDS certificate by The Copper Mark.
Our Responsible Minerals Program (RMP) is our minerals and metals supply
chain due diligence program that applies to minerals and metals that we
source from third parties (either for feedstock or third-party trading purposes).
The RMP has been designed to align with the OECD’s Due Diligence
Guidance for Responsible Supply Chains of Minerals from Conflict-Affected
and High-Risk Areas. We are currently undertaking a project to develop and
integrate an expanded scope of environmental risks that will seek to align
the due diligence undertaken within the RMP with the OECD’s Handbook on
Environmental Due Diligence in Mineral Supply Chains.
Under the Responsible supply chains pillar of our social value framework, we
seek to create sustainable, ethical and transparent supply chains together
with our partners. One of the FY2024 short-term milestones within the
Responsible Supply Chains pillar outlined in OFR 6.5 that we met was to
determine ethical supplier improvement plans with partners, where required.
The Ethical Supply Chain and Transparency (ESCT) team within Compliance
reviews audit reports prepared by our third-party audit provider and monitors
corrective action taken by suppliers in response to audit findings.
For more information on our supplier due diligence approach refer to
the Summary of FY2024 audits in the BHP Group Modern Slavery
Statement 2024 available at bhp.com/MSS2024
For more information on our Responsible Minerals Program refer
to our Responsible Minerals Program Report 2024 available
at bhp.com/-/media/documents/environment/2024/240827_
BHPResponsibleMineralsProgramReport2024
For more information on our approach to value chain sustainability refer
to bhp.com/sustainability/value-chain-sustainability
Global Industry Standard on Tailings Management
As an ICMM member, BHP has committed to achieving alignment with the
Global Industry Standard on Tailings Management (GISTM) for all BHP-
operated tailings storage facilities (TSFs). BHP is focused on safety and the
integrity of TSFs at our operated assets to protect people and the environment.
In August 2023, we disclosed an overview of our conformance against the
GISTM for our TSFs with a GISTM classification of Very High or Extreme
rated facilities as at 31 July 2023 (excluding the four TSFs introduced to the
BHP portfolio by the acquisition of OZ Minerals in May 2023), based on a
self-assessment. Our August 2024 public disclosure is an update of the 2023
disclosure, and also includes the results of third-party validation of 10 of these
TSFs and the remainder will be included in future disclosures.
In accordance with the timeline for members of the ICMM, work towards
GISTM conformance has been progressed for the 49 remaining BHP-
operated TSFs and we plan to disclose an overview of our conformance
in August 2025. Further detail is reported in the GISTM public
disclosure document.
For our Global Industry Standard on Tailings Management Public
Disclosure 2024 refer to bhp.com/sustainability
For more information on tailings storage facilities refer to
bhp.com/sustainability/tailings-storage-facilities
32
BHP Annual Report 2024
Material topics and impacts for sustainability reporting
Material topic and overview of potential and actual impacts
Most relevant risk factors
SDG index
Read more
Decarbonisation
Climate change
We recognise climate change may pose risks to fundamental human
rights, including the rights to life, health, food and an adequate standard
of living. We continue to work towards our climate change targets and
goals and the implementation of our climate change adaptation strategy.
8.1 Operational events
8.1 Significant social or
environmental impacts
8.1 Low-carbon transition
8.1 Inadequate business resilience
6.9 Climate
change
Healthy environment
Biodiversity and land management
The nature of our operations can have significant environmental impacts
and those impacts can adversely affect human rights.
8.1 Operational events
8.1 Significant social or
environmental impacts
8.1 Inadequate business resilience
6.10
Environment
and nature –
biodiversity
Water
Access to safe, clean water is a basic human right and water is essential
to maintaining healthy ecosystems, cultural and spiritual values and
sustaining economic growth. Unmanaged or uncontrolled operational
water-related risks have the potential to adversely impact the health and
safety of our employees, contractors and community members, spiritual
and cultural values, communities, environmental resources, BHP’s legal
rights to continue operations and compliance with regulations.
8.1 Operational events
8.1 Significant social or
environmental impacts
8.1 Inadequate business resilience
6.10
Environment
and nature –
oceans and
fresh water
Indigenous partnerships
Indigenous peoples
Many of our operations globally are located on or near Indigenous
traditional lands and we acknowledge that potential impacts of our
operations may extend beyond direct physical impacts and include
impacts on intangible cultural heritage or on Indigenous peoples’
culture and way of life.
8.1 Operational events
8.1 Significant social or
environmental impacts
8.1 Ethical misconduct
6.12
Indigenous
peoples
Safe, inclusive and future-ready workforce
Safety
The nature of our business is such that our workforce can be exposed
to risks that can impact their safety and long-term wellbeing.
8.1 Operational events
8.1 Inadequate business resilience
6.1 Safety
People
Our ambition is to have a workforce that is truly representative of the
societies where we operate, across attributes of indigeneity, gender,
age, race, disability, sexuality, carer and veteran status and the
intersectionality between them. We acknowledge the presence of
sexual harassment and sexual assault in the mining industry and BHP
considers it a material health and safety risk.
8.1 Significant social or
environmental impacts
8.1 Ethical misconduct
6.6 People
Health
We recognise our working environments can impact and potentially
expose our workforce at our offices and operated assets to potential
health and wellbeing impacts.
8.1 Operational events
8.1 Inadequate business resilience
6.7 Health
Thriving, empowered communities
Community
Human rights of community members may potentially be impacted,
including rights related to freedom of expression and self-determination
as well as economic, social and cultural rights, such as health and
wellbeing, work, adequate housing and water and sanitation.
8.1 Operational events
8.1 Significant social or
environmental impacts
8.1 Ethical misconduct
6.11
Community
Other
Ethics and business conduct
Corruption can adversely impact the human rights
of community members.
8.1 Ethical misconduct
8.1 Accessing key markets
6.8 Ethics
and business
conduct
33
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
6.5 2030 goals
Our social value scorecard
Our social value framework, 2030 goals and social value scorecard were
first published in June 2022. Since then, we have worked to embed social
value into our decision-making through processes and systems, such as:
– carrying out social value assessments for our operated assets to identify
social value priorities ahead of the annual planning cycle
– utilising our non-economically quantifiable impact (NEQI) framework
to systematically identify, consistently evaluate and transparently
present actual and potential social value impacts for consideration
in our investment decisions where applicable
We provide progress on our 2030 goals through our social value
scorecard. The scorecard is intended to evolve over time as our plans
mature and to keep pace, as appropriate, with our internal and external
environment. Our performance in FY2024 against the scorecard and our
new FY2025 milestones are provided on page 35 to demonstrate our
progress towards our 2030 goals.
For more information on how the metrics and milestones support
progress towards our 2030 goals and the methods we use to measure
progress refer to the BHP ESG Standards and Databook 2024
available at bhp.com/ESGStandards2024
Social investment
Guided by our social value framework, our social investment aims to make
a meaningful contribution to addressing the sustainable development
challenges of most relevance to our business, partners and stakeholders.
In FY2024, our voluntary social investment totalled US$136.7 million.
This investment consisted of US$102.4 million in direct funding for
initiatives in line with our social value framework, US$15.2 million to
non-operated joint venture social investment programs, and US$1.8 million
under the BHP Matched Giving Program. Administrative costs to facilitate
social investment activities totalled US$12.5 million and US$6.4 million
supported the operations of the BHP Foundation.
For more information on our social investment, including case studies
and performance against our global social investment indicators, refer to
bhp.com/sustainability/approach/social-investment
For more information on the BHP Foundation refer to
bhp‑foundation.org
These footnotes refer to the next page
1. With widespread adoption expected post 2030. We have revised the language used in
our medium-term goal for steelmaking to provide greater clarity and reflect the range of
steelmaking process routes that now form part of our strategy. This is due to technology
advances as well as the evolution of our strategy. For more information refer to the BHP
Climate Transition Action Plan 2024 available at bhp.com/CTAP2024.
2. For the definition of the terms used to express these positions, including ‘target’, ‘goal’,
‘net zero’, ‘carbon neutral’ and ‘operational GHG emissions’ refer to Additional information
10.4. For more information on the essential definitions, assumptions and adjustments for
our targets and goals refer to Metrics, targets and goals in OFR 6.9.
3. Nature-positive is defined by the TNFD Glossary version 1.0 as ‘A high-level goal and
concept describing a future state of nature (e.g. biodiversity, ecosystem services and
natural capital) which is greater than the current state’. We understand it to include land and
water management practices that halt and reverse nature loss – that is, supporting healthy,
functioning ecosystems. BHP intends to review this definition in FY2025, in light of the
recently revised TNFD Glossary version 2.0 (June 2024) definition of nature-positive.
4. Excluding areas we hold under greenfield exploration licences (or equivalent tenements),
which are outside the area of influence of our existing mine operations. 30 per cent will be
calculated based on the areas of land and water that we steward at the end of FY2030. For
more information refer to the BHP ESG Standards and Databook 2024 available at bhp.com/
sustainability. For an overview of the operational area (i.e. disturbed area) and non-operational
area within our own operational footprint that is the boundary of our 2030 Healthy environment
goal, and their size and relativity to one another refer to the infographic in OFR 6.10.
5. For our FY2024 key metric, while some of the land related to the Daunia and Blackwater
mines is pending transfer following BMA’s divestment of these mines on 2 April 2024,
these areas are no longer under BMA’s control or operated for BMA’s benefit so have
been excluded from the areas of land and water we stewarded at 30 June 2024.
6. Cultural diversity in our workforce will be measured based on our substantive progress
towards reflecting the cultural diversity of the societies where we operate.
7. Baseline year and performance data adjusted; for the adjustments we make, refer to
Climate‑related metrics, targets and goals beginning on page 52 in OFR 6.9.
8. CY2008 was selected as the baseline year for this goal to align with the base year for the
International Maritime Organisation’s CY2030 emission intensity goal and its corresponding
reasoning and strategy. Baseline and performance data have been adjusted to only include
voyages associated with the transportation of commodities currently in BHP’s portfolio due to
the data availability challenges of adjusting by asset or operation for CY2008 and subsequent
year data. GHG emissions intensity calculations currently include the transportation of copper,
iron ore, steelmaking coal, energy coal, molybdenum, uranium and nickel. Baseline and
performance data have also been adjusted for a methodology change to use maritime transport
emission factors from EU Regulation 2023/1805, after The British Standards Institution EN 16258
standard (the source of the emission factors we previously used) was withdrawn in CY2023.
9. Excluding in-kind contributions.
10. Area under stewardship that has a formal management plan that includes conservation,
restoration or regenerative practices. 1.62 per cent is calculated based on the areas of
land and water that we stewarded at 30 June 2024, as per footnote 4. For more information
refer to the BHP ESG Standards and Databook 2024, available at bhp.com/sustainability.
11. Natural capital accounts are a way to measure the amount, condition and value of
environmental assets in a given area. They help describe changes in ecosystems and
how these impact wellbeing and economies.
12. Point in time data at 30 June 2024.
13. 8.3 per cent refers to Indigenous employee participation at Minerals Australia operations. Total
Indigenous employee participation in Australia, including non-operational roles (1.9 per cent),
was 7.5 per cent at 30 June 2024.
14. 11.2 per cent refers to Indigenous employee participation at the Jansen potash project
and operation in Canada.
15. 10.1 per cent refers to Indigenous employee participation at Minerals Americas
operations in Chile.
16. Since publishing our FY2023 scorecard, we have updated the methodology we use
to track our ‘Progress to plan’ key metric and this change is reflected in our FY2024
performance against this metric. We had previously intended the metric would be
Indigenous partner-measured (using a traffic light score) on satisfaction in relation to the
milestones agreed in relevant partnerships, as co-designed in our regional Indigenous
Peoples Plans. This update clarifies our intention to report on ‘Progress to plan’ in
relation to our progress against the current or planned regional Indigenous Peoples
Plans in Australia, Canada and Chile. The updated methodology for this metric aligns
with the reporting methodology for the finalised regional plans, including the Australian
Reconciliation Action Plan (RAP) published in May 2023 and the Canada Indigenous
Partnerships Plan (CIPP) approved in June 2024 and published in August 2024, both of
which will report on progress against the milestones co-designed in each plan. Australia is
the only region with data available to report on its first year of progress against the RAP in
FY2024, therefore the social value scorecard metric for Australia is considered ‘on track’
for FY2024. The first progress report for Canada on our co-designed CIPP will be made
in our Annual Report 2025. We are still developing our regional Indigenous Peoples Plan
for Chile. We have retained the Indigenous partner-measured methodology for measuring
the ‘Present relationship health’ key metric. For more information refer to OFR 6.12 and the
BHP ESG Standards and Databook 2024 available at bhp.com/ESGStandards2024.
17. Indigenous partners who participated in the relationship health check project in FY2024
considered and provided feedback on social, cultural and commercial aspects of their relationship
with BHP and provided a rating on a 0-10 scale on the present health of their relationship with BHP
– 0 is very poor, 5 is average, and 10 is very good. For more information refer to OFR 6.12.
18. Reduction in life-altering injury or illness includes life-altering or long-term permanent
disabling injuries and illnesses as defined by BHP’s Risk Framework. Since we commenced
measuring our life-altering injury and illness metric, we have learned that a longer
measurement period is required for analysis to allow for the classification of more chronic
conditions. Therefore, it will not be reported on in this Report or included as a key metric in
the social value scorecard in FY2025. This reflects a change from what we proposed in our
FY2023 social value scorecard and so we have retained this metric in our FY2024 scorecard
(without reporting against it) to explain the change in approach. The two main illness and
injury types that influence life-altering injury or illness for BHP are musculoskeletal cases and
noise-induced hearing loss cases, both of which we report on in OFR 6.7.
19. Co-design requires meaningful engagement and contribution to the plan from a variety of
interested stakeholders. For an overview of our approach to co-design and co-creation
(terms which we use interchangeably) refer to OFR 6.11.
20. This includes contribution to suppliers, wages and benefits for employees, dividends,
taxes, royalties and voluntary social investment. For more information refer to the BHP
Economic Contribution Report 2024.
21. Net Promoter Scores (NPS) show respective feedback from our customers and suppliers,
and measure the willingness of our customers/suppliers to recommend BHP to others.
NPS is used as a proxy for gauging overall satisfaction.
22. This milestone was achieved by developing a Group-level framework for nature-positive plans
to achieve the 2030 Healthy environment goal (BHP Healthy environment goal roadmap).
23. Refer to OFR 6.10 for more information regarding the BHP Healthy environment goal roadmap.
34
BHP Annual Report 2024
Social value scorecard
See previous page for footnotes
Decarbonisation
Healthy
environment
Indigenous
partnerships
Safe,
inclusive and
future-ready
workforce
Thriving,
empowered
communities
Responsible
supply chains
2030 goals
At least 30% reduction
in operational GHG
emissions; support 40%
GHG emissions intensity
reduction of BHP-
chartered shipping of our
products, and support
industry to develop steel
production technology
capable of 30% lower
GHG emissions intensity
relative to conventional
blast furnace
steelmaking.1,2
Create nature-positive³
outcomes by having at
least 30% of the land
and water we steward,4,5
under conservation,
restoration or
regenerative practices.
In doing so we focus
on areas of highest
ecosystem value both
within and outside
our own operational
footprint, in partnership
with Indigenous peoples
and local communities.
Respectful
relationships that
hear and act upon the
distinct perspectives,
aspirations and rights
of Indigenous peoples
and support the
delivery of mutually
beneficial and jointly
defined outcomes.
A thriving workforce
that is safe, healthy,
gender balanced
at every level,
culturally diverse6 and
inclusive and skilled
for the future.
Partner with
communities and
stakeholders to
co-create and
implement plans that
deliver jointly defined
economic, social
and environmental
outcomes.
Together with our
partners, we create
sustainable, ethical
and transparent
supply chains.
Key metrics
32%
Reduction in
operational GHG
emissions (Scopes 1
and 2 emissions from
our operated assets)
from FY20207
42%
Reduction in
GHG emissions
intensity of BHP-
chartered shipping
of our products
from CY20088
$140 million
Committed in
steelmaking
partnerships
and ventures
to date (US$)9
1.62%
Area under
nature-positive
management
practices10
0
Assets with natural
capital account11
Indigenous employee
participation12
8.3% Australia13
11.2% Canada14
10.1% Chile15
$609m
Indigenous
procurement
spend (US$)
Progress to plan16
Australia
Canada
Chile
Present relationship
health17
Reduction in life-
altering injury or
illness18
87%
Engagement and
Perception Survey
wellbeing score
37.1%
Female employee12
participation
7
Assets have
co-created host
community plans
100%
Co-designed19
outcomes on track
according to plan
$49.2bn
Total economic
contribution
(US$)20
62
Customer
Net Promoter Score
(NPS)21
52
Supplier Net
Promoter Score
(NPS)21
Short-term milestones FY2024
Complete a pilot
scale Electric Smelter
Furnace design study
Commence
construction
of boiler diesel
displacement solution
Delivery of equipment
for proof-of-
concept trials for
electrified rail and
excavator solutions
Engage the market
to introduce
additional lower/
zero GHG emission
BHP-chartered
vessels through
industry partnerships
Establish
‘nature-positive’
plans22 to deliver
the Group-level
2030 goal
Indigenous voices
and perspectives
are incorporated
into co-designed
priorities in
each region
>90%
implementation of
controls identified
and approved
through the
Fatality Elimination
Program and
assigned
to FY2024
Female employee12
participation
exceeds 37%
Co-design external
community-
facing targets
Implement LME
Responsible
Sourcing
requirements
Complete ICMM
Performance
Expectations for
all operating assets
Determine
ethical supplier
improvement plans
with partners,
where required
Short-term milestones FY2025
Commence proof-
of-concept trials
for battery electric
equipment in
collaboration with
original equipment
manufacturers
Continue
development of
the direct reduced
iron electric smelting
furnace pathway
to plan
Commence
implementation
of BHP Healthy
environment
goal roadmap23
Indigenous voices
and perspectives
are incorporated
into co-designed
priorities in each
region
Improvement
on key metrics
from FY2024
performance
Co‑creation further
embedded in
internal practice
Engage with
suppliers through
our audit program
to monitor
implementation of
corrective actions
plans, where
required
Implement NGO
partnerships to build
increased reach and
capabilities in BHP’s
Ethical Supply Chain
and Transparency
program
Read more
OFR 6.9 Climate
change
Climate Transition
Action Plan 2024
OFR 6.10
Environment
and nature
OFR 6.12
Indigenous
peoples
OFR 6.1 Safety
OFR 6.6 People
OFR 6.7 Health
OFR 6.11
Community
BHP Group Modern
Slavery Statement 2024
BHP Responsible
Minerals Program
Report 2024
PLANET PEOPLE PROSPERITY
Aus
Chile
4.5 5.2
7.3
Can
Indicators:
On track
Improved
No change/data not available
Not on track
Complete
New/revised
Partially met
35
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
6.6 People
Our more than 90,000 employees and contractors around the world are the
foundation of our business. We aim to attract and retain the best people
and our distinctive way of working through the BHP Operating System
(BOS) seeks to empower our people to bring the best of themselves to
improve their work every day.
Our Values set the tone for our culture and are a unique part of our
competitive advantage. Our Values are a declaration of what we stand for
and are designed to guide our behaviour and decision-making, as we work
together in the pursuit of delivering on our purpose. In today’s dynamic,
uncertain world, anchoring our decision-making to a clear set of values
remains as important as ever. In FY2024, we engaged with employees,
partners and other stakeholders as we sought to redefine Our Values in
a way that builds upon our rich history, while also reflecting BHP today.
Our refreshed Values were launched in May 2024. They are simple and
designed to enable our people to be ready to move quickly and deliberately
to create and act on opportunities and navigate challenges as they arise.
Our refreshed Values are:
Do what’s
right
Seek better
ways
Make a
difference
A sustainable
future starts with
safety and integrity,
building trust with
those around us.
Listening to learn
and inspiring
challenge is how
we drive progress.
The accountability
to act, create value
and have impact
is on each of us,
every day.
Developing our capabilities and an enabled culture
We invest in the development of our people to build capability and drive
stronger performance.
In support of work to deliver the capabilities for today and tomorrow,
BHP’s FutureFit Academy (located in Western Australia and Queensland)
provides a pathway for new employees, some of whom have never worked
in our industry before, to join Minerals Australia through an accredited
maintenance and production traineeship or a trade apprenticeship.
Once trained and qualified, employees move to one of our Australian
assets. The strong partnership between vocational educational institutions
and our FutureFit Academy facilitates the provision of nationally accredited
qualifications and is a unique attraction and retention lever for BHP.
The FutureFit Academy is designed as an inclusive learning environment,
welcoming employees who are new to the industry and providing
permanent employment from day one. As at the end of FY2024, our
student cohort included 80 per cent female participation and was made up
of over 20 per cent Indigenous intake.
The FutureFit Academy expanded in FY2024 to provide a larger footprint
in Perth, Western Australia, moving to a purpose-built learning centre
that includes fabrication and auto electrical trades in addition to the
core mechanical fitting and heavy diesel programs. A satellite FutureFit
Academy was also established in Newman, Western Australia, providing
a belt splicing program for experienced students.
Our intern and graduate programs also serve to attract and develop
emerging talent for critical skills we need for the future. In FY2024, we
had 60 first-year university students participate as part of our First-
Year Internship Program across Australia. The program aims to boost
enrolments in Australian resource-related tertiary degrees by exposing
science and engineering students to mining careers. In FY2024, an
additional 147 university students joined the BHP Internship Program
for five to 24 weeks to gain experience in their chosen field of study
through on-the-job learning, working on mine sites alongside technical
professionals. Our selected interns have early access to apply for
our annual graduate program intakes. In FY2024, we onboarded 177
employees into our graduate program across Australia, Chile, Canada,
Singapore and the United States, to meet the needs for future skills across
our operations and functions in those regions.
To support our focus to build leader capability and drive stronger
performance, we conduct multi-level leadership development programs.
The Senior Leadership Forum is intended to develop senior leaders
through shared goals and context. In FY2024, this forum was delivered
quarterly with a summit held in late FY2024 to further engage our senior
leaders in relation to our purpose, strategy and operating system, and to
launch the refreshed Our Values. Additionally, we also continue to facilitate
an Integrated Leadership Forum for general managers on a quarterly
basis to align this next critical cohort of leaders. Further, around 2,000
leaders including supervisors, superintendents and managers attended
BHP Distinctive Leaders programs in FY2024, focused on developing their
ability to lead inclusively, ethically and through complexity.
We ask our employees and contractors about their experiences working
with BHP via an Engagement and Perception Survey twice a year.
After each survey, our team leaders assess what is working well and what
they can learn from others before taking action to address improvement
areas. Additionally, this survey is used to measure progress against a
wellbeing metric within the Safe, inclusive and future-ready workforce pillar
in our social value scorecard. In March 2024, we had a response rate of
82 per cent of employees, with 24,000 contractors also providing feedback.
We achieved a strong result, with 80 per cent of participants responding
favourably to questions related to their engagement and connection to BHP
and 87 per cent to questions related to their wellbeing.
Inclusion and diversity
We believe an inclusive and diverse workforce promotes engagement,
safety and productivity, and is valued by prospective employees as well
as our current workforce.
Our Inclusion and Diversity Position Statement confirms our vision,
commitment and contributions to inclusion, equity and diversity.
Since 2016, we have been embedding flexible working, ensuring our
facilities and equipment are purpose-fit by partnering with our supply chain
partners, and undertaking work to mitigate bias in our systems with the
aim of creating workplaces that are safe and inclusive for a diverse range
of people.
Our goal is to attract and retain a workforce that is representative of
society. We do this by implementing measures designed to address the
barriers and impacts of bias and discrimination experienced by people
within underrepresented groups, through listening to their experience and
gaining insights from our engagement surveys and our voluntary self-
identification survey, ‘Tell Us About You’. As of February 2024, over 11,000
of our employees had completed the survey.
We also recognise pay is a critical mechanism for creating gender equality.
To help mitigate gender pay disparities and prevent the creation of pay
gaps, we continue to drive improvements in our systems and processes
to remove systemic bias. As an example, our recruitment processes
include a ‘blind reward’ process, which is designed to reduce potential
bias in remuneration offers at the time of hire. We use global best practice
methodologies to calculate the pay gap between men and women in
like-for-like or comparable roles. We analyse our pay data and conduct
gender pay equity reviews at least annually. The results of the pay equity
reviews are reported to the BHP People and Remuneration Committee.
Our FY2024 employee remuneration data, including a breakdown by
gender, is available in the ESG Standards and Databook 2024.
Gender balance1
In CY2016, we announced our aspiration to achieve gender balance within
our employee workforce globally by the end of CY2025, which we define as
a minimum 40 per cent women and 40 per cent men. This has also been
included as one of the key metrics we measure progress against our Safe,
inclusive and future-ready workforce pillar in our social value scorecard.
We increased the participation of women working at BHP in FY2024 by
1.9 percentage points compared to FY2023, with around 10,500 more
female employees at the end of FY2024 than FY2016. As at 30 June 2024,
women represented 37.1 per cent of our employee workforce. Since we
first set our gender balance aspiration in 2016, BHP has more than
doubled the participation of women (from 17.6 per cent to 37.1 per cent).
We also reached a significant milestone during FY2024 achieving over
40 per cent participation of women in our employee workforce across the
Minerals Americas operations in Chile, and as at 30 June 2024 this was
40.9 per cent.
1. Based on a ‘point in time’ snapshot of employees as at 30 June 2024, including employees on extended absence, as used in internal management reporting for the purposes of monitoring
progress against our goals. New hires is based on a 12-month period from 1 July 2023 to 30 June 2024. ‘People leaders’ are defined as employees with one or more direct reports. ‘Senior
executives’ are defined as employees in the Executive Leadership Team (ELT) and direct reports to the ELT in grade 15 and above roles. Figures reported do not include employees of
BHP Mitsubishi Alliance’s Blackwater and Daunia operations, sold to Whitehaven Coal during FY2024.
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BHP Annual Report 2024
The gender breakdown of new hires in FY2024 was 48.1 per cent men
and 51.9 per cent women. We improved our participation of women in
leadership in FY2024 by 2.0 per cent compared to FY2023. As at 30 June
2024, 31.7 per cent of people leaders were women and of our senior
executives 40.9 per cent were women and 59.1 per cent were men.
For operational teams, a focus on roster and job redesign is designed to
support greater female participation. Our Bamboo flexible work program is
an example of this.
Case study – Bamboo flexible work program
In FY2024, our Bamboo flexible work program was a finalist in the
Chamber of Minerals and Energy of Western Australia Women in
Resources Awards. Founded in 2019 at Newman Operations, the
Bamboo program is a residential gender diversity initiative that
supports the attraction and retention of women in historically male-
dominated roles. The Bamboo program is targeting an 80 per cent
female intake from the Newman township, creating an opportunity for
new-to-industry and existing workers to have flexible work options
with reduced shift hours, enabling them to actively maintain a career
in mining production, specifically haul truck operations.
For more information on the Bamboo flexible work program
refer to bhp.com/people
Gender composition of employees, leaders and the Board1,2,3
30,000
20,000
10,000
0
People leaders
Male
Female
Male
Female
Employees
9
6
3
0
Board members
Male
Female
Male
Female
Executive Leadership Team members
FY2022
FY2024
FY2023
1. Based on a ‘point in time’ snapshot of employees as at 30 June 2024, including
employees on extended absence, as used in internal management reporting for the
purposes of monitoring progress against our goals. For FY2024, this does not include
employees of BHP Mitsubishi Alliance’s Blackwater and Daunia operations, sold to
Whitehaven Coal during FY2024.
2. For FY2023, this did not include employees that transitioned from the OZ Minerals
business via acquisition on 2 May 2023 (359 female employees and 1,098 male
employees at 30 June 2023).
3. For FY2023, some of our employees did not identify as male or female (<0.1 per cent of
total employees). These employees were excluded from data presented in the gender
composition graphs to protect the privacy of those employees.
Indigenous employment
Indigenous peoples are critical partners of BHP across our operations.
We recognise, as part of our global Indigenous Peoples Policy Statement,
we can contribute to the economic empowerment of Indigenous peoples
by providing opportunities for employment, training and procurement and
by supporting Indigenous enterprises.
We have set targets to increase Indigenous employment in our Minerals
Australia operations, Minerals Americas operations in Chile and our
Jansen potash project in Canada.
Indigenous employee participation1
Minerals Americas operations
employees in Chile
Period
Target (%)
30 June 2024 (%)
By the end
of FY 2025
10.0
10.1
Minerals Australia operations
employees in Australia2
Period
Target (%)
30 June 2024 (%)
By the end
of FY 2027
9.7
8.3
Jansen potash project and
operation employees in Canada
Period
Target (%)
30 June 2024 (%)
By the end
of FY 2026
20.0
11.2
1. Point in time data at 30 June 2024.
2. Indigenous employee participation overall in Australia at 30 June 2024 was 7.5 per
cent, including Minerals Australia operations, 8.3 per cent Indigenous, and non-
operational locations, 1.9 per cent Indigenous.
For more information on our 2030 goals related to Indigenous
partnerships refer to 6.12
Racial equity program
There is no place for racism at BHP or anywhere in the community.
We recognise and acknowledge racism impacts our people’s sense of
identity, value, feelings of respect and psychological safety. We are taking
action to better understand the prevalence of racism at BHP to promote
racial awareness and equity in our workplace, and we recognise there is
more still to do.
We continue to take action to increase awareness of and promote
reporting, response and investigations in relation to racial harassment
matters. In FY2024, across our global operations and offices:
– 109 reports of racial harassment were received into BHP’s reporting
channels for raising misconduct concerns.
– 42 per cent of the reports received were logged by leaders, on behalf
of others.
– 23 investigated cases of racial harassment conduct were established
as having occurred.
– Of the 23 established cases, 21 individuals responsible had their
employment terminated (or were removed from site if a contractor)
or resigned.
– 19 reports of racial harassment were dealt with by a non-investigative
resolution pathway at the impacted person’s request.
Our racial equity working group is led by Chief Financial Officer Vandita
Pant as the executive sponsor and oversees work with a focus on
eliminating racism and striving to create an environment free from
racial discrimination. As part of its work, this group works alongside
our Indigenous engagement teams in Australia, Chile, Canada and the
United States.
Throughout FY2024, we continued to progress our work in identifying
and addressing structural barriers to equity, and in building awareness
and capability in our leaders. We also continued to improve our
grievance processes to better support people who tell us when they have
experienced racism. Our work in FY2024 included:
– commencing the refresh of a central online platform called RespectHub
including the development of a new virtual assistant RespectChat,
aimed at providing information and tools to our workforce to prevent
and respond to racism, including support options, response pathways
and reporting
– launching new chapters of EmBRace (Employees Beyond Race), our
employee resource group focused on discussions around race and
racial diversity. Local chapters have now been set up in Canada and
South Australia, in addition to existing chapters in Western Australia,
Queensland, Singapore and Manila
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Operating and Financial Review
6 Sustainability continued
– continuing our internal and external global awareness and
communication campaign, the ‘people of BHP’ series, which aims to
celebrate our diversity
– recording and launching a four-part podcast series on racial awareness,
with a series of BHP leaders in conversation with external subject
matter experts, to continue to support our people to develop a racially
aware mindset
– signing up to the RISE Project run by Diversity Council Australia,
to commence work in FY2025 to implement organisational change
interventions that will help address systemic and organisational
barriers for women from culturally and racially marginalised
(CARM) backgrounds
LGBT+ inclusion
Our LGBT+ ally employee inclusion group, Jasper, established in 2017, is a
natural extension of our inclusion and diversity aspirations. Its membership
base grew to around 2,900 at the end of FY2024, with 16 chapters globally.
In FY2024, we continued to advocate for LGBT+ inclusion and partner with
charities throughout the communities where we operate, to help our LGBT+
employees develop a strong sense of belonging inside and outside of our
offices and our mine sites.
In FY2024, BHP in Chile was recognised by the Human Rights Campaign
(HRC) with certification under the HRC Equidad CL program as one of the
‘Best Places to Work LGBTI+ 2024’. The certification in Chile is delivered
by HRC, Pride Connection and Iguales Foundation and is awarded based
on a benchmark assessment of a company’s measurable workplace
equality and inclusion efforts for the LGBTI+ community.
Disability
To foster a workplace where people with a disability can fully participate
and thrive, during FY2024 we progressed the development of our first
global Disability Action Plan, which is expected to be launched during the
first half of FY2025. The plan seeks to address three strategic pillars –
people, culture, systems – to encourage, recognise and promote an active
commitment to improving accessibility and disability inclusion.
Though we are early in this journey, recognising that everyone has unique
needs and strengths, our ambition is to address and remove barriers so
that people with a disability can equitably participate in our workforce.
Employee relations
In Australia, the Federal Government has introduced several tranches
of significant industrial relations legislative reforms. In June 2023,
this included the introduction of changes to the enterprise bargaining
framework with multi-enterprise bargaining. During FY2024, the Federal
Government enacted the ‘same job same pay’ policy, enhanced workplace
delegates’ rights and empowered the Fair Work Commission to make
workplace determinations in the case of intractable bargaining. Not all the
legislative reforms have fully commenced operation and we will continue
to monitor how they are applied to further our assessment of impacts
on BHP and our contracting partners, including the potential to increase
labour costs.
In Chile, the 40-hour week regulation was enacted in April 2023 and
requires a gradual implementation over the next five-year period to move
from 45 to 40 working hours per week. During FY2024, implementation
commenced for the collective agreements that were completed, which
now include mandatory shift reductions to 42-hour weeks in April 2026
and 40-hour weeks by April 2028. We continue navigating and monitoring
progress on a number of legal developments that may have implications
for employee relations in Chile, for example, pension reform and branch
negotiation regulation.
During FY2024, Minerals Australia participated in 11 collective bargaining
processes, with seven enterprise agreements completed (with 23 presently
in operation) and four subject to ongoing negotiations as at 30 June
2024. In Minerals Australia, there was one round of collective bargaining
where protected industrial action occurred during FY2024 (BMACo
OCO Enterprise).
Minerals Americas participated in four collective bargaining processes
during FY2024, with three completed prior to 30 June 2024 and one
concluded subsequent to 30 June 2024. No protected industrial action
occurred during FY2024 at our Minerals Americas operations in Chile.
Payroll review
Review of employee allowances and entitlements
In FY2023, we identified and disclosed two issues with certain allowances
and entitlements affecting some current and former employees in Australia.
We self-reported these issues to Australia’s Fair Work Ombudsman (FWO)
and engaged Protiviti, a global assurance firm, to undertake a review of our
payroll systems. We are sorry that this has happened and we are working
to make this right.
We continue to progress historical remediation of both issues. We have
a dedicated hotline and secure online portal in place to support impacted
current and former employees and facilitate remediation payments.
We encourage any former employees who think they may be impacted by
these issues to contact us via the hotline or portal.
Refer to our website bhp.com/payroll-review
The first issue involves certain rostered employees having leave incorrectly
deducted on public holidays. OZ Minerals was affected by a similar issue
before being acquired by BHP in May 2023. At the end of July 2024,
we had identified approximately 35,500 current and former employees
who are affected by this issue, dating back to 2010. Progress on
remediation includes:
– recrediting leave hours to approximately 19,000 current employees,
including employees who had been affected by a similar leave deduction
issue at OZ Minerals, before it was acquired by BHP in May 2023
– payments made to approximately 7,500 former employees impacted by
this issue, including those who had been affected during a prior period
of employment at OZ Minerals
– ongoing endeavours to connect with approximately 9,000 former
employees who we have identified as eligible for a payment but have not
yet been able to locate with the contact information we have
We aim to complete the majority of public holiday leave deduction
payments by the end of FY2025.
The second issue involves current and former employees at Port Hedland
in Western Australia Iron Ore (WAIO) who are entitled to additional
allowances due to an error with their employing entity in their employment
documentation. Following detailed analysis, we have identified
approximately 230 current and former employees affected by this issue,
dating back to 2013. We are continuing to pay additional allowances to
affected current employees. We are also progressing payments to affected
current and former employees for historical impacts.
Based on the currently available information, the cost of remediating
the leave issue and the employing entity issue, incorporating on-costs,
including associated superannuation and interest payments (BHP share),
remains in line with the previously recognised US$280 million pre-tax, as
reflected in the Group’s FY2023 financial results.
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BHP Annual Report 2024
Improving our payroll systems and processes
In FY2023 we engaged Protiviti to conduct a review of BHP’s payroll
systems and framework, including governance, processes, controls and
systems. Protiviti’s review is ongoing. We are progressing a range of work
to improve our global payroll systems and processes, including embedding
stronger governance, controls and processes and continuing to invest
in the right capabilities to meet the needs of our broad operations and
workforce into the future. We expect this work to continue over the next
few years.
We will continue to engage with the FWO and other relevant government
agencies as we progress this work.
The Board and CEO have taken these issues seriously and a range of
consequences have been implemented for employees in connection
with these issues. Specifically, the Board has determined that the CEO’s
FY2024 CDP outcome will include a 4.3 percentage point reduction to
reflect his ultimate accountability for BHP’s payroll systems. This CDP
reduction for the CEO in FY2024 is US$185,000 and is equivalent to
25 per cent of the CEO’s target annual short term incentive pro-rated
for the portion of the relevant period that he was CEO. For others with
accountability for BHP’s payroll issues (including current and prior
ELT members) there have been reductions determined in the variable
remuneration outcomes ranging between 25 per cent to 100 per cent of
relevant annual target variable pay.
Other consequences have ranged from letters of warning, remuneration
consequences and termination of employment.
Further detail is provided in the Remuneration Report.
Sexual harassment
The safety of our employees and contractors is paramount. Our priority
is to ensure our workplaces are safe and inclusive for all and to enact our
culture of care. This includes the elimination of sexual harassment, which
we recognise is unequivocally unacceptable. We encourage our people
to be active bystanders through education and leadership role modelling
and to report incidents so we can provide appropriate support and more
effectively address and eliminate sexual harassment at BHP.
In FY2024, BHP’s strategy to eliminate sexual harassment was
underpinned by the Australian Human Rights Commission Guidelines for
Complying with the Positive Duty under the Sex Discrimination Act 1984
(Cth). Our strategy was also informed by external experts, such as Kristin
Hilton, Kate Jenkins AO along with Queensland University of Technology.
The strategy seeks to prevent sexual harassment by addressing the drivers
and risk factors and enhancing our response to incidents, early intervention
and taking a person-centred response by increasing support and agency
for impacted persons. We acknowledge how sexual harassment interacts or
combines with other psychosocial hazards and we have sought to address
this in the way we approach prevention through holistic risk management.
Risk management
Sexual harassment has been defined as a material health and safety risk at
BHP since CY2018. Our risk management approach includes conducting risk
assessments to identify scenarios in which sexual or gendered harassment
may arise, their potential causes and the controls we can implement to
prevent and reduce harm. This recognises the high intersectionality with other
psychosocial risks, which can increase the likelihood of sexual harassment
occurring and the severity of harm it can cause. We acknowledge there
are factors that contribute to the likelihood of workplace sexual harassment
that are more pronounced in the mining industry. This includes isolated or
remote working locations, a historically male-dominated workforce and
accommodation villages, roles and equipment design as well as factors that
are common across all industries and workplaces.
Our FY2024 focus was on implementing additional prevention controls
informed by our data and organisational learnings across all assets and
offices, including review and recommendations from third-party experts.
Our sexual harassment prevention controls are associated with further
education and maintaining respectful behaviours; leadership and culture;
recruitment processes; security measures at accommodation villages;
contractor and third-party engagement; data transparency and action;
person-centred care for impacted persons; accessible confidential reporting;
trauma-informed response and investigations, including multiple resolution
options and pathways; and appropriate and proportionate disciplinary action.
Culture, knowledge and leadership
We are committed to fostering a positive culture that is safe, respectful and
inclusive for all workers (employees and contractors) and supports gender
equality and diversity at all levels and across all areas. Gender balance is a
key protective factor for sexual harassment prevention and BHP aspires to
have a gender-balanced employee workforce by end of CY2025.
In FY2024, we continued to engage and empower our entire workforce to take
action as active bystanders by enhancing their capabilities to identify and call
out disrespectful behaviour through scenario-based learning. BHP strives to
ensure leaders understand their obligations to prevent sexual harassment and
are visibly committed to safe, respectful and inclusive workplaces through
setting clear expectations and role modelling respectful behaviours.
Support and reporting
We encourage our workforce to report any concerns relating to potential
sexual harassment, including by providing centralised and confidential
reporting tools and mandatory reporting requirements for line leaders.
Impacted persons are offered a range of support options throughout and
beyond the process to resolution.
Investigations of reports of sexual harassment are conducted by our
specialised Response and Investigations team, which is independent from
our other business units. This team includes experts trained in a person-
centred, trauma-informed approach to help place the impacted person
at the centre of decisions made during the investigation process and to
minimise the risk of further harm to that individual.
Alternatively, resolution pathways can be used in certain cases.
This process only occurs where the resolution pathway is proportionate
to the nature of the conduct and with the agreement of the impacted
person. The resolution pathways include supported conversations with
respondents, additional training, monitoring or awareness raising on BHP’s
expectations of respectful behaviours in the workplace. We continue to
monitor and review the use of our resolution pathways to assess whether
they are meeting the needs of impacted people and to improve reporting to
support organisational lessons learned.
Measuring
We measure our progress against our initiatives and key metrics for sexual
harassment prevention and response, such as training completion, risk
management, control implementation and effectiveness, engagement
results and misconduct reporting data, and are committed to continually
improving our approach. De-identified information and trend analysis data
on the number of complaints, nature of complaints, resolution pathways,
outcomes and timelines are provided to senior leadership and the Board to
raise awareness and support continuous improvement of how we prevent
and mitigate the impacts of sexual harassment at BHP.
For more information on how we are improving our approach
to the prevention of and response to sexual harassment refer to
bhp.com/sustainability/safety‑health/sexual‑harassment
Reports of sexual harassment
There were 417 reports of sexual harassment in FY2024. These behaviours
are unacceptable and we are working to eliminate them at BHP by increasing
awareness and promoting reporting, response and investigations in relation
to these matters. Since October 2020, BHP managers and leaders have
been required to enter any misconduct concerns raised directly with them
into BHP’s misconduct reporting channels1 (with the impacted person
remaining anonymous if requested). In FY2024, 42 per cent of sexual
harassment reports received into BHP’s misconduct reporting channels
were logged by managers or leaders on behalf of their direct reports.
During FY2024, across BHP’s global operations (including off site) and
offices, 100 investigated cases of sexual harassment2 conduct were
established as having occurred through an investigation.3
Of the 100 established cases:
– 1 involved a sexual assault
– 22 involved sexualised and indecent touching
– 32 involved sexually aggressive comments, stalking, grooming or
image‑based harassment
– 45 involved other forms of sexual harassment, including sexualised
conversations or jokes
1. BHP’s channels to raise misconduct concerns comprise an online portal and 24-hour multilingual call service. Reporting channels are confidential and accessible to all, including external
partners and stakeholders and the public, to report conduct that may be unethical, illegal or inconsistent with Our Code of Conduct.
2. Sexual harassment is, as defined in the Sex Discrimination Act 1984 (Cth), an unwelcome sexual advance, unwelcome request for sexual favours or other unwelcome conduct of a sexual
nature, in circumstances where a reasonable person would have anticipated the possibility that the person harassed would be offended, humiliated and/or intimidated. Sexual harassment
encompasses a range of conduct, including displaying sexually graphic images, sexually suggestive comments, suggestive or inappropriate looks, gestures or staring, non‑consensual
touching or acts of a sexual nature and sexual assault. We note the definition of sexual harassment may vary in different jurisdictions.
3. The calculation is based on reports closed in FY2024, containing one or more established allegations. Not all reports resulted in a finding. This can occur if there is insufficient information,
the respondent is not able to be identified or was previously terminated, or the impacted person did not wish to proceed. This figure includes cases opened in FY2024 and prior to FY2024
that were closed during the reporting period. When referring to cases closed during FY2024 this excludes cases that were still open at the end of the reporting period.
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Operating and Financial Review
6 Sustainability continued
– 103 individuals responsible had their employment terminated (or were
removed from site if a contractor) or resigned
In addition to the matters listed above, in FY2024 60 reports of sexual
harassment were dealt with by way of non-investigative resolution
pathways, instead of an investigation being conducted. In addition
to non‑investigative resolution pathways, there are cases of sexual
harassment that cannot be investigated due to insufficient information or
the wishes of the impacted person. Examples include anonymous reports
and non-participation of the impacted person. However, all cases are
assessed for safety and impacts as part of preliminary investigative actions
and all participants (if identified) are offered support irrespective of whether
the matter can be formally investigated.
For more information on how we are improving our approach
to the prevention, response, support and measuring of sexual
harassment refer to bhp.com/sustainability/safety‑health/
sexual‑harassment
6.7 Health
We set mandatory minimum standards to identify, assess and manage
health risks and their potential impacts, and monitor the health of our
employees and contractors.
Occupational exposures
BHP follows the hierarchy of controls to reduce occupational exposures to
as low as reasonably practicable. Our mandatory minimum performance
requirements for risk management and our Risk Framework support the
identification and management of occupational exposures. Where there is
a potential for our employees and contractors to be exposed to chemical
and physical hazards in workplace atmospheres, we implement controls
intended to prevent, minimise, and/or mitigate the likelihood and severity
of potential associated health impacts. These actions may include the use
of respiratory protective equipment until appropriate, higher-order controls
have been identified, implemented and verified to consistently reduce
exposure below occupational exposure limits. Occupational exposure limits
indicate the level of permissible exposure for a length of time (usually eight
hours) to a chemical or physical hazard that is not likely to affect the health
of a worker. Occupational exposure limits for our most material exposures
are set according to the latest scientific evidence.
Exposure data in this Report in all cases is presented without considering
protection from the use of personal protective equipment where required,
as outlined in our Health Global Standard.
In FY2024, for our most material exposures of diesel particulate matter
(DPM) and respirable silica, we had a 46 per cent reduction in the
number of employees and contractors potentially exposed compared
to our FY2023 exposure profile. More specifically, we have recorded a
23 per cent reduction in the number of employees and contractors with
potential exposure to DPM and 54 per cent reduction in the number of
employees and contractors potentially exposed to respirable crystalline
silica. When exposure reduction is considered over the last six years, we
have achieved a 78 per cent reduction to our most material exposures.
We continue to have zero employees and contractors routinely exposed
to coal mine dust above the occupational exposure limit. We are currently
undertaking a baseline exposure monitoring program at the former
OZ Minerals Australian assets and will provide a comparable exposure
profile in FY2025.
Exposure reduction trend over time1,2,3,4
1,200
400
800
1,600
2,000
0
FY2020
FY2021
FY2022
FY2023
FY2024
Coal mine dust exposures
Silica exposures
DPM (Diesel) exposures
We are committed to having no AL4 (fatalities and life-threatening
illnesses) events and a reduction in life-altering injuries and illnesses.
Due to the latency between initial exposure and diagnosis of disease
for our most material airborne contaminant exposures, we must
demonstrate ongoing exposure reduction and effectiveness of controls,
where exposures may remain elevated. In FY2023, reduction plans
were developed at the asset level across operations for implementation
with priority afforded to the asset’s most material exposures.
The implementation of these exposure reduction plans commenced
in FY2024 and will continue to be a focus in FY2025.
Welding fume exposure control has been a particular focus for several
assets across BHP throughout FY2024. Additional controls, including
on-torch extraction systems and portable local exhaust ventilation systems
have been implemented at Olympic Dam. Control effectiveness testing
has been carried out by the local Occupational Hygiene team, indicating
a 50 per cent reduction in welding fume exposure since September 2022.
Due to the success of this project, additional similar controls are now being
trialled in some of our other operations, including WAIO, at Mining Area C,
Jimblebar and Mt Whaleback.
Occupational exposure hazard awareness and training is provided
at induction and periodically, including during fit testing for hearing
protection and respiratory protective devices. Wherever workers take
part in occupational exposure assessment programs, they receive
written feedback on their results and anonymised data is provided to
line management.
We have implemented real-time monitoring at several of our Minerals
Australia and Minerals Americas operated assets to support further
exposure reduction of silica and DPM. Fixed-position monitors identify
dusty conditions in real time enabling immediate controls, such as
increased ventilation or water sprays, to be deployed. Data from portable
monitors is made available at the end of shifts, rather than when results of
samples sent to the laboratory for analysis become available. This enables
prompt action to be taken if real-time monitoring demonstrates an
increasing trend in potential exposure.
Occupational illness
The reported occurrence of occupational illness for employees in FY2024
was 270, which was 3.77 per million hours worked. This represented a
13 per cent decrease in incidence compared with FY2023, which was
4.35 per million hours worked. For our contractor workforce, the reported
occupational illness in FY2024 was 216, which was 1.79 per million hours
worked, representing a 10 per cent decrease in incidence compared with
FY2023, which was 1.99 per million hours worked.
As noted in our FY2024 performance against our social value scorecard
provided in OFR 6.5, BHP is committed to reducing life-altering injury or
illness and we continue to track the number of life-altering injuries and
illnesses internally. Since we commenced measuring our life altering
injury and illness metric, we have learned that a longer measurement
period is required for analysis to allow for the classification of more
chronic conditions. Therefore, it will not be reported on in this Report or
included as a key metric in the social value scorecard in FY2025. The two
main illness types that influence the number of life-altering illnesses are
musculoskeletal cases and noise-induced hearing loss cases, both of
which we continue to report on annually. Information relating to injuries
can be found in section 6.1.
Musculoskeletal illness is the predominant occupational illness category for
BHP employees and contractors, representing 68 per cent of our workforce
illnesses in FY2024. These conditions include damage to bones, joints,
ligaments, tendons and soft tissues, caused by repetitive heavy work,
muscular strain, or maintaining poor postures for extended periods of time.
Noise-induced hearing loss represents 8 per cent of occupational illnesses
in FY2024. Employees and contractors exposed to noise levels above
the defined workplace exposure limits in our Health Global Standard
participate in hearing conservation programs, which include a periodic
hearing test and hearing protection fit testing. We have established design
recommendations that seek to eliminate or reduce high or prolonged noise
exposures by focusing on noise source.
1. Data excludes divested operations as follows: BHP Mitsui Coal (sale completed on 3 May
2022) and BHP’s oil and gas portfolio (merger with Woodside completed on 1 June 2022).
Prior years’ data (FY2020 to FY2022) has been re-stated to exclude these operations.
Divested BMA assets, Daunia and Blackwater (divested on 2 April 2024) are included in
FY2024 data up until the date of divestment.
2. Occupational exposures data excludes Projects.
3. Occupational exposure data excludes assets acquired as part of the OZ Minerals
acquisition. We are currently undertaking baselining of exposure data to provide
comparable exposure profile in FY2025.
4. As of FY2021, the occupational exposure limit for Coal was reduced to 1.5 mg/m3
compared to 2.0mg/m3 in previous years.
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BHP Annual Report 2024
Heat stress contributed to 4 per cent of our reported occupational illnesses
in FY2024. Elevated temperatures and strenuous activity place some of
our workforce at an increased risk of heat illness. High-risk work groups
are identified, and a range of controls are in place to manage heat stress.
In FY2024, a new heat awareness online learning module was released for
workers across Minerals Australia to provide workers with the knowledge
to identify signs of heat illness and how to manage the risks associated
with working in the heat. Hydration testing has also been made available
at several operations with high heat risk.
Recognising climate change may exacerbate existing temperature
related risks, in FY2024 we piloted an approach at Olympic Dam to
better understand and quantify the potential impact of heat stress on
our workforce under different future climate scenarios. Modelling was
based on climate data and temperatures within the underground mine
to determine potential productivity and health impacts caused by heat
stress under different scenarios. The findings of this assessment will
assist in the identification of additional controls that may be required
to ensure our workforce can perform their roles safely under changing
climatic conditions.
Coal mine dust lung disease
In FY2024, 21 cases of coal mine dust lung disease (CMDLD)1 were
reported to the Workers’ Compensation Regulatory Services.2 Of the
13 accepted claims in FY2024, two were current BHP employees, while
the remaining 11 were former employees. For cases involving current
employees, we offer counselling, medical support, and redeployment options
where relevant. Former employees are eligible for workers’ compensation
insurance and associated care is managed externally to BHP.
We have controls in place across all our relevant operated assets with the
goal of ensuring none of our employees and contractors are exposed to
respirable CMD above the occupational exposure limit (OEL). We continue
to identify and progress projects, such as real-time dust monitoring, to
facilitate our recognition and action when the working environment may
present a health hazard and seek to implement high order controls such as
engineering controls to eliminate or reduce exposures rather than continued
reliance on lower order controls such as respiratory protection. We have
observed consistent control of CMD exposures with no employees or
contractors potentially exposed to CMD above the OEL since FY2021.
Physical and mental health
The physical and psychological health and wellbeing of our workforce
is of paramount importance as we continue to work towards enhancing
the inclusivity and future-readiness of our employees and contractors.
In FY2024, we continued efforts to make meaningful and positive
improvement to employee health and wellbeing by building stronger
relationships via our active collaborations with industry partners.
We engaged with initiatives such as the ‘Minding Mining Minds’ (MMM)
which aims to develop tools and evidence-based models and share
learnings across industry, the Building Safe and Respectful Workplaces
(BSRW) which aims to help eliminate disrespectful behaviour in the
resources industry including sexual harassment, bullying and racism and
we have an active partnership with the Global Business Collaboration for
better mental health.
Our focus internally has been on embedding our learnings. In FY2024,
we embedded the BSRW principles into our global onboarding. A Global
Wellness Committee was also established, bringing together asset and
corporate office Wellness Committees into a global forum to collaborate
on initiatives, implement strategic improvements and share learnings.
The Committee aims to build mental health literacy, increase awareness
and benefit overall physical and mental wellbeing, and has maintained
a strong ongoing participation in global health campaigns, such as BHP
Mental Health Month, RUOK? day and Movember.
In FY2024, the Group Health team introduced the Women Can initiative to
promote women’s physical and mental health. The Women Can initiative
ran during March, aiming to lift the profile and importance of women’s
health and wellbeing. Through prestart education packs, personal shares
and panel discussions held with senior female leaders, including our Chief
People Officer, and Group HSS Officer, BHP provided education and an
opportunity for safe and impactful conversations on the importance of
self-care, health screening, menopause and providing a safe and inclusive
workplace. During this campaign, BHP formed a formal partnership
with Menopause Friendly Australia and is working towards achieving
accreditation as a menopause friendly employer where we aim to raise
awareness, educate staff and engage in training and policy and process
change to address women’s health and menopause in the workplace.
Psychosocial risk management
We continue to integrate psychosocial hazard identification and
management into the way we work. Our employees and contractors
are encouraged to identify and call out disrespectful behaviours that
may contribute to psychological harm, including bullying and sexual
harassment, as well as other psychosocial hazards.
Our Psychosocial Risk Assessment Program was established in FY2023
and initially focused on our operated assets. In FY2024, we completed
psychosocial risk assessments across our global functions. From this work
we have developed an organisation-wide psychosocial risk profile across
five evidence-informed BHP-specific Psychosocial Hazard Domains – in
interpersonal; traumatic; physical (distance and fatigue); organisational and
job-inherent hazards. We will deploy these Hazard Domains to categorise
and rank psychosocial hazards and identify controls for our most significant
psychosocial hazards.
In FY2024, we developed and commenced the introduction of the BHP
Psychosocial Health Index, which we will complete in FY2025. This is an
assessment tool and confidential platform for employees and contractors to
provide feedback on how they experience the physical and psychological
aspects of their work environments, the social aspects of their job and the
design and management of work, together with an associated measure
of physical and mental health that helps us determine where harm may
be occurring.
As part of our Psychosocial Risk Assessment Program, we have also
expanded our support options, including providing additional pathways for
employees and contractors to seek information and support on preventing
and managing psychosocial hazards when they occur. We also expanded
and simplified our tools and guidelines in FY2024, centralising them in one
easily accessible hub and enabled ‘in the moment’ interactive support via
a new digital tool.
Support for employees affected by family and domestic violence
BHP has a Family and Domestic Violence Assistance Program, which was
updated in FY2024, that aims to provide employees with support for their
health, safety, wellbeing and independence if they are experiencing family
and domestic violence.
As part of the program, employees can access up to 10 days’ additional
paid leave if they are affected by family and domestic violence or
supporting someone who is.
Support also includes emergency accommodation, emergency financial
help and access to safety and security plans. These supports consider
safety measures, such as transport to and from work, changing location of
work, setting up new phone numbers, screening/blocking calls and emails,
and supporting access to legal advice.
6.8 Ethics and business conduct
Our conduct
Our Code of Conduct (Our Code) is designed to help us make the right
decisions every day and deliver on our purpose to bring people and
resources together to build a better world. It applies to everyone who works
for us, with us or on our behalf. To assist our employees and contractors
understand how Our Code applies, regular training is undertaken.
Breaching Our Code can result in serious consequences and depending
on the severity of the breach this could include counselling, warnings and
even termination of employment. We encourage people to speak up where
a decision or action is not in line with Our Code or Our Values.
BHP requires reports of business conduct concerns to be treated with
appropriate confidentiality and has policies in place intended to prohibit
any kind of retaliation against people who make or may make a report, or
who cooperate with an investigation. These may also include reports made
to regulators. We consider all forms of retaliation to be misconduct and
grounds for disciplinary action, up to and including termination. We have a
number of key policy and process documents to support a safe to speak up
culture, including our BHP Whistleblower Policy.
Our Code is available in five languages and accessible at
bhp.com/about/operating-ethically/our-code#/
Our BHP Whistleblower Policy sets out additional information,
including protections available to persons who make eligible disclosures
under Australian law and accessible at bhp.com/-/media/documents/
ourapproach/operatingwithintegrity/taxandtransparency/240523_
bhpwhistleblowerpolicy
1. CMDLD is the name given to the lung diseases related to exposure to coal mine dust and includes coal workers’ pneumoconiosis, silicosis, mixed dust pneumoconiosis and chronic
obstructive pulmonary disease.
2. Cases reported to Workers’ Compensation Regulatory Services are not an indication that the CMDLD was related to work. BHP evaluates each case for work-relatedness and where
identified, the case will be included in occupational illness reporting.
41
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Reports received are assessed by the Ethics and Investigations team to
determine an appropriate response, which may include an investigation
or other resolution. In assessing the appropriate response, BHP applies
a proportionate and person-centred approach to the report considering all
participants. People impacted by reports of sexual harassment and racism
are offered specialised support by the Ethics Support Service, which
enables people impacted to have input into BHP’s response. The impacted
person’s preferences as well as the type and severity of the alleged
misconduct are considered in determining the appropriate response,
which may include an investigation, training, facilitated conversations and
line leader intervention. Quarterly reporting on the most serious reports is
provided to senior leaders and the Risk and Audit Committee, which has
representation of Board members, and includes reported case metrics,
outcomes and insights. The reporting supports leadership awareness and
informs priorities for ongoing improvement. Feedback is obtained regularly
from stakeholders, including case participants, external experts and
management, to continually improve our response to reports.
In FY2024, 5,087 reports regarding business conduct were received
directly into BHP’s channels to raise misconduct concerns.¹ Out of the
total misconduct reports, 25 per cent were raised by leaders on behalf of
someone else. There continues to be a great focus on health and wellbeing
in the workplace, and we have seen a 6 per cent decrease of bullying and
harassment cases from 3,067 in FY2023 to 2,870 in FY2024.
Of the business conduct reports received, 41 per cent were made
anonymously.1 Of the total business conduct reports closed during
FY2024, 41 per cent contained one or more established allegations.2,3
Business conduct concerns raised in FY20241,4
Harassment and bullying (2,870)
56.4%
Health, safety or environment breach (640)
12.6%
Sexual harassment (417)
8.2%
Fraud (401)
7.9%
Discrimination (321)
6.3%
Cybersecurity, data privacy or
intellectual property breach (195)
3.8%
Other* (134)
2.6%
Racial harassment (109)
2.2%
* Other: This includes issues such as Retaliation for speaking up; Deficiencies in a
business conduct investigation; Failure to Report Code of Conduct Breach; Attempting
to identify an anonymous reporter; Improper political or governmental conduct;
Human rights or modern slavery; Ask a question; Trade control breach; Inappropriate
investigator conduct in business conduct investigation; Consensual relationship with
power imbalance.
Employees and contractors can raise their concerns through a number of
channels (including anonymously) or through leaders. Anyone, including
external partners, stakeholders and the public, can lodge a concern in the
form of a report, either online in our channels to raise misconduct concerns
or via the 24-hour, multilingual call service.
Anti‑corruption
We continue our commitment to contribute to the global fight against
corruption in the resources industry. Our commitment to anti‑corruption
is embodied in Our Charter and Our Code.
As part of this commitment, we prohibit authorising, offering, giving or
promising anything of value directly or indirectly to anyone to influence
them in their role, or to encourage them to perform their work disloyally
or otherwise improperly. We also prohibit facilitation payments, which
are payments to government officials for routine government actions.
Our people must take care that third parties acting on our behalf do not
violate anti‑corruption laws. Disciplinary action, including dismissal or
termination of contractual relationships, may follow from a breach of
these requirements.
To manage corruption risk, we work to achieve optimal resource allocation
to areas of our business with the highest exposure to corruption risks.
The identification, assessment and management of corruption risks
associated with growth opportunities remains a significant area of focus for
our Compliance function, via a sub-team dedicated to supporting functions
that are responsible for initiating transactions and growth opportunities in
countries with higher corruption risks.
Activities that potentially involve higher exposure to corruption risk require
review or approval by our Compliance function, as documented in our
anti‑corruption compliance framework. In FY2024, we continued conducting
monitoring focused on verifying the operation of anti-corruption controls in
relation to higher risk relationships and activities, including the provision of
community donations and sponsorships, identification and management of
corruption risks relating to government officials and community leaders in
the context of local procurement, and sole source procurement decisions.
We regularly review our anti-corruption framework for compliance with
the requirements of the US Foreign Corrupt Practices Act, the UK Bribery
Act, the Australian Criminal Code and the applicable laws and regulatory
developments of all places where we do business. These laws are
consistent with the standards of the OECD Convention on Combating
Bribery of Foreign Public Officials in International Business Transactions.
Our Compliance function is independent of our assets and regions and
reports to the Chief Legal, Governance and External Affairs Officer.
Our Chief Compliance Officer also reports quarterly to the Risk and Audit
Committee on compliance issues and meets at least annually with the Risk
and Audit Committee Chair.
The Compliance function also participates in anti-corruption risk
assessments in respect of our operated assets or functions, our interests in
non-operated assets and new business opportunities that we consider are
exposed to material anti-corruption risks. In FY2024, the function provided
input into 27 anti-corruption risk assessments.
Building employee awareness remains critical to the effective management
of corruption risk across BHP. Anti-corruption training is required to
be provided to all employees and contractors as part of mandatory
regular training on Our Code. Our Compliance function also regularly
communicates and engages with identified higher-risk roles and provides
additional risk-based anti-corruption training for employees, contractors
and employees of some of our business partners and community partners.
In FY2024, we revised our anti-corruption electronic learning module
to incorporate new scenarios designed to reinforce understanding and
support learning. The new e-learning module is expected to be made
available in early FY2025.
For more information on ethics and business conduct refer to
bhp.com/ethics
Transparency and accountability
We support initiatives by governments of the countries where we
operate to publicly disclose the content of our licences or contracts
for the development and production of minerals that form the basis of
our payments to government, as outlined in the Extractive Industries
Transparency Initiative (EITI) Standard.
Other initiatives include our work with Transparency International chapters,
representation on the Board of the EITI, financial support for and Steering
Committee membership of the Bribery Prevention Network (in Australia)
and funding of the BHP Foundation, including its Natural Resource
Governance Global Program.
We believe knowing who ultimately controls and benefits from a company
helps to reduce risk and strengthen accountability. In FY2024, we
continued our active and public support for ultimate beneficial ownership
transparency. We maintained information on how we use beneficial
ownership information as part of our anti-corruption due diligence on
investments, partners, contractors and suppliers. We also continued to
make clear via published statements, including in Our Code and web
content, that we do not partner or contract with entities that are assessed
as presenting a high corruption risk that decline to provide beneficial
ownership information as part of our due diligence process. In parallel
with these steps, we continued to publish our list of entities in which BHP
Group Limited’s effective interest is 100 per cent and certain entities in
which BHP Group Limited’s effective interest is less than 100 per cent,
including all controlled subsidiaries operating in the mining sectors, all
mining operations joint ventures generating material revenue for BHP
(and available information in relation to the other legal owners in these
joint ventures) and entities in which we hold a partial interest (with some
exclusions – refer to bhp.com/sustainability/ethics-business-conduct).
These efforts are complementary to the BHP Foundation’s partnership
with EITI and Open Ownership to support governments to transform the
availability and use of beneficial ownership data for effective governance in
the extractive sector.
6 Sustainability continued
1. This excludes reports not containing a business conduct concern and excludes reports logged by leaders on behalf of others.
2. The calculation is based on reports closed in FY2024, containing one or more established allegations. Not all reports resulted in a finding. This can occur if there is insufficient information,
the respondent is not able to be identified, was previously terminated, or the impacted person did not wish to proceed. This figure includes cases opened in FY2024 and prior to FY2024
that were closed during the reporting period. When referring to cases closed during FY2024, it excludes cases that were still open at the end of the reporting period.
3. As the established rate reflects the number of cases established out of all business conduct concerns closed during the reporting period, the parameter has been updated to better reflect
the cases that are considered business conduct concerns at closure (i.e. the investigation category). Additionally, calculating the established rate based on investigation category provides
a more stable measure since case attributes can vary whilst the investigation is underway and unlikely to change once the investigation has concluded and case is closed.
4. FY2024 data includes all former OZ Minerals assets in Australia and Brazil.
42
BHP Annual Report 2024
6.9 Climate change
We believe the warming of the climate is unequivocal, human influence is
clear and physical climate-related impacts are unavoidable. We recognise
the role we play in supporting the net zero transition the world must make.
For our full position on climate change refer to bhp.com/climate
Climate‑related governance
Climate change and climate transition planning is a material governance and
strategic issue for our Board and management. Additional details concerning
our climate-related governance for FY2024 have been made in our Climate
Transition Action Plan (CTAP 2024).
Our CTAP 2024 was approved by the Board, with its development and
ongoing implementation governed by the Board and its Committees
and management.
Our Board, Committees and management structure and roles as
they apply to climate-related matters, the skills and experience
of the Board and management and remuneration incentives for
management are disclosed in Enabling delivery – Our governance on
page 50 and Enabling delivery – Our management, remuneration and
organisational capability on page 51 of our CTAP 2024 available at
bhp.com/CTAP2024
For information on the role and composition of the Board and its
Committees and each Committee’s key activities in FY2024, including
in relation to climate-related matters, as well as the Board skills matrix,
the process for Board evaluation and director training, induction and
development, refer to our Corporate Governance Statement 3, 4 and
5 on pages 99 to 106, later in this Report
Our disclosures and approach to reporting
Climate Transition Action Plan
In August 2024, we published our second Climate Transition Action
Plan, which sets out our strategic approach and plans for achieving our
operational and value chain greenhouse gas (GHG) emissions targets
and goals, as well as our response to climate-related risks (threats and
opportunities). This follows on from our first CTAP, which we published
in CY2021.
Our CTAP 2024 is primarily a forward-looking plan and set of actions,
while this Report discloses in:
– This OFR 6.9: Progress in FY2024 against our climate change strategy,
GHG emissions targets and goals, commitments and key metrics
– Governance: An overview of governance structures, activities and
remuneration incentives, including those that relate to our climate
change strategy (additional detail concerning our governance around
climate-related risks is set out in our CTAP 2024)
– Financial Statements: Potential financial statement impacts, where
material or relevant, of the assumptions, plans and actions of our climate
change strategy and the consideration of climate-related risks in the
assessment of significant areas of judgement and estimation required
for the presentation of the financial statements
Our CTAP 2024 is available at bhp.com/CTAP2024
Given the global nature of our business, customers and supply chain,
the development of our CTAP 2024 considered the goals of the Paris
Agreement and the commitments and policy settings of relevant key
jurisdictions at this time. Our global headquarters are located in Australia,
which has a Long‑Term Emissions Reduction Plan and legislated national
targets to reduce Australia’s net GHG emissions to 43 per cent below
CY2005 levels by CY2030, and to achieve net zero GHG emissions
by CY2050.
We continue to monitor and take into consideration the evolving policy and
regulatory landscape applicable to our operations as part of the periodic
review by management and the Board of the appropriateness of and our
progress towards our GHG emissions targets and goals.
Navigating our disclosures
TCFD recommended disclosures
Our response
This Report:
Operating and
Financial Review
This Report:
Governance
This Report:
Financial
Statements
Climate
Transition
Action Plan 2024
Governance: Disclose the organisation’s governance around climate‑related risks and opportunities.
a) Describe the board’s oversight of climate‑related risks and opportunities
Page 43
Pages 98 to 111
–
Page 50
b) Describe management’s role in assessing and managing climate‑related
risks and opportunities
–
Pages 107 to 111
–
Page 51
Strategy: Disclose the actual and potential impacts of climate‑related risks and opportunities on the organisation’s businesses, strategy,
and financial planning where such information is material.
a) Describe the climate‑related risks and opportunities the organisation has
identified over the short, medium, and long term
Pages 49 to 51
Pages 74 to 82
–
Pages
162 to 165
Pages 10 to 30
Page 52
b) Describe the impact of climate‑related risks and opportunities on the
organisation’s businesses, strategy, and financial planning
Pages 43 to 59
Pages 74 to 82
–
Pages
162 to 165
Pages 10 to 54
c) Describe the resilience of the organisation’s strategy, taking into consideration
different climate‑related scenarios, including a 2°C or lower scenario
Pages 50 to 51
–
Pages
162 to 165
Pages 31 to 38
Pages 42 to 45
Pages 61 and 62
Risk Management: Disclose how the organisation identifies, assesses, and manages climate‑related risks.
a) Describe the organisation’s processes for identifying and
assessing climate‑related risks
Pages 48 and 49
Pages 73 to 74
–
–
Page 52
b) Describe the organisation’s processes for managing climate‑related risks
Pages 48 to 51
Pages 73 to 74
–
–
Page 52
c) Describe how processes for identifying, assessing, and managing climate-
related risks are integrated into the organisation’s overall risk management
Pages 73 to 74
–
–
Page 52
Metrics and Targets: Disclose the metrics and targets used to assess and manage relevant climate‑related risks and opportunities where such
information is material.
a) Disclose the metrics used by the organisation to assess climate‑related risks
and opportunities in line with its strategy and risk management process
Pages 52 to 59
Pages
116 to 125
–
Page 51
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 GHG emissions,
and the related risks
Pages 52 to 59
–
–
Pages 10 to 30
c) Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets
Pages 52 to 59
–
–
Pages 10 to 30
Pages 57 to 60
43
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
TCFD‑consistent disclosures
In accordance with the UK Listing Rules as set by the UK Financial
Conduct Authority, we believe our disclosures are consistent with the four
recommendations and 11 recommended disclosures of the Task Force on
Climate-related Financial Disclosures (TCFD).
The ‘Navigating our disclosures’ table on the previous page sets
out the TCFD’s recommended disclosures, grouped under the four
recommendations and where our aligned disclosures can be found
within this Report and our CTAP 2024.
Because our CTAP 2024 is our primary publication this year for
disclosing significant detail on our climate change plan for the climate
transition and our climate change strategy, we have included certain
TCFD‑recommended disclosures in our CTAP 2024 to enable them to be
read in that broader context. We do not repeat them in this Report to avoid
duplication. TCFD recommended disclosures for FY2024 that have been
published in our CTAP 2024 are:
– TCFD Strategy recommended disclosures (a) and (b): Our detailed
strategy and areas of focus for reducing operational GHG emissions
(Scopes 1 and 2 emissions from our operated assets), including our
industry collaboration and our material sources of operational GHG
emissions (i.e. electricity, diesel and fugitive methane emissions).
These disclosures have been published in Operational GHG
emissions on pages 10 to 18 in our CTAP 2024 available at
bhp.com/CTAP2024
– TCFD Strategy recommended disclosures (a) and (b): Our detailed
strategy for supporting the reduction of value chain GHG emissions
(Scope 3 emissions).
These disclosures have been published in Value chain GHG
emissions on pages 19 to 30 in our CTAP 2024 available at
bhp.com/CTAP2024
– TCFD Strategy recommended disclosures (b) and (c): Detailed
information on our strategy for our commodity and asset portfolio, as
well as the resilience of our strategy and portfolio in our 1.5°C scenario.
These disclosures have been published in Portfolio on pages 31 to
38, Additional information – Our 1.5°C scenario assumptions and
the signposts we monitor on page 61 and Additional information
– Our 1.5°C scenario compared to benchmarks on page 62 in our
CTAP 2024 available at bhp.com/CTAP2024
– TCFD Governance recommended disclosures (a) and (b): Detailed
information on our Board, Committees and management structure and
roles as they apply to climate-related matters, the skills and experience of
Board and management.
– TCFD Metrics and Targets recommended disclosure (a): The
climate‑related remuneration incentives for management, separate
to the Remuneration Report in this Report.
These disclosures have been published in Enabling delivery – Our
governance on page 50 and Enabling delivery – Our management,
remuneration and organisational capability on page 51 in our CTAP
2024 available at bhp.com/CTAP2024
For more information on our alignment with other sustainability and ESG
standards, including the Climate Action 100+ Net Zero Company
Benchmark and GHG Protocol series of standards, refer to our
BHP ESG Standards and Databook 2024 available at bhp.com/climate
Operational GHG emissions (Scopes 1 and 2
emissions from our operated assets)
Performance and highlights
– We remain on track to meet our medium-term target to reduce
operational GHG emissions (Scopes 1 and 2 emissions from our
operated assets) by at least 30 per cent by FY2030 from an FY2020
baseline. For FY2024, despite an increase from FY2023 (explained
later), our operational GHG emissions were 32 per cent lower against our
FY2020 baseline (baseline year and performance data adjusted; for more
information on the adjustments we make, refer to Climate-related metrics,
targets and goals on pages 52 to 59, later in this OFR 6.9). We have not
used carbon credits or applied offsetting in our assessment that we are
on track to meet our medium-term target.
– We achieved 100 per cent renewable electricity use at our Chilean
operations in CY2023 and are on track to achieve the same in CY2024.
In FY2024, we started our market engagement to deliver up to
500 megawatts (MW) of off-grid renewable electricity generation and
battery storage for WAIO.
– We announced our collaboration with Rio Tinto to share outcomes of the
first stage of CAT 793 and Komatsu 930 battery-electric haul truck trials
planned to occur at mine sites in Western Australia’s Pilbara region in
CY2024 and CY2026 respectively.
– We met our FY2024 social value scorecard Decarbonisation pillar
milestone to ‘commence the construction of a boiler diesel displacement
solution’ by progressing our Escondida boiler project through to
execution, with expected operations starting in CY2025. Once this
project is operational, and together with its counterpart project at
Spence, it is expected to displace up to 30 million litres of diesel per year
by using a zero GHG emissions heat source (combining a thermo-solar
and electric boiler solution).
– We partially met our FY2024 social value scorecard Decarbonisation
pillar milestone to ‘deliver equipment for proof-of-concept trials for
electrified rail and excavator solutions’ by starting our operational trial of
a Liebherr R9400 electric excavator at WAIO, the first in BHP’s fleet and
one of the first to be trialled in Australia. We also completed the design
of electrical infrastructure for our future electric truck trials and started
installation of charging infrastructure for our future electric locomotive
trials. These are important activities to enable our progress towards
diesel displacement and the electrification of vehicles and mining
equipment. We rated the milestone as only partially met due to delays.
We anticipate we will fully meet this milestone in FY2025 and do not
expect this to affect achievement of our medium-term target.
Operational GHG emissions (Scopes 1 and 2 emissions
from our operated assets)
Medium‑term
target:
Reduce operational GHG emissions (Scopes 1 and 2
emissions from our operated assets) by at least 30 per cent
by FY2030 from an FY2020 baseline.
Long-term
net zero goal:
Achieve net zero operational GHG emissions (Scopes 1
and 2 emissions from our operated assets) by CY2050.
Performance, adjusted
5.0
10.0
15.0
20.0
0
MtCO2-e
13.6
9.2
FY2020
FY2021
FY2022
FY2023
FY2024
Value chain GHG emissions (Scope 3 emissions) – Overall
Long‑term
net zero goal:
We have a long-term goal of net zero Scope 3 GHG
emissions by CY2050. Achievement of this goal is uncertain,
particularly given the challenges of a net zero pathway for
our customers in steelmaking, and we cannot ensure the
outcome alone.
Performance, adjusted
125.0
250.0
375.0
500.0
0
MtCO2-e
FY2020
FY2021
FY2022
FY2023
FY2024
352.0
377.0
For more information on the essential definitions, assumptions, GHG emissions boundaries, measurement approach and adjustments for this
medium-term target and these long-term net zero goals, including the potential use of offsetting, refer to Climate-related metrics, targets and goals on
pages 52 to 59, later in this OFR 6.9
44
BHP Annual Report 2024
We have previously disclosed that our progress towards our medium-term
target and long-term net zero goal to reduce operational GHG emissions is
expected to be non-linear. Our view is that our pathway in coming years is
complicated by a number of factors, including projected organic changes
(i.e. arising from our existing business) in our production of commodities
and the current lack of available technology solutions to support more rapid
GHG emission reductions (particularly for diesel displacement). Our plan
to achieve our medium-term target accounts for these factors and we will
continue to look for opportunities to help see the emerging technologies we
need to reach technological readiness and commercial viability, to support
progress towards our long-term net zero goal.
For FY2024, our total operational GHG emissions (unadjusted inventory)
increased by 2 per cent from FY2023 and our total operational energy
consumption increased by 4 per cent from FY2023. This was largely driven
by an increase in electricity and distillate/gasoline consumption from
former OZ Minerals sites in Copper South Australia, where we accounted
for a full 12 months in FY2024, compared to only two months in FY2023
(as we acquired OZ Minerals on 2 May 2023). There may be differences
between our annual total operational GHG emissions inventory (unadjusted
inventory) and the GHG emissions we measure for the baseline year,
reference year and performance for our operational GHG emissions
medium-term target and long-term net zero goal, resulting from different
approaches to the treatment of divestments, acquisitions and methodology
changes based on the purpose for which the data is being reported.
For more information on the calculation of our annual total operational
GHG emissions data and total operational energy consumption data,
refer to Climate-related metrics, targets and goals on pages 52 to 59,
later in this OFR 6.9
For CY2023, the GHG emissions intensity of our production of our
commodities is estimated to rank in the first quartile for our iron ore,
copper and steelmaking coal mines, and the second quartile for our nickel
operations (ahead of all Indonesian-based operations) of global mining
operations analysed by CRU. This analysis is based on CY2023 data from
CRU (as CRU data is prepared on a calendar year basis), and includes
CRU’s assumptions and estimates of BHP’s operations. We transitioned
to using CRU (rather than Skarn Associates) for this analysis in FY2024 as
part of an annual vendor assessment and selection process.
For more information on how GHG emissions intensity of our production
of our commodities has been calculated and compared, refer to the BHP
ESG Standards and Databook 2024 available at bhp.com/climate
Pathway to our medium-term target and long-term
net zero goal
The projected pathway to our medium-term target, as shown in the chart
below, is expected to set us up well for greater GHG emission reductions
after FY2030 through the following actions:
– procuring renewable and other low to zero GHG emissions electricity
– working to minimise the increase in operational GHG emissions from
organic production growth and new operational sites
– accelerating development and reducing risk exposure to diesel
displacement solutions through testing and sequenced deployment
– pursuing solutions to abate fugitive methane emissions
Our plan is to meet our medium-term target through structural GHG
emissions abatement instead of offsetting. We will not use regulatory
carbon credits (i.e. those used for compliance under regulatory schemes
such as the Safeguard Mechanism in Australia) to meet our medium-term
target. In addition, in our projected pathway, we have not planned to use
voluntary carbon credits to meet our medium-term target. However if
there is an unanticipated shortfall in our pathway, we may need to use
voluntary carbon credits1 that meet our integrity standards to close the
performance gap.
Our potential pathway to our operational GHG emissions long-term net zero
goal beyond FY2030, as disclosed in our CTAP 2024, requires us to:
– displace diesel via electric mining equipment/vehicles (e.g. haul trucks,
locomotives, excavators, shovels)
– procure additional renewable and other low to zero GHG emissions
electricity to support the increased amount of electricity required for
electric mining equipment/vehicles
– minimise fugitive methane emissions to the greatest extent technically
and commercially viable, through enhanced application of existing or
emerging technology
For our potential pathway to our operational GHG emissions
long-term net zero goal refer to the CTAP 2024 available at
bhp.com/CTAP2024
Projected pathway to our medium-term target for operational GHG emissions (Scopes 1 and 2 emissions from our operated assets)2
Operational GHG emissions (million tonnes of carbon dioxide equivalent (MtCO2-e)) (adjusted for acquisitions, divestments and methodology changes)
12
4
8
0
16
–32%
Diesel
Electricity
Organic growth
Range of uncertainty
Other sources
FY2020
Electricity
Other
changes
FY2024
Organic
growth
Electricity
Diesel
Other
sources
FY2030
1. We define regulatory carbon credits to mean carbon credits used to offset GHG emissions for regulatory compliance in our operational locations (such as the Safeguard Mechanism
in Australia). We define voluntary carbon credits to mean carbon credits generated through projects that reduce or remove GHG emissions outside the scope of regulatory compliance
(including Australian Carbon Credit Units not used for regulatory compliance).
2. Future GHG emission estimates are based on current annual business plans. Includes former OZ Minerals Australian assets and plans. Excludes Blackwater and Daunia (divested on
2 April 2024). FY2020 to FY2024 GHG emissions data has been adjusted for acquisitions, divestments and methodology changes. ‘Other changes’ refers to changes in GHG emissions
from energy consumption other than electricity. ‘Organic growth’ represents increase in GHG emissions associated with planned activity and growth at our operations. ‘Other’ refers to
GHG emissions from fugitive CO2 and methane emissions, natural gas, coal and coke, fuel oil, liquefied petroleum gas or other sources. GHG emissions calculation methodology changes
may affect the information presented in this chart. ‘Range of uncertainty’ refers to higher risk options currently identified that may enable faster or more substantive decarbonisation, but
which currently have a relatively low technology readiness level or are not yet commercially viable.
45
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
Many of the technologies we will need to achieve our long-term net zero
goal for our operational GHG emissions are not yet ready to be deployed.
A pathway between our medium-term target in FY2030 and our long-term
net zero goal in CY2050 will require a significant technological step change
in safety, reliability, productivity, availability and economics.
In the BHP Annual Report 2023, we published our operational GHG
emissions projected pathway to FY2030 and potential pathway between
FY2031 and CY2050. Incorporating the outcomes of our most recent
annual planning process, our operational GHG emissions projected (to
FY2030) and potential (beyond FY2030) pathways to our long-term net
zero goal has been updated for FY2024, with the primary changes being:
– a decrease in diesel GHG emissions abatement due to new
and unforeseen challenges experienced by original equipment
manufacturers, resulting in less certainty of technology and
commercial readiness of diesel displacement options
– an increase in the range of uncertainty due to less certainty of
technology and commercial readiness of diesel displacement options,
as well as our enhanced understanding of the challenges presented
by a change to our operations as complex and far‑reaching as large-
scale electrification
Additionally:
– our Jansen potash project’s heightened focus on operational
readiness for first production has deferred certain studies on low
to zero GHG emission energy options and GHG emission reduction
technologies until after first production commences (expected in late
CY2026). We continue to pursue commercial solutions with our partners
to reduce operational GHG emissions for Jansen.
– the planned FY2024 drilling program at BMA, which will assist in
obtaining a deeper understanding of methane quality and quantity (in
both magnitude and density), will now commence during FY2026/27.
Certain methane management studies have been completed at BMA
that identified some changes to the longer-term characterisation of its
methane gas profile and combined with investigations of other technical
and operational factors, these findings will inform the development of
a more targeted methane measurement, management and mitigation
strategy for our open-cut mines.
These changes are not expected to have any material impact on our ability
to meet our operational GHG emissions medium-term target.
Based on what we know today, we estimate we can reduce our gross
operational GHG emissions by up to around 85 per cent against FY2020
levels by CY2050 (adjusted for acquisitions, divestments and methodology
changes) without the use of offsetting. We will continue to look for
opportunities to help see the emerging technologies we need to reach
technological readiness and commercial viability.
For more information on our strategy and areas of focus to enable us to
achieve our operational GHG emissions medium-term target and long-
term net zero goal refer to Operational GHG emissions on pages 10 to
18 of our CTAP 2024 available at bhp.com/CTAP2024
Capital allocation
Capital allocation towards operational GHG emissions reduction initiatives
is considered as part of the maintenance capital category within our
Capital Allocation Framework. For FY2024, our capital (incremental) and
operating expenditure on initiatives associated with operational GHG
emission reductions was US$61 million.
For more information on actual and planned expenditure to support
operational GHG emission reductions refer to Financial Statements note
16 ‘Climate change’ on pages 162 to 165 in this Report
Value chain GHG emissions (Scope 3 emissions)
Value chain
Approach
For FY2024, our reported Scope 3 emissions inventory (unadjusted inventory)
increased by 2 per cent from FY2023. This was largely driven by reported
GHG emission increases in Category 1 ‘Purchased goods and services
(including capital goods)’ and Category 10 ‘Processing of sold products’
(specifically iron ore processing to crude steel). Our reported Scope 3
emissions inventory remains dominated by the processing of our iron ore
and steelmaking coal products (83 per cent) and, to a lesser extent, from the
combustion of energy coal (10 per cent), with additional contributions including
the GHG emissions associated with our direct suppliers (4 per cent) and the
shipping of our products (2 per cent).
We project the planned closure of our Mt Arthur Coal mine by FY2030
would result in Scope 3 emissions in Category 11 (which covers GHG
emissions from the end use of products sold by the reporting company,
such as the combustion of energy coal) becoming an insignificant source
in our reported Scope 3 emissions inventory.
As explained in our CTAP 2024, we do not anticipate significant reductions
in our reported Scope 3 emissions inventory in the near term. This is
partly due to the way we currently estimate certain Scope 3 emissions
categories, which is generally not supplier- or customer-specific and
therefore would not reflect the GHG emission reductions they achieve.
We are seeking ways to improve the availability of data and have included
this as part of our strategy. We have had some early successes with data
availability for shipping and our use of the Veracity data platform for carbon
accounting. Our aim remains to progressively improve our capability to
measure Scope 3 emissions, particularly for GHG emissions from our
customers’ processing of iron ore and steelmaking coal to produce steel
which falls within Category 10, ‘Processing of sold products’.
There may be differences between our annual reported Scope 3 emissions
inventory (unadjusted inventory) and the GHG emissions we measure for
the baseline year, reference year and performance for our value chain
GHG emissions medium-term goals and long-term net zero targets and
goal, resulting from different GHG emissions boundaries and/or different
approaches to the treatment of divestments, acquisitions and methodology
changes based on the purpose for which the data is being reported.
In FY2024, we adjusted the data for our value chain GHG emissions
targets and goals baseline year, reference years and annual performance
for methodology changes and, for the first time, material acquisitions and
divestments (for our material Scope 3 emissions categories). The primary
impact was to our FY2020 reported Scope 3 emissions inventory, which
reduced from 413.6 MtCO2-e (unadjusted inventory) to 352.0 MtCO2-e
(adjusted for acquisitions, divestments and methodology changes).
For more information on the calculation of our annual reported Scope 3
emissions inventory, and on the adjustments we have made to the data
for the baseline years, reference years and annual performance for our
value chain GHG emissions medium-term goals and long-term net zero
targets and goal refer to Climate-related metrics, targets and goals on
pages 52 to 59 in this OFR 6.9
Our strategy to support reduction of GHG emissions in our value chain has
four primary focus areas:
1. Support the development and adoption of GHG emissions intensity
reduction technologies in steelmaking
2. Enhance the quality of the iron ore and steelmaking coal we produce (as the
GHG emissions intensity of conventional blast furnace steelmaking can be
reduced by improving the quality of the iron ore and steelmaking coal used)
3. Encourage direct suppliers to pursue net zero for their operational GHG
emissions (Scopes 1 and 2 emissions)
4. Support the development and adoption of GHG emission reduction
technologies in shipping
These focus areas have been set with consideration of the scale of GHG
emissions in our value chain, the level of impact we can achieve with
stakeholders and industry, and the alignment to our portfolio strategy.
For FY2024, our capital and operating expenditure on initiatives associated
with value chain GHG emission reductions was US$33 million.
For more information on actual and planned expenditure to support value
chain GHG emission reductions refer to Financial Statements note 16
‘Climate change’ on pages 162 to 165 in this Report
For more information on our committed funding and estimated co-
investments by us and others to support value chain GHG emission
reductions refer to Value chain GHG emissions on pages 19 to 30
in our CTAP 2024 available at bhp.com/CTAP2024
Operational GHG emissions from our non-operated joint venture interests
are reported in our Scope 3 emissions inventory under Category 15
‘Investments’ and are an immaterial source of Scope 3 emissions when
compared to our FY2024 reported Scope 3 emissions inventory. We see
our role in non-operated assets as primarily to encourage and seek to
influence them through their respective governance structures to reduce
their operational GHG emissions, as well as sharing decarbonisation
knowledge and experience where appropriate.
46
BHP Annual Report 2024
Steelmaking
Performance and highlights
– We met our FY2024 social value scorecard Decarbonisation pillar
milestone to ‘complete a pilot scale electric smelting furnace design
study’ with the global engineering firm Hatch. This study firmed up the
technical scope, risks and costs and underpinned our decision to take the
technology forward with industry partners.
– We started a joint study for the development of an electric smelting
furnace pilot facility in Australia, pooling our knowledge and project
resources with our study partners BlueScope and Rio Tinto.
– We commissioned carbon capture, utilisation and storage (CCUS)
pilot equipment and commenced industrial trials capturing CO2 from
blast furnace gas at Ghent steelworks in Belgium, in collaboration with
ArcelorMittal and Mitsubishi Heavy Industries.
– We signed two partnership project agreements with leading Chinese
steelmakers Baowu and HBIS to trial production and smelting of iron ore
pellets and direct reduced iron utilising BHP iron ores.
– We produced electrically smelted iron from BHP iron ores using
hydrogen reduction and electric smelting technologies at laboratory
scale at the BHP Centre for Sustainable Steelmaking Research
(University of Newcastle, Australia) and conducted batch trials at 100 kg
scale at Aachen University in Germany.
– We engaged with 92 per cent of our direct iron ore and steelmaking
coal sales customers on GHG emission reduction pathways and carbon
accounting methodologies.
Longer-term industry pathways and strategy
We support the steelmaking sector and our customers to develop solutions
to reduce the GHG emissions intensity of steel production. We do this
through a mix of collaborative partnerships and consortiums, research,
investments through BHP Ventures (our dedicated venture capital unit),
and emissions data calculation standardisation and transparency.
We use our conceptual ‘steel decarbonisation framework’ as a foresight
tool. It consists of the four process routes which, in our view, offer the
greatest potential for developing into near zero emission steelmaking1
with sufficient flexibility, scalability and efficiency to support widespread
adoption. The four process routes are described by the core ironmaking
furnace or reactor used (i.e. blast furnace, electric arc furnace, electric
smelting furnace and electrolysis).
We now have projects with 48 industry partners – including nine
steelmaking customers representing 20 per cent of reported global steel
production according to recent World Steel Association data, 16 research
institutes and 11 technology companies (both start-ups and vendors).
Our CTAP 2024 provides more detail of potential longer-term industry
pathways and our strategy and actions, including case studies of
our projects.
For more information on potential industry pathways and our strategy
and actions to support the reduction of steelmaking GHG emissions
intensity in our value chain and our plan to achieve our medium-term
goal refer to Value chain GHG emissions – Steelmaking: Our Scope
3 emissions goal to support capability for GHG emissions intensity
reduction on pages 24 and 25 of our CTAP 2024 available at
bhp.com/CTAP2024
Direct suppliers
Performance and highlights
We continued to engage with and encourage our top 500 direct suppliers
to set their own operational GHG emissions (Scopes 1 and 2 emissions)
targets or goals to align with our long-term target to achieve net zero by
CY2050 for the operational GHG emissions of our direct suppliers, with
engagement made across 78 per cent of those top 500 suppliers to date.
Industry pathways and strategy
Each year we spend billions of dollars on goods and services from
thousands of suppliers. Our strategy targets the top 500 direct suppliers
by spend, which contributed to 78 per cent of our FY2024 total spend
on suppliers.
Our strategy encompasses three areas of focus – selective purchasing,
supportive engagements and measurement and monitoring.
Our CTAP 2024 provides more detail of potential longer-term industry
pathways and our strategy and actions.
For more information on potential industry pathways and our strategy
and actions to support the reduction of supplier GHG emissions in our
value chain and our plan to achieve our long-term net zero target refer to
Value chain GHG emissions – Direct suppliers: Our Scope 3 emissions
net zero target for direct suppliers’ operational GHG emissions on page 28
of our CTAP 2024 available at bhp.com/CTAP2024
1. 0.40 tonnes of CO2‑e per tonne of crude steel for 100 per cent ore‑based production (no scrap), as defined by the International Energy Agency (IEA) and implemented
in ResponsibleSteel International Standard V2.0 (‘near zero’ performance level 4 threshold). IEA (2022), Achieving Net Zero Heavy Industry Sectors in G7 Members,
IEA, Paris, License: CC BY 4.0, which also describes the boundary for the emission intensity calculation (including in relation to upstream emissions).
Value chain GHG emissions (Scope 3 emissions) – Steelmaking
Medium‑term
goal:
Support industry to develop steel production technology
capable of 30 per cent lower GHG emissions intensity
relative to conventional blast furnace steelmaking, with
widespread adoption expected post-CY2030.
Performance
50
100
150
200
0
FY2022
FY2023
FY2024
US$ million financial value committed (cumulative) (excluding in-kind contributions)
75
114
140
For more information on how and why we revised the language used in our medium-term goal, refer to Value chain GHG emissions – Steelmaking:
Our Scope 3 emissions goal to support capability for GHG emissions intensity reduction on pages 24 and 25, of our CTAP 2024 available
at bhp.com/CTAP2024
For more information on the essential definitions, assumptions, GHG emissions boundaries, measurement approach and adjustments for this
medium-term goal and this long-term net zero target, including the potential use of offsetting, refer to Climate-related metrics, targets and goals
on pages 52 to 59, later in this OFR 6.9
We have revised the language used in our medium-term goal for steelmaking to provide greater clarity and to reflect the range of steelmaking process
routes that now form part of our strategy. This is due to technology advances as well as the evolution of our strategy.
Value chain GHG emissions (Scope 3 emissions) – Direct suppliers
Long‑term
net zero target:
Achieve net zero by CY2050 for the operational
GHG emissions (Scopes 1 and 2 emissions) of
our direct suppliers.
Performance, adjusted
MtCO2-e
FY2020
FY2021
FY2022
FY2023
FY2024
0
5.0
10.0
15.0
20.0
11.6
14.3
47
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
Shipping
Performance and highlights
– We are on track to meet our medium-term goal to support 40
per cent GHG emissions intensity reduction of BHP-chartered
shipping of BHP products by CY2030 from a CY2008 baseline year.
For FY2024, the GHG emissions intensity of BHP-chartered shipping
was 42 per cent below CY2008 (baseline year and performance
adjusted; for more information on the adjustments we make refer
to Climate-related metrics, targets and goals on pages 52 to 59 in
this OFR 6.9). We believe it will be possible to at least maintain, if
not reduce, GHG emissions intensity in the coming years, although
this will be challenging because of our expanding business activity
and the associated dependence on the availability of GHG emission
reduction solutions.
– We completed the retrofit of a wind assisted propulsion system (a
flettner rotor) on M/V Koryu with our customer and partner Pan Pacific
Copper and Norsepower. This vessel will be used for delivery of our
copper concentrates from Chile to Japan. We intend to report the GHG
emission reductions achieved by this in FY2025.
– We met our FY2024 social value scorecard Decarbonisation pillar
milestone to ‘engage the market to introduce additional lower/zero GHG
emission BHP-chartered vessels through industry partnerships’ by
progressing our expression of interest for an ammonia value chain (the
supply of, and a vessel’s use of, low to zero GHG emission ammonia as a
marine fuel) and consolidating our position in the market. Our next steps
are to continue working with shortlisted participants across technical,
commercial and supply assurance aspects with an intention to deploy
these vessels on our iron ore trade route in the latter half of this decade.
– Our expression of interest for an ammonia value chain aims to set
up a potentially viable pathway to meet our First Movers Coalition
commitment that, by CY2030, 10 per cent of our total products shipped
to our customers using our time charter vessels will be using zero
GHG emission fuels. This commitment is subject to the availability
of technology, supply, safety standards and the establishment of
reasonable thresholds for price premiums.
Industry pathways and strategy
The International Maritime Organisation (IMO) has set levels of ambition
for the international shipping sector that aim to progressively reduce GHG
emissions and reach net zero GHG emissions by or around CY2050.
In the 2020s, the largest GHG emission reduction opportunities for
international shipping are expected to come from improved operational
and technological energy efficiency, including voyage optimisation and
energy savings devices. Use of technologically ready lower GHG emission
alternative fuels (e.g. biofuels, liquified natural gas) are still dependent on the
availability of supply in shipping routes and their commercial viability.
In the longer term, switching to low to zero GHG emission fuels that are
currently technologically not ready (e.g. ammonia produced with low to
zero GHG emissions, civil nuclear technologies for commercial vessel
propulsion) is expected to be a significant lever.
As one of the world’s largest dry bulk charterers, we play an important
role in supporting the international shipping sector to meet or exceed
the GHG emission reduction ambitions set by the IMO. Our strategy
encompasses three areas of focus – efficiency improvements, lower GHG
emission and low to zero GHG emission alternative fuels, and improved
carbon accounting.
Our CTAP 2024 provides more detail of longer-term industry pathways and
our strategy and actions.
For more information on potential industry pathways and our strategy
and actions to support the reduction of shipping GHG emissions in our
value chain and our plan to achieve our medium-term goal and long-
term net zero target refer to Value chain GHG emissions – Shipping:
Our Scope 3 emissions goal to support GHG emissions intensity
reduction and net zero target on pages 29 and 30 of our CTAP 2024
available at bhp.com/CTAP2024
Climate‑related risk management
How we identify and manage climate‑related risk
At BHP, we take an enterprise approach to risk management and operate
under one Risk Framework for all risks, including climate-related risks
(threats and opportunities). Our Risk Framework requires the identification
and management of risks to be embedded in business activities and
provides requirements and guidance on the tools and processes
to manage current and emerging risks. Our mandatory minimum
performance requirements for risk management and the Climate Change
Global Standard set the minimum requirements to manage climate-related
risks and apply across our operated assets and functions, and to decision-
making processes for sales, marketing and procurement.
To support the identification and management of climate-related risks
at BHP, we monitor and interpret external signals, events and trends
associated with transition risk and physical climate-related risk, which
may include existing and emerging scientific, policy, legal and regulatory,
reputational, and market developments.
Risk owners of climate-related risks must assess physical and transition
climate-related risks, considering potential impacts, including to safety,
productivity and cost across operated assets, value chains, infrastructure
and services, and host communities.
The Climate Change Global Standard also sets mandatory minimum
requirements for assessing physical climate-related risks (refer to Physical
climate-related risks and adaptation in this OFR 6.9, for our progress to
date), as well as for asset-level climate change plans and the value chain
climate adaptation plan owned by our Commercial function. A number
of these assessments and plans are still underway, and they are also
regularly reviewed and revised to ensure continued relevance.
Value chain GHG emissions (Scope 3 emissions) – Shipping
Long‑term
net zero target:
Achieve net zero by CY2050 for the GHG emissions from
all shipping of BHP products.
Performance, adjusted
MtCO2-e
FY2020
FY2021
FY2022
FY2023
FY2024
0
2.5
5.0
7.5
10.0
6.6
6.2
For more information on the essential definitions, assumptions, GHG emissions boundaries, measurement approach and adjustments for this
medium-term goal and this long-term net zero target, including the potential use of offsetting, refer to Climate-related metrics, targets and goals
on page 52 to 59, later in this OFR 6.9
Value chain GHG emissions (Scope 3 emissions) – Shipping
Medium‑term
goal:
Support 40 per cent GHG emissions intensity reduction
of BHP-chartered shipping of BHP products by CY2030,
from a CY2008 baseline.
Performance, adjusted
2.5
5.0
7.5
10.0
0
gCO2-e per deadweight tonne per nautical mile
5.8
3.4
CY2008
FY2023
FY2024
48
BHP Annual Report 2024
When assessing the materiality of climate-related risks (as for all risks
identified through our Risk Framework), we consider the likelihood (by
reference to timeframes) and severity of potential impacts (including to
health and safety, the environment, communities, human rights and social
value) by estimating the maximum foreseeable loss (MFL) if that risk were
to materialise. The MFL is the estimated impact to BHP in a worst-case
scenario without regard to probability and assuming all controls are
ineffective. This supports us to prioritise and understand the significance of
climate-related risks in relation to other risks.
For more information on how we manage risk (including climate-related
risk) and our risk factors refer to OFR 8 on pages 73 to 82 in this Report
We recognise a changing climate can influence or exacerbate risks across
our risk profile, including those associated with asset integrity, pricing of
inputs, access to markets, changes to regulation and access to funding.
Decisions on the prioritisation of actions to manage climate‑related threats
or pursue climate-related opportunities are made consistent with our
standard risk management, planning and investment processes applicable
to all risks identified under our Risk Framework. Using a consistent
approach allows us to consider climate-related risks across our business
to focus our actions on those that are material and integrate management
of them into our core activities and business plans. We continue to embed
climate-related risk across our risk profile and to improve the controls
required to manage threats or enhance opportunities. We also continue
to review our climate-related risk profile periodically, seeking to identify,
assess and manage new or evolving climate‑related risks.
Climate‑related risks
In setting and monitoring the delivery of our strategy, we consider
identified climate-related risks (threats and opportunities), both physical
and transition (as applicable and to the extent their potential impacts are
sufficiently understood) across the following time horizons:
– short‑term (zero to two years), aligning with our two‑year budget process
– medium‑term (two to five years), defining supportive actions and
initiatives that sit outside of our two‑year budget process in order to
support our long‑term strategy
– long‑term (five to 30 years, or longer in certain cases), given our supply,
demand and pricing forecasts and our scenarios for portfolio analysis
extend to CY2050 and in some cases beyond
Climate‑related risks are broadly categorised as:
– Transition risks, which arise from existing and emerging policy,
regulatory, legal, technological, market and other societal responses
to the challenges posed by climate change and the transition to a net
zero economy
For detailed disclosures on the management of transition risks
refer to Transition to a net zero economy on page 50 in this OFR 6.9,
and in Portfolio on pages 31 to 38 in our CTAP available at
bhp.com/CTAP2024
– Physical risks, which refer to acute risks that are event‑driven (including
increased severity and frequency of extreme weather events) and
chronic risks resulting from longer‑term changes in climate patterns
For detailed disclosures about the studies we are undertaking
to assess our exposure to physical climate-related risks refer
to Physical climate-related risks and adaptation on page 51
in this OFR 6.9
Relevant BHP Group risk
factors (refer to OFR 8 for
more information)
Climate-related risk
Potential influence of
climate-related issues on
BHP Group risk factors over time1
Short-term
(0 to 2 years)
Medium-term
(2 to 5 years)
Long-term
(5 to at least
30 years)
Transition risk
Operational events
– Technological solutions to reduce GHG emissions
Low
Low to
medium
High
Significant social or
environmental impacts
– Engaging in or association with activities with actual or perceived adverse
climate-related impacts
– Failure to meet evolving stakeholder expectations
– Political, regulatory or judicial developments
Low
Low to
medium
High
Low‑carbon transition
– Low to zero GHG emission technologies or changes in customer preferences
altering demand for our products
– Perceptions of climate-related financial risk reducing access to capital and/or
insurance for BHP or our customers or suppliers
– Reputational damage and litigation
– Adverse market, legal or regulatory responses
Low
Low
High
Adopting technologies and
maintaining digital security
– Technological solutions to reduce GHG emissions
Low
Low
High
Optimising growth and
portfolio returns
– Failure to achieve expected commercial objectives due to climate-
related impacts
Low
Low
High
Accessing key markets
– Legal or regulatory changes, with respect to carbon-intensive industries and exports
Low
Low
High
Inadequate business resilience
– Geopolitical, global economic, regional or local developments or adverse events
Low
Low
High
Physical risk
Operational events
– Extreme weather and other climate-related events that may impact production
Low
Low
Medium
Significant social or
environmental impacts
– Failure to adequately identify or to appropriately manage physical
climate-related risks
Low
Low to
medium
Medium
Inadequate business resilience
– Acute and chronic physical climate-related impacts, event-driven and
longer-term changes in climate patterns
Low
Low
Medium
1. The estimated potential (i) change to the level of influence of relevant climate-related issues and their associated risk factors on BHP’s existing risk exposure and/or (ii) degree to which
they may exacerbate existing risks within our risk profile, based on currently available information and noting that some assessments are preliminary and/or incomplete (particularly in
relation to physical climate-related risk) and may change significantly.
Climate change and climate-related risks have the potential to influence or exacerbate risks across our operations and functions and are required to be
considered and, where applicable, integrated in accordance with our Risk Framework into our asset risk profiles to be managed across each of these time
horizons (see the table above). The linkage of these time horizons to our planning processes and activities and strategy formation informs our decision-
making and enables us to take appropriate and timely risk management actions.
For more information on BHP’s Risk Framework, how we manage climate-related risks and the potential
impact to BHP operations refer to OFR 8 on pages 73 to 82 in this Report
49
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
Transition to a net zero economy
Our portfolio’s resilience
We continue to seek to maximise our exposure to products that enable and
support decarbonisation and electrification, urbanisation and a growing
population, and to minimise the risk that capital may be stranded in a
rapidly decarbonising world. To support this outcome, we consider a range
of inputs, including our 1.5°C scenario, when testing the resilience of our
portfolio and making investment decisions.
Our CTAP 2024 analyses our portfolio’s resilience in our new 1.5°C
scenario and describes key input assumptions, analytical methods, outputs
and sensitivities we used in or derived from this scenario.
We use our planning range (our long-term forecast of demand, supply and
price across our commodities) for operational planning. It is comprised of
three unique, independent planning cases: a ‘most likely’ base case, and
an upside case and downside case that provide the range’s boundaries.
These three cases reflect proprietary forecasts for the global economy
and associated sub-sectors (i.e. energy, transport, agriculture, steel) and
the resulting market outlook for our core commodities. The assessments
of future states are not explicitly climate scenarios designed to test the
resilience of our portfolio to different global climate action trajectories.
However, in all three future state estimates, while the global gross domestic
product assumptions and pace and drivers of decarbonisation policy and
technology diffusion vary, most developed economies reach net zero
around CY2050, with other developing economies reaching net zero in
CY2060 and CY2070. The modelled output of our planning range results
in global CO2 emission pathways implying a projected global temperature
increase of around 2°C by CY2100.
Our planning range’s demand, supply and price forecasts for key
commodities are used to inform data inputs into our operational modelling
and drive operational planning. Our planning range is also used for
strategy formation and investment decisions.
We use our 1.5°C scenario to derive commodity price sensitivities to
assess potential impacts on portfolio value compared with our base case
valuations using our planning range. Our modelling indicates our portfolio
remains resilient under our 1.5°C scenario. The value of our copper, potash
and nickel assets increases relative to the base case of our planning
range, and offsets the effect to our portfolio from some downside risk to
steelmaking coal. The net present value of our portfolio under our 1.5°C
scenario is approximately the same as under the current base case of our
planning range, indicating we would be resilient in an accelerated transition
to a 1.5°C outcome. Western Australia Nickel’s temporary suspension
(see below) has not altered our scenario analysis, which includes nickel
in our portfolio.
As described elsewhere in this Report, as well as in our CTAP 2024,
we continue to reposition our portfolio towards commodities that can
enable and support megatrends, such as global decarbonisation and
electrification. Our actions to enable and support include BMA’s divestment
of the Blackwater and Daunia mines as a further step to concentrate our
coal portfolio on the higher-quality (grade) coals increasingly preferred by
steelmaking customers and the acquisition of OZ Minerals in FY2023 to
support the creation of a South Australia copper basin. We expect such
actions to further enhance the overall resilience of our portfolio over time.
In July 2024, we announced our Nickel West operations and West
Musgrave project (Western Australia Nickel) would be temporarily
suspended from October 2024. Over the longer term, our 1.5°C scenario
and the base case of our planning range see nickel demand growing in
response to the transition. However, the decision to temporarily suspend
operations follows oversupply in the global nickel market. At the time of our
announcement, forward consensus nickel prices over the next half of the
decade had fallen sharply reflecting strong growth of alternative low-cost
nickel supply.
For more analysis of our portfolio’s resilience in our new 1.5°C scenario
and more information about the three planning cases in our planning
range and their use refer to Portfolio on pages 31 to 38 of our CTAP
2024 available at bhp.com/CTAP2024
For key assumptions and metrics for our new 1.5°C scenario and a
comparison with other 1.5°C scenarios refer to Additional information –
Our 1.5°C scenario assumptions and the signposts we monitor
on page 61 and Additional information – Our 1.5°C scenario
compared to benchmarks on page 62 of our CTAP 2024 available
at bhp.com/CTAP2024
For disclosures related to potential financial statement impacts in our
new 1.5°C scenario refer to Financial Statements note 16 ‘Climate
change’ on pages 162 to 165 in this Report
Impact on our business, strategy and capital alignment
and allocation
The final (or sufficiently resolved) results of our climate-related risk
assessments across our short-, medium- and long-term time horizons
(as described on the previous page 49), as well as our 1.5°C scenario,
are considered and integrated into our strategy and as a sensitivity in our
capital allocation processes. This enables us to test the extent to which our
business and capital allocation are aligned with a rapidly decarbonising
global economy.
We are undertaking our studies of physical climate-related risks to
progressively identify, assess and quantify the potential future impacts to
site operations, productivity and estimated cost for our operated assets.
Once the results of the risk quantification studies for our operated assets
are completed, we propose to use the results to inform updates to our
risk profile, including new risk management activities, inform corporate
planning, identify areas where we should focus our assessment of new or
strengthened controls or adaptation responses, and assess the financial
and social value of adaptation measures.
For an overview of how climate-related issues have impacted our
operational activities and our approach with respect to our value chain
refer to Operational GHG emissions (Scopes 1 and 2 emissions from
our operated assets) on pages 44 to 46 and Value chain GHG emissions
(Scope 3 emissions) on pages 46 to 48 in this OFR 6.9
For more information on potential financial statement impacts due to
climate-related risks, refer to Financial Statements note 16 ‘Climate
change’ on pages 162 to 165 in this Report
For more information on the studies we are undertaking to assess our
exposure to physical climate-related risks refer to Physical climate-
related risk and adaptation on page 51 in this OFR 6.9
For more information on our commodity production, revenue and
expenditure refer to Climate-related metrics, targets and goals on
pages 52 to 59 in this OFR 6.9
Carbon pricing
We embed carbon prices within our planning range and planning cases that
inform asset planning, asset valuations and operational decision-making,
including the prioritisation of operational GHG emission reduction projects.
For our qualitative and quantitative disclosures related to carbon
pricing refer to Financial Statements note 16 ‘Climate change’ on
pages 162 to 165 in this Report
Equitable change and transition
We seek meaningful, long‑term, mutually beneficial relationships that
respect local cultures. We aim to support the development of diversified
and resilient local communities and economies that contribute to wellbeing
that continues beyond the life of our operated assets.
For information on the work we are undertaking to leave a positive
legacy from our mining in the Hunter Valley as we move towards
the planned closure of Mt Arthur Coal refer to Equitable change
and transition on pages 46 to 48 of our CTAP 2024 available at
bhp.com/CTAP2024
Climate policy advocacy
We believe governments around the world should adopt and progress
policies aligned with the goals of the Paris Agreement to limit the increase
in the global average temperature by CY2100 to well below 2°C above
pre-industrial levels and pursue efforts to limit the increase to 1.5°C.
We commit to conducting our climate policy advocacy consistent with
these goals in our direct advocacy and our indirect advocacy. Our Climate
Policy Principles show how we intend this commitment to be translated
into action.
Our Climate Policy Principles, the approach we take to our direct and
indirect advocacy, and our latest advocacy disclosures are available at
bhp.com/sustainability/climate-change/advocacy-on-climate-policy and
bhp.com/about/operating-ethically/industry-associations
For more information on our policy advocacy refer to Climate policy
advocacy on pages 39 to 41 of our CTAP 2024 available at
bhp.com/CTAP2024
50
BHP Annual Report 2024
Physical climate‑related risks and adaptation
A changing climate can exacerbate and create physical climate‑related
risks, which include:
– Acute physical climate-related risks: Extreme climatic events, such
as floods, cyclones and heatwaves, that may be more severe or more
frequent because of a changing climate
– Chronic physical climate-related risks: The incremental worsening of
conditions, such as the gradual increase in the number of extreme heat
days over the years, or rising sea levels
The mining sector is exposed to both acute and chronic physical
climate-related risks because of its remote outdoor operations with
labour and physical capital exposed to the elements, and because of
its dependency on global value chains. The long lives of mining assets
mean they could encounter deteriorating conditions in later decades.
Geographically dispersed sites and value chains increase the diversity of
physical climate-related impacts we could encounter.
We are undertaking studies to assess our exposure to physical climate-
related risks that draw on science-based climate data. We are working
to complete these studies and continue verification and review of results
in FY2025. Our approach to evaluating our operational physical climate-
related risks is illustrated in the ‘Our approach to physical climate-related
risk’ diagram on this page.
Climate modelling
We commissioned WTW (one of our insurance advisors) to develop a
climate dataset covering our operated assets and some key value chain
locations, to develop a more holistic understanding of the potential
parameters of our physical climate-related risk exposure and how it may
change over time.
This climate dataset is based on the publicly available Shared
Socioeconomic Pathways (SSP) scenarios used by the Intergovernmental
Panel on Climate Change, and includes latest generation (Coupled Model
Intercomparison Project Phase 6 (CMIP6)) and CMIP5 climate models,
applied to our operated assets. The dataset covers more than 20 climate-
related hazards potentially relevant to our global operations, such as average
temperature, extreme precipitation, and cyclones, which can represent
physical climate-related risks. Alongside this we apply local observational
climate data and other sources of climate projections. This approach allows
us to develop a localised view of potential impacts, including changes in
rainfall patterns, average and maximum temperatures and sea level rise.
The climate dataset includes a baseline (CY2001 to CY2020) and
projections for three future time horizons (CY2026 to CY2045, CY2046 to
CY2065, CY2066 to CY2085) for the following Intergovernmental Panel on
Climate Change SSP-based GHG emission scenarios:1
– Low‑case: Estimated average global temperature increase of 1.8°C by
CY2100 (SSP1‑2.6)
– Mid‑case: Estimated average global temperature increase of 2.7°C by
CY2100 (SSP2‑4.5)
– High‑case: Estimated average global temperature increase of 4.4°C by
CY2100 (SSP5‑8.5)
The table ‘Potential physical climate-related risks at our operated assets
and in their value chains’ on this page shows the physical climate-related
risks that our studies to date indicate could have potential impact for our
operated assets (including via impacts in our value chain). The first stage
of our analysis looks at our operated assets that are currently producing
(excluding NSWEC and former OZ Minerals sites) and our Jansen potash
project. We plan to include currently producing former OZ Minerals sites
and to expand and adapt our approach to incorporate our legacy assets
and NSWEC in FY2025.
Our approach to physical climate-related risk
Climate data projections: Use of climate data and
projections for different scenarios and time horizons
Safety, productivity and cost impacts:
Applying internal models to assess potential
impacts to safety, cost and productivity
Financial impacts and value-at-risk: Incorporating
assessment results into internal planning models to
understand potential financial impacts and value-at-risk
Incorporating into business planning,
risk management and capital allocation:
Embedding consideration of physical climate-related
risk (including value-at-risk) into business planning,
risk management, and capital allocation, as required
Operational site impacts: Engineering assessments
to understand the potential direct impact of
climate-related events on our sites
1. Table SPM.1, Summary for Policymakers. In: Climate Change 2021: The Physical Science Basis. Contribution of Working Group I to the Sixth Assessment Report of the Intergovernmental
Panel on Climate Change. IPCC, CY2021.
Potential physical climate-related risks at our operated assets and in their value chains
Climate hazard
Potential operational site impacts
Extreme precipitation and/or flooding
Inundation of mines and/or key production infrastructure
Disruption and/or damage to water supply infrastructure
Exacerbation of tailings storage facility failure risk
Coastal hazards (including higher sea levels, cyclones, storm surge
and changes in marine ecosystems)
Disruption and/or damage to port and coastal infrastructure
and operations
Extreme temperatures
Disruption and/or damage to electrical infrastructure
Changes in rainfall, temperature and/or evaporation patterns
Water shortages for operational activities
Extreme weather events (including extreme heat, extreme precipitation and/or
flooding, cyclones)
Workforce health and safety incidents
Disruption in the supply of critical production inputs, and access
to supply chain infrastructure
For more information on our approach to physical climate-related risk quantification studies, existing risk controls and potential adaptation responses refer
to Physical risk and adaptation on pages 42 to 45 of our CTAP 2024 available at bhp.com/CTAP2024
For more information on how physical climate-related risk has been considered in asset carrying values refer to Financial Statements note 16 ‘Climate
change’ on pages 162 to 165 in this Report
51
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Climate-related metrics, targets and goals
Primary metrics we consider when assessing and managing climate‑related risks (threats and opportunities)
Metric
Refer to
Commodity production, revenue and expenditure
– Commodity production, revenue and expenditure table on page 52 in this OFR 6.9
Capital allocation and alignment
– Planned capital expenditure table on page 53 in this OFR 6.9
– Financial Statements note 16 ‘Climate change’ on pages 162 to 165 in this Report
Operational GHG emissions (Scopes 1 and 2 emissions from our
operated assets)
– Operational GHG emissions (Scopes 1 and 2 emissions) inventory table on page 54
in this OFR 6.9
Value chain GHG emissions (Scope 3 emissions)
– Value chain GHG emissions (Scope 3 emissions) inventory table on page 55 in this
OFR 6.9
Production, reserves and resources
– Production and Mineral Resources and Ore Reserves in Additional Information 4 and
6 on pages 205 to 251 in this Report
Management’s Cash and Deferred Plan (proportion linked to climate)
– Remuneration Report on pages 115 to 131 in this Report
Carbon pricing
– Financial Statements note 16 ‘Climate change’ on pages 162 to 165 in this Report
We report on a number of other sustainability‑related metrics (e.g. water use, biodiversity) in our sustainability disclosures, and recognise their interconnection
with climate change. However, we do not currently use these as our core metrics for the assessment and management of climate‑related risks.
For more information on our social value and sustainability‑related goals, metrics and milestones refer to OFR 6 Sustainability
beginning on page 29 in this Report
The role of our commodities in the transition
We continue to engage with investors, industry and standard setters to explore ways of establishing clear methodologies for classification and measurement
of ‘green revenue’1 and associated capital expenditure within the resources sector. We note that, at present, there are still divergent and evolving views
globally on what constitutes green revenue, with no clear definition or expectations for other sustainability indicators for the resources sector.
Traceability of end use for many commodities, such as copper and nickel, remains a challenge as they undergo multiple stages of processing and have
a diverse range of end uses. Given this continued uncertainty, we have presented multiple classifications of certain of our commodities to reflect a view
on their actual or potential contribution to the transition to a net zero economy.
The classification we have given to our commodities (described in the table below) is intended to be an indicative approach pending clear and resolved
methodologies for identifying key transition materials that contribute to the transition to a net zero economy and the calculation of the revenues they
generate. We also acknowledge the classification focuses on the theme of enabling the transition to a net zero economy to mitigate climate change,
and broader sustainability indicators in relation to how these commodities are produced are also important to consider.
Classification
Definition
Commodities
Climate Action 100+ Net Zero Standard for Diversified Mining, September 2023
Key transition materials
Copper, nickel
FTSE Russell’s Green Revenues Classification System, v1.1, January 2024
Key raw minerals and metals
Uranium
BHP
Future-facing commodities2
Copper, nickel, potash
We believe steelmaking materials like iron ore and steelmaking coal also have an important role to play in the global transition to net zero. We expect the
blast furnace with carbon capture, utilisation and storage (CCUS) to be an important part of the journey towards the end-state objective of widespread
near zero emission steel, and it requires higher-quality steelmaking coal as an input. External analysis, such as the International Energy Agency’s net
zero by 2050 scenario,3 supports this view.
Our view on steelmaking materials and their role in the transition to net zero is described in Portfolio – Steelmaking, iron ore
and steelmaking coal in our 1.5°C scenario on pages 37 and 38 of our CTAP 2024 available at bhp.com/CTAP2024
1. ‘Green revenue’ is a label referenced externally, including by standard setters and in investor-led benchmarks, which is intended as a measure of the extent to which products and services
contribute to the transition to a net zero, resource efficient and socially inclusive economy. For more information refer to unep.org/regions/asia-and-pacific/regional-initiatives/supporting-
resource-efficiency/green-economy.
2. Commodities that we determine to be positively leveraged in the energy transition and broader global response to climate change, with potential for decades-long demand growth to
support emerging mega-trends like electrification and decarbonisation.
3. International Energy Agency’s World Energy Outlook 2023, iea.org/reports/world-energy-outlook-2023.
The table below presents the production, revenue and capital expenditure for our commodities.
Historical commodity production, revenue and capital expenditure
Commodity
Production (kt)
Revenue
(US$M)
Major capital (growth)
expenditure (US$M)
Other capital
expenditure1 (US$M)
Total capital
expenditure (US$M)
FY2024
FY2023
FY2024
FY2023
FY2024
FY2023
FY2024
FY2023
FY2024
FY2023
Copper2
1,865
1,717
17,229
14,902
920
299
3,002
2,544
3,922
2,843
Nickel2
82
80
1,378
1,879
707
74
665
678
1,373
752
Potash
0
0
0
0
1,323
838
-238
-193
1,085
645
Uranium
4
3
568
362
Included within figures for copper3
Iron ore
259,684
257,043
27,805
24,678
405
144
1,715
1,919
2,119
2,063
Steelmaking coal
22,275
29,020
5,793
7,429
30
97
519
405
549
502
Energy coal
15,368
14,172
1,873
3,528
0
0
100
156
100
156
Other4
Not applicable
Not applicable
1,014
1,039
0
0
125
122
125
122
Notes
– FY2023 figures include former OZ Minerals operations from the date of acquisition. FY2024 figures include BMA’s Blackwater and Daunia coal mines up to completion of their divestment
on 2 April 2024. Cerro Colorado entered temporary care and maintenance in December 2023.
1. ‘Other capital expenditure’ includes maintenance and decarbonisation capital, improvement capital and exploration. Negative figures for potash result from the accounting treatment for this category.
2. Capital expenditure for by-products gold, silver and molybdenum is included within the capital expenditure for copper, while nickel is included within the capital expenditure for nickel. It is
not possible to disaggregate due to the integrated nature of operations.
3. Capital expenditure for uranium is included within copper’s capital expenditure as it is not possible to disaggregate due to the integrated nature of operations.
4. ‘Other’ for ‘Production’ has not been calculated due to small production volumes of by-products cobalt, gold, lead, molybdenum, silver and zinc. ‘Other’ for ‘Revenue’ includes by-products
cobalt, gold, lead, molybdenum, silver and zinc. ‘Other’ for ‘Major capital (growth) expenditure’ and ‘Other capital expenditure’ primarily represents the capital spend for Group functions.
6 Sustainability continued
52
BHP Annual Report 2024
The table below presents our planned major capital (growth) for our commodities.
Planned major capital (growth) capital expenditure in commodities (US$M)
Commodity and classification
FY2025
FY2026
Copper1
1,572
1,567
Nickel1
1172
0
Potash
1,864
1,734
Uranium
Included within figures for copper3
Iron ore
1,346
1,599
Steelmaking coal
0
0
Energy coal
0
0
Other4
0
0
Notes
– Major capital represents projects greater than US$250M. FY2025 and FY2026 figures are sourced from our budget.
1. Capital expenditure for by-products gold, silver, molybdenum and cobalt is included within the capital expenditure for copper and nickel as it is not possible to disaggregate due to the
integrated nature of operations.
2. Represents planned capital expenditure for development of West Musgrave.
3. Capital expenditure for uranium is included within copper’s capital expenditure as it is not possible to disaggregate due to the integrated nature of operations.
4. ‘Other’ primarily represents the capital spend for Group functions.
Our reported energy consumption and GHG emissions inventory
Operational energy consumption inventory: Operational control basis (petajoule (PJ), unless otherwise indicated)
FY2024
FY2023
FY2022
Total operations basis energy
consumption
Consumption of fuel
– Coal and coke
1
1
1
– Natural gas
11
11
22
– Distillate/gasoline
88
85
87
– Other
3
2
2
Consumption of electricity
40
39
37
Total operational energy consumption
143
138
149
Total operations basis
other metrics
Operational energy consumption from renewable sources
26
26
17
Consumption of electricity from grid
36
35
33
Operational energy intensity (GJ per tonne of copper
equivalent production)
21
19
20
Acquired and divested operations
(as reflected in Total operations
basis energy consumption)
Operational energy consumption from acquired operations
(included from the date of acquisition)
4
1
0
Operational energy consumption from divested operations
(included only up to the completion date or effective date,
as applicable, of the divestment)
6
8
24
Notes
− Definition: Energy consumption refers to the annual quantity of energy consumed by BHP from the combustion of fuel and operation of our facilities, together with purchased or
acquired electricity, steam, heat or cooling consumed by our operated assets.
− Organisational boundary: We have made our calculations based on an operational control approach in alignment with the Greenhouse Gas Protocol Corporate Accounting and
Reporting Standard.
− Rounding: Data has been rounded to the nearest 1 PJ.
− For all metrics, FY2023 reported values now include almost two months of former OZ Minerals facilities data from the date of acquisition (completed on 2 May 2023). See later notes on
specific metric restatements caused by this update.
− Operational energy consumption from renewable sources includes third-party supplied renewable electricity as evidenced by renewable energy certificates (RECs) or supplier-provided
documentation. FY2023 reported value includes a small portion of biofuels.
− Operational energy consumption from acquired operations consists of former OZ Minerals facilities.
− Operational energy consumption from divested operations consists of BMC (sale of our interest in BMC completed on 3 May 2022), our Petroleum business (merger with Woodside
completed on 1 June 2022) and the Blackwater and Daunia mines (sale by BMA completed on 2 April 2024).
− Restatement: Consumption of electricity FY2023 reported value has been restated to include former OZ Minerals facilities data (see earlier note). Previously reported value was
38 gigajoules (GJ).
− Restatement: Consumption of electricity from grid FY2023 reported value has been restated to include former OZ Minerals facilities data (see earlier note). Previously reported value
was 34 GJ.
− Restatement: Operational energy intensity (GJ per tonne of copper equivalent production) FY2022 and FY2023 reported values have been restated due to calculations now based on
FY2024 average realised product prices, with production figures consistent with operational energy consumption reporting boundaries. Previously reported values were 19 GJ per tonne
of copper equivalent production for FY2022 and 18 GJ per tonne of copper equivalent production for FY2023.
53
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
Operational GHG emissions (Scopes 1 and 2 emissions) inventory
This table presents our reported operational GHG emissions (Scopes 1 and 2 emissions from our operated assets) inventory. There may be differences
between this annual total operational GHG emissions inventory (unadjusted inventory) and the GHG emissions we measure for the baseline year,
reference year and performance for our operational GHG emissions medium-term target and long-term net zero goal, resulting from different approaches
to the treatment of divestments, acquisitions and methodology changes based on the purpose for which the data is being reported.
For the measurement applicable to our operational GHG emissions medium-term target and long-term net zero goal refer to Operational GHG emissions
(Scopes 1 and 2 emissions from our operated assets) medium-term target and long-term goal definitions on page 56 in this OFR 6.9
For more information on the calculation methodologies, assumptions, treatment of divestments and acquisitions and key references used in the preparation
of our reported GHG emissions data refer to our BHP GHG Emissions Calculation Methodology 2024 available at bhp.com/climate
Operational GHG emissions (Scopes 1 and 2 emissions): Operational control basis (MtCO2-e, unless otherwise indicated)
FY2024
FY2023
FY2022
Total operations basis GHG emissions
Scope 1 emissions
8.2
8.0
9.1
Scope 2 emissions
1.9
1.9
3.1
Total operational GHG emissions
10.1
9.9
12.2
Total operations basis other metrics
Voluntary carbon credits retired
0
0
0
Location‑based Scope 2 emissions
3.7
3.8
4.8
Operational GHG emission intensity (tCO2‑e per tonne of copper
equivalent production)
1.5
1.4
1.7
Proportion of Scope 1 emissions covered under
an emissions‑limiting regulation (%)
73%
80%
78%
Proportion of Scope 1 emissions from methane (%)
15%
16%
17%
Acquired and divested operations
(as reflected in Total operations basis
GHG emissions)
Scopes 1 and 2 emissions from acquired operations
(included from the date of acquisition)
0.3
0.04
0
Scopes 1 and 2 emissions from divested operations
(included only up to the completion date or effective date,
as applicable, of the divestment)
0.8
1.0
2.3
Notes
− Definition: Scope 1 emissions refers to direct GHG emissions from our operated assets. Scope 2 emissions refers to indirect GHG emissions from the generation of purchased or
acquired electricity, steam, heat or cooling that is consumed by our operated assets. Scope 2 emissions have been calculated using the market-based method, unless otherwise specified,
in alignment with the Greenhouse Gas Protocol Scope 2 Guidance.
− Organisational boundary: Scopes 1 and 2 emissions have been calculated based on an operational control approach in alignment with the Greenhouse Gas Protocol Corporate
Accounting and Reporting Standard.
− Rounding: Data has been rounded to the nearest 0.1 MtCO2-e.
− For all metrics, FY2023 reported values now include almost two months of former OZ Minerals facilities data from the date of acquisition (completed on 2 May 2023). See later notes on
specific metric restatements caused by this update.
− Scopes 1 and 2 emissions from acquired operations consists of former OZ Minerals facilities (see earlier note).
− Scopes 1 and 2 emissions from divested operations consists of BMC (sale of our interest in BMC completed on 3 May 2022), our Petroleum business (merger with Woodside completed on
1 June 2022) and the Blackwater and Daunia mines (sale by BMA completed on 2 April 2024).
− Restatement: Scope 1 emissions FY2022 reported value has been restated due to the correction of a system error. Previously reported value was 9.2 MtCO2-e.
− Restatement: Scope 2 emissions FY2023 reported value has been restated to include almost two months of former OZ Minerals facilities data from the date of acquisition (see earlier
note). Previously reported value was 1.8 MtCO2-e.
− Restatement: Operational GHG emissions intensity (tonnes of carbon dioxide equivalent (tCO2-e) per tonne of copper equivalent production) FY2022 and FY2023 reported values have
been restated due to calculations now based on FY2024 average realised product prices, with production figures consistent with operational GHG emissions reporting boundaries.
Previously reported values were 1.6 tonnes CO2-e per tonne of copper equivalent production for FY2022 and 1.3 tonnes CO2-e per tonne of copper equivalent production for FY2023.
− Restatement: Proportion of Scope 1 emissions covered under an emissions-limiting regulation FY2022 and FY2023 reported values have been restated, where for FY2022 it is due to
the unintentional exclusion of the GHG emissions from a divested Petroleum operation, while for FY2023 it is due to the inclusion of former OZ Minerals facilities data (see earlier note).
Previously reported values were 71 per cent for FY2022 and 81 per cent for FY2023.
− Restatement: Proportion of Scope 1 emissions from methane (%) FY2022 and FY2023 reported values have been restated, where for FY2022 it is due to the same system error as
described earlier for Scope 1 emissions, while for FY2023 it is due to minor amendments to fugitive emissions as part of the annual reconciliation process for Australian regulatory
reporting. Previously reported values were 18 per cent for FY2022 and 15 per cent for FY2023.
54
BHP Annual Report 2024
Value chain GHG emissions (Scope 3 emissions) inventory
This table presents our reported value chain GHG emissions (Scope 3 emissions) inventory. There may be differences between this annual reported
Scope 3 emissions inventory (unadjusted inventory) and the GHG emissions we measure for the baseline year, reference year and performance for our
value chain GHG emissions medium-term goals and long-term net zero targets and goal, resulting from different GHG emissions boundaries and/or
different approaches to the treatment of divestments, acquisitions and methodology changes based on the purpose for which the data is being reported.
For the measurement applicable to our value chain GHG emissions medium-term goals and long-term net zero targets and goal refer to Value chain GHG
emissions (Scope 3 emissions) medium-term goals definitions and Value chain GHG emissions (Scope 3 emissions) long-term targets and goal definitions
on pages 57 to 59 in this OFR 6.9
For more information on the calculation methodologies, assumptions, treatment of divestments and acquisitions and key references used in the preparation
of our reported GHG emission data refer to our BHP GHG Emissions Calculation Methodology 2024 available at bhp.com/climate
Value chain GHG emissions (Scope 3 emissions) (MtCO2-e)
FY2024
FY2023
FY2022
Category 1
Purchased goods and services (including capital goods)
11.7
9.4
8.8
Category 3
Fuel‑ and energy‑related activities
2.5
2.4
2.2
Category 4
Upstream transportation and distribution
– Shipping
4.3
4.3
4.5
– Non-shipping
0.4
0.5
0.4
Category 6
Business travel
0.1
0.1
0.1
Category 7
Employee commuting
0.3
0.2
0.3
Category 9
Downstream transportation and distribution
– Shipping
2.1
2.3
3.5
– Non-shipping
0.3
0.2
0.0
Category 10 Processing of sold products
– Steelmaking: Iron ore processing to crude steel
292.0
282.9
270.8
– Steelmaking: Steelmaking coal processing to crude steel
22.4
28.7
34.5
– Copper processing
1.2
1.1
1.0
– Nickel processing
0.5
0.5
0.3
Category 11 Use of sold products
– Energy coal
38.4
37.0
37.6
– Natural gas, crude oil and condensates, natural gas liquids
0.0
0.0
34.9
Category 15 Investments
1.2
1.3
2.8
Total Scope 3 emissions
377.6
370.8
401.9
Notes
− Definition: Scope 3 greenhouse gas emissions refers to all other indirect GHG emissions (not included in Scope 2) that occur in our value chain. Scope 3 emissions have been calculated
using methodologies consistent with the Greenhouse Gas Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard.
− Organisational boundary: Category 10, Processing of sold products, Category 11, Use of sold products and Category 15, Investments all defined on an equity share basis. All other Scope
3 emissions boundaries are defined on a category-by-category (and in some cases, sub-category) basis due to data limitations. Scope 3 emissions reporting necessarily has a degree of
overlap in reporting boundaries due to our involvement at multiple points in the lifecycle of the commodities we produce and consume.
− Rounding: Data has been rounded to the nearest 0.1 MtCO2-e.
− Assessing and comparing reductions in Scope 3 emissions should consider the impact that acquisitions and divestments have had.
− Scope 3 emissions data includes GHG emissions for former OZ Minerals assets from the date of acquisition (completed on 2 May 2023). Former OZ Minerals Scope 3 emissions data has
not been included in certain categories and/or sub-categories due to data limitations. We estimate these GHG emissions to be immaterial.
− All Scope 3 emissions data includes divested operations only up to the completion date or effective economic date (as applicable) of the divestment. Divestments include divestment of
our interest in the Rhourde Ouled Djemma (ROD) Integrated Development (completed in April 2022), divestment of our interest in BMC (completed on 3 May 2022), divestment of our
Petroleum business (merger with Woodside completed on 1 June 2022) and BMA’s divestment of the Blackwater and Daunia mines (completed on 2 April 2024).
− Category 4, Upstream transportation and distribution and Category 9, Downstream transportation and distribution now use maritime transport emission factors from EU Regulation
2023/1805, after The British Standards Institution (BSI) EN 16258 standard (the source of the emission factors we previously used) was withdrawn in CY2023. Category 9, Downstream
transportation and distribution also now uses a changed methodology for the portside transport of iron ore in China (which began in FY2023) consisting of more accurate mapping for the
transport of our products from port to customer via a combination of road, rail and barge.
− Category 10, Processing of sold products does not include GHG emissions associated with downstream processing of our zinc, gold, silver, ethane, cobalt and uranium oxide products as
production and sales volumes are relatively small and a large range of possible end uses apply. We estimate these GHG emissions to be immaterial.
− Category 15, Investments covers the Scopes 1 and 2 emissions (on an equity basis) from entities in which we hold an interest that are not operated by BHP.
− Restatement: Category 1, Purchased goods and services (including capital goods) FY2023 reported value has been restated to include former OZ Minerals assets (see earlier note).
Previously reported value was 9.1 MtCO2-e.
− Restatement: Category 3, Fuel- and energy related-activities FY2022 reported value has been restated to correct a minor calculation error. Previously reported value was 2.3 MtCO2-e.
− Restatement: Category 4, Upstream transportation and distribution FY2022 and FY2023 reported values have been restated, where for FY2022 it is due to the change in maritime
transport emission factors as described earlier for Category 4, Upstream transportation and distribution, and for FY2023 it is due to the same change in emission factors and also the
inclusion of former OZ Minerals assets (see earlier note). Previously reported values were 4.5 MtCO2-e for FY2022 and 4.4 MtCO2-e for FY2023.
− Restatement: Category 9, Downstream transportation and distribution FY2022 and FY2023 reported values have been restated due to the change in maritime transport emission factors
and the methodology change, as described earlier for Category 9, Downstream transportation and distribution. Previously reported values were 3.2 MtCO2-e for FY2022 and 2.8 MtCO2-e
for FY2023.
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Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
Definitions and key details for our GHG emissions targets and goals
For the definitions of the terms used to express our GHG emissions targets and goals, including ‘target’, ‘goal’, ‘net zero’ and ‘carbon neutral’, refer to
Additional information 10 on pages 245 to 250 in this Report
Operational GHG emissions (Scopes 1 and 2 emissions from our operated assets) medium-term target and long-term net zero goal
definitions, assumptions, adjustments and additional key details
Description
Medium‑term target: Reduce operational GHG emissions by at least 30 per cent from FY2020 levels by FY2030
Long‑term net zero goal: Achieve net zero operational GHG emissions by CY2050
Baseline year or
reference year,
and period
Medium‑term target: Baseline year: FY2020 | Period: FY2020 to FY2030
Long‑term net zero goal: Reference year: FY2020. FY2020 is used as a reference year to track progress towards our goal, but is not
a baseline year for achieving our goal. | Period: FY2020 to CY2050
Type and reduction
Medium‑term target: Type: Absolute | Reduction: Gross; At least 30 per cent
Long‑term net zero goal: Type: Absolute | Reduction: Net; 100 per cent (where we currently estimate up to around an 85 per cent gross
operational GHG emissions reduction against FY2020 levels by CY2050 without the use of carbon credits for offsetting)
Boundary
Inventory boundary: Scopes 1 and 2 emissions: Operational control
Exclusions
Non-operated assets and equity investments (included in our value chain GHG emissions (Scope 3 emissions) long-term net zero goal)
GHGs included
CO2, CH4, N2O, HFC, PFC, SF6
Offsetting
Medium‑term target: Our plan is to achieve our medium-term target through structural GHG emissions abatement instead of
offsetting our operational GHG emissions. We will not use regulatory carbon credits (i.e. those used for compliance under regulatory
schemes such as the Safeguard Mechanism in Australia) to meet our target. In our projected pathway, we have not planned to
use voluntary carbon credits to meet our medium-term target, but if there is an unanticipated shortfall in our pathway, we may use
voluntary carbon credits that meet our integrity standards to close the performance gap.
Long‑term net zero goal: Planned, to close the performance gap beyond our current estimate of up to around an 85 per cent gross
operational GHG emissions reduction against FY2020 levels by CY2050 without the use of carbon credits for offsetting
Measurement approach
Scope 1 emissions are calculated using emission factors and methodologies required under mandatory local regulatory programs
where BHP operates, including the National Greenhouse Energy and Reporting (NGER) scheme for Australian operations, Green
Tax legislation (referencing Intergovernmental Panel on Climate Change (IPCC) emission factors) for Chilean operations and
Canadian Greenhouse Gas Reporting Program (referencing IPCC emission factors) for our Jansen potash project. In the absence of
mandatory local regulatory programs, the Australian NGER scheme emission factors and methodology is used. Scope 2 emissions
are calculated using the market-based method using electricity emission factors sourced directly from the supplier where available, as
evidenced by Renewable Energy Certificates and/or supplier-provided documentation. Where supplier-specific emission factors are
not available, a default location-based emission factor for electricity, as published in local regulations or industry frameworks, is used.
Key adjustments made
to baseline year or
reference year and
subsequent data
Baseline year (for our target) and reference year (for our goal) and performance data have been adjusted for divestment of our
interest in BMC (completed on 3 May 2022), divestment of our Petroleum business (merger with Woodside completed on 1
June 2022), BMA’s divestment of the Blackwater and Daunia mines (completed on 2 April 2024), our acquisition of OZ Minerals
(completed on 2 May 2023) and for methodology changes (use of IPCC Assessment Report 5 (AR5) Global Warming Potentials and
the transition to a facility-specific GHG emission calculation methodology for fugitives at Caval Ridge and Saraji South).
Performance, adjusted
FY2020: 13.6 MtCO2‑e FY2021: 13.8 MtCO2‑e FY2022: 10.2 MtCO2‑e FY2023: 9.1 MtCO2‑e FY2024: 9.2 MtCO2‑e
Target or goal setting
method
Medium‑term target: Our target is measured on a cumulative GHG emission basis against an overall carbon budget. The target
percentage reduction was established in FY2020 by applying the same rate of reduction to BHP’s GHG emissions as the rate
at which the world’s GHG emissions would have to contract in order to meet the Paris Agreement goal to hold global average
temperature increase to well below 2°C above pre-industrial levels (known as the ‘absolute contraction method’).
Long‑term net zero goal: Our goal was developed with the ambition to achieve net zero for our operational GHG emissions by
CY2050. Our progress against this goal will be measured on an absolute basis.
Target or goal derived
using a sectoral
decarbonisation
approach
Medium‑term target: No, our target was derived using the absolute contraction method specified earlier. At the time of setting the
target, there were no mining sector‑specific pathways for jurisdictions where we operate.
Long‑term net zero goal: No, however our goal is consistent with the global net zero ambition.
Process for reviewing
the setting of the target
or goal
The Board approves BHP’s significant social, community and sustainability policies (upon recommendation from the Nomination
and Governance Committee), including those related to climate change and climate transition planning, public sustainability goals
and targets (including for GHG emission reductions). We review our GHG emissions targets and goals as part of the periodic
development of an updated CTAP, or more frequently if required.
Process for monitoring
progress towards the
target or goal
Monitored on an annual basis through our business planning processes, which forecast operational GHG emissions and identify
planned, proposed or potential GHG emission reduction projects out to CY2050. As part of this process, an internal GHG emissions
target is set for the relevant financial year and monitored through our annual reporting processes, with progress reviewed by
management and the Board as part of publication of our annual reporting disclosures. Our target is also monitored on a six-monthly
basis through our social value scorecard framework, with progress reviewed by management and the Board as part of publication of
our half-year results (as well as annual reporting disclosures), or more frequently if required.
Third-party validation
of our target or goal
No, but we obtain reasonable assurance over our externally reported performance against our target and goal.
Carbon budget for
target/goal period
Medium‑term target: 126.9 MtCO2-e (FY2020 to FY2030). This reflects a linear reduction between our baseline year and the target
year. In the interim years before FY2030, we periodically refer to our carbon budget to assess our cumulative GHG emissions
against our carbon budget to FY2030. This enables us to determine if we are on track to achieve our medium-term target or whether
we anticipate potential use of voluntary carbon credits to close any performance gap by FY2030 (which we do not currently anticipate).
Long‑term net zero goal: For the period FY2020 to FY2030, refer to the carbon budget for our target. We do not currently use a
carbon budget for the period beyond FY2030.
Expected progression
Progress towards our target and net zero goal is expected to be non-linear and will be affected by organic changes in our production
of commodities.
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BHP Annual Report 2024
Value chain GHG emissions (Scope 3 emissions) medium-term goals definitions assumptions, adjustments and additional key details
Description
Steelmaking medium‑term goal: Support industry to develop steel production technology capable of 30 per cent lower GHG emissions
intensity relative to conventional blast furnace steelmaking, with widespread adoption expected post-CY2030.
Shipping medium-term goal: Support 40 per cent GHG emissions intensity reduction of BHP-chartered shipping of BHP products
Baseline year or
reference year,
and period
Steelmaking medium‑term goal: Reference year: CY2020 (global average GHG emissions intensity for conventional blast furnace
steelmaking as at CY2020, being 2.2 tonnes of CO2 per tonne of crude steel. Source: IEA Iron and Steel Technology Roadmap
(October 2020)). CY2020 is used as a reference year to assess the potential of collaborative partnerships and venture capital
investments to which we may commit funding (refer to ‘measurement approach’ later in this table), but is not a baseline year for
achieving our goal. | Period: FY2020 to CY2030.
Shipping medium‑term goal: Baseline year: CY2008 (reflecting International Maritime Organisation (IMO) objectives for the shipping
industry) | Period: CY2008 to CY2030
Type and reduction
Steelmaking medium‑term goal: Type: Not applicable | Reduction: Not applicable
Shipping medium‑term goal: Type: Intensity | Reduction: Gross; 40 per cent
Boundary
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal:
− GHG emissions from maritime transportation not owned or operated by BHP, but chartered and paid for by BHP, where the
transportation was of BHP-produced products sold by BHP. In some cases, the goal’s boundary may differ from the boundaries
under mandatory reporting.
− Inventory boundary: Scope 3 emissions, Category 4, shipping of BHP products only.
Exclusions
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal:
− GHG emissions from maritime transportation owned, operated and/or chartered and paid for by a third party, where the
transportation was of BHP-produced products sold by BHP.
− GHG emissions from maritime transportation not owned or operated by BHP, but chartered and paid for by BHP, where the
transportation was of third-party-produced products sold by BHP (pursuant to our third-party-trading activity).
− GHG emissions from maritime transportation not owned or operated by BHP, but chartered and paid for by BHP or a third party,
where the transportation was of products purchased by BHP.
GHGs included
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: CO2, CH4, N2O
Offsetting
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: Not planned but will be periodically assessed
Measurement approach
Steelmaking medium‑term goal: Committed funding (US$) for collaborative partnerships and venture capital investments with the
aim to support industry to develop steel production technology capable of 30 per cent lower GHG emissions intensity relative to
conventional blast furnace steelmaking.
Shipping medium‑term goal: Average gCO2-e per deadweight tonne per nautical mile (gCO2-e/dwt/nm), weighted based on IMO
defined vessel size ranges utilised by BHP during the time period, using a well-to-wake CO2-e emission factor from EU Regulation
2023/1805.
Key adjustments made
to baseline year and
subsequent data
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: Baseline year and performance data have been adjusted to only include voyages associated with the
transportation of commodities currently in BHP’s portfolio due to the data availability challenges of adjusting by asset or operation
for CY2008 and subsequent year data. GHG emissions intensity calculations currently include the transportation of copper, iron ore,
steelmaking coal, energy coal, molybdenum, uranium and nickel. Baseline year and performance data have also been adjusted for a
methodology change to use maritime transport emission factors from EU Regulation 2023/1805, after The British Standards Institution
EN 16258 standard (the source of the emission factors we previously used) was withdrawn in CY2023.
Performance, adjusted
(only for shipping)
Steelmaking medium‑term goal: FY2022: US$75 million | FY2023: US$114 million | FY2024: US$140 million
Shipping medium‑term goal: CY2008: 5.8 gCO2-e/dwt/nm | FY2023: 3.5 gCO2-e/dwt/nm | FY2024: 3.4 gCO2-e/dwt/nm
Goal setting method
Steelmaking medium‑term goal: Qualitative. Tracked based on the funding (US$) we commit in collaborative partnerships and
venture capital investments with the aim to support industry to develop steel production technology capable of 30 per cent lower
GHG emissions intensity relative to conventional blast furnace steelmaking.
Shipping medium‑term goal: Set as a point in time, i.e. with the specific date of ‘by CY2030’ for our goal to support a 40 per cent GHG
emissions intensity reduction of BHP-chartered shipping of BHP products, while reflecting the challenges and uncertainty and our
inability (as BHP alone) to ensure Scope 3 emission reductions. As a result, the goal is not based on a trajectory and does not imply a
specific carbon budget, and so Scope 3 emissions may fluctuate (with some increases and/or non-linear decreases) during the period
before the goal date.
Goal derived
using a sectoral
decarbonisation
approach
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: No, although our goal is generally consistent with the IMO’s CY2030 emissions intensity goal for the
international shipping sector and we selected CY2008 as our goal’s baseline year to align with the base year for the IMO’s CY2030
goal and its corresponding reasoning and strategy.
Process for reviewing
the setting of the goal
The Board approves BHP’s significant social, community and sustainability policies (upon recommendation from the Nomination and
Governance Committee), including those related to climate change and climate transition planning, public sustainability goals and
targets (including for GHG emission reductions). We review our GHG emissions targets and goals as part of the periodic development
of an updated CTAP, or more frequently if required.
Process for monitoring
progress towards
the goal
Monitored on a six-monthly basis through our social value scorecard framework, with progress reviewed by management and the
Board as part of publication of our half-year results and annual reporting disclosures, or more frequently if required.
Third-party validation
of our goal
No, but we obtain limited assurance over our externally reported performance against our goals.
Carbon budget for goal
period
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: Our goal is not based on a trajectory and does not imply a specific carbon budget.
Expected progression
Steelmaking medium‑term goal: Not applicable
Shipping medium‑term goal: Progress towards our goal is expected to be non-linear and affected by organic changes in our
production of commodities and associated increases in vessel chartering, due to the dependence on the availability of GHG emission
reduction solutions more broadly across the shipping industry.
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Financial Statements
Governance
Contents
Operating and Financial Review
Value chain GHG emissions (Scope 3 emissions) long-term net zero targets and goal definitions assumptions, adjustments
and additional key details
Description
Value chain long-term net zero goal: We have a long-term goal of net zero Scope 3 GHG emissions by CY2050. Achievement of this
goal is uncertain, particularly given the challenges of a net zero pathway for our customers in steelmaking, and we cannot ensure
the outcome alone
Shipping long-term net zero target: Target net zero by CY2050 for the GHG emissions from all shipping of BHP products. Ability to
achieve the target is subject to the widespread availability of carbon neutral solutions to meet our requirements, including low to zero
GHG emission technologies, fuels, goods and services
Direct suppliers long-term net zero target: Target net zero by CY2050 for the operational GHG emissions of our direct suppliers.
Ability to achieve the target is subject to the widespread availability of carbon neutral solutions to meet our requirements, including
low to zero GHG emissions technologies, fuels, goods and services
Reference year, and
period
Reference year: FY2020. FY2020 is used as a reference year to track progress towards our targets and goal, but is not a baseline
year for achieving our targets or goal. Period: FY2020 to CY2050
Type and reduction
Type: Absolute
Reduction: Net; 100 per cent
Boundary
Value chain long-term net zero goal:
– Total reported Scope 3 emissions are estimated on an equity basis for downstream GHG emissions. For the upstream GHG
emissions component, the boundary is defined on a category-by-category basis due to data limitations.
– Inventory boundary: Scope 3 emissions.
Shipping long-term net zero target:
– GHG emissions from maritime transportation not owned or operated by BHP where the transportation was of BHP-produced
products sold by BHP. May be BHP-chartered or third-party-chartered. In some cases, the target’s boundary may differ from the
boundaries under mandatory reporting.
– Inventory boundary: Scope 3 emissions, Categories 4 and 9, shipping of BHP products only.
Direct suppliers long-term net zero target:
– Scopes 1 and 2 emissions of our direct suppliers included in BHP’s reported Scope 3 emissions reporting categories of
purchased goods and services (including capital goods), fuel- and energy-related activities, business travel and employee
commuting. In some cases, the target’s boundary may differ from the boundaries under mandatory reporting.
– Inventory boundary: Scope 3 emissions, Categories 1, 3, 6 and 7 (subset) emissions are being used as a proxy for the Scopes 1
and 2 emissions of our direct suppliers.
Exclusions
Value chain long-term net zero goal: Refer to exclusions for our shipping and suppliers’ targets.
Shipping long-term net zero target:
– GHG emissions from maritime transportation not owned or operated by BHP, but chartered and paid for by BHP, where the
transportation was of third-party-produced products sold by BHP (pursuant to our third-party-trading activity).
– GHG emissions from maritime transportation not owned or operated by BHP, but chartered and paid for by BHP or a third-party,
where the transportation was of products purchased by BHP.
Direct suppliers long-term net zero target: Scope 3 emissions (for our direct suppliers) associated with our purchased goods and
services (including capital goods), fuel- and energy-related activities, business travel and employee commuting.
GHGs included
Value chain long-term net zero goal: Defined by the available data, which differs by Scope 3 emissions category. We intend to
continue to improve our GHG emission calculations over time to encompass specific greenhouse gases as data becomes available.
Shipping long-term net zero target: CO2, CH4, N2O
Direct suppliers long-term net zero target: Defined by the available data, which differs by Scope 3 emissions category. We intend to
continue to improve our GHG emission calculations over time to encompass specific greenhouse gases as data becomes available.
Offsetting
We anticipate offsetting by our customers, suppliers and other third parties will play a role in meeting our long-term net zero goal
(and potentially our long-term net zero targets), particularly for residual GHG emissions in steelmaking which are not currently
expected to reach zero by CY2050. Where third parties offset their GHG emissions that appear in our reported Scope 3 emissions
inventory, we plan to recognise and report the net GHG emissions after offsetting. Carbon credits sourced by third parties in our
value chain and associated with GHG emissions that appear in our reported Scope 3 emissions inventory would need to be high-
integrity before we recognised that offsetting in our reporting.
6 Sustainability continued
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BHP Annual Report 2024
Measurement approach
Value chain long-term net zero goal: Description of the calculation methodology used for each Scope 3 emissions category can be
found in the BHP GHG Emissions Calculation Methodology 2024, available at bhp.com/climate
Shipping long-term net zero target: Vessel- and voyage-specific GHG emissions calculated using maritime transport emission
factors from EU Regulation 2023/1805.
Direct suppliers long-term net zero target: As a proxy for measurement of the Scopes 1 and 2 emissions of our direct suppliers,
progress is currently measured using Categories 1, 3, 6 and 7 emissions data using a mix of spend-based and activity-based
methodology.
Key adjustments made
to reference year and
subsequent data
Value chain long-term net zero goal: Category 1, Category 3, Category 4 (maritime component), Category 9 (maritime component),
Category 10, Category 11 and Category 15 GHG emissions in reference year and performance data have been adjusted for the
divestment of our interest in Cerrejón (with an effective economic date of 31 December 2020), divestment of our interest in BMC
(completed on 3 May 2022), divestment of our interest in the Rhourde Ouled Djemma (ROD) Integrated Development (completed
in April 2022), divestment of our Petroleum business (merger with Woodside completed on 1 June 2022), BMA’s divestment of
the Blackwater and Daunia mines (completed on 2 April 2024) and acquisition of OZ Minerals (completed on 2 May 2023). The
remaining categories have not been adjusted due to their immateriality to our long-term net zero goal.
Shipping long-term net zero target: Category 4 (maritime component) and Category 9 (maritime component) GHG emissions in
reference year and performance data have been adjusted for a methodology change to use maritime transport emission factors
from EU Regulation 2023/1805, after The British Standards Institution (BSI) EN 16258 standard (the source of the emission factors
we previously used) was withdrawn in CY2023, and have been adjusted for the divestment of our interest in BMC (completed on
3 May 2022), divestment of our Petroleum business (merger with Woodside completed on 1 June 2022), BMA’s divestment of the
Blackwater and Daunia mines(completed on 2 April 2024) and acquisition of OZ Minerals (completed on 2 May 2023).
Direct suppliers long-term net zero target: Category 1 and Category 3 GHG emissions in reference year and performance data have
been adjusted for the divestment of our interest in BMC (completed on 3 May 2022), divestment of our Petroleum business (merger
with Woodside completed on 1 June 2022), BMA’s divestment of the Blackwater and Daunia mines (completed on 2 April 2024) and
acquisition of OZ Minerals (completed on 2 May 2023). Categories 6 and 7 were not adjusted due to their immateriality to our
long-term net zero target.
Performance, adjusted
Value chain long-term net zero goal: FY2020: 352.0 MtCO2‑e | FY2021: 356.3 MtCO2‑e | FY2022: 364.1 MtCO2‑e |
FY2023: 371.6 MtCO2‑e | FY2024: 377.0 MtCO2‑e
Shipping long-term net zero target: FY2020: 6.6 MtCO2‑e | FY2021: 7.2 MtCO2‑e | FY2022: 7.1 MtCO2‑e | FY2023: 6.4 MtCO2‑e |
FY2024: 6.2 MtCO2‑e
Direct suppliers long-term net zero target: FY2020: 11.6 MtCO2‑e | FY2021: 11.7 MtCO2‑e | FY2022: 11.5 MtCO2‑e |
FY2023: 13.0 MtCO2‑e | FY2024: 14.3 MtCO2‑e
Target/goal setting
method
Set as a point in time, i.e. with the specific date of ‘by CY2050’ to reach the target or goal of net zero, while reflecting the challenges
and uncertainty and our inability (as BHP alone) to ensure Scope 3 emission reductions. As a result, the target or goal is not based
on a trajectory and does not imply a specific carbon budget, and Scope 3 emissions may fluctuate (with some increases and/or
non‑linear decreases) during the period before the target or goal date.
Target/goal derived
using a sectoral
decarbonisation
approach
No
Process for reviewing
the setting of the
target/goal
The Board approves BHP’s significant social, community and sustainability policies (upon recommendation from the Nomination
and Governance Committee), including those related to climate change and climate transition planning, public sustainability goals
and targets (including for GHG emission reductions). We review our GHG emissions targets and goals as part of the periodic
development of an updated CTAP, or more frequently if required.
Process for monitoring
progress towards the
target/goal
Monitored on a yearly basis through our annual reporting processes, with progress reviewed by management and the Board as part of
publication of our annual reporting disclosures, or more frequently if required.
Third-party validation
of our target/goal
No, but we obtain limited assurance over our externally reported performance against our targets and goal.
Carbon budget for
target/goal period
Our targets and goal are not based on trajectories and do not imply specific carbon budgets.
Expected progression
Progress towards our targets and goal is expected to be non-linear and affected by organic changes in our production
of commodities.
59
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6.10 Environment and nature
We acknowledge nature, including biodiversity, is deteriorating worldwide
at unprecedented rates. We are supportive of global efforts to halt and
reverse nature loss in the coming decade, following adoption of the
Kunming-Montreal Global Biodiversity Framework during the Conference
of the Parties to the Convention on Biological Diversity in December 2022.
We recognise that to help enable the energy transition, critical minerals
production will need to increase, and it will be essential that this production
meets high standards of environmental stewardship. BHP’s business, our
suppliers and customers, Indigenous peoples and the local communities
where we operate, all depend on and enjoy nature and the ecosystem
services it provides. We acknowledge the nature of our operations and our
environmental performance can impact the natural environment, including
the provision of ecosystem services.
Our Environment Global Standard outlines the minimum requirements
for managing our environmental risks and complying with our
environmental obligations using environmental management systems
aligned to ISO14001. We are working to enable these systems to better
support our approach to environmental management and performance.
The Environment Global Standard also describes our requirement to
apply the mitigation hierarchy (avoid, mitigate, rehabilitate, compensatory
actions) in our approach to managing environmental risks. Our Risk
Framework supports how we seek to identify, assess and manage
environmental risks, as well as our strategic decision-making.
For more information on BHP’s approach to water stewardship,
biodiversity and land, including associated strategies refer to the
following sections and bhp.com/water and bhp.com/biodiversity
Nature-related goal and targets
We have set, and are now focusing on the steps required to achieve, our
2030 Healthy environment goal and our context-based water targets (refer
to the Fresh water and oceans section later in OFR 6.10) that are designed
as part of our contribution towards the global efforts to reduce and/or
reverse nature loss.
Our 2030 Healthy environment goal, announced in 2022, is to create
nature-positive1 outcomes by having at least 30 per cent of the land
and water we steward2 under conservation, restoration or regenerative
practices by the end of FY2030. Our focus is on areas of highest
ecosystem value, both within and outside our own operational footprint,
in partnership with Indigenous peoples and local communities.
Our 2030 Healthy environment goal was developed in anticipation of the
Kunming-Montreal Global Biodiversity Framework. We focus our activities
in support of achieving this goal on the large areas of non-operational
land we steward, as this land offers the greatest opportunity for us to
apply conservation, restoration or regenerative practices at a larger scale.
Our Healthy environment goal and the mitigation hierarchy are considered
as part of the factors we use to inform management approaches for our
operational and non-operational areas.
To meet the FY2024 short-term milestone for the Healthy environment pillar
of our social value scorecard, we have developed a Group-level framework
for nature-positive plans to achieve the 2030 Healthy environment goal
(BHP Healthy environment goal roadmap).4 We intend to assess the
potential opportunities identified in the BHP Healthy environment goal
roadmap to inform business decisions designed to enable BHP to progress
towards our 2030 Healthy environment goal.
As at 30 June 2024, we had 83,012 hectares or 1.62 per cent5 of the land
and water that we steward2,7 under nature-positive management practices3
compared to 79,718 hectares or 1.56 per cent at the end of FY2023.6
The FY2024 area under nature-positive management practices3 has
increased by 3,295 hectares (or 4.13 per cent) since FY2023.
The increase in area under nature-positive management practices in
FY2024 compared to FY2023 is due to: the inclusion of areas under
nature-positive management practice at the former OZ Minerals operation
Carrapateena and the West Musgrave project, not included in our FY2023
reporting; an additional regulatory conservation area at one of BMA’s
assets in FY2024; and BMA’s divestment of the Blackwater and Daunia
mines,7 resulting in these areas, including some areas reported in FY2023
as under nature-positive management practices,3 being excluded from the
land and water we steward.2
The calculation for the area under nature-positive management practices
includes areas under regulatory and voluntary conservation and
restoration, and regenerative agriculture. A breakdown of this can be found
in the BHP ESG Standards and Databook 2024. We plan to continue to
assess, validate and disclose material information regarding the Healthy
environment goal calculation methodology, in consideration of evolving
external frameworks and stakeholder expectations.
For more information on our Healthy environment goal methodology
and natural capital metrics framework, how the BHP Healthy
environment goal roadmap was developed using a targeted version
of the TNFD’s LEAP approach, and examples of areas under
nature‑positive management practice refer to bhp.com/environment
For more information on our 2030 goals refer to OFR 6.5
For more information on how we manage risk refer to OFR 8
6 Sustainability continued
Nature’s four realms – land, ocean, fresh
water and atmosphere
What do we mean by nature
and its associated terms?
– The Recommendations of the Taskforce on Nature-related
Financial Disclosures (TNFD Recommendations), which were
finalised in September 2023, describe nature as having four major
components or realms: land, fresh water, ocean and atmosphere –
each of which interact with people and society. Biodiversity is
a characteristic of all four realms. At BHP, we are continuing to
evolve our sustainability-related reporting to align with this concept
of nature.
– BHP adopts the definitions as outlined in the TNFD Glossary
version 1.0 for the following key nature-related terms: Nature,
Nature-positive, Natural Capital, Biodiversity, Realm, Ecosystem
function and Ecosystem services. We intend to review these
definitions in FY2025, in light of the recently revised TNFD Glossary
Version 2.0 (June 2024).
– Biodiversity is an essential characteristic of adaptable, resilient
and functional ecosystems, which provides society with ecosystem
services on which we rely – clean water, fresh air, productive soils,
pollination, climate regulation and climate physical risk mitigation;
and services through which we enjoy recreation, amenity, spiritual
connection and wellbeing.
For definitions refer to Additional information 10.4 and the
TNFD’s version 1.0 glossary at tnfd.global/publication/glossary/
Atmosphere
Society
Land
Fresh
water
Ocean
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BHP Annual Report 2024
Nature‑related risk and impact management
Our approach to biodiversity and nature recognises the five key drivers
of nature loss (changes in land and sea use, direct exploitation of natural
resources, pollution, climate change, invasive species), as outlined by the
United Nations Environment Programme (UNEP).
Our primary approach to preventing or minimising our adverse
impacts to nature (including air, fresh water and oceans, land and
biodiversity) within our operational footprint is to apply the mitigation
hierarchy. For an example of how we apply the ‘avoid’ pillar, refer to our
environmental-related commitments below.
For more information on governance of sustainability
topics, including nature, refer to OFR 6.3
Our environmental-related commitments are:
– We do not explore or extract resources within the boundaries of
World Heritage listed properties.
– We do not explore or extract resources adjacent to World Heritage
listed properties, unless the proposed activity is compatible with
the outstanding universal values for which the World Heritage
property is listed.
– We do not explore or extract resources within or adjacent to
the boundaries of the International Union for Conservation of
Nature (IUCN) Protected Areas Categories I to IV, unless a plan
is implemented that meets regulatory requirements, takes into
account stakeholder and partner (including Indigenous peoples)
expectations and contributes to the values for which the protected
area is listed.
– We do not operate where there is a risk of direct impacts to
ecosystems that could result in the extinction of an IUCN Red List
Threatened Species in the wild.
– We do not dispose of mined waste rock or tailings into a river or
marine environment.
– We do not use aqueous film forming foams (AFFF) containing
per- and poly-fluoroalkyl substances (PFAS) at our operated
assets. We replace with fluorine free foam products.
The requirement to apply the mitigation hierarchy, our environmental-
related commitments and other Group-wide approaches to environmental
management are set out in our Environment Global Standard and in
mandatory minimum performance requirements for risk management.
We released an updated Environment Global Standard in April 2024 and
key changes include:
– an increased focus on risk and impact management:
i. extends requirements for identifying and assessing nature‑related
risks to include those within BHP’s supply chain
ii. requires consideration of impacts and dependencies, physical risks,
systemic risks and transition risks when assessing nature‑related risk
iii. emphasises application of the mitigation hierarchy when
identifying, assessing and implementing environment‑related controls
– a new requirement to develop and implement asset-level nature-
positive activities and to include these activities within the BHP Healthy
environment goal roadmap
– a new environmental-related commitment to cease use of aqueous film
forming foams (AFFF) that contain per- and poly-fluoroalkyl substances
(PFAS) (a key FY2024 action to reduce our impact associated with one
of the five major drivers of nature loss, pollution)
– enhanced rehabilitation planning commitments
We are prioritising managing our nature-related risks (including impacts,
dependencies, threats and opportunities) within the land and waters we
steward. In FY2024, BHP commissioned work to improve our process for
how we understand and manage nature-related risk in the value chain.
In FY2024, BHP also introduced a new Global Land Use Permitting (GLUP)
system. GLUP is a global software solution developed inhouse to support
the internal end-to-end compliance requirements of our Land Use Permit
process, which is a key control to manage land use disturbance risks
and support application of the avoid and minimise steps of the mitigation
hierarchy. This solution was designed to support the Land Use Permit
owners and contributors to better understand their obligations and how to
manage BHP’s risk to cultural heritage, environment and biodiversity through
a simple, transparent and collaborative global technology system.
For more information on the updated list of nature-related impacts
and dependencies that have been evaluated as part of the
development of the BHP Healthy environment goal roadmap refer to
bhp.com/environment
For more information on the water‑related risks (including impacts,
dependencies, threats and opportunities) we take to seek to prevent,
mitigate or enhance them refer to bhp.com/water
For our overarching approach to risk management refer to OFR 8
For more information on our environmental approach refer to the
Environment Global Standard and our nature‑related management
and governance processes at bhp.com/environment
Fresh water and oceans
Water is integral to what we do and vital to the longevity of BHP. We depend
on access to water and cannot operate without it. Our Water Stewardship
Position Statement outlines our vision for a water secure world by 2030, an
aim consistent with the United Nations Sustainable Development Goal 6,
and considers ecosystem health, cultural and spiritual values, human
rights, communities, Indigenous peoples and economic growth among
other factors. Our position statement is supported by our Water Stewardship
Strategy, which focuses on understanding and managing water-related risk,
disclosure, contributing to the resolution of shared water challenges, valuing
water and sharing innovations and learning.
Water data and accounting relies on a variety of data sources, including from
water modelling, direct measurement and estimation techniques based on
available known methodologies (e.g. estimation of evaporation from water
storages). Recognising that the water models, water balances and assumptions
used in our water accounting approach contain inherent uncertainty; and in line
with our commitment to continuous improvement; we continue to review the
assumptions and refine our methodology of our water accounts and data.
These footnotes refer to previous page
1. Nature-positive is defined by the TNFD Glossary version 1.0 as ‘A high-level goal and concept describing a future state of nature (e.g. biodiversity, ecosystem services and natural
capital) which is greater than the current state’. We understand it includes land and water management practices that halt and reverse nature loss – that is, supporting healthy, functioning
ecosystems. BHP intends to review this definition in FY2025, in light of the recently revised TNFD Glossary version 2.0 (June 2024) definition of nature positive.
2. This excludes areas we hold under greenfield exploration licences (or equivalent tenements), which are outside the area of influence of our existing mine operations. 30 per cent will be calculated based
on the areas of land and water that we steward at the end of FY2030.
3. Nature-positive management practices refer to an area under stewardship that has a formal management plan that includes conservation, restoration or regenerative practices. For more
information refer to the BHP ESG Standards and Databook 2024, available at bhp.com/sustainability.
4. The BHP Healthy environment goal roadmap is intended to apply to our operated assets in Australia, Chile and Canada. Due to the acquisition of OZ Minerals and prioritisation of
activities based on risks and impacts, Carrapateena, Prominent Hill, West Musgrave and legacy assets are currently out of scope for the roadmap; with the exception of West Musgrave,
these assets are planned to be incorporated into the roadmap in FY2025. Incorporation of West Musgrave into the BHP Healthy environment goal roadmap will be reviewed following the
decision to temporarily suspend the Western Australia Nickel operations.
5. 1.62 per cent is calculated based on the areas of land and water that we stewarded (excluding areas we hold under greenfield exploration licences (or equivalent tenements) and subject to
footnote 7) at 30 June 2024 – which was approximately 5,125,935 hectares; an increase of approximately 18,750 hectares compared to approximately 5,107,185 hectares at 30 June 2023.
6. FY2023 values are a restatement of our previously reported 1.3 per cent and 82,132 hectares. The restatement from 82,132 to 79,718 hectares under nature-positive management
practices for FY2023 is due to a change in our methodology and associated definitions; with FY2023 values being reported based on GRI Biodiversity 2016 304-3 definitions.
The restatement from 1.3 per cent to 1.56 per cent area under nature-positive management practices3 is primarily due to approximately 1.5 million hectares of greenfield exploration
licences, which are located outside the area of influence of our existing mine operations, being incorrectly assigned to ‘the land and water we steward’2 component of the Healthy
environment goal calculation in FY2023.
7. While some of the land related to the Daunia and Blackwater mines is pending transfer following BMA’s divestment of these mines on 2 April 2024, these areas are no longer under BMA’s
control or operated for BMA’s benefit so have been excluded from the areas of land and water we stewarded at 30 June 2024.
61
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Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
6 Sustainability continued
1. Water performance data does not include Carrapateena or Prominent Hill operations.
2. CBWTs are intended to apply at the asset level for our operated assets. Due to the previous divestment review of NSWEC, along with CBWTs for our legacy assets in the United States
and Canada, CBWTs for NSWEC and at least one legacy asset area are planned to be released in FY2025. BHP plans to review the suitability of the existing Olympic Dam WRSA and
CBWTs during FY2025, following the creation of the Copper South Australia asset, inclusive of Olympic Dam, Carrapateena and Prominent Hill. We expect to review the need to revise or
create CBWTs when there are substantial changes to our portfolio or one of our projects moves into the operational phase. The Western Australia Nickel context-based water targets do
not include the West Musgrave Project.
In FY2024, seawater continued to be our largest source of water withdrawal (58 per cent in FY24 compared to 52 per cent in FY2023);
groundwater (a mixture of high- and low-quality water) remained our most significant non-seawater source (23 per cent in both FY2024
and FY2023).
The volumes withdrawn in FY2024 represent approximately 28 gigalitres (GL) or 7 per cent reduction in water withdrawal compared to
FY2023. This was primarily due to a reduction in high-quality Type 2 surface water (precipitation and run-off) withdrawal from our BMA and
NSWEC assets, attributable to a decrease in rainfall at those operational areas.
Total water withdrawals from operated assets located in high or very high water-stressed areas (as determined by WWF Water Risk Filter)
was 33,330 megalitres (ML) (9 per cent of total withdrawals for BHP operated assets) compared to 35,340 ML (and 9 per cent) in FY2023;
and consisted of 81 per cent high-quality (Type 1 and 2) water compared to 69 per cent in FY2023. This is primarily due to increased
Type 2 water withdrawal at Pampa Norte, which is sourced from third-party desalinated water (i.e. the original source of this water is
Type 3). Over the same period, Pampa Norte’s Type 3 water withdrawal from third-party surface water decreased from approximately
6,090 ML to approximately 3,350 ML. This is in line with Pampa Norte’s water strategy and context-based water target milestones to cease
operational use of terrestrial water sources from water scarce areas.
In FY2024 the significant decrease in water re-use and recycling at Pampa Norte was primarily due to a change in the methodology for calculating
reused and recycled water, using measured values in calculations instead of estimations.
Key:
Ocean-related performance update
Fresh water-related performance update
Recycled water-related performance
We continue to seek opportunities to source our water from lower-grade
sources rather than use high-quality water resources from the catchments
where we operate. Key insights from our FY2024 water performance are
outlined above.1
In FY2024, we commenced review and refinement of our water accounts
and model at our Western Australia Nickel asset, completing a review at
Mount Keith. Updates to Leinster’s water model are planned to be rolled
out in FY2025. The continuation of this program will be subject to review,
and there is no current plan to disclose water data from West Musgrave
in the future, following the announcement of temporary suspension of
operations at Western Australia Nickel. In FY2025, we also intend to
align Prominent Hill and Carrapateena to ICMM’s Water Reporting, Good
Practice Guide (2nd Ed) and the Minerals Council of Australia’s Water
Accounting Framework, to enable disclosure of water data from these
operations from FY2026.
Context-based water targets
In our Water Stewardship Position Statement, we committed to develop
context-based water targets (CBWTs). These targets were informed by
BHP’s view of water-related risks in the relevant catchment and by the
shared water challenges identified in the Water Resource Situational
Analysis (WRSA). A WRSA is a holistic assessment and summary of the
sustainability, governance, and social, cultural, spiritual, environmental
and economic values of water (fresh or marine) within a defined
catchment area, which provides a rounded understanding of the shared
water challenges and collective action opportunities for the catchment.
The CBWTs aim to improve our internal BHP water management
and contribute to collective benefit and shared approaches to water
management in the regions where we operate. Our CBWTs support
BHP’s 2030 Healthy environment goal and are expected to contribute
to the protection or restoration of water-dependent ecosystems in the
vicinity of our operated assets. The CBWTs are underpinned by a series
of milestones and we delivered all asset-level CBWT2 FY2024 short-term
milestones except one at West Australia Nickel, as summarised on the
next page.
In FY2024, we engaged third parties (e.g. universities) to undertake a
WRSA at NSWEC, including to review publicly available information and
engage with partners and stakeholders (e.g. communities, Indigenous
groups, policymakers and other private corporations within our catchment
areas). Shared water challenges were identified through a WRSA.
NSWEC’s WRSA was released in August 2024. CBWTs for NSWEC and
one of our legacy assets are planned to be released in FY2025.
Beyond BHP’s footprint, we made voluntary contributions to support
environmental resilience across the regions where we operate, including
through thought leadership and action on the ground. For example,
in FY2024:
– We continued to collaborate with the University of Notre Dame to
develop a framework for corporations and policymakers to consider the
human right to water to support social equity and reduce corporate risk.
During FY2024, work continued to make the framework more practical
by developing decision support tools and case studies.
– We continued to progress with the Groundwater Modelling Decision
Support Initiative (GDMSI) with partner organisations Rio Tinto and
Flinders University to help promote the application of advances in
groundwater modelling for environmental and water management
decisions. During FY2024, the initiative reviewed the application of
numerical groundwater modelling in environmental assessments and
delivered a discussion paper on some of the challenges associated with
disclosing and addressing technical uncertainty in decisions.
– BMA has been a member of the Fitzroy Partnership for River Health
and Mackay Whitsunday Isaac Healthy Rivers to Reef Partnership since
2020 and 2022 respectively, contributing over A$0.55 million to these
partnerships in FY2024. One of the key goals of these partnerships is to
provide a more complete picture of river and marine health – providing
funding, resources and contributing water quality and ecosystem health
monitoring data through data-sharing arrangements. In FY2024, the
Mackay Whitsunday Isaac Healthy Rivers to Reef ‘Project Blueprint’, water
quality monitoring and engagement in the Whitsundays, was expanded
to include direct Traditional Owner participation. Project Blueprint has
completed over 12 trips and analysed over 360 samples.
For more information on the Fitzroy Partnership for River Health and
Mackay Whitsunday Isaac Healthy Rivers to Reef Partnership,
including annual report reports, refer to riverhealth.org.au and
healthyriverstoreef.org.au
For more information on WRSAs and CBWTs, including progress
against the targets, and longer-term CBWT milestones, refer to
bhp.com/water and bhp.com/sustainability/environment/water/shared-
water-challenges
NSWEC’s WRSA is available at bhp.com/sustainability/environment/
water/shared-water-challenges/what-is-wrsa
Detailed information on water accounting and reporting of metrics
required by the ICMM Guidance is available at bhp.com/water
For more information on our water performance in FY2024 and case
studies on activities we are undertaking to progress towards meeting
our water stewardship vision refer to bhp.com/water
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BHP Annual Report 2024
Biodiversity
In accordance with the 2022 Kunming-Montreal Global Biodiversity
Framework BHP acknowledges biodiversity is fundamental to human
wellbeing, a healthy planet, and economic prosperity for all people.
We have a Group-level biodiversity strategy that outlines our purpose and
strategic priorities, and is designed to inform operational decision-making
across the full lifecycle of mining operations at our operated assets.
The Group-level strategy provides a clear direction that enables alignment
of asset-level biodiversity and land objectives and supports delivery of
the 2030 Healthy environment goal. The focus areas in the biodiversity
strategy are valuing natural capital, innovation and collaboration, and
nature-related disclosures.
Our work on understanding and managing the value of nature to our
business and to the communities where we operate continues to progress
following the completion of our pilot natural capital accounting (NCA) case
study at our Beenup site in Western Australia in FY2023. Further NCA
piloting was performed in FY2024 at our Olympic Dam operation,
as part of a broader project led by Cooperative Research Centre for
Transformations in Mining Economies (CRC TiME) and CSIRO, with input
from the Australian Government Department of Climate Change, Energy,
the Environment and Water, and other CRC TiME partners. This project
provided inputs to a suite of new resources that has been released to
support the mining industry adopting NCA – a way of accounting for
impacts on nature over the life of projects. The Olympic Dam pilot case
study provided new insights into what is possible using industry data at an
operating asset and revealed the need for a clear underlying rationale to
inform the design of decision-useful natural capital accounts.
The BHP Healthy environment goal roadmap includes a preliminary
natural capital metrics framework, which considers the ecological status
and socio-economic value of natural capital assets that we impact and/
or depend on. It was applied in FY2024 to establish the initial metrics that
are intended to be used to measure the impact of BHP’s nature-positive
management practices.
Beyond BHP’s footprint, we made voluntary contributions to support
environmental resilience across the regions where we operate, including
through on-ground action. For example:
– In FY2024, we finalised our four-year coral reef restoration project with the
Woppaburra Traditional Owners, who are the custodians of Sea Country
adjacent to our BMA operations in the southern Great Barrier Reef.
The project was co-designed by Woppaburra people with some attaining
qualifications in coral aquaculture techniques that have led to employment
opportunities. Our pilot of the Seascape Framework, which is one of the
world’s largest Indigenous created and managed marine conservation
initiatives, continued with Conservation International in Lau, Fiji.
– In FY2024, we renewed our fourth extension of the Bush Blitz Project for
a further five years to the end of FY2030. Bush Blitz is Australia’s largest
nature discovery program – a unique multi-million-dollar partnership
between BHP, the Australian Government and Earthwatch Australia to
document plants and animals across the country. Since the program
began in 2009, Bush Blitz has discovered more than 2,100 new species
and has added thousands of species records to what is already known.
Phase 3 of the program, from 1 June 2018 to April 2024, involved
15 field expeditions, which covered 2,966,495 hectares of land and
almost 62 square kilometres of sea, making a major contribution to the
understanding and conservation of Australia’s biodiversity. During
these expeditions, Bush Blitz scientists – supported by BHP employees
and educators serving as field research assistants – discovered
311 species new to science. The surveys also engaged hundreds of
Indigenous rangers, Traditional Owners, park rangers and other land
managers. In particular, Bush Blitz has undertaken research on
Indigenous-managed properties, creating positive cultural exchange
and learning opportunities for rangers and scientists.
– Since FY2021, we have partnered with Curtin University on the use
of environmental DNA (eDNA) as a novel biomonitoring tool to enable
the development of ecosystem condition indices. We have supported
five pilot studies that focus on protected species (e.g. the Pilbara olive
python), subterranean conservation research, functional ecology of the
Chilean wetlands of the Altiplano, and studies to develop new assays
that can be used to detect invasive marine species. This work was
extended in FY2024 to include research into sampling eDNA from soil
and air. In terms of impact, the research has produced 22 scientific
publications, supported six post-graduate students, sequenced the
first complete genome of the Pilbara olive python, added 391 marine
sequences to GenBank, and assembled over 150 new mitochondrial
genomes. A Funding Agreement for a further four years of ongoing
eDNA research with Curtin University was signed in FY2024.
For more information on our 2030 goals refer to OFR 6.5 and for
information on our biodiversity strategy refer to bhp.com/biodiversity
For more information on our approach to biodiversity and land
management and case studies on activities we are undertaking
to progress towards meeting our biodiversity aims refer to
bhp.com/biodiversity
For more information on the CRC TiME and CSIRO NCA project and
resources refer to crctime.com.au/blog/media-release-new-reports-
to-help-test-applicability-of-natural-capital-accounting-in-australias-
mining-sector/
Progress against FY2024 context-based water target milestones
FY2024 milestone
Progress
BMA
Make available unutilised1 BMA water
allocations to the temporary water
trading market for each year from
FY2024
This milestone was achieved in FY2024.
3.05GL of water allocations was traded on the temporary water trading market
in FY2024.
Escondida and
Pampa Norte
Cease extraction of terrestrial water
for Cerro Colorado operational use
This milestone was achieved in FY2024.
Extraction for operational use ceased December 2023.
Nickel West2
Facilitate establishment of a Northern
Goldfields catchment regional water
working group
While activities have been undertaken in line with the intent of the FY2024 short-term
milestone, this milestone has not yet been achieved. The Northern Goldfields
catchment regional water working groups are being established by local native title
holders, and Nickel West actively collaborated in this process throughout FY2024.
Olympic Dam
Implement a permanent daily abstraction
limit on Wellfield A at 5ML/d
This milestone was achieved in FY2024.
Daily abstraction from Wellfield A remained below 5ML/d throughout FY2024.
Western Australia
Iron Ore
Initiate and support a collaborative
scoping study for a regional water
data sharing solution
This milestone has been achieved in FY2024.
Terms of Reference for the Weeli Wolli Catchment Industry Collaboration
group, coordinated by the Chamber of Minerals and Energy, have been agreed.
BHP funding has been committed to support shared environmental analytics
incorporating a catchment scale integrated groundwater database in the Pilbara.
1. Some water allocations at BMA are not made available for sale ‘in year’ and are retained for strategic contingency purposes as ‘carry over’. Unutilised ‘carry over’ is subject to ongoing
assessment throughout the year as to what can be made available. At 30 June any unused ‘carry over’ amounts are incorporated into the following financial year’s ‘in year’ water for the
total river scheme’s announced allocations by the Resource Operator.
2. The existing commitment to develop an ‘action to improve BHP’s water performance’ CBWT in the future will be reviewed following the decision to temporarily suspend Western Australia
Nickel operations. The Western Australia Nickel context-based water targets do not include the West Musgrave Project.
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Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Land
As at 30 June 2024, BHP owned, leased or managed approximately
8,874,555 hectares of land compared to approximately 8,038,027 hectares
as at 30 June 2023. The approximately 836,528-hectare increase is
primarily due to the incorporation of former OZ Minerals Australian land
holdings. Approximately 2 per cent (approximately 144,634 hectares)
of this area has been disturbed for mining operation purposes and
approximately 16 per cent (approximately 22,885 hectares) of land we have
disturbed is currently rehabilitated.
Most of the area we steward is located in Australia and is for non-
operational land uses, such as pastoral leases or land set aside for
conservation. BHP’s approach to environmental management is tailored
to different area types in our portfolio. See Figure below for a visualisation
of this.
For more information on our approach to biodiversity and land
management and case studies on activities we are undertaking
to progress towards meeting our biodiversity aims refer to
bhp.com/biodiversity
Atmosphere and air quality
Clean air is crucial for the health of our people, our host communities and
the surrounding ecosystems. We are actively working to improve air quality
management, with a focus on managing emissions of particulate matter
from our operations.
Our emission of nitrous oxides, particulates and sulphur dioxide is
considered non-material in comparison to global emissions as determined
by the GRI materiality assessment process. We have extensive particulate
monitoring and management programs at some of our operated assets.
We report air emissions (such as nitrous oxides) as part of the BHP ESG
Standards and Databook 2024, available at bhp.com/ sustainability, and
discuss our approach and management to these on our environment
webpage at bhp.com/environment.
For more information on our approach to air quality,
refer to the Pilbara Air Quality Program case study at
bhp.com/sustainability/environment
6 Sustainability continued
Infographic footnotes:
1. Land data is calculated as the total area of land owned, leased or managed by BHP at 30 June 2024. This value includes greenfield exploration licences (or equivalent tenements), which
are outside the area of influence of our existing mine operations. Land associated with the Daunia and Blackwater mines is excluded, as the mines were divested by BMA during the year.
While some of the land related to the Daunia and Blackwater mines is pending transfer following completion on 2 April 2024, it is no longer under BMA’s control or operated for BMA’s
benefit and has been excluded on that basis.
2. Note that this was incorrectly stated in the FY2023 Annual Report as ‘operational area – the area we hold for mining’, rather than ‘disturbed area, predominantly for operational purposes’.
3. This excludes areas we hold under greenfield exploration licences (or equivalent tenements), which are outside the area of influence of our existing mine operations. 30 per cent will be
calculated based on the areas of land and water that we steward at the end of FY2030.
4. Nature-positive is defined by the TNFD Glossary version 1.0 as ‘A high-level goal and concept describing a future state of nature (e.g. biodiversity, ecosystem services and natural
capital) which is greater than the current state’. We understand it includes land and water management practices that halt and reverse nature loss – that is, supporting healthy, functioning
ecosystems. BHP intends to review this definition in FY2025, in light of the recently revised TNFD Glossary version 2.0 (June 2024) definition of nature positive.
In FY2024, BHP owned, leased or managed an area of just under 8.9 million hectares1 consisting of:
Operational areas
Non-operational areas
Outside BHP footprint
Outside BHP footprint
Refers to areas held by others,
including thought leadership
on approaches to assessing
nature-positive4 outcomes
Outcome we seek
– avoiding and minimising impacts to the
environment and our host communities from
our operational activities
– no net loss of biodiversity over mine life cycle
– compliance with environmental permits
How we manage
– 2030 Social Value goals, incl. Healthy environment
goal and associated context-based water targets
– Global Standards, including the Environment Global
Standard, Climate Change Global Standard and
Closure and Legacy Management Global Standard
– BHP Healthy environment goal roadmap
– Indigenous Peoples Policy Statement
– mitigation hierarchy
– environmental-related commitments
– Asset Environment Management Systems
– risk management
Outcome we seek
– focus area for delivering at least 30% of the land and
water we steward3 under conservation, restoration or
regenerative practices
– build resilience of natural environment, focusing on
highest ecosystem value
– strengthening partnerships with Indigenous peoples
How we manage
– 2030 Social Value goals, incl. Healthy environment
goal and associated context-based water targets
– Global Standards, including Environment
Global Standard
– BHP Healthy environment goal roadmap
– Indigenous Peoples Policy Statement
Outcome we seek
– contributing to positive conservation outcomes
beyond the areas where we operate
How we manage
– BHP Social Investment Strategy, portfolio and
funding for both on-ground action, piloting new
concepts and thought leadership initiatives.
2%
approx. 144,634 hectares
disturbed area2
Predominantly for
operational purposes
98%
approx. 8.7 million
hectares
Predominantly areas we
hold for strategic purposes
or alternative use
(e.g. pastoral or conservation)
64
BHP Annual Report 2024
Environmental legal cases
We have settled ongoing legal cases involving environmental matters
for our operated assets. Examples for Lagunillas (Cerro Colorado) and
Monturaqui (Escondida) are described below.
Nine fines were issued and paid in FY2024 in relation to environmental
laws and regulations at our operated assets. For more information refer to
the 2024 ESG Standards and Databook.
Lagunillas (Cerro Colorado)
In 2021, an individual filed an environmental damage claim against Cerro
Colorado (CMCC) before the First Environment Court of Antofagasta,
alleging CMCC’s water extraction from the Lagunillas aquifer had damaged
the aquifer, as well as a nearby lagoon and wetlands. The substantive
case was heard in FY2022. In November 2023, the Environmental Court
approved the settlement submitted by the parties, concluding that the
environmental remediation measures in the agreement are adequate.
Monturaqui (Escondida)
In March 2022, the Chilean Environmental Regulator (SMA) sanctioned
Escondida, concluding it had breached its environmental permit causing
irreparable environmental damage due to its water extraction from
the Monturaqui aquifer. In March 2022, the SMA imposed a fine of
approximately US$8.3 million. In February 2023, Escondida filed an appeal
before the First Environmental Court seeking to annul the SMA decision.
The appeal is pending.
Shortly after the March 2022 SMA decision, two related environmental
damage claims were filed in the First Environment Court of Antofagasta.
Following a hearing in July 2023, the Court is now in a position to render
a ruling on the claims’ merits, which we expect could occur within the next
12 months.
Engagement
Beyond our operational activities, we engage across communities,
Indigenous peoples’ representatives, government, industry association
memberships, our customers and suppliers, business and civil society on a
range of topics related to environmental management.
Through our engagement in industry associations, we have provided input
into their advocacy with governments on behalf of industry. In FY2024,
our focus within industry has been on streamlining approvals and permits
whilst maintaining environmental standards; recognising environmental,
social and economic factors must be considered in these processes.
Specific examples include:
– direct and indirect engagement, via the Minerals Council of Australia,
with the Australian Government on its Nature Positive law reforms,
outlining our alignment with the government’s intent to reform the current
national environmental laws so they achieve the right balance between
better outcomes for the environment and supporting economic growth,
investment and job creation
– indirect advocacy via the Chilean Mining Council, in relation to a Bill that
strengthens environmental management instruments, deepening citizen
participation, and providing greater certainty and reduced processing
times. We also advocate for the reduction of processing times without
weakening environmental standards
We also partner with others to advance the thinking in our priority areas of
action. As an International Council on Mining and Metals (ICMM) member,
we have worked with industry peers to develop the ICMM’s nature position
statement with associated commitments, which was adopted by ICMM
members in January 2024.
For more information on the ICMM nature position statement refer to
icmm.com/en-gb/our-principles/position-statements/nature
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6.11 Community
Through our business activities and the social, economic and
environmental initiatives that accompany them, we can make a significant
contribution to communities where we operate and to society more broadly.
Our operations can also generate impacts for host communities that
need to be carefully identified, monitored and addressed. This tension
challenges us to look for inclusive, innovative and integrated solutions that
meet the constantly evolving performance expectations that communities
and society hold for us. This means the voice of our community
stakeholders remains a critical input into our short-term response and
our long-term vision around community engagement, partnership
and investment.
In FY2024, we continued to manage relevant risks (threats and
opportunities) and impacts as well as progressed development of
our longer-term strategic approach to community engagement.
This includes an increased focus on seeking to adopt a ‘co-creation’
approach – involving and providing agency for our partners to shape
selected initiatives.
Co-creation
Co-creation, or co-design, in essence, is a strategic approach involving
the integration of diverse partners’ resources, knowledge and networks to
resolve complex collective challenges or realise more enhanced outcomes
through collaboration. It places BHP within a larger ecosystem where
stakeholders actively participate in project development and delivery.
Stakeholders act as valuable contributors to each design process and
ideas generated via co-creation become integral to a company’s decision-
making process. Throughout this Report we use the terms co-creation and
co-design interchangeably.
For the Thriving, empowered communities (TEC) pillar of the social value
scorecard, BHP’s experience and learning from external sources have
demonstrated that integrating a co-creation approach is an opportunity,
when adopted in the right circumstances, to generate outcomes that are
more valued by Indigenous peoples, communities, governments and civil
society through an enhanced sense of ownership and benefit. There are
also business benefits to this approach, including enhanced social value
outcomes and impact. As such, the TEC pillar focuses on the adoption of the
practice of co-designed targets within the 2030 scorecard. In FY2024, we
increased our focus on co-creation within our general community approach.
This includes commencing the development of criteria that provide guidance
on co-design practices, processes and assessments against the social value
targets within the TEC pillar of our social value framework.
For more information on our social value scorecard, including our
co-creation metrics and milestones, refer to OFR 6.5
Understanding communities
Our approach to community engagement and research includes:
– Community perception surveys – snapshots of the communities where
we operate and stakeholders’ perspectives on their community priorities
and of sector and BHP performance, completed on a regular basis.
As at 30 June 2024, field work for the latest community perceptions
survey was underway.
– Community baseline studies – desktop assessments that provide
quantitative and qualitative data on social, cultural, economic and
political characteristics of the communities where we operate. The most
recent baselines were completed in FY2023 and included all operated
and legacy assets and our exploration regions at that time. The former OZ
Minerals operations will be included in future community baseline studies.
– Community and human rights impact and opportunity assessments
(CHRIOAs) – analysis of surveys, baseline studies and community
stakeholder feedback against asset plans to identify and prioritise
potential and actual risks, impacts and opportunities related to
local communities where we operate (see the following section for
more details).
– Community engagement and social investment indicators – data
collected related to community engagements (e.g. number of community
concerns and use of operational grievance mechanisms) and social
investment partnerships (e.g. outcome indicators of a particular project)
that provide insights to the communities’ relationships with us.
We continue to track and report instances of community concerns,
complaints and grievances received through our operational grievance
mechanisms and other feedback avenues. In FY2024, there were 600
community concerns and complaints received across our operated assets
globally. Of note, 462 of these related to a mass submission of email
communications received in relation to potential impacts of the BMA Caval
Ridge Horse Pit Extension project during the public disclosure period.
The nature of the concerns raised were the same in each submission
and included potential impacts to flora and fauna, impacts on ground and
surface water and the final landform of the project.
6 Sustainability continued
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Prioritised community and human rights issues for operating regions identified in CHRIOAs
– Climate-related
– Cumulative environmental impacts
– Social investment
– Economic diversification
– Education and training
– Local employment
– Cumulative
environmental impacts
– Relationships with
Indigenous peoples
– Workforce mental health
– Community mental health
– Housing availability/
affordability
– Education/training/
employment
Chile
– Climate-related
– Physical health and safety
– Closure
New South Wales
– Water access and pollution
– Free, prior, informed consent
– Access to remedy
– Housing availability/
affordability
South Australia
– Climate-related
– Water access and pollution
– Free, prior, informed consent
– Access to remedy
– Dust/noise/air quality
– Housing availability/affordability
– Closure
– Education/training/employment
– Cultural heritage management
– Workforce mental health
– Remuneration
Western Australia
Queensland
– Cumulative
environmental impacts
– Limited community infrastructure
– Education/training/employment
– Cost of living/Inflation
– Employment opportunities
Canada
The majority of remaining concerns and complaints related to operational
issues, such as dust, road and rail impacts, lighting and noise.
Asset complaint volumes remained relatively stable from last year’s
figures with the exception of BMA (attributed to the Horse Pit Extension
project submission as detailed above) and a 57 per cent decrease in
complaints at NSWEC, through the resolution of an ongoing issue with a
single community stakeholder. Ten complaints were made by Indigenous
communities in Chile which we are seeking to address through ongoing
dialogue with those communities. Concerns, complaints and grievances
from communities connected to the former OZ Minerals assets are
expected to be incorporated in the BHP Annual Report from FY2025.
In FY2024, we implemented a new enterprise-wide stakeholder
management system that enables us to maintain improved records
of community engagements and our commitments. This system also
incorporates an updated external facing complaints and grievance portal
designed to improve accessibility for community members to provide direct
feedback to us. We intend to launch the enhanced portal for the system
in FY2025. We also updated our internal standards, designed to provide
improved guidance for community engagement and social performance
leading practice as well as to enhance integration with our existing
business processes, such as asset planning and risk assessments.
For more information on stakeholder concerns reflecting entries
received through our local grievance mechanisms, local stakeholder
engagement and ongoing community research, including community
perception surveys, refer to the BHP ESG Standards and
Databook 2024 at bhp.com/ESGStandards2024
We recognise many of the communities where we operate rely on mining
and associated activities to support their livelihoods. We aim to ensure
change and transitions are equitable and deliberately considered across
the lifecycle of our business and for the communities where we operate.
For information on our approach to equitable change and transition,
including equitable change and transition at our Mt Arthur coal mine,
refer to the BHP Climate Transition Action Plan 2024 available at
bhp.com/CTAP2024
Community and human rights impact and
opportunity assessments
In FY2024, building on the results of the community and human rights
baseline studies completed for all operated assets and certain exploration
regions in FY2023, we developed and commenced implementation
of a globally consistent methodology for community and human rights
impact and opportunity assessments (CHRIOAs), which identified and
prioritised potential impacts, risks and opportunities related to the local
communities where we operate. The approach was trialled at all our
operated assets (excluding the former OZ Minerals assets) and selected
exploration regions. This enabled identification of the potential community
and human rights impacts and opportunities most prevalent to each region
while also supporting a global view of recurring issues, which can help us
identify potential opportunities for company-wide action or collaboration.
The identified risks, impacts and opportunities are being evaluated and are
expected to be embedded within asset and relevant functions’ FY2025 risk
profiles. The highest priority areas for each operating region are detailed
in the map below, with US legacy assets and Exploration prioritising water
access and pollution as the key CHRIOA priority risk areas. In FY2025,
we plan to further embed the CHRIOA process through the integration of
identified risks (threats and opportunities) into asset risk profiles to enable
action. We also expect to include the former OZ Minerals assets in this
process in future years.
As we acquire assets in new areas, we may be exposed to additional
human rights risks. For information on our approach to addressing modern
slavery risks in our operations and supply chains, refer to the BHP Group
Modern Slavery Statement 2024.
For more information on our approach to community refer to
bhp.com/communities
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6.12 Indigenous peoples
Indigenous peoples are important partners for BHP’s activities. Across our
Minerals Australia and Minerals Americas activities, BHP operates on or
close to the traditional lands of Indigenous peoples and we have a deep
respect for their distinct cultures, rights, perspectives and aspirations.
BHP is committed to working collaboratively with Indigenous peoples
to develop long‑term partnerships based on trust and mutual benefit as
set out in our Indigenous Peoples Policy Statement. It is through this
commitment that we aim to support reconciliation with Indigenous peoples
and contribute to improved social, economic and environmental outcomes.
In FY2024, we developed and introduced procedures for projects and
new operations to identify and assess the severity of potential adverse
impacts to Indigenous peoples’ and to engage and consult Indigenous
peoples to understand how we can seek to avoid and mitigate adverse
impacts, with the intention of substantially addressing potentially impacted
Indigenous peoples’ ambitions and concerns. We have also introduced
new procedures for projects and new operations to engage with and
seek to obtain ‘free, prior and informed consent’ (FPIC) from potentially
impacted Indigenous peoples in accordance with the approach set out in
our Indigenous Peoples Policy Statement. Where gaps exist between the
host government’s laws and regulations about consultation with Indigenous
peoples and BHP’s approach to FPIC, our policies require that BHP apply
the higher standard. All projects and proposed new operations are required
to submit progress reports to senior management across the project
lifecycle to report on progress or any challenges to satisfying BHP’s FPIC
procedures. In FY2025, we aim to continue to strengthen our internal
systems for collecting and reporting on the global management of risks to
Indigenous peoples and FPIC processes with Indigenous peoples.
During FY2024, we progressed work in relation to further developing
how we will approach Indigenous Cultural and Intellectual Property (ICIP)
and Data Sovereignty in line with the principle set out in our Indigenous
Peoples Policy Statement. We plan to continue this work into FY2025,
which we expect to inform the design of our standards and processes for
the collection, access and reuse of cultural information that pertains to
Indigenous peoples.
6 Sustainability continued
Incorporate Indigenous voices, values,
knowledge and perspectives
BHP will seek out Indigenous voices, values, knowledge and
perspectives in the way we work. We will connect with Indigenous
peoples to better appreciate the historical, legal, social,
environmental, cultural and political landscape where we
operate or seek to operate, and how to better manage
the environment we share.
Strengthen engagement with Indigenous peoples
through dialogue and co-design
BHP will engage early and support meaningful dialogue with
Indigenous peoples by sharing knowledge and information both
ways and ensure our processes allow for active participation in
appropriate aspects of the design, implementation and
monitoring of plans that impact Indigenous peoples.
BHP’s Indigenous Peoples Policy Statement
BHP’s ambition is to create long-term relationships with Indigenous peoples based on trust and mutual benefit. We aim to support reconciliation
with Indigenous peoples and contribute to improved social, economic and environmental outcomes. Through our Policy Statement we will be
guided by the aims of the United Nations Declaration on the Rights of Indigenous peoples as articulated in the Policy Statement’s Principles,
which are summarised below.
Seek to obtain the free, prior and
informed consent of potentially affected
Indigenous peoples
BHP’s default position will be that a proposed new operation
or capital project should not proceed without consent; and
where consent has not been provided, BHP will escalate senior
management involvement in the process to determine if the new
operation or capital project will proceed.
Respect Indigenous peoples’ cultural and
intellectual property and data sovereignty
BHP acknowledges the value and ownership of information
related to Indigenous cultural heritage and the rights to
information regarding Indigenous peoples’ narratives,
traditions and lore.
Regional Indigenous Peoples Plans
Principles
Indigenous partnerships
Under the Indigenous partnerships pillar of our social value framework, we
have set ourselves the goal of delivering respectful relationships that hear
and act upon the distinct perspectives, aspirations and rights of Indigenous
peoples and support the delivery of mutually beneficial and jointly defined
outcomes (refer to OFR 6.5). We have committed to report annually on
metrics for Indigenous employee representation, Indigenous procurement,
our ‘progress to plan’ against the co-designed Indigenous Peoples Plans in
each region where we operate, and about actions to improve the health of
our relationships with those Indigenous peoples.
Relationship health
In FY2024, we completed an inaugural assessment of the health of our
relationships with a range of our Indigenous partners. We engaged global
research firm, Ipsos, to independently gather feedback on a confidential
basis from a number of BHP’s Indigenous partners in Australia, Canada
and Chile where we operate our assets. In total, representatives from 17
of 26 Indigenous partner organisations who were contacted to take part
in the inaugural assessment agreed to participate. All organisations that
were contacted for the inaugural assessment have current agreements with
BHP or are located on or near our operations. The feedback indicated that
relationships had been strained in the past. While BHP is making some
progress in its relationships with Indigenous partners, there is still more to
do to achieve our goal of delivering respectful relationships that hear and
act upon the distinct perspectives, aspirations and rights of Indigenous
peoples and support the delivery of mutually beneficial and jointly defined
outcomes. Recommendations for improvement include more resourcing
and empowerment of BHP’s Indigenous Engagement teams, and greater
involvement for Indigenous partners in BHP decision-making around
employment, procurement and community initiatives to ensure opportunities
are available to Indigenous peoples at the community level. The feedback also
indicated that some Indigenous partners desire a greater level of involvement
from BHP in community engagements, such as in cultural events and informal
meetings. The relationship health results varied across the different countries
covered in the assessment and is broadly summarised as:
Canada: The five Canadian Indigenous organisations that participated
reported a positive trajectory in their relationship health with BHP and
expressed the most optimism in their feedback on the future potential of
relationships. Key personnel at BHP were seen to instigate respectful,
meaningful and genuine engagements with Indigenous communities.
This has helped create trust in BHP’s commitment to deliver positive
outcomes through community investments and initiatives. Some areas
of concern included past instances of cultural disrespect and that
proactive steps to understand Indigenous history and culture were not
always consistently applied. In some instances, there was frustration
expressed about communications and transparency, as well as present
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BHP Annual Report 2024
levels of Indigenous employment representation. The feedback indicates
desire to see more two-way dialogue with decision-makers established.
Looking to the future, Canadian Indigenous partners expressed a high
degree of optimism at the economic opportunities at the Jansen operation.
To maintain this optimism, partners in Canada seek increased Indigenous
representation in decision-making processes and positions and expect a
stronger focus on training and upskilling so that Indigenous peoples may
increase their employability to work for BHP.
Australia: The six Australian Indigenous organisations that participated
indicated there had been an improvement in relationship health from the
past to the present. Many of the improvements in overall relationship
health were attributed to key personnel at BHP who advocate strongly for
Indigenous partners and who conduct their engagements respectfully with
long-term goals of Indigenous advancement in mind. The establishment
of Indigenous Engagement and Cultural Heritage teams and greater
direct engagement from BHP senior leaders in Australia were seen
as improvements. However, the feedback also indicates only marginal
improvement from the present to the future for our relationships in
Australia. Some Indigenous partners reported that relationships can still
feel transactional and lacked continuity. In some instances, there was a
view expressed that BHP could provide more commercial and employment
opportunities to Indigenous partners and improve the accessibility of its
systems and processes. These factors contributed to a less optimistic
outlook about the future state of the relationship compared to the other
jurisdictions. There was a desire expressed by Australian Indigenous
partners to see more Indigenous peoples advancing to more senior roles
in BHP. Partners also expressed a desire to see more social investment
initiatives that benefit more groups. These changes, along with more
frequent engagement with decision-makers, were seen as necessary steps
to build trust and to help move towards more respectful relationships based
on mutual benefit in the future.
Chile: The six Chilean Indigenous organisations that participated
indicated they had seen modest improvement in relationship health
from the past to the present and were more optimistic in their view on
the future. Indigenous partners in Chile perceive inadequacies in the
opportunities and operational and environmental protections offered by
the national legal system and they expect BHP to set a higher standard.
There was a perception that BHP had prioritised commercial outcomes in
the past and there had, in some cases, been inadequate recognition and
understanding of Chilean culture and values. Some partners continue to
perceive protections as inadequate in managing environmental impacts
and want to see BHP enhance cultural protections, improve access to
areas that hold cultural meaning and implement measures to minimise
the health impacts of mining on communities. More generally, partners
expressed a desire to see BHP be more proactive in engagement with a
broader range of the community, including those that are not recognised
by Chilean legal structures. Partners believe employment and training
opportunities could be better geared to Indigenous staff and skillsets in the
community to improve levels of Indigenous employment. There appears to
be an openness from Indigenous partners to continue engaging to improve
relationships with BHP in Chile.
Relationship health assessment results
Past
Present
Future
Aggregate
Australia
Canada
Chile
3.8
5.6
5.2
5.3
4.5
7.2
6.6
9.8
2.7
2.7
5.9
7.3
Each interview was structured around one theme: How would you rate the
overall health of the organisation/entity’s relationship with BHP over three
time periods in considering the past, present and future of the relationship?
Responses were recorded as a rating from zero to 10. Our regional
Indigenous Peoples Plans are being considered in light of the partner
feedback received and to identify areas of focus within the actions set
under those plans.
Progress to plan
We are making progress with our commitments in the global Indigenous
Peoples Policy Statement and the social value framework to incorporate
‘Indigenous voices and perspectives’ into co-designed priorities, as set out
in the Indigenous Peoples Plans in each region where we operate.
We ‘partially met’ our FY2024 social value scorecard short-term milestone
‘Indigenous voices and perspectives are incorporated into co-designed
priorities in each region’ as two out of three countries have published a
co-designed regional Indigenous Peoples Plan that has incorporated the
voices and perspectives of Indigenous peoples. Australia published its
Reconciliation Action Plan (RAP) in FY2023. Canada approved its Canada
Indigenous Partnerships Plan (CIPP) in FY2024. Chile is still developing its
regional Indigenous Peoples Plan and hopes to publish it in FY2026.
Australia: Minerals Australia released its RAP in FY20231. There were
25 RAP targets that were due to be achieved in FY2024; of this, 21
targets were completed in full and we also completed our reforms to
embed four ongoing RAP targets into standard business requirements.
RAP targets have been embedded in BHP’s business planning process
and performance is measured regularly through a new RAP performance
dashboard with live data and scorecards. The BHP RAP Governance and
Accountability Framework has seen the development of the BHP Australian
Indigenous Peoples Working Group (AIPWG) that is attended by the
Minerals Australia Business President and Chief Legal, External Affairs and
Governance Officer.
Canada: Minerals Americas approved its first Canada Indigenous
Partnerships Plan (CIPP) in FY2024. The plan assists BHP to
operationalise our global Indigenous Peoples Policy Statement and
respond to the Truth & Reconciliation Call to Action 92 for businesses in
Canada. The CIPP signifies the journey towards greater co-creation and
to develop impactful partnerships, deliver on Indigenous employment
and procurement targets, as well as support the wellbeing of Indigenous
peoples through internal cultural awareness training and social investment
activities. Implementation of the CIPP is expected to begin in Q1
of FY2025.
Chile: In FY2024, Minerals Americas designed the process for developing
an Indigenous Peoples Plan for Chile and is expected to commence
consultations with Indigenous peoples in FY2025 to start to co-design the
plan. We are aim to publish the plan in FY2026.
Indigenous procurement and employee participation
We are making progress against our social value scorecard metrics
for Indigenous employee participation and Indigenous procurement.
Indigenous employment teams developed and implemented Indigenous
workforce initiatives in FY2024 to help provide pathways to employment,
support our Indigenous workforce, build a more culturally capable
non-Indigenous workforce and meet our employment metrics. In Australia,
our Indigenous employment was at 8.3 per cent in FY2024, down from
8.6 per cent in FY2023, and our target is to reach 9.7 per cent by FY2027.
In Chile, our Indigenous employment was at 10.1 per cent in FY2024, up
from 9.7 per cent in FY2023, and we surpassed our target to reach 10 per
cent by FY2025. In Canada, our Indigenous employment was at 11.2 per
cent in FY2024, up from 7.7 per cent in FY2023, and our target is to reach
20 per cent by FY2026.
For more information on our employee data and approach refer to
OFR 6.6
In FY2024, we continued to improve engagement with Indigenous
businesses across all our operating locations.2 Compared to FY2023, our
direct global spend with Indigenous businesses increased by 83 per cent to
US$609 million in FY2024 and the number of Indigenous vendors engaged
rose by 20 per cent to 263. Through this effort, we have seen continued
growth in spend with Indigenous businesses across our Australian assets
with FY2024 direct spend of US$458 million up from US$267.5 million in
FY2023 in line with our Reconciliation Action Plan (RAP) commitments.
In Canada, spend with Indigenous business partnerships during FY2024
totalled US $151 million continuing the focus on these opportunities since
the sanctioning of Jansen Stage 1.
Footnotes
1. For more information about the Australian RAP refer to bhp.com/-/media/project/
bhp1ip/bhp-com-en/documents/careers/indigenous-peoples-and-bhp/200921_
bhpreconciliationactionplan.pdf.
2. For definitions for Indigenous businesses in each operating location refer to the ESG
Standards and Databook 2024.
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Operating and Financial Review
6 Sustainability continued
Minerals Australia
BHP held its second annual Traditional Owners’ Forum in Brisbane
in November 2023 with strong representation from Traditional Owner
groups from around Australia. BHP sought input from Traditional Owners
to co-create the 2023 agenda, and the themes of discussion provided
an opportunity to reflect and speak honestly on BHP’s performance and
delivery in the context of Traditional Owner experiences.
We have undertaken consultation in FY2024 to understand the elements
of an effective and sustainable model for an Indigenous advisory body
in Minerals Australia, and, once developed, the advisory body will shape
BHP’s understanding and implementation of commitments in the RAP, until
the end of FY2027.
A Cultural Heritage Standard that was developed in FY2023 by the
Minerals Australia Cultural Heritage team was embedded in all BHP
operated assets in Minerals Australia in FY2024. This Standard considers
leading international and national frameworks and aims to enable mining
activity while simultaneously encouraging the voices of relevant First
Nations/Indigenous peoples to be at the forefront of decision-making
processes on heritage matters through the mining lifecycle.
In FY2024, one new Heritage Agreement and 11 new Cultural Heritage
Management Plans were successfully negotiated with Indigenous
communities. These Cultural Heritage Management Plans mainly covered
existing operations at WAIO and BMA to modernise existing government
approvals. In line with our social value approach, new heritage protection
areas were also agreed through the Cultural Heritage Management Plans
and projects supported with communities to culturally map these places for
knowledge transfer and wider community benefits.
Minerals Americas
Chile
In FY2024, Escondida developed a new Indigenous partnership strategy
which aims to build a stable, long-term relationship, based on trust and
mutual benefits, with the five Indigenous communities of Borde Sur:
Peine, Talabre, Socaire, Camar and Toconao. The strategy is focused
on resolving past grievances, honoring commitments and creating
opportunities for regular and structured dialogue between Escondida and
Indigenous communities that will contribute to improved relationships,
build greater trust and proactively address community concerns.
In FY2024, Escondida updated its Community Relationship Strategy
with the Indigenous community of Peine, which is focused on building
and maintaining a long-term relationship. Meetings have been held with
Peine to help inform the project of progressive closure of the Monturaqui
well field.
Our Cerro Colorado operation is planning the execution of several projects
for the next five to seven years, including: care and maintenance activities,
closure works on the Parca Slope, geo/hydro physical drillings and the
Cerro Colorado Life Extension (CCLE) project. All projects will be executed
on the Cerro Colorado mine site and surrounding territories, which are on
lands that are neighbouring the villages of Parca, Iquiuca, Quipisca and
Mamiña, among others. These areas are under a Chilean state’s special
administrative regime (Área de Desarrollo Indígena) and are subject to
territorial claims by different Indigenous organisations. We are engaging
with Indigenous peoples to include their voices during the study phases for
these projects. Despite experiencing challenges with some engagements,
Cerro Colorado is working on an update of the strategy with Indigenous
communities, aimed at reaching agreements with as many communities/
associations as possible.
Canada
In FY2024, we started to operationalise two draft milestones in the Canadian
Indigenous Partnership Plan (CIPP) while it was under development.
The recommended review and refresh of our internal Indigenous awareness
training that is delivered to all employees and contractors that work at our
Jansen site is underway and will include Indigenous perspectives in the
Effective Leadership training. Additionally, Human Resources conducted
an external review of the human resources policies to support Indigenous
inclusion. A new employee resource group for Indigenous employees located
in Canada, Indigenous@BHP Canada, was created in FY2024 and has been
meeting regularly to determine how best to support recruitment, retention and
advancement for current and future Indigenous employees.
Legacy assets
BHP owns more than 20 former copper, uranium and other mine sites,
called legacy assets, in the US southwest and across Canada. Many of
these sites are in the traditional territories of Native American Tribes and
First Nations. The legacy assets are in a state of closure or post-closure and
focused on tailings and water management, risk mitigation and technical
studies, closure and environmental remediation projects, and general site
care and maintenance. We recognise closure is a long-term process, and
that Indigenous peoples have an interest in seeing the sites returned to as
close to a natural state as possible. BHP engages with Indigenous groups
near our legacy assets and is in varying stages of resetting or establishing
collaborative working relationships and partnerships.
Resolution Copper
Resolution Copper Mining is owned by Rio Tinto (55 per cent) and BHP
(45 per cent), and managed by Rio Tinto. We acknowledge the Resolution
Copper project area includes areas of cultural significance for Native
American Tribes and their members, and is the subject of ongoing litigation.
Development of the project continues to be studied and remains subject to
regulatory reviews by federal, state and local governments. Resolution Copper
Mining continues to cooperatively engage in these regulatory processes and
has publicly stated its commitment to deepening ongoing engagement with
Native American Tribes and stakeholders to understand and seek to mitigate
potential adverse impacts, while also collaborating to create shared value
opportunities. We are monitoring Resolution Copper Mining’s engagement,
FPIC and agreement-making processes.
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What we assured
Ernst & Young (‘EY’, ’we’) was engaged by BHP to provide limited assurance over certain sustainability data and disclosures in BHP’s Annual Report, ESG Standards and Databook, and online for the year
ended 30 June 2024 in accordance with the Criteria, as defined in the following table:
What we assured (Limited Assurance Subject Matter)
What we assured it against (Criteria)
BHP’s qualitative disclosures in Section 6 of the Operating and Financial Review
within the BHP Annual Report 2024
–
Management’s own publicly disclosed criteria
BHP’s sustainability policies and standards as disclosed in the ICMM tab in the
BHP ESG Standards and Databook 2024 at bhp.com/sustainability
–
International Council on Mining and Metals (ICMM) Mining Principles and relevant Performance Expectations
and mandatory Position Statements (Subject Matter 1 of the ICMM Assurance and Validation Procedure 2023
(ICMM Procedure))
BHP’s identification and reporting of its material sustainability issues, risks and
opportunities described within Section 6 of the BHP Annual Report 2024 and online
at bhp.com/sustainability/approach
–
ICMM Procedure Subject Matter 2
–
Global Reporting Initiative (GRI) Standards 2021 GRI 3: Material Topics
BHP’s implementation of systems and approaches to manage its material
sustainability risks and opportunities
–
ICMM Procedure Subject Matter 3
BHP’s reported performance of its material sustainability issues, risks and
opportunities in Section 6 of the Operating and Financial Review within the
BHP Annual Report 2024 and the BHP ESG Standards and Databook 2024,
referenced above
–
ICMM Procedure Subject Matter 4
–
Management’s own publicly disclosed criteria. as informed by the GRI Topic Standards, and the Sustainability
Accounting Standards Board (SASB) Mining and Metals Standard
–
BHP Scopes 1, 2, and 3 GHG Emissions Calculation Methodology 2024, as informed by the National
Greenhouse and Energy Reporting (Measurement) Determination 2008 for scope 1 and scope 2 GHG data,
and the World Resource Institute/World Business Council for Sustainable Development Greenhouse Gas
Protocol: A Corporate Accounting and Reporting Standard, including the GHG Protocol: Scope 2 Guidance
and the Corporate Value Chain Scope 3 Accounting and Reporting Standard for scope 3 GHG data
Water stewardship reporting, at an operated asset level, in the BHP Annual Report
2024, the BHP ESG Standards and Databook 2024, referenced above, and
supporting disclosures included online at bhp.com/sustainability/environment/water
–
ICMM guidance and minimum disclosure Standards: Water Reporting: Good practice guide (2nd edition), 2021
In addition, we were engaged by BHP to provide reasonable assurance over the following information in accordance with the noted Criteria, as defined in the following table:
What we assured (Reasonable Assurance Subject Matter)
What we assured it against (Criteria)
Scope 1 and Scope 2 greenhouse gas emissions as reported in Section 6 of the
Operating and Financial Review within the BHP Annual Report 2024 and the BHP
ESG Standards and Databook 2024, referenced above.
–
World Resource Institute/World Business Council for Sustainable Development (WRI/WBCSD) Greenhouse
Gas Protocol
–
BHP’s Scopes 1, 2 and 3 GHG Emissions Calculation Methodology 2024
6.13 Independent Assurance Report to the Management and Directors of BHP Group Limited
Our Conclusion:
Ernst & Young (‘EY’, ‘we’) were engaged by BHP Group Limited (‘BHP’) to undertake a limited and reasonable assurance engagement as defined by International Auditing Standards over the Limited
Assurance Subject Matter and Reasonable Assurance Subject Matter (defined below) for the year ended 30 June 2024. Our conclusions are as follows:
–
Limited assurance: Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe the Limited Assurance Subject Matter
for the year ended 30 June 2024 has not been prepared, in all material respects, in accordance with the Criteria (as defined below).
–
Reasonable assurance: In our opinion, the Reasonable Assurance Subject Matter for the year ended 30 June 2024 is prepared, in all material respects, in accordance with the Criteria (as
defined below).
Emphasis of Matter:
We draw attention to BHP’s methodology for accounting for water performance metrics as disclosed in Section 6.10 of BHP’s Annual Report, and associated ESG Standards and Databook. BHP’s method
reflects current industry-wide practice for water modelling which includes estimation of certain variables which contains inherent uncertainty. Consequently, BHP’s disclosed water performance data,
prepared in accordance with the criteria, is subject to estimation uncertainty which may affect the precision of the data presented. Our conclusion is not modified in respect of this matter.
Other than as described in the preceding paragraphs, which set out the
scope of our engagement, we did not perform assurance procedures
on the remaining information included in the BHP Annual Report
2024, and accordingly, we do not express an opinion or conclusion on
this information.
The Limited Assurance Subject Matter and the Reasonable Assurance
Subject Matter may be referred to in this report, individually or
collectively, as the case requires, as the ‘Subject Matter’.
Key responsibilities
BHP’s responsibility
BHP’s management is responsible for selecting the Criteria, and
ensuring the Subject Matter is prepared, in all material respects, in
accordance with that Criteria. This responsibility includes establishing
and maintaining internal controls, maintaining adequate records and
making estimates that are relevant to the preparation of the Subject
Matter, such that it is free from material misstatement, whether due to
fraud or error.
EY’s responsibility and independence
For the limited assurance engagement, our responsibility is to
express a conclusion on the Limited Assurance Subject Matter based
on the evidence we have obtained. For the reasonable assurance
engagement, our responsibility is to express an opinion conclusion on
the Reasonable Assurance Subject Matter based on the evidence we
have obtained.
We have complied with the independence and relevant ethical
requirements, which are founded on fundamental principles of integrity,
objectivity, professional competence and due care, confidentiality and
professional behaviour.
EY applies Auditing Standard ASQM 1 Quality Management for
Firms that Perform Audits or Reviews of Financial Reports and
Other Financial Information or Other Assurance or Related Services
Engagements, which requires the firm to design, implement and operate
a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Our approach to conducting the assurance procedures
We conducted our assurance procedures in accordance with the
International Auditing and Assurance Standards Board’s International
Standard on Assurance Engagements Other Than Audits or Reviews
of Historical Financial Information (‘ISAE 3000’) and the Standard
for Assurance on Greenhouse Gas Statements (‘ISAE 3410’) and
the terms of reference for this engagement as agreed with BHP on
22 March 2024.
For the limited assurance engagement, these standards require that we
plan and perform our engagement to express a conclusion on whether
anything has come to our attention that causes us to believe that
the Limited Assurance Subject Matter is not prepared, in all material
respects, in accordance with the Criteria, and to issue a report.
For the reasonable assurance engagement, these standards require
that we plan and perform our engagement to obtain reasonable
assurance about whether, in all material respects, the Reasonable
Assurance Subject Matter is presented in accordance with the Criteria,
and to issue a report.
For both a limited assurance engagement and a reasonable assurance
engagement, the nature, timing and extent of the assurance procedures
selected depend on our professional judgement, including an
assessment of the risk of material misstatement, whether due to fraud
or error.
Description of assurance procedures performed
A limited assurance engagement consists of making enquiries, primarily
of persons responsible for preparing the Limited Assurance Subject
Matter and related information, and applying analytical and other
appropriate procedures.
The limited assurance procedures we performed were based on our
professional judgement and included, but were not limited to:
– Interviewing select corporate and site personnel to understand the
reporting process at group, business, asset, and site level, including
management’s processes to identify BHP’s material issues
– Reviewing BHP policies and management standards to determine
alignment with the ICMM’s 10 Sustainable Development principles
and position statements
– Checking the BHP Annual Report 2024 to understand how BHP’s
identified material issues, risks and opportunities are reflected within
the qualitative disclosures
– Evaluating whether the information disclosed in the Limited
Assurance Subject Matter is consistent with our understanding of
sustainability management and performance at BHP
– Evaluating the suitability of the Criteria and that the Criteria have been
applied appropriately to the Subject Matter
– Conducting virtual and in-person site procedures at BHP locations
on a sample basis, based on our professional judgement (which we
currently implement on a rotational basis across reporting years), to
evidence site level data collection and reporting to Group as well as
to identify existence and confirm completeness of the sustainability
performance data and statements included within the Subject Matter
– Undertaking analytical procedures of the quantitative disclosures
in the Subject Matter to determine the reasonableness of the
information presented
– On a sample basis for qualitative and quantitative statements
within the Subject Matter, based on our professional judgement,
reviewing underlying data to source information and data to
assess completeness of claims, such as process conversations,
review of invoices, incident reports, meter calibration records, and
meter data; re-performing calculations to check accuracy; and
reviewing explanations about the sustainability performance data
and statements
– Reviewing other information within the BHP Annual Report 2024
for consistency and alignment to other quantitative and qualitative
information within the Subject Matter
– Reviewing BHP media coverage relating to sustainability-related
topics to identify material events that may require disclosure
– Checking the water balance for each operated asset inclusive of
understanding the methodologies used to consider consistency with
the Criteria, and reviewing meter and calibration records on a sample
basis, based on our professional judgement.
Additional reasonable assurance procedures we performed were based
on professional judgement and included, but were not limited to:
– For our reasonable assurance of Scope 1 and Scope 2 greenhouse
gas emissions, on a sample basis, checked the methodologies
used by BHP to consider consistency with the Criteria, considered
completeness of sources obtained from our site procedures,
and checked underlying data to source information to assess
completeness and accuracy of performance data, which included
reviewing invoices, meter calibration records and meter data.
We believe that the evidence obtained is sufficient and appropriate to
provide a basis for our limited assurance conclusion and reasonable
assurance opinion.
Inherent limitations
While we considered the effectiveness of management’s internal
controls when determining the nature and extent of our procedures,
our assurance engagement was not designed to provide assurance on
internal controls.
The greenhouse gas emissions quantification process is subject
to scientific uncertainty, which arises because of incomplete
scientific knowledge about the measurement of greenhouse gases.
Additionally, greenhouse gas procedures are subject to estimation
and measurement uncertainty resulting from the measurement and
calculation processes used to quantify greenhouse gas emissions
within the bounds of existing scientific knowledge.
Additional inherent limitations – limited assurance scope
Procedures performed in a limited assurance engagement vary in
nature and timing from, and are less in extent than for, a reasonable
assurance engagement. Consequently, the level of assurance obtained
in a limited assurance engagement is substantially lower than the
assurance that would have been obtained had a reasonable assurance
engagement been performed. Our procedures were designed to obtain
a limited level of assurance on which to base our conclusion and do not
provide all the evidence that would be required to provide a reasonable
level of assurance.
Our procedures did not include testing controls or performing
procedures relating to checking aggregation or calculation of data
within IT systems.
Additional inherent limitations – reasonable assurance scope
While our procedures performed for our reasonable assurance
engagement are of a higher level of assurance, due to the use of
sampling techniques, it is not a guarantee that it will always detect
material misstatements.
Other matters
We have not performed assurance procedures in respect of any
information relating to prior reporting periods, including those presented
in the Limited Assurance Subject Matter and Reasonable Assurance
Subject Matter. Our report does not extend to any disclosures or
assertions made by BHP relating to future performance plans and/
or strategies disclosed in the BHP Annual Report 2024, the BHP ESG
Standards and Databook 2024, and supporting disclosures online.
Use of our Assurance Report
We disclaim any assumption of responsibility for any reliance on this
assurance report to any persons other than the management and
the directors of BHP, or for any purpose other than that for which it
was prepared.
Our assurance procedures were performed over certain web-
based information that was available via web links as of the date
of this assurance report. We provide no assurance over changes
to the content of this web-based information after the date of this
assurance report.
Ernst & Young
Mathew Nelson
Melbourne, Australia
Partner
27 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
71
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Fundão dam failure
As a result of the Fundão dam failure in November 2015, a significant
volume of tailings (39.2 million cubic metres) resulting from the iron ore
beneficiation process was released. Tragically, 19 people died as a result
of the failure. The communities of Bento Rodrigues, Paracatu de Baixo
and Gesteira were flooded and other communities and the environment
downstream in the Doce River basin were also affected.
Samarco restarted its operations at a reduced production level in December
2020 and is currently operating at 31 per cent of its production capacity.
For information on Samarco’s operations refer to OFR 5.3
Our response and support for the Foundation
Following the dam failure, BHP Brasil1 has been and remains fully committed
to supporting the extensive ongoing remediation and compensation efforts
of Renova Foundation in Brazil. BHP Brasil’s commitment to collectively
seek solutions for a full, fair and definitive response remains unwavering.
In March 2016, a Framework Agreement entered into between Samarco,
Vale, BHP Brasil and relevant Brazilian authorities established the
Renova Foundation, a not-for-profit, private foundation responsible for
implementing 42 remediation and compensatory programs. BHP Brasil,
along with Samarco and Vale, provide support and funding to the Renova
Foundation, including through representation in its governance structures.
As of 30 June 2024, the Renova Foundation has spent R$37 billion
(approximately US$7.7 billion) on remediation and compensation programs,
of which approximately US$2.6 billion has been provided by BHP Brasil.
Renova Foundation
Compensation and financial assistance
The Renova Foundation continues to provide compensation to people
impacted by the dam failure, oversees an extensive community resettlement
program and manages measures to remediate the environment affected.
Compensation and financial assistance of approximately R$17.5 billion
(approximately US$3.5 billion)2 as of 30 June has been paid to support
approximately 430,000 people affected by the dam failure. This includes:
– Approximately R$12.2 billion (approximately US$2.5billion)2 paid to
approximately 110,000 people under the court-mandated simplified
indemnity system (known as the Novel system). The Novel system was
designed to provide compensation for informal workers who have had
difficulty proving the damages they suffered, such as cart drivers, sand
miners, artisanal miners and street vendors. The court determined the
closure of the Novel system for new entries in September 2023.
– Approximately 33,000 people received emergency financial assistance.
– Approximately 39,000 people received general damages (including for
loss of life, injury, property damage, business impacts, loss of income
and moral damages) and more than 290,000 people have been paid a
total of approximately R$305.6 million (approximately US$69 million)2
for temporary water interruption.
For updates on reparation progress refer to bhp.com/what-we-do/global-
locations/brazil/samarco-reparations
Resettlement
A key priority for the Renova Foundation is the resettlement of the
communities of Novo Bento Rodrigues, Paracatu and Gesteira. For Novo
Bento Rodrigues and Paracatu, priority efforts included construction of
houses and private property, such as small businesses and churches, as
well as infrastructure and public services, including roads, power, water
and sewer networks, health and services centres and schools. At Gesteira,
pursuant to an agreement finalised in May 2023 and ratified by the court,
families and the public authorities have opted to receive compensation
instead of building a new community.
As at 30 June 2024, approximately 91 per cent of resettlement cases have
been completed, either via completion of construction (with families moving
in or handover to families in progress) or cash payment for those families
who have opted for this option instead of the other resettlement solutions
offered by the Renova Foundation. More than 260 families are now living
in their new homes in Novo Bento Rodrigues and Paracatu, as well as
other locations.3 Novo Bento Rodrigues and Paracatu are now functioning
communities. Water treatment stations, a health centre, a church, a football
field, as well as multiple businesses are operating, including supermarkets,
restaurants, bars, retail shops and service stations. Additionally,
community-led traditional festivities, such as Carnival and other religious
events, are taking place regularly in both towns.
The resettlements have involved ongoing engagement and consultation
with a large number of stakeholders, including the affected community
members, their technical advisers, state prosecutors, municipal leaders,
regulators and other interested parties.
The new towns were designed on land chosen by the communities to be as
close as possible to the previous layout, addressing the wishes and needs
of the families and communities while also meeting permitting requirements.
Each family receives access to an architect to design their house within size
parameters, which is then finalised and built by the Renova Foundation.
Mandated COVID-19 workforce restrictions and suspensions of works
on-site from 2020 to 2022, increases to the technical scope for
resettlement of the communities and permitting delays have impacted
the timeline for completion. Ongoing efforts to accelerate completions
while maintaining the safety requirements continued throughout FY2024.
For updates on reparation progress refer to
bhp.com/what-we-do/global-locations/brazil/samarco-reparations
Other socio-economic programs
The Renova Foundation continues to implement a wide range of socio-
economic programs in addition to compensation and resettlement programs.
These programs cover health and infrastructure projects in the Doce River
basin, promotion of economic development in the impacted communities and
sewage treatment facilities to further improve the water quality in the Doce River.
Regarding infrastructure projects, the Risoleta Neves Hydroelectric
Power Plant (Candonga), which was shut down after the Fundão dam
failure, restarted its operations in the state of Minas Gerais in March 2023.
Additionally, 18 new water pipelines have been built in the Doce River,
including one to serve the population of Governador Valadares, the biggest
city in the river basin, and 19 water treatment supply systems have been
upgraded to provide alternative water sources.
Environmental remediation
Since December 2019, the impacted riverbanks and floodplains have
been vegetated, river margins stabilised and in general, water quality and
sediment qualities have returned to historic levels. The Renova Foundation
continues implementing long-term monitoring and compensatory initiatives.
The Brazilian Water Agency, a federal body responsible for the
implementation of Brazilian water resources, has classified the water
from the Doce River as Class II, which means the water can be used
for human consumption after conventional treatment, the protection of
aquatic habitats and primary contact recreation, such as swimming, water
skiing and diving, among other things. This is supported by approximately
1.5 million pieces of data generated annually along the Doce River by the
largest watercourse monitoring system in Brazil, which is led by the Renova
Foundation together with six public agencies, including the National Water
and Sanitation Agency. Additionally, according to information provided by
municipalities and water supply institutions, since December 2015 most
of the population in the Doce River basin is using and consuming the river
water after conventional treatment.
To further improve water quality in the Doce River, as compensation,
the Renova Foundation has made R$840 million (approximately
US$174 million) available for sanitation projects to prevent pollution
from untreated sewage, given approximately 270 million cubic metres
of untreated sewage is deposited into the Doce River every year –
approximately six times the volume of non-toxic tailings that was released
from Fundão. Additionally, R$1.7 billion (approximately US$352 million)
was made available for forest recovery. It is intended that in total 40,000
hectares and 5,000 springs will be fully restored in a partnership with
approximately 2,000 rural properties.
A ban on fishing activities along the coast of Espírito Santo and a
precautionary conservation restriction preventing fishing for native fish species
in the Doce River in Minas Gerais remain in place. The Renova Foundation
continues to engage with the authorities with the goal of lifting the restrictions.
For updates on reparation progress refer to
bhp.com/what-we-do/global-locations/brazil/samarco-reparations
Legal proceedings
BHP Group Limited, BHP Group (UK) Ltd (formerly BHP Group Plc) and BHP
Brasil are involved in legal proceedings relating to the Fundão dam failure.
BHP Brasil, Samarco, Vale and several public authorities have been
engaging in negotiations to seek a definitive and substantive settlement of
certain claims relating to the Fundão dam failure.
For information on the significant legal proceedings and settlement
negotiation process involving BHP refer to Additional information 8
7 Samarco
1. BHP Billiton Brasil Ltda (BHP Brasil) and Vale S.A. (Vale) are 50:50 shareholders in Samarco Mineração S.A. (Samarco), the independent operator of Samarco.
2. USD amount is calculated based on actual transactional (historical) exchange rates related to Renova funding.
3. For those families who chose not to join the resettlement with their previous community and instead resettled elsewhere.
72
BHP Annual Report 2024
8 How we manage risk
Risk management helps us to protect and create value, and is central to achieving our purpose and strategic objectives.
Our Risk Framework has four pillars: risk strategy, risk governance, risk process and risk intelligence.
Risks associated with the organisations, businesses or assets that we acquire are transitioned to BHP’s Risk Framework as part of integration activities,
which generally involves a transitional period. Risk integration of our OZ Minerals assets (excluding the OZ Minerals Brazil assets which are subject to
ongoing strategic review) remains on track for completion by the end of CY2024.
Risk strategy
Risk classification
We classify all risks to which BHP is exposed using our Group Risk
Architecture. This is a tool designed to identify, analyse, monitor and
report risk, which provides a platform to understand and manage
risks. Similar risks are considered together in groups and categories.
This is designed to give the Board and management visibility over
the aggregate exposure to risks on a Group-wide basis and support
performance monitoring and reporting against BHP’s risk appetite.
Risk appetite
BHP’s Risk Appetite Statements, aligned to our Group Risk
Architecture, are approved by the Board and are a foundational
element of our Risk Framework. They provide guidance to
management on the amount and type of risk we seek to take in
pursuing our objectives.
Key risk indicators
Key risk indicators (KRIs) are set by management to help monitor
performance against our risk appetite. They also support decision-
making by providing management with information about financial and
non-financial risk exposure at a Group level. Each KRI has a target, or
optimal level of risk we seek to take, as well as upper and lower limits.
Where either limit is exceeded, management will review potential
causes to understand if BHP may be taking too little or too much risk
and to identify whether further action is required.
Risk culture
Our risk management approach is underpinned by a risk culture
that supports decision-making in accordance with BHP’s values,
objectives and risk appetite. We use a common foundation across
BHP to build the tools and capabilities required to enable us to
understand, monitor and manage our risk culture. These include the
risk-culture assessments undertaken as part of our internal audit plan.
Strategic business decisions
Strategic business decisions and the pursuit of our strategic
objectives can inform, create or affect risks to which BHP is exposed.
These risks may represent opportunities as well as threats. Our Risk
Appetite Statements and KRIs assist in determining whether a
proposed course of action is consistent with BHP’s risk appetite.
Our focus when managing risks associated with strategic business
decisions is to enable the pursuit of high-reward strategies. Therefore,
as well as having controls designed to protect BHP from threats, we
seek to implement controls to enable and/or enhance opportunities.
Risk governance
Three lines model
BHP uses the ‘three lines model’ to define the role of different teams
across the organisation in managing risk. This approach sets clear
accountabilities for risk management and provides appropriate
‘checks and balances’ to support us in protecting and growing value.
The first line is provided by our frontline staff, operational
management and people in functional roles – anyone who makes
decisions, deploys resources or contributes to an outcome is
responsible for identifying and managing the associated risks.
The Risk team and other second-line teams are responsible for
providing expertise, support, monitoring and challenge on risk-related
matters, including by defining Group-wide minimum standards.
The third line, our Internal Audit team, is responsible for providing
independent and objective assurance over the control environment
(governance, risk management and internal controls) to the Board
(including applicable Board Committees) and Executive Leadership
Team. Additional assurance may also be provided by external
providers, such as our External Auditor.
The Risk team and Internal Audit team are led by the Chief Risk
and Audit Officer. This structure facilitates overall effectiveness of
both teams, including through alignment of second- and third-line
assurance activities across BHP, while maintaining the independence
of our Internal Audit team through appropriate safeguards.
BHP Board and Committees
The Board reviews and monitors the effectiveness of the Group’s
systems of financial and non-financial risk management and internal
control. The broad range of skills, experience and knowledge of
the Board assists in providing a diverse view on risk management.
The Risk and Audit Committee (RAC) and Sustainability Committee
assist the Board by reviewing and considering BHP’s material risk
profile (covering operational, strategic and emerging risks) on a
biannual basis.
Risk management performance is monitored and reported to the
RAC, as well as the Sustainability Committee for health, safety,
environment and community matters, supporting the Board to
challenge and hold management to account.
For information on other Board Committee activities
that support risk governance at BHP refer to
Corporate Governance Statement 5
73
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
8 How we manage risk continued
8.1 Risk factors
Our risk factors are described below and may occur as a result of our
activities globally, including in connection with our operated and non-
operated assets, third parties engaged by BHP or through our value
chain. These risks, individually or collectively, could threaten our strategy,
business model, future performance, solvency or liquidity and reputation.
They could also materially and adversely affect the health and safety of
our people or members of the public, the environment, the communities
where we or our third-party partners and providers operate, or the
interests of our partners and stakeholders, which could in each case lead
to litigation, regulatory investigations or enforcement actions (including
class actions or actions arising from contractual, legacy or other liabilities
associated with divested assets), or a loss of partner, stakeholder and/
or investor confidence. References to ‘financial performance’ include our
financial condition and liquidity, including due to decreased profitability or
increased operating costs, capital spend, remediation costs or contingent
liabilities. BHP may also be exposed to risks that we currently believe to be
immaterial that may materially affect our business if they occur.
Each risk factor may present opportunities as well as threats. We take
certain risks for strategic reward in the pursuit of our strategy and purpose,
including to grow our asset portfolio and develop the right capabilities for
the future of our business. Some of the potential threats and opportunities
associated with each of our risk factors are described below, along with the
key controls to manage them. These controls are not exhaustive and many
Group-wide controls (such as Our Code of Conduct, Risk Framework,
mandatory minimum performance requirements for risk management,
health, safety and other matters, dedicated non-operated joint venture
teams and our Contractor Management Framework) help to support
effective and efficient management of all risks in line with our risk appetite.
While we implement preventative and/or mitigating controls designed to
reduce the likelihood of a threat from occurring and minimise the impacts if
it does, these may not always be effective.
Risk process
Our Risk Framework requires identification and management of risks
(both threats and opportunities) to be embedded in business activities
through the following process:
– Risk identification – threats and opportunities are identified and
each is assigned an owner or accountable individual.
– Risk assessments – risks are assessed using appropriate
and internationally recognised techniques to determine their
potential impacts and likelihood, prioritise them and inform risk
treatment options.
– Risk treatment – controls are implemented to prevent, minimise
and/or mitigate threats, and enable and/or enhance opportunities.
– Monitoring and review – risks and controls are reviewed
periodically and on an ad hoc basis (including where there are
high-potential events or changes in the external environment) to
evaluate performance.
– Communication – relevant information is recorded in our enterprise
risk management system to support continuous improvement and
share risk intelligence across the Group.
Our Risk Framework includes requirements and guidance on the tools
and processes to manage current and emerging risks.
Current risks
Current risks are risks that could impact BHP today or in the near
future and comprise current operational risks (risks that have their
origin inside BHP or occur as a result of our activities) and current
strategic risks (risks that may enhance or impede the achievement of
our strategic objectives).
Current risks include material and non-material risks (as defined by
our Risk Framework). The materiality of a current risk is determined
by estimating the maximum foreseeable loss (MFL) if that risk were to
materialise. The MFL is the estimated impact to BHP in a worst-case
scenario without regard to probability and assuming all controls,
including insurance and hedging contracts, are ineffective.
For more information on our risk factors refer to OFR 8.1
Our focus for current risks is to prevent their occurrence or minimise
their impact should they occur, but we also consider how to maximise
possible benefits that might be associated with strategic risks (as
described in the Risk strategy section). Current material risks are
required to be evaluated once a year at a minimum to determine
whether our exposure to the risk is within our target range.
Emerging risks
Emerging risks are newly developing or changing risks that are
highly uncertain and difficult to quantify. They are generally driven by
external influences and often cannot be prevented by BHP.
BHP maintains a ‘watch list’ of emerging themes and monitors
associated signals to interpret external events and trends, providing
an evolving view of the changing external environment and how
it might impact our business. We use the watch list and signal
monitoring to support the identification and management of emerging
risks, as well as to inform and test our corporate strategy.
Once identified, our focus for emerging risks is on structured
monitoring of the external environment, advocacy efforts to reduce
the likelihood of the threats manifesting and identifying options to
increase our resilience to these threats.
Risk intelligence
The Risk team provides the RAC, Sustainability Committee and
senior management with insights on risk management across
BHP. Risk reports may include trends, aggregate exposure and
performance for our most significant risks, updates on the Risk
Framework and risk management priorities, an overview of (and
material changes in) BHP’s material risk profile and updates on
emerging risk themes and signals.
We maintain a risk insights dashboard designed to provide current,
data-driven and actionable risk intelligence to our people at all levels
of the business to support decision-making. This tool empowers the
business to manage risks more effectively, with increased accuracy
and transparency.
The Board, RAC and Sustainability Committee also receive other
reports to support the Board to review and monitor the effectiveness
of BHP’s systems of financial and non-financial risk management.
Examples of these include internal audit reports, ethics and
investigations reports, compliance reports and the Chief Executive
Officer’s report.
For more information on our risk factors refer to OFR 8.1
74
BHP Annual Report 2024
Risk factor: Operational events
Risks associated with operational events in connection with our activities globally, resulting in significant adverse impacts on our people, communities,
the environment or our business.
Why is this important to BHP?
We engage in activities that have previously caused and have the potential
to further cause harm to our people and assets, communities, other
stakeholders and/or the environment, including serious injuries, illness and
fatalities, loss of infrastructure, amenities and livelihood, and damage to
sites of cultural significance. An operational event at our operated or non-
operated assets or through our value chain could also cause damage or
disruptions to our assets and operations, impact our financial performance,
result in litigation or class actions and cause long-term damage to our
licence to operate and reputation. Potential physical climate-related
impacts could increase the likelihood and/or severity of risks associated
with operational events. Impacts of operational events may also be
amplified if one event triggers another (for example, a geotechnical
instability event that causes a failure in a nearby tailings storage facility)
or if we fail to respond to any events in a way that is consistent with our
corporate values and partner and stakeholder expectations.
Examples of potential threats
– Air, land (road and rail) and marine transportation events (such as
aircraft crashes or vessel collisions, groundings or hydrocarbon release)
that occur while transporting people, supplies or products, including to
or from exploration, operation or customer locations. These locations
may be in or require travel through areas of cultural significance or
remote and environmentally sensitive areas, including in Australia,
South America, Asia, the United States, Canada and Sweden.
– Failure of a water or tailings storage facility, such as the tragic failure
of the Fundão dam at Samarco in 2015 or a failure at one of our other
facilities in Australia, Chile, Peru, the United States, Canada or Brazil.
– Unplanned fire events or explosions (on the surface or underground).
– Geotechnical instability events (such as failure of underground
excavations, which may be subject to greater risk than surface mines,
unexpected large wall instabilities in our open-pit mines, or potential
interaction between our mining activities and community infrastructure
or natural systems), including at our mines in Australia, Chile, Peru, the
United States, Canada or Brazil.
– Critical infrastructure, equipment, or hazardous materials
containment failures, other occupational or process safety events or
workplace exposures.
– Operational events experienced by third parties, which may also result
in unavailability of shared critical infrastructure (such as railway lines
or ports) or transportation routes (such as the Port Hedland channel in
Western Australia).
– An operational event that may adversely affect our people and assets,
communities, other stakeholders and/or the environment, including
serious injuries, illness and fatalities, loss of infrastructure and damage
to sites of cultural significance.
– Our operations, workforce, communities, supply chains, customers
and third-party partners and providers may be increasingly exposed to
changes in the frequency, intensity and/or duration of intense storms,
drought, flooding, wildfire and other extreme weather or weather-related
events and patterns (such as extreme heat).
Examples of potential opportunities
– Our commitment to our communities, the environment and the safety
and wellbeing of our people may increase operational resilience as well
as partner and stakeholder confidence, enhancing our ability to attract
and retain talent and access (or lower the cost of) capital.
– Collaborating with industry peers and relevant organisations on
minimum standards (such as the internationally recognised Flight Safety
Foundation’s Basic Aviation Risk Standard, Global Industry Standard
on Tailings Management, Large Open Pit Project guidelines on open-pit
mining design and management, and the Cave Mining 2040 Consortium
on deep mining design and management) supports improvements to
wider industry management of operational risks and may also identify
opportunities to improve our own practices.
Key management actions
– Planning, designing, constructing, operating, maintaining and monitoring
surface and underground mines, water and tailings storage facilities, and
other infrastructure and equipment in a manner designed to maintain
structural integrity, prevent incidents and protect our people, assets,
communities, the environment and other stakeholders.
– Specifying minimum requirements and technical specifications, such
as for transportation (including high-occupancy vehicles, fixed and
rotary wing aircraft and their operators) and geotechnical (including
characterisation, design, ground control and monitoring), and focusing
on compliance with operating specifications, industry codes and
other relevant standards, including BHP’s mandatory minimum
performance requirements.
– Continuing to focus on improving our management of safety risks,
including through investigation and response to the recent fatal incidents
across our operations, and through programs such as the Fatality
Elimination and Field Leadership Programs.
– Defining key governance roles, such as a dam owner (an internal BHP
individual who is accountable for maintaining effective governance
and integrity of each tailings storage facility) and providing training and
qualifications for our people.
– Inspections, technical reviews, audits and other assurance activities,
such as independent dam safety reviews and geotechnical
review boards.
– Maintaining evacuation routes, supporting equipment, crisis and
emergency response plans and business continuity plans.
– Incorporating future climate projections into risks associated
with operational events through ongoing assessment of physical
climate‑related risks.
FY2024 insights
Our exposure to risks associated with operational events remained
broadly stable in FY2024. BHP achieved conformance to the Global
Industry Standard on Tailings Management for ‘Very High’ and
‘Extreme’ rated facilities in H1 FY2024, supporting our continued
focus to further improve the safety and integrity of all facilities across
our operated and closed assets.
For more information refer to
OFR 6.1 – Safety
OFR 6.4 – Material topics
for sustainability
reporting
OFR 6.6 – People
OFR 6.7 – Health
OFR 6.9 – Climate change
OFR 6.10 – Environment
and nature
OFR 6.11 – Community
OFR 6.12 – Indigenous peoples
OFR 7 – Samarco
bhp.com/sustainability
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Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
8 How we manage risk continued
Risk factor: Significant social or environmental impacts
Risks associated with significant impacts of our operations on and contributions to communities and environments throughout the life cycle of our assets
and across our value chain.
Why is this important to BHP?
The long-term viability of our business is closely connected to the
wellbeing of the communities and environments where we have a
presence and our business is subject to increasing, complex and changing
regulatory and stakeholder expectations. At any stage of the asset life
cycle, our activities and operations may have or be perceived to have
significant adverse impacts on communities and environments. In these
circumstances, we may fail to meet the evolving expectations of our
partners and stakeholders (including investors, governments, employees,
suppliers, customers and Indigenous peoples and other community
members) whose support is needed to realise our strategy and purpose.
This could lead to loss of partner or stakeholder support or regulatory
approvals, increased taxes and regulation, enforcement action, litigation
(including class actions), or otherwise impact our licence to operate and
adversely affect our reputation, ability to attract and retain talent, ability to
access capital, operational continuity and financial performance.
Examples of potential threats
– Engaging in or being associated with activities (including through non-
operated joint ventures and our value chain) that have or are perceived
to have individual or cumulative adverse impacts on nature (including
biodiversity, land, waters and air), climate change, supply chain or
responsible sourcing requirements, human rights or Indigenous peoples’
rights or cultural heritage.
– Failing to meet evolving partner or stakeholder expectations in
connection with our alignment with global frameworks and societal
goals, our strategic decisions, legal and regulatory obligations,
acceptability of mining activities, relationships with Indigenous peoples,
community wellbeing and the way we invest in communities or our
approach to nature (including biodiversity, land, waters and air), climate
change, supply chain or responsible sourcing requirements, human
rights, Indigenous peoples’ rights or cultural heritage priorities.
– Political, regulatory and judicial developments (such as legislation
to enact policy positions on climate change, nature-related risk or
human rights) could increase uncertainty in relation to our operating
environment, and/or require us to adjust our business plans or strategy.
For example, changes to regulations may require us to modify mine
plans, limit our access to reserves and resources, alter the timing or
increase costs associated with exploration and development of and
production from, or closure and rehabilitation of, our assets, increase
sourcing costs or expose BHP to unanticipated environmental or other
legacy liabilities.
– Failing to adequately identify or to appropriately manage physical
climate-related risks and/or nature-related risks to biodiversity
and ecosystems. For example, loss of important biodiversity
and/or ecosystems as a result of operational activities (e.g.
unauthorised clearing of vegetation) could result in land access
restrictions, a decrease in demand for our products or limit our access
to new opportunities.
Examples of potential opportunities
– Our support for responsible stewardship of natural resources may
enhance the resilience of the environments and communities where we
operate to threats (including potential physical climate-related impacts
and nature loss).
– Strong social performance, including sustainable mining and a focus on
the wellbeing of communities, could generate competitive advantage in
the jurisdictions where we operate.
– Our global social value framework and projects funded through social
investment may improve partner and stakeholder relations, enhance
community trust and increase investor confidence and demand for
our commodities.
– Greater clarity, transparency and standards associated with regulatory
regimes that support and protect communities and the environment
may increase requirements across our sector, generating competitive
advantage for companies that have already invested in social and
environmental performance.
Key management actions
– The Community Global Standard, the Environment Global Standard,
the Climate Change Global Standard and our mandatory minimum
performance requirements for water, closure and legacy management,
and social value and sustainability are designed to set out our targets,
goals, commitments and/or approach to these matters, strengthening
our social, human rights and environmental performance.
– Engaging in regular, open and transparent dialogue with partners
and stakeholders to better understand their expectations, concerns
and interests, undertaking research to better understand partner and
stakeholder perceptions, and taking those considerations into account
in planning and execution activities.
– Continuing to operationalise our Indigenous Peoples Policy Statement,
including by introducing procedures for projects and assets to identify
and assess potential adverse impacts to Indigenous peoples, and to
engage and consult with them to better understand how we can avoid,
mitigate and/or substantially address any adverse impacts.
– Building social value into our decision-making process, along with
financial considerations, including through our social value framework
and 2030 goals.
– Building partner and stakeholder trust and contributing to environmental
and community resilience, including through collaborating on shared
challenges (such as climate change and nature), enhanced external
reporting of our operated assets’ potential impacts on nature, and
maximising the value of social investments (including contributing to
climate-related initiatives) through our social investment strategy.
– Conducting regular research and impact assessments for operated
assets to better understand the social, environmental, human rights and
economic context. This supports us to identify and analyse potential
partner, stakeholder, community and human rights impacts, including
modern slavery risks and emerging issues. We also complete risk-based
due diligence screening on suppliers through our Ethical Supply Chain
and Transparency program.
– Integrating closure into our planning, decision-making and other
activities through the life cycle of our operated assets, as set out in
our mandatory minimum performance requirements for closure and
legacy management.
FY2024 insights
Our exposure to risks with potentially significant social or
environmental impacts steadily increased in FY2024 due to
greater external stakeholder expectations for corporate social and
environmental performance, including aspects of climate change and
nature. The intersections between climate change, nature, Indigenous
peoples and human rights are becoming more widely understood
by civil society, contributing to an evolving and increasingly complex
risk landscape. To support effective management of these risks, we
continue to monitor and seek to better understand the intersecting risk
landscape and integrate controls into our management systems.
For more information refer to
OFR 6.5 – 2030 goals
OFR 6.6 – People
OFR 6.9 – Climate change
OFR 6.10 – Environment and nature
OFR 6.11 – Community
OFR 6.12 – Indigenous peoples
bhp.com/sustainability
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BHP Annual Report 2024
Risk factor: Optimising growth and portfolio returns
Risks associated with our ability to position our asset portfolio to generate returns and value for shareholders, including through acquisitions, mergers
and divestments.
Why is this important to BHP?
We make decisions and take actions in pursuit of our strategy to optimise
our asset portfolio and to secure and create growth options in future-facing
commodities (such as copper, nickel and potash). These may include active
portfolio changes such as the recent sale of the Daunia and Blackwater
mines in Queensland, the acquisition of OZ Minerals and, if completed, the
proposed acquisition of Filo Corp and agreement to form a joint venture
with Lundin Mining. These may also include supporting innovative early-
stage mineral exploration companies (including for example through our
accelerator program, BHP Xplor), and maturing and developing organic
growth options across our existing portfolio. A strategy that does not
support BHP’s objectives and/or ill-timed execution of our strategy, or other
circumstances, may lead to a loss of value that impacts our ability to deliver
returns to shareholders and fund our investment and growth opportunities.
It may also result in our asset portfolio being less resilient to climate-related
risks or movements in commodity prices, or inflationary pressures and
other macroeconomic factors. In the short term, adverse movements in
commodity prices may reduce our cash flow, ability to access capital or pay
dividends. A failure to optimise our asset portfolio for structural movements
in commodity prices (including those arising from climate-related risks) over
the long term may result in asset impairments and could adversely affect the
results of our operations, financial performance and returns to investors.
Examples of potential threats
– Commodity prices have historically been and may continue to be subject
to significant volatility, including due to global economic and geopolitical
factors, industrial activity, commodity supply (including the development
of new resources and supply chain disruptions) and demand (including
inventory levels), technological change, product substitution, tariffs,
interest rate movements and exchange rate fluctuations. Our usual
policy and practice is to sell our products at prevailing market prices
and, as such, movements in commodity prices may affect our financial
performance. Long-term price volatility, sustained low prices or
increases in costs may adversely impact our financial performance
as we do not generally have the ability to offset costs through
price increases.
– Failure to optimise our portfolio through effective and efficient
acquisitions, exploration, large project delivery, mergers, divestments or
expansion of existing or acquired assets (including due to sub-optimal
capital prioritisation) may adversely impact our performance and/or
returns to investors.
– Failure to identify potential changes in commodity attractiveness and
missed entry or commodity exit opportunities may result in decreased
return on capital spend for, or overpayment to acquire or invest in, new
assets or projects, stranded assets or reduced divestment proceeds.
– Failure to achieve expected commercial objectives from assets or
investments, such as cost savings, increased revenues or improved
operational performance (including as a result of inaccurate commodity
price assumptions or resources and reserves estimates), may result
in returns that are lower than anticipated and loss of value. This could
be exacerbated by impacts from factors such as climate-related
risks, supply chain disruptions (for example, disruption in the energy
sector impacting our end-user markets), labour shortages, inflationary
pressures and unfavourable exchange rates, creating operational
headwinds and challenging on-time and on-budget project delivery.
– Renegotiation or nullification of permits, inability to secure new
permits or approvals, increased royalties, such as the Queensland
Government’s increase in coal royalty tax in June 2022, fiscal or
monetary policy instability or changes may increase our costs or
adversely impact our ability to achieve expected commercial objectives
from assets or investments, access reserves, develop, maintain or
operate our assets, enter new jurisdictions, or otherwise optimise
our portfolio.
– Inability to predict long-term trends in the supply, demand and price of
commodities and optimise our asset portfolio accordingly may restrict
our ability to generate long-term returns from the portfolio. For example,
slowing economic growth in China, political and trade tensions, market
volatility or the global transition to a low-carbon economy may result in
lower demand and prices for some of our products, which may in turn
adversely impact our portfolio returns.
– Partnering with companies for growth may also damage our reputation
and lead to increased potential for litigation if those companies or
associated activities are misaligned with our values, standards or
stakeholder expectations, particularly in circumstances in which we do
not operate the asset or have a controlling interest in the venture.
Examples of potential opportunities
– Acquisition of new resources or acceleration of organic growth options
in future-facing commodities may strengthen and diversify our portfolio
and protect and grow value over the long term.
– Ability to predict long-term commodity demand, supply and price trends
may lead to BHP being able to identify and acquire new future-facing
commodities and assets ahead of our competitors or exit from declining
commodities in a timely manner, strengthening our portfolio and leading
to long-term, higher portfolio returns.
– BHP may be perceived as a welcome and valued or preferred partner for
the development of new resource opportunities, enabling us to secure
new assets or exploration opportunities to create long-term optionality in
the portfolio.
Key management actions
– Further developing strategies, processes and frameworks to grow
and protect our portfolio and to assist in delivering ongoing returns to
shareholders, including:
– our Capital Allocation Framework, corporate planning processes and
investment management processes
– annual reviews (including resilience testing) of portfolio valuations
– our exploration, ventures (such as BHP Ventures), accelerators (such
as BHP Xplor) and business development programs, which focus on
replenishing our resource base and enhancing our portfolio (including
creating and securing more options in future-facing commodities)
– our long-term strategic outlook and ongoing strategic processes to
assess our competitive advantage and enable the identification of
threats to or opportunities for our portfolio through forecasting and
scenario modelling
– monitoring signals to interpret external events and trends, and
designing commodity strategies and price protocols that are reviewed
by management and the Board
– our balance sheet and liquidity framework, which is designed to
maintain a robust balance sheet with sufficient liquidity and access to
diverse sources of funding, to enable us to be ready to pursue growth
opportunities as and when they arise
– Pursuing a considered approach to new country entry, including further
building our capability to operate in higher-risk jurisdictions, in order to
support portfolio opportunities.
– Further developing BHP’s social value proposition to position BHP as a
preferred partner for the development of resource opportunities in line
with the expectations of local communities, host governments and other
global stakeholders.
FY2024 insights
Our exposure to risks associated with optimising growth and portfolio
returns remained stable in FY2024 as we continued to implement a
growth agenda focused on aligning the portfolio towards future-facing
commodities. In particular, in FY2024 we completed the sale of the
Daunia and Blackwater mines in Queensland to Whitehaven Coal,
approved an investment in stage two of the Jansen potash project
in Canada, and continued to pursue options to build our portfolio in
future-facing commodities. We also made the decision to temporarily
suspend Western Australia Nickel as a result of oversupply in the
global nickel market. Forecast nickel prices for the next half of the
decade have fallen sharply due to strong growth in alternative, low-
cost nickel supply.
For more information refer to
OFR 3 – Positioning for growth
OFR 9 – Performance by commodity
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Financial Statements
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Contents
Operating and Financial Review
8 How we manage risk continued
Risk factor: Low-carbon transition
Risks associated with the transition to a low-carbon economy.
Why is this important to BHP?
Transition risks arise from existing and emerging policy, regulatory, legal,
technological, market and other societal responses to the challenges posed
by climate change and the transition to a low-carbon economy. As a world-
leading resources company, BHP is exposed to a range of transition risks
that could affect the execution of our strategy or our operational efficiency,
asset values and growth options, resulting in a material adverse impact on our
financial performance, share price or reputation, including increased potential
for litigation. Conversely, transition risks may also present opportunities
for our diverse portfolio and through decarbonisation of our business.
The complex and pervasive nature of climate change means transition risks
are interconnected with and may amplify our other risk factors. Additionally,
the inherent uncertainty of potential societal responses to climate change may
create a systemic risk to the global economy and our business.
Examples of potential threats
– Introduction or improvement of low-carbon technologies or changes
in customer preference for products that support the transition to a
low-carbon economy may decrease demand for some of our products,
increase our costs or decrease the availability of key inputs to
production. For example:
– Rapid shift to alternative steelmaking technology pathways (including
electric arc furnace (EAF) and direct reduced iron (DRI) steelmaking)
may reduce anticipated demand for our steelmaking coal and may
result in the early closure or divestment of our steelmaking coal mines.
– Increased recovery and reuse rates of commodities may reduce
demand for our products.
– New battery technologies that use no or less nickel could enter the
market and reduce demand for our nickel products.
– Adverse macroeconomic changes, such as a decline in global economic
activity and/or security, could be exacerbated by the transition to a low-
carbon economy and reduce anticipated demand for our future-facing
commodities, such as copper and nickel.
– Perceptions of climate-related financial risk and/or social concerns
around climate change may result in investors divesting our securities
or changing their expectations or requirements for investment in our
securities, cause financial institutions not to provide financing or other
products (such as insurance cover) to BHP or to our suppliers or
customers, affect our suppliers’ willingness to provide goods or services,
and affect our customers’ wish to procure our commodities. In turn,
these factors could increase our costs and adversely impact our ability
to optimise our portfolio and pursue growth opportunities.
– Perceived or actual misalignment of BHP’s climate actions (goals, targets
and performance) with societal and investor expectations, or a failure to
deliver our climate actions, may result in damage to our reputation, reduced
investor confidence, climate-related litigation (including class actions) or
give rise to other adverse regulatory, legal or market responses.
– Sub-optimal selection, quality, implementation or effectiveness of
technology and related low-carbon supplies that are intended to
contribute towards the delivery of our climate targets, goals and
strategies, or unavailability of that technology and related low-carbon
supplies (including due to the failure of trials of new technology, a failure
of external equipment manufacturers or suppliers to deliver on schedule
or competition for limited supply) could prevent, limit, delay or increase
costs in achieving our plans for operational decarbonisation.
– Changes or ambiguity in laws, regulations, policies, obligations, government
actions and our ability to anticipate and respond to such changes or
accurately interpret the ambiguity, including GHG emission targets and
schemes, restrictive licensing, carbon taxes, carbon offsetting regulations,
border adjustments or the addition or removal of subsidies, may give
rise to adverse regulatory, legal or market responses. For example, the
implementation of regulations intended to reduce GHG emissions in the
steel industry in China could adversely impact demand for our steelmaking
coal or iron ore. In addition, inadequate market supply of credible carbon
credits or price volatility in carbon markets could increase our operating
costs or result in adverse social value or compliance implications.
Inconsistent or developing regulatory regimes globally may increase
the likelihood of an inadvertent failure to or inability to comply with some
regulations and exacerbate the impacts of transition risks.
Examples of potential opportunities
– Our copper, nickel, iron ore, steelmaking coal and uranium provide
essential building blocks for existing and new renewable energy
infrastructure and alternative power generation and electric vehicles, and
can play an important part in the transition to a low-carbon economy.
– Our potash fertiliser options, once operational, have the potential to
promote more efficient and profitable agriculture and help alleviate the
increased competition for arable land, including due to implementation
of nature-based solutions to help address climate change and global
population growth.
– Increased collaboration with customers, suppliers and original equipment
manufacturers, such as BHP’s partnerships with ArcelorMittal,
BlueScope, China Baowu, HBIS Group, JFE, POSCO and Tata Steel to
explore technologies to reduce GHG emissions across the steel value
chain, can provide opportunities for the development of new products
and markets.
Key management actions
– Establishing public positions on, and mandatory minimum performance
requirements for, managing climate change risks (threats and
opportunities), which are set out in our Climate Change Report 2020,
our Climate Transition Action Plan 2024 and the Environment Global
Standard and the Climate Change Global Standard.
– Using climate-related scenarios, as well as our planning cases and
other themes and signposts (such as monitoring policy, regulatory, legal,
technological, market and other societal developments) to evaluate the
resilience of our portfolio, allocate capital and inform our strategy.
– Considering transition risks (including carbon prices) when making
capital expenditure decisions or allocating capital through our Capital
Allocation Framework, supporting the prioritisation of capital and
investment approval processes.
– Seeking to mitigate our exposure to risks arising from policy and regulation
in our operating jurisdictions and markets by reducing our operational GHG
emissions and supporting GHG emission reductions in our value chain.
– Informing investors on progress to date and plans for achieving our
operational and value chain GHG emissions goals and targets, for
example, through investor briefings and publications, including our
Climate Transition Action Plan 2024.
– Advocating for the introduction of an effective, internationally aligned
long-term policy framework that can deliver a measured transition to a
low-carbon economy.
FY2024 insights
Our exposure to transition risks increased during FY2024 due to
continued societal expectations for accelerated decarbonisation by
companies, significant regulatory developments across the globe
(such as the enhanced Safeguard Mechanism enacted into law
in Australia) and commitment by 130 countries at the 2023 United
Nations Climate Change Conference to triple global renewable energy
generation capacity by 2030. Many jurisdictions (including Australia)
have implemented, are in the process of designing, or are considering,
mandatory climate-related financial reporting regimes (including the
introduction of the Climate-related financial disclosures Bill into the
Australian Parliament) and – in some cases – broader sustainability
reporting requirements. This includes the EU’s Corporate Sustainability
Reporting Directive (CSRD), and a growing number of jurisdictions have
announced an intention to adopt the IFRS Sustainability Disclosure
Standards developed by the International Sustainability Standards Board
(ISSB). There are also increased efforts by some governments to fund
expansion of renewable energy generation and technologies that help
enable the energy transition, which may increase the scale and pace
of the low-carbon transition, and influence the availability of lower GHG
emissions technology options for BHP. These external developments
present both threats and opportunities for BHP as we continue to
increase our portfolio exposure to future-facing commodities.
For more information refer to
BHP Climate Change Report 2020
BHP Climate Transition Action Plan 2024
OFR 3 – Positioning for growth
OFR 6.5 – 2030 goals
OFR 6.9 – Climate change
OFR 6.10 – Environment
and nature
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BHP Annual Report 2024
Risk factor: Accessing key markets
Risks associated with market concentration and our ability to sell and deliver products into existing and future key markets, impacting our
economic efficiency.
Why is this important to BHP?
We rely on the sale and delivery of the commodities we produce to
customers around the world. Changes to laws, international trade
arrangements, contractual terms or other requirements and/or geopolitical
developments could result in physical, logistical or other disruptions to our
operations in or the sale or delivery of our commodities to key markets.
These disruptions could affect sales volumes or prices obtained for
our products, adversely impacting our financial performance, results of
operations and growth prospects.
Examples of potential threats
– Government actions, including economic sanctions, tariffs or other trade
restrictions, imposed by or on countries where we operate or into which
we sell or deliver our products may prevent BHP from selling or make it
more difficult for BHP to sell in key markets.
– Physical disruptions to the delivery of our products to customers in
key markets, including due to the disruption of shipping routes, closure
or blockage of ports or land logistics (road or rail), armed conflict or
criminality and organised crime. In some cases, physical disruptions
may be driven or intensified by weather and climate variability, including
as potentially exacerbated or affected by climate change. Our operations
are located in remote and environmentally sensitive areas, which may
be particularly exposed to climate-related disruptions.
– Legal or regulatory changes (such as new or increased royalties
or taxes; government-mandated price caps; port, export or import
restrictions or customs requirements; shipping/maritime regulatory
changes; restrictions on movements or imposition of quarantines;
or changing environmental restrictions or regulations, including
measures with respect to carbon-intensive industries or imports) and
commercial changes (such as changes to the standards, preferences
and requirements of customers) may adversely impact our ability to sell,
deliver or realise full market value for our products.
– Failure to maintain strong relationships with customers or changes to
customer demands for our products may reduce our market share or
adversely impact our financial performance.
– Increasing geopolitical tensions (including the Russia-Ukraine and
Middle Eastern conflicts) may adversely affect our strategic and
business planning decisions and/or increase the time it takes us to
manage our access to key markets, particularly if we fail to detect or
anticipate deviations in the geopolitical environment in a timely manner.
Examples of potential opportunities
– Monitoring macroeconomic, societal, geopolitical and policy
developments and trends may reveal new markets or commodities,
identify opportunities to strengthen secondary markets for existing
products or identify a potential competitive advantage or price premium
for existing products.
– Developing strategic partnerships and strong, mutually beneficial
relationships with our customers may enable us to create value.
– Building a deep understanding of geopolitical threats and opportunities
and their potential impacts on global trade flows and our business could
enhance our strategy, business planning and response, providing a
potential future competitive advantage.
– Identifying the potential for weather and climate variability, including as
potentially exacerbated or affected by climate change, to disrupt delivery
of products and implementing management measures, may increase the
resilience of our operations and value chain.
– Monitoring signals and building relationships with and understanding
the perspectives of influential partners and stakeholders may improve
our ability to understand and provide input to policy development, and
to respond to and manage any impacts from policy changes (such as
trade policies).
Key management actions
– Monitoring and assessing our ability to access key markets, and
maintaining sales plans, product placement and business resilience
strategies and relationships with relevant partners and stakeholders.
– Maintaining response plans for various scenarios (including physical
disruptions of logistics) to mitigate disruptions to our ability to access
key markets.
– Monitoring geopolitical and macroeconomic developments and trends,
including through signal monitoring and our enterprise-level watch
list of emerging themes, to provide an early indication of events that
could impact our ability to access or offer opportunities in relation to
key markets.
– Identifying weather and/or climate-related vulnerabilities and
implementing controls to mitigate disruptions to our ability to physically
access key markets.
– Diversifying our asset and commodity portfolio, such as our ongoing
investment in potash through the Jansen potash project, to reduce
exposure to market concentration risks.
FY2024 insights
Exposure to risks associated with access to key markets remained
broadly stable in FY2024. We continue to observe global armed
conflict, political tensions, ineffective law enforcement and
governance, resource and economic nationalism, social instability,
and environmental deterioration. Although we have limited influence
over changes in our external environment, we continue to focus
on management of these risks, including through diversifying our
portfolio to reduce exposure to market concentration risk.
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Operating and Financial Review
8 How we manage risk continued
Risk factor: Adopting technologies and maintaining digital security
Risks associated with adopting and implementing new technologies, and maintaining the effectiveness of our existing digital landscape (including cyber
defences) across our value chain.
Why is this important to BHP?
Our business and operational processes are increasingly dependent on the
effective application and adoption of technology, which we use as a lever to
deliver on our current and future operational, financial and social objectives.
This exposes BHP to risks originating from adopting or implementing new
technologies, or failing to take appropriate action to position BHP for the
digital future, which may impact the capabilities we require, the effectiveness
and efficiency of our operations and our ability to compete effectively.
New technology adopted in our business may not perform as anticipated
and may result in unintended impacts on our operations. We may also fail
to maintain the effectiveness of our existing and future digital landscape,
including cyber defences, exposing us to technology availability, reliability
and cybersecurity risks. These could lead to operational events, commercial
disruption (such as an inability to process or ship our products), corruption
or loss of system data, misappropriation or loss of funds, unintended
loss or disclosure of commercial or personal information, enforcement
action or litigation, which could also impact the environment and partners,
suppliers and stakeholders across our value chain. Additionally, an inability
to adequately maintain existing technology or implement critical new
technology, or any sustained disruption to our existing technology may
adversely affect our licence to operate, reputation, results of operations and
financial performance.
Examples of potential threats
– Cybersecurity events or attacks on our information or operational
technology systems, including on third-party partners and providers (such
as our cloud service providers), may result in a failure of business-critical
technology systems at one or more of our assets, which may reduce
operational productivity, result in environmental damage, fines, penalties,
litigation, regulatory or governmental investigations, workforce disruption,
prolonged negative media attention and/or adversely impact safety and
financial performance. We have experienced cybersecurity threats in
the past and may experience them in the future and, as our dependence
on information systems, including those of our third-party partners and
providers, grows, we may become more vulnerable to an increasing threat
of continually evolving cybersecurity risks.
– Failure to invest in appropriate technologies or to keep pace with
advancements in technology that support the pursuit of our objectives
may adversely impact the effectiveness or efficiency of our business and
erode our competitive advantage. For example, a failure to implement
appropriate technologies that support our assets to produce higher-grade
commodities or less waste from existing resources (such as ongoing
initiatives to incorporate new technologies and data analytics to leaching
processes) could limit our ability to sell our commodities or reduce costs.
– Failure to identify, access and secure necessary infrastructure and key
inputs (including electricity, internet bandwidth, data, software, licences
or other rights in intellectual property, hardware and talent) to support
new technology innovations and advanced technologies may adversely
affect our ability to adopt, operate or retain access to those technologies.
This includes Artificial Intelligence (AI) and machine learning, process
automation, robotics, data analytics, cloud computing, smart devices
and remote working solutions. For example, adopting new technology to
reduce GHG emissions using alternative energy sources may require new
infrastructure, while effective implementation of new digital technologies
(such as machine learning) may be heavily dependent on access to data.
In addition, the use of Al and machine learning may increase our exposure
to cybersecurity risks and additional risks relating to the protection of
data, including increased exposure of confidential or otherwise protected
information to unauthorised recipients, which could result in liability under
or termination of our contracts with third parties, misuse of our intellectual
property or other unintended consequences.
– Failure to adopt or successfully integrate new technology, technology
enhancements or technology acquired through inorganic growth (such
as through acquisition of a company with different types and standards
of securities, technologies and systems) may result in impacts to our
business and operations. This could lead to operational stoppage
events, commercial disruption (such as an inability to pay or accept
payment), inability to disclose accurately or an inability to adequately
maintain existing technology.
– Failure or outage of our information or operational technology systems.
Examples of potential opportunities
– Applying digital solutions across our operations may unlock greater
productivity and safety performance. For example, using predictive
analytics to enable operations to identify asset condition and efficiencies
may improve safety, production and equipment availability, and reduce
maintenance and other costs.
– Technology solutions to reduce GHG emissions may support BHP, our
suppliers and customers in achieving climate action targets and goals.
For example, BHP signed an agreement in December 2023 with HBIS
Group trialling alternative steelmaking technology pathways including
direct reduced iron production designed to lower blast furnace carbon
emissions, with the aim of supporting the global energy transition.
– Developing AI in a safe and responsible manner in exploration, mine
planning, remote operation and advanced robotic technologies may
identify or provide access to previously unknown or inaccessible
deposits and development of end-to-end autonomous mining systems.
– Using digital simulations and predictive trend modelling may enable us
to optimise the deployment of new technologies, such as automation
and electrification, support early identification of process variances and
faults, and support the marketing of our products to customers.
Key management actions
– Employing a number of measures designed to protect against, detect
and respond to cyber threats, events or attacks, including BHP’s
mandatory minimum performance requirements for technology and
cybersecurity, cybersecurity performance requirements for suppliers,
cybersecurity resilience programs, an enterprise security framework
and cybersecurity standards, cybersecurity risk and control guidance,
security awareness programs and training to build capability, security
assessments and continuous monitoring, restricted physical access to
hardware and crisis management plans.
– Managing localised or project-specific exposure to technology and cyber
risks at the asset, function or project level, including risks associated
with business-critical technology systems. Enterprise-level risks that are
specific to technology, such as those that pose a greater threat to our
wider business and strategic opportunities, are generally managed by
our global Technology team and other relevant stakeholders to support
delivery of our technology strategy.
– Maturing a Data Strategy to improve data quality and management of
critical data that enhances our adoption of digital technologies.
– Monitoring regulatory changes and collaborating with industry
stakeholders, research partners and policymakers to design company
guidelines (such as our AI Strategy and Framework, and Responsible
AI principles) and to develop, implement and maintain technological
solutions with appropriate guardrails and controls in place that
support compliance with an evolving regulatory environment and meet
societal expectations.
FY2024 insights
Our exposure increased in FY2024 due to elevated external
cybersecurity threat conditions with high-profile cyber incidents
experienced by other businesses across Australia and abroad.
We continue to monitor and manage the increasing exposure,
including through leveraging next generation technologies.
Our focus is on strengthening the management of cybersecurity risk
and controls across BHP, as well as monitoring third-party events
(including in relation to our third-party partners and providers) that
may impact our business.
For more information refer to
OFR 2 – What differentiates us
OFR 6.9 – Climate change
80
BHP Annual Report 2024
Risk factor: Ethical misconduct
Risks associated with actual or alleged deviation from societal or business expectations of ethical behaviour (including breaches of laws or regulations)
and wider or cumulative organisational cultural failings, resulting in significant reputational impacts.
Why is this important to BHP?
Actual or alleged conduct of BHP or our people or third-party partners and
providers that deviates from the standard of ethical behaviour required
or expected of us could result in reputational damage or a breach of law
or regulations. Such conduct includes fraud, corruption, anti-competitive
behaviour, money laundering, breaching trade or financial sanctions,
market manipulation, privacy breaches, ethical misconduct, failure to
comply with regulatory requirements and wider organisational cultural
failings. A failure to act ethically or legally may result in negative publicity,
investigations, public inquiries, regulatory enforcement action, litigation
or other civil or criminal proceedings, other forms of compensation or
remediation, or increased regulation. It could also threaten the validity of
our tenements or permits, or adversely impact our reputation, results of
operations, financial performance or share price. Impacts may be amplified
if our senior leaders fail to uphold BHP’s values or address actual or
alleged misconduct in a way that is consistent with societal, partner and
stakeholder expectations. Our workplace culture may also be eroded,
adversely affecting our ability to attract and retain talent. Risks and impacts
are also heightened by the complex and continuously evolving legal and
regulatory frameworks that apply to the jurisdictions where we operate and
potentially conflicting obligations under different national laws.
Examples of potential threats
– Failing to prevent breaches of international standards, laws, regulations
or other legal, regulatory, ethical, environmental, governance or
compliance obligations, such as external misstatements, inaccurate
financial or operational reporting or a breach of our continuous
disclosure obligations.
– Corruption (for example, in connection with the acquisition of early-
stage options in a country with weaker governance standards), market
misconduct or anti-competitive behaviour, including in relation to our
joint venture operations.
– Failing to comply with trade or financial sanctions (which are complex
and subject to rapid change and may potentially result in conflicting
obligations), health, safety and environmental laws and regulations,
native title and other land rights or tax or royalty obligations.
– Failing to protect our people from harm (including to mental and physical
health) due to misconduct that takes place in connection with their work,
such as discrimination or sexual harassment.
– Failing to uphold BHP’s values or address actual or alleged misconduct
may adversely impact workplace culture and may expose BHP to
regulatory action or litigation, adversely impacting our reputation and
ability to attract and retain talent.
Examples of potential opportunities
– Our capability to manage ethical misconduct risks may expand portfolio
growth options by providing greater assurance that we can operate
legally and ethically in high-risk jurisdictions.
– Managing ethical misconduct risks in line with societal, partner and
stakeholder expectations may distinguish BHP from competitors and
enhance our ability to raise capital, attract and retain talent, engage
with governments and communities in new jurisdictions, obtain permits,
partner with external organisations or suppliers, or market our products
to customers.
– Playing a leading role in the management of ethical misconduct risks,
such as sexual harassment risks, may help BHP to increase ethical and
behavioural standards across the resources industry.
Key management actions
– Setting the ‘tone from the top’ through Our Charter, which is central
to our business and describes our purpose, values and how we
measure success.
– Implementing internal policies, standards, systems and processes for
governance and compliance to support an appropriate culture and
prioritise respectful behaviours at BHP, including:
– Our Code of Conduct (Our Code) and BHP’s mandatory minimum
performance requirements for business conduct, market disclosure
and other matters
– training on Our Code and in relation to anti-corruption, market
conduct, trade sanctions, data privacy and competition laws
– ring fencing protocols to separate potentially competing businesses
within BHP
– governance and compliance processes, including procurement and
other internal controls, and tailored monitoring of control effectiveness
– oversight and engagement with high-risk areas by our Ethics and
Investigations, Compliance and Internal Audit teams, and the Risk
and Audit Committee
– review and endorsement by our Compliance team of the highest-
risk transactions, such as gifts and hospitality, engagement of
third parties, community donations and sponsorships above
defined thresholds
– automated counterparty and transaction screening against lists of
entities subject to trade sanctions
– our reporting channels for raising misconduct concerns (comprising
an online portal and confidential 24-hour multilingual call service),
supported by an ethics and investigations framework and central
investigations team
– campaigns and sessions held globally by our leaders to set
expectations around racism, sexual harassment and other
disrespectful behaviours, including our ‘Active Bystander’ training that
is designed to empower everyone across BHP to call out disrespectful
and harmful behaviours
– Continuing to enforce Our Code via appropriate investigations and
responses, including disciplinary action, in addition to deployment
of appropriate controls to prevent harm (including to mental and
physical health).
– Requiring anti-corruption and human rights risks to be considered as
part of our new country entry approval process.
FY2024 insights
Our exposure to ethical misconduct risks increased in FY2024 due to
heightened trade sanctions risks, including an increase in the volume
and complexity of trade sanctions measures globally. Our Compliance
team continues to focus on control enhancements to manage evolving
threats (such as trade sanctions) and strengthen key anti-corruption
and other compliance controls across the Group, including in relation
to the integration of OZ Minerals. With BHP’s continued focus on
portfolio growth, there is a potential for further increases in exposure
to anti-corruption and other ethical misconduct risks in higher-
risk jurisdictions.
For more information refer to
Our Charter and Our Code of Conduct
OFR 6.6 – People
OFR 6.8 – Ethics and business conduct
OFR 6.11 – Community
OFR 6.12 – Indigenous peoples
Corporate Governance Statement
81
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Risk factor: Inadequate business resilience
Risks associated with unanticipated or unforeseeable adverse events and a failure of planning and preparedness to respond to, manage and recover from
adverse events (including potential physical climate-related impacts).
Why is this important to BHP?
In addition to the threats described in our other risk factors, our business
could experience unanticipated, unforeseeable or other adverse events
(internal or external) that could harm our people, disrupt our operations
or value chain or damage our assets or corporate offices, including
our non-operated assets in which BHP has a non-controlling interest.
A failure to identify or understand exposure, adequately prepare for these
events (including maintaining business continuity plans) or build wider
organisational resilience may inhibit our (or our third-party partners and
providers’) ability to respond and recover in an effective and efficient
manner. This includes a failure to build resilience to physical climate-
related risks. Material adverse impacts on our business include reduced
ability to access resources, markets and the operational or other inputs
required by our business, reduced production or sales of or demand for,
our commodities, or increased regulation, which could adversely impact
our financial performance, share price or reputation and could lead to
litigation (including class actions).
Examples of potential threats
– Geopolitical, global economic, regional or local developments or
adverse events, such as social unrest, strikes, work stoppages,
labour disruptions, social activism, terrorism, bomb threats, economic
slowdown, acts of war or other significant disruptions in areas where we
operate or have interests.
– Extreme weather and climate-related events, such as heatwaves,
extreme precipitation and flooding, hurricanes, cyclones and fires.
For example, production at our steelmaking coal asset, BMA, was partly
impacted in H1 FY2024 due to depleted inventory positions that arose
from extended weather impacts on the east coast of Australia.
– Other natural events, including earthquakes, tsunamis, wildfires, solar
flares and pandemics.
– Potential physical climate-related impacts, such as acute risks that
are event driven (including increased frequency and severity of
extreme weather events) and chronic risks resulting from longer-term
changes in climate patterns. Climate hazards may include changes
in precipitation patterns, water shortages, rising sea levels, increased
storm intensity, prolonged extreme temperatures and increased drought,
fire and flooding.
– Failure by suppliers, contractors or joint venture partners to perform
existing contracts or obligations (including due to insolvency), such as
construction of large projects or supply of key inputs to our business
(for example, consumables for our mining equipment).
– Failure of our risk management or other processes (including controls)
to prepare for or manage any of the risks discussed in this Risk factors
section may inhibit our (or our third-party partners and providers’)
ability to manage any resulting adverse events and may disrupt our
operations or adversely impact our financial performance or reputation.
This includes unknown pre-existing failures in organisations, businesses
or assets that we acquire through non-organic growth, as well as any
failures that occur during their integration to our business (for example,
due to different standards or systems).
Examples of potential opportunities
– Risk identification and management supports proactive, focused and
prioritised deployment of resources to reduce exposure to adverse
events. It may be used to inform priorities and strategies across BHP,
supporting a proportionate and cost-effective response, which could
provide a competitive advantage at a regional or global level.
– Building wider organisational resilience may enable us to maintain
dividends to shareholders amid adverse external events and make
growth-generating, counter-cyclical investments, as well as to help us
mitigate the impacts of unforeseeable adverse events.
– Adaptation to climate change across our operations and in our value
chain could enhance the safety, productivity and climate resilience
of our operated assets, position BHP as a supplier of choice and
enhance our ability to consistently grow value. Support for climate-
vulnerable communities and ecosystems may also improve our social
value proposition.
Key management actions
– Implementing Group-wide controls to enhance business resilience,
including BHP’s mandatory minimum performance requirements for
security, crisis and emergency management and business continuity
plans, and seeking to maintain an investment grade credit rating.
– Monitoring our current state of readiness (preparedness, redundancy
and resilience), including through scenario analysis and business
resilience exercises, supporting organisational capability in our
operations, functions and senior management to effectively and
efficiently respond to and recover from adverse events should
they materialise.
– Monitoring the external environment, including political and economic
factors, through signal monitoring, our geopolitical monitoring and
public policy frameworks and our enterprise-level watch list of emerging
themes, to support early identification of policy changes or adverse
events for which we may need to increase preparedness.
– Identifying security threats that could directly or indirectly impact our
operations and people in countries of interest to BHP.
– Further developing and implementing our adaptation strategy with
respect to physical climate-related risks, including requiring operated
assets and functions to identify and progressively assess physical
climate-related risks (including to our value chain) and seeking to build
climate change adaptation into their plans, activities and investments.
– Maintaining quality, centralised climate data covering each of our
operating locations so that our people have access to appropriate
data to support climate studies that can be used to inform investment
decisions around enhancing our operational resilience.
FY2024 insights
Our exposure to risks associated with inadequate business resilience
increased in FY2024. The United Nations Framework Convention
on Climate Change Secretariat’s NDC Synthesis Report (released
in November 2023) noted national climate action plans remain
insufficient to limit global temperature rises to 1.5°C and, according
to the World Meteorological Organisation, CY2023 was the warmest
year on record with further natural disasters and prolonged weather
events experienced across the globe. Additionally, a global rise in
conflict, instability and criminality in CY2023 created new security
challenges. Our Security team continues to monitor the evolving
external security environment to better understand how it can impact
BHP and our industry and how we can manage associated exposure.
For more information refer to
BHP Climate Change Report 2020
BHP Climate Transition Action Plan 2024
OFR 6.1 – Safety
OFR 6.7 – Health
OFR 6.9 – Climate change
OFR 6.10 – Environment and nature
bhp.com/sustainability
8 How we manage risk continued
82
BHP Annual Report 2024
9 Performance by commodity
Management believes the following information presented by commodity
provides a meaningful indication of the underlying financial and operating
performance of the assets, including equity accounted investments, of
each reportable segment. Information relating to assets that are accounted
for as equity accounted investments is shown to reflect BHP’s share,
unless otherwise noted, to provide insight into the drivers of these assets.
For more information as to the statutory determination of our
reportable segments refer to Financial Statements note 1
‘Segment reporting’
Unit costs is one of our non-IFRS financial measures used to monitor the
performance of our individual assets and is included in the analysis of each
reportable segment.
For the definition and method of calculation of our non-IFRS
financial measures, including Underlying EBITDA and Unit costs,
refer to OFR 10
9.1 Copper
Detailed below is financial and operating information for our Copper assets
comparing FY2024 to FY2023.
Year ended 30 June
US$M
2024
2023
Revenue
18,566
16,027
Underlying EBITDA
8,564
6,653
Net operating assets
36,368
34,229
Capital expenditure
3,711
2,698
Underlying ROCE
13%
12%
Total copper production (kt)
1,865
1,717
Average realised prices
Copper (US$/lb)
3.98
3.65
Unit Costs
Escondida (US$/lb)
1.45
1.40
Spence (US$/lb)
2.13
2.11
Copper South Australia (US$/lb)1
1.37
–
1. FY2023 comparative is not disclosed as Copper South Australia includes Olympic Dam
as well as Prominent Hill and Carrapateena which were acquired on 2 May 2023 as part
of the acquisition of OZL which only contributed to the performance of the business from
the date of acquisition.
Key drivers of Copper’s financial results
Price overview
Copper prices rose in H2 FY2024, with the LME official cash settlement
price hitting a new record high in May on bullish investor sentiment, fuelled
by expectations of lower interest rates in the United States, possible copper
smelter cuts in China and the LME banning the delivery of Russian metal.
However, copper prices then moderated by the end of FY2024 reflecting
underlying near-term fundamentals with weak Chinese demand and
rising stocks. In the near term, slowing demand growth in China due to
continued weakness in the real estate sector is expected to be partially
offset by more positive trends in power grid spending and consumer durable
goods. We anticipate Europe will be slower to recover from weakness in
manufacturing, while the United States will continue to improve more swiftly
due to a more resilient underlying economy. We now expect CY2024 to be in
marginal surplus, a reflection of softer demand expectations for China and
higher supply. In the medium to longer term, traditional demand (such as
home building, electrical equipment and household appliances) is expected
to remain solid and demand from emerging sectors, such as artificial
intelligence and data centres, should add to this. The decarbonisation
megatrend is also expected to bolster demand. We anticipate that the cost
curve required to meet that demand is likely to steepen as challenges to
the development of new resources progressively increase. This implies that
should deficits occur in this phase, as we expected they will, fly-up pricing
may well occur and in turn this could spur inducement of new, higher cost
supply in the long term.
Production
Total Copper production for FY2024 increased by 9 per cent to 1,865 kt.
Escondida copper production increased by 7 per cent to 1,125 kt primarily
due to higher concentrator feed grade of 0.88 per cent, compared to 0.82
per cent in FY2023. The positive impact of the higher grade was partially
offset by planned lower cathode production as a result of prioritising
concentrator throughput in prior years.
Pampa Norte copper production decreased by 8 per cent to 266 kt including
a record 255 kt at Spence and 11 kt at Cerro Colorado. Spence production
increased 6 per cent driven by improved concentrator throughput and
increases in both concentrator feed grade and recoveries, partially offset by
lower cathode production in line with expected decline in stacked feed grade.
Cerro Colorado entered temporary care and maintenance in December 2023.
Copper South Australia copper production increased by 39 per cent to
322 kt from the successful integration of OZ Minerals (OZL) following the
acquisition in FY2023. The processing of Prominent Hill and Carrapateena
concentrate at Olympic Dam resulted in annual records for cathode and
gold production at Olympic Dam. The successful commissioning and ramp
up of Crusher 2 led to record material mined and concentrate produced
at Carrapateena.
Antamina copper production increased by 4 per cent to 144 kt, as a result
of record concentrator throughput offsetting planned lower feed grades.
Zinc production was 17 per cent lower at 103 kt, as a result of planned
lower feed grades.
Carajás produced 8.4 kt of copper and 5.8 troy koz of gold.
Financial results
Copper revenue increased by US$2.5 billion to US$18.6 billion in FY2024
due to higher average realised copper prices and increased sales volumes
following the successful integration of OZL following the acquisition
in FY2023.
Underlying EBITDA for Copper increased by US$1.9 billion to
US$8.6 billion. Price impacts, net of price-linked costs, increased
Underlying EBITDA by US$1.4 billion. Higher sales volumes increased
Underlying EBITDA by US$0.6 billion driven by the successful integration
of OZL, higher feed grade at Escondida and record concentrate production
at Spence offset by planned lower cathode volumes at Spence.
Controllable cash costs increased by US$0.2 billion, primarily due to higher
maintenance at Escondida and higher exploration spend at Copper South
Australia (Copper SA) for drilling activities at Oak Dam.
Favourable foreign exchange rate movements increased EBITDA by
US$0.3 billion.
Inflation negatively impacted Underlying EBITDA by US$0.3 billion but
was offset by lower fuel, energy and consumable price movements of
US$0.3 billion. An increase in Non-cash costs of US$0.3 billion related
to lower stripping capitalisation at Escondida and Spence, reflecting the
phase of the respective mine plans.
Outlook
Total Copper production of between 1,845 and 2,045 kt is expected
in FY2025.
Escondida production of between 1,180 and 1,300 kt is expected in
FY2025, reflecting both an expected increase in concentrator feed grade
and throughput compared to FY2024.
Spence production of between 240 and 270 kt is expected in FY2025.
Copper South Australia production of between 310 and 340 kt is expected
in FY2025.
Antamina copper production of between 115 to 135 kt due to mine
sequencing resulting in lower throughput, and zinc production of between
90 and 110 kt is expected in FY2025.
Escondida unit costs in FY2025 are expected to be between US$1.30 and
US$1.60 per pound (at an exchange rate of USD/CLP 842).
Spence unit costs in FY2025 are expected to be between US$2.00 and
US$2.30 per pound (at an exchange rate of USD/CLP 842).
Copper South Australia unit costs in FY2025 are expected to be between
US$1.30 and US$1.80 per pound (at an exchange rate of AUD/USD 0.66).
83
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
9 Performance by commodity continued
9.2 Iron Ore
Detailed below is financial and operating information for our Iron Ore
assets comparing FY2024 to FY2023.
Year ended 30 June
US$M
2024
2023
Revenue
27,952
24,812
Underlying EBITDA
18,913
16,692
Net operating assets
13,812
16,956
Capital expenditure
2,033
1,966
Underlying ROCE
83%
67%
Total iron ore production (Mt)
260
257
Average realised prices
Iron ore (US$/wmt, FOB)
101.04
92.54
Unit Costs
WAIO (US$/t)
18.19
17.79
Key drivers of Iron Ore’s financial results
Price overview
Iron ore consumption in China was strong in CY2023. In contrast, steel
output continued to contract in developed regions albeit at a slower rate than
previous years. Over the next two years we expect a small improvement in
global steel production with growth led by India and Southeast Asia, with
some additional growth from a recovery in developed regions. After a strong
CY2023, we expect Chinese blast furnace run rates to ease in CY2024,
under pressure from subdued steel margins and the potential for policy-
driven production controls. During H2 FY2024, iron ore prices first declined
and then traded in the range of around US$100 to US$120/t. A widening
surplus has emerged with Chinese port inventories rising to elevated levels.
For the balance of CY2024 and into CY2025, we expect supply from low-cost
major iron ore producers to grow while iron ore consumption is experiencing
a modest decline. Our estimate of real-time cost support continues to sit in
the US$80 – US$100/t range on a 62% Fe CFR basis. Should surpluses
persist as we forecast, we would expect some high-cost suppliers may be
driven out of the market over time. How quickly and effectively the Chinese
policies targeted at the property sector stabilise it, and the government’s
approach to regulating steel production, will both be large swing factors for
the remainder of CY2024 and into CY2025. In the medium term, China’s
demand for iron ore is expected to be lower than it is today as it moves
beyond the crude steel production plateau and as the ratio of scrap-based
steelmaking rises. We maintain our view that China’s steel production has
plateaued above 1.0 and this is likely to continue across the mid-2020s.
However, Chinese pig iron production is expected to decline during this
period with more recycled scrap used in steelmaking. We expect demand for
our products in other developing regions in Asia to offset this to a degree.
Production
Total Iron Ore production increased by 1 per cent to a record 260 Mt.
WAIO achieved record production of 255 Mt (287 Mt on a 100 per cent
basis), reflecting strong supply chain performance with increased capacity
unlocked by the Port Debottlenecking Project 1 (PDP1) and record
production at South Flank. These more than offset the impacts of the
continued tie-in activity for the Rail Technology Programme 1 (RTP1).
South Flank completed ramp up to full production capacity of 80 Mtpa (100
per cent basis) in FY2024 and following commissioning in December 2023,
ramp up of PDP1 remains on track to be completed in CY2024.
Samarco production increased by 5 per cent to 4.7 Mt (BHP share), as a
result of higher concentrator throughput.
Financial results
Total Iron Ore revenue increased by US$3.1 billion to US$28.0 billion
in FY2024, reflecting higher average realised prices and higher sales
volumes as a result of record production from strong supply chain
performance with increased capacity unlocked by PDP1 and record
production at South Flank.
Underlying EBITDA for Iron Ore increased by US$2.2 billion to
US$18.9 billion primarily due to higher average realised prices, net of
price-linked costs, of US$2.0 billion. Higher sales volumes increased
Underlying EBITDA by US$0.6 billion driven by record production partially
offset by US$0.2 billion of higher controllable cash costs as we ramped
up South Flank and increased production. Other items, such as inflation
and unfavourable foreign exchange rate impacts, were partially offset by
lower fuel, energy and consumable price movements collectively reduced
Underlying EBITDA by US$0.2 billion.
Outlook
WAIO production is expected to be between 250 and 260 Mt (282 and
294 Mt on a 100 per cent basis) in FY2025 as the Group ramps up the
planned tie‑in activities for RTP1.
WAIO unit costs in FY2025 are expected to be between US$18.00 and
US$19.50 per tonne (based on an exchange rate of AUD/USD 0.66).
Samarco production is expected to be between 5 and 5.5 Mt (BHP share)
in FY2025 with the second concentrator expected to come online during
Q3 FY2025.
9.3 Coal
Detailed below is financial and operating information for our Coal assets
comparing FY2024 to FY2023.
Year ended 30 June
US$M
2024
2023
Revenue
7,666
10,958
Underlying EBITDA
2,290
4,998
Net operating assets
6,472
7,266
Capital expenditure
646
657
Underlying ROCE
19%
47%
Total steelmaking coal production (Mt)
22
29
Total energy coal production (Mt)
15
14
Average realised prices
Steelmaking coal (US$/t)
266.06
271.05
Hard coking coal (HCC) (US$/t)
273.03
273.59
Weak coking coal (WCC) (US$/t)
205.54
251.13
Thermal coal (US$/t)
121.52
236.51
Unit Costs
BMA (US$/t)
119.54
96.46
Key drivers of Coal’s financial results
Price overview
Across FY2024 steelmaking coal prices were relatively stable with an overall
slight decline in prices. The demand picture was mixed with strong Indian
steel production growth and recovery in the EU from the lows of CY2023,
offsetting output contractions in both Northeast Asia and North America.
Against this backdrop, Australian supply recovered slower than expectations,
while Mongolian exports continued to surge. Notwithstanding recent supply
side challenges, we still expect a modest recovery of seaborne supply in
the near term. Meanwhile, availability of land borne imports into China and
operational recovery of Chinese domestic mines are key uncertainties.
On seaborne demand, India is expected to maintain its current strong
momentum while OECD importing regions are likely to experience a gradual
pickup in their steel industries. While seaborne supply in the steelmaking
coal market is expected see a marginal surplus in CY2025, the supply of
higher-quality coals is likely to stay relatively tight. Over the longer term, we
expect that higher-quality steelmaking coals, such as those produced by
our BMA assets, will be valued for their role in reducing the GHG emissions
intensity of blast furnaces and, combined with the growth of the steel
industry in hard coking coal importing countries such as India, will have
growing and resilient demand for decades to come. With the major seaborne
supply region of Queensland being currently less conducive to long-life
capital investment as a result of changes to the royalty regime, the scarcity
value of higher-quality steelmaking coals may well also increase over time.
84
BHP Annual Report 2024
Production
Steelmaking coal
BMA production decreased by 23 per cent to 22.3 Mt (44.6 Mt on a 100
per cent basis) as a result of increased stripping to improve supply chain
stability and restore depleted inventory positions, which arose from
extended weather impacts and labour constraints over recent years, and
the divestment of Blackwater and Daunia on 2 April 2024. Production was
also impacted by an extended longwall move and geotechnical faulting
at Broadmeadow during H1 FY2024, and the temporary suspension of
operations following the fatality of a team member at Saraji. Blackwater and
Daunia produced 5 Mt (10 Mt on a 100 per cent basis) in FY2024 prior to
their divestment.
Energy coal
NSWEC production increased by 8 per cent to 15.4 Mt due to strong
operating performance as improved weather and labour availability
enabled an uplift in truck productivity.
Financial results
Coal revenue decreased by US$3.3 billion to US$7.7 billion in
FY2024 mainly due to lower average realised prices, lower volumes at
BMA as a result of increased stripping to improve supply chain stability
and the divestment of Blackwater and Daunia, partially offset by higher
volumes at NSWEC due to strong operating performance.
Underlying EBITDA for Coal decreased by US$2.7 billion to US$2.3 billion.
Price impacts, net of price-linked costs, decreased Underlying EBITDA by
US$1.5 billion.
Lower sales volumes of US$1.0 billion were due to lower production at
BMA, including the divestment of Blackwater and Daunia, partially offset
by higher production at NSWEC. Inflation negatively impacted Underlying
EBITDA by US$0.1 billion and controllable cash costs increased by
US$0.1 billion from higher stripping and contractor costs to support higher
production at NSWEC.
Outlook
BMA coal production for FY2025 is expected to be between 16.5 and
19 Mt (33 and 38 Mt on a 100 per cent basis), reflecting the divestment of
Blackwater and Daunia and impact of elevated strip ratios as we continue to
improve supply chain stability and re-establish raw coal inventory positions.
BMA unit costs in FY2025 are expected to be between US$112 and
US$124 per tonne (based on an exchange rate of AUD/USD 0.66).
NSWEC coal production for FY2025 is expected to be between 13 and 15 Mt.
9.4 Other assets
Detailed below is an analysis of Other assets’ financial and operating
performance comparing FY2024 to FY2023.
Western Australia Nickel
Key drivers of Western Australia Nickel’s
financial results
Price overview
The nickel industry moved into significant surplus during CY2023.
Indonesia produced almost 20 per cent of global primary nickel in CY2019,
and that share increased to over 50 per cent by CY2023. This came at a time
of weak traditional stainless steel demand in the OECD, and global battery
value chain destocking. The nickel market weakness has continued into
CY2024 albeit with a brief price rebound in May on supply curtailments and
disruptions in Australia and New Caledonia. On the demand side, electric
vehicle sales remained solid in China, but penetration rates in the OECD
have slowed in parallel with weaker traditional stainless steel demand for
nickel, which caused global visible nickel stocks to rise. These trends are
expected to continue into CY2025 suggesting that the market will remain
in surplus over that period. While voluntary curtailments continue to occur
across the industry, including by BHP, these are still not near the scale that
would be expected to balance the market near term. We estimate that we
are still in a multi-year run of surpluses. Longer term, we see the market
rebalancing in the late 2020s as we continue to believe nickel will be a core
beneficiary of the electrification megatrend.
Production
Nickel West production increased by 2 per cent to 81.6 kt, as we produced
a higher proportion of the lower value matte products as a result of
increased maintenance at Kwinana Refinery and severe weather events.
Financial results
Western Australia Nickel Revenue decreased by US$0.5 billion to
US$1.5 billion in FY2024, reflecting lower average realised prices.
Underlying EBITDA for Western Australia Nickel decreased by
US$0.5 billion to a loss of US$0.3 billion. Price impacts, net of price-linked
costs, decreased Underlying EBITDA by US$0.4 billion. Controllable cash
costs increased by US$0.1 billion due to increased third-party ore
purchases following delivery issues in FY2023.
Outlook
On 11 July 2024, we announced the temporary suspension of operations at
Western Australia Nickel and that operations will be suspended by October
2024 and handover activities for temporary suspension will be completed
by December 2024. BHP intends to review the decision to temporarily
suspend Western Australia Nickel by February 2027.
Potash
Potash recorded an Underlying EBITDA loss of US$255 million in FY2024,
compared to a loss of US$205 million in FY2023.
Jansen Stage 1 is 52 per cent complete and remains on track for first
production in late CY2026 with a two-year expected ramp up period.
The engineering work and execution of procurement agreements is largely
complete. In FY2024, a longer than usual summer season enabled early
completion of the mill’s foundation. In FY2025, underground and surface
construction works will continue, including structural, mechanical and
electrical activities for the mill areas. The Group also expects to complete
the conversion of the service shaft headframe to a permanent structure.
Jansen Stage 2 execution activity has now commenced and is 2 per
cent complete, with first production expected in FY2029, followed by an
expected three-year ramp-up period. In FY2025, the focus will be on
detailed engineering, procurement for major equipment and construction
packages, and structural steel fabrication.
Price overview
Potash demand has been strong in CY2024, after a sharp rebound in
CY2023, with global potash shipments this year estimated to return to its
previous CY2020 peak level of 72 Mtpa, driven by good affordability and
inventory build-up. In the medium-term existing capacity in the FSU is
expected to trend back to normal operating rates, while new supply could
also come from the region, including some expansion projects potentially
resuming construction. Longer term, we believe that potash stands to
benefit from the intersection of global megatrends: rising population,
changing diets and the need for the more sustainable intensification of
agriculture on the globe’s finite arable land. We consider this compelling
demand picture, rising geopolitical uncertainty and the maturity of the
existing production asset base to provide an attractive entry opportunity in
a lower-risk supply jurisdiction such as Saskatchewan, Canada.
9.5 Impact of changes to commodity prices
The prices we obtain for our products are a key driver of value for BHP.
Fluctuations in these commodity prices affect our results, including cash
flows and asset values. The estimated impact of changes in commodity
prices in FY2024 on our key financial measures is set out below.
Impact on profit
after taxation
(US$M)
Impact on
Underlying
EBITDA
(US$M)
US¢1/lb on copper price
26
37
US$1/t on iron ore price
163
233
US$1/t on steelmaking coal price
7
10
US$1/t on energy coal price
10
14
US¢1/lb on nickel price
1
1
85
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
10 Non-IFRS financial information
We use various non-IFRS financial information to reflect our underlying financial performance.
Non-IFRS financial information is not defined or specified under the requirements of IFRS, but is derived from the Group’s Consolidated Financial
Statements prepared in accordance with IFRS. The non-IFRS financial information and the below reconciliations included in this Report are unaudited.
The non-IFRS financial information presented is consistent with how management reviews financial performance of the Group with the Board and the
investment community.
Sections 10.1 and 10.2 outline why we believe non-IFRS financial information is useful and the calculation methodology. We believe non-IFRS financial
information provides useful information, however should not be considered as an indication of, or as a substitute for, statutory measures as an indicator
of actual operating performance (such as profit or net operating cash flow) or any other measure of financial performance or position presented in
accordance with IFRS, or as a measure of a company’s profitability, liquidity or financial position.
The following tables provide reconciliations between non-IFRS financial information and their nearest respective IFRS measure.
Exceptional items
To improve the comparability of underlying financial performance between reporting periods, some of our non-IFRS financial information adjusts the
relevant IFRS measures for exceptional items.
For more information on exceptional items refer to Financial Statements note 3 ‘Exceptional items’
Exceptional items are those gains or losses where their nature, including the expected frequency of the events giving rise to them, and impact is
considered material to the Group’s Consolidated Financial Statements. The exceptional items included within the Group’s profit for the financial years
are detailed below.
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Continuing operations
Revenue
−
−
−
Other income
877
−
840
Expenses excluding net finance costs, depreciation, amortisation and impairments
(139)
(103)
(494)
Depreciation and amortisation
−
−
−
Net impairments
(3,800)
−
−
(Loss)/profit from equity accounted investments, related impairments and expenses
(3,032)
215
(676)
Profit/(loss) from operations
(6,094)
112
(330)
Financial expenses
(506)
(452)
(290)
Financial income
−
−
−
Net finance costs
(506)
(452)
(290)
Profit/(loss) before taxation
(6,600)
(340)
(620)
Income tax (expense)/benefit
837
(266)
(454)
Royalty-related taxation (net of income tax benefit)
−
−
−
Total taxation (expense)/benefit
837
(266)
(454)
Profit/(loss) after taxation from Continuing operations
(5,763)
(606)
(1,074)
Discontinued operations
Profit/(loss) after taxation from Discontinued operations
−
−
8,159
Profit/(loss) after taxation from Continuing and Discontinued operations
(5,763)
(606)
7,085
Total exceptional items attributable to non-controlling interests
−
(107)
−
Total exceptional items attributable to BHP shareholders
(5,763)
(499)
7,085
Exceptional items attributable to BHP shareholders per share (US cents)
(113.7)
(9.8)
140.0
Weighted basic average number of shares (Million)
5,068
5,064
5,061
86
BHP Annual Report 2024
Non-IFRS financial information derived from Consolidated Income Statement
Underlying attributable profit
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Profit after taxation from Continuing and Discontinued operations attributable to BHP shareholders
7,897
12,921
30,900
Total exceptional items attributable to BHP shareholders1
5,763
499
(7,085)
Underlying attributable profit
13,660
13,420
23,815
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
Underlying basic earnings per share
Year ended 30 June
2024
US cents
2023
US cents
2022
US cents
Basic earnings per ordinary share
155.8
255.2
610.6
Exceptional items attributable to BHP shareholders per share1
113.7
9.8
(140.0)
Underlying basic earnings per ordinary share
269.5
265.0
470.6
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
Underlying attributable profit – Continuing operations
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Profit after taxation from Continuing and Discontinued operations attributable to BHP shareholders
7,897
12,921
30,900
(Profit)/loss after taxation from Discontinued operations attributable to members of BHP
−
−
(10,655)
Total exceptional items attributable to BHP shareholders1
5,763
499
(7,085)
Total exceptional items attributable to BHP shareholders for Discontinued operations2
−
−
8,159
Underlying attributable profit – Continuing operations
13,660
13,420
21,319
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
2. For more information refer to Financial Statements note 28 ‘Discontinued operations’.
Underlying basic earnings per share – Continuing operations
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Underlying attributable profit – Continuing operations
13,660
13,420
21,319
Weighted basic average number of shares (Million)
5,068
5,064
5,061
Underlying attributable earnings per ordinary share – Continuing operations (US cents)
269.5
265.0
421.2
Underlying EBITDA
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Profit from operations
17,537
22,932
34,106
Exceptional items included in profit from operations1
6,094
(112)
330
Underlying EBIT
23,631
22,820
34,436
Depreciation and amortisation expense
5,295
5,061
5,683
Net impairments
3,890
75
515
Exceptional item included in Depreciation, amortisation and impairments1
(3,800)
−
−
Underlying EBITDA
29,016
27,956
40,634
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
87
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
10 Non-IFRS financial information continued
Underlying EBITDA – Segment
Year ended 30 June 2024
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations2
Total Group
Profit from operations
6,524
13,759
2,557
(5,303)
17,537
Exceptional items included in profit from operations1
−
3,066
(880)
3,908
6,094
Depreciation and amortisation expense
2,023
2,027
611
634
5,295
Net impairments
17
61
2
3,810
3,890
Exceptional item included in Depreciation, amortisation
and impairments1
−
−
−
(3,800)
(3,800)
Underlying EBITDA
8,564
18,913
2,290
(751)
29,016
Year ended 30 June 2023
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations2
Total Group
Profit from operations
4,810
14,847
4,295
(1,020)
22,932
Exceptional items included in profit from operations1
−
(176)
−
64
(112)
Depreciation and amortisation expense
1,810
1,993
697
561
5,061
Net impairments
33
28
6
8
75
Underlying EBITDA
6,653
16,692
4,998
(387)
27,956
Year ended 30 June 2022
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations2
Total Group
Profit from operations
6,330
18,742
9,582
(548)
34,106
Exceptional items included in profit from operations1
−
729
(849)
450
330
Depreciation and amortisation expense
1,765
2,203
762
953
5,683
Net impairments
470
33
9
3
515
Underlying EBITDA
8,565
21,707
9,504
858
40,634
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
2. Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (which comprises the Nickel West operations and,
following the OZ Minerals (OZL) acquisition on 2 May 2023, the West Musgrave project), legacy assets and consolidation adjustments.
Year ended 30 June 2024
US$M
Profit from
operations
Exceptional
items included
in profit from
operations1
Depreciation
and
amortisation
Net
impairments
Exceptional
items included
in Depreciation,
amortisation and
impairments1
Underlying
EBITDA
Potash
(257)
−
2
−
−
(255)
Western Australia Nickel2
(4,174)
3,800
72
3,800
(3,800)
(302)
Other3
(872)
108
560
10
−
(194)
Total
(5,303)
3,908
634
3,810
(3,800)
(751)
Year ended 30 June 2023
US$M
Profit from
operations
Exceptional
items included
in profit from
operations1
Depreciation
and
amortisation
Net
impairments
Exceptional
items included
in Depreciation,
amortisation and
impairments1
Underlying
EBITDA
Potash
(207)
−
2
−
−
(205)
Western Australia Nickel2
55
−
105
2
−
162
Other3
(868)
64
454
6
−
(344)
Total
(1,020)
64
561
8
−
(387)
Year ended 30 June 2022
US$M
Profit from
operations
Exceptional
items included
in profit from
operations1
Depreciation
and
amortisation
Net
impairments
Exceptional
items included
in Depreciation,
amortisation and
impairments1
Underlying
EBITDA
Potash
(149)
−
2
−
−
(147)
Western Australia Nickel2
327
−
91
2
−
420
Other3
(726)
450
860
1
−
585
Total
(548)
450
953
3
−
858
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
2. Western Australia Nickel comprises the Nickel West operations and, following the OZL acquisition on 2 May 2023, the West Musgrave project.
3. Other includes functions, other unallocated operations, legacy assets and consolidation adjustments.
88
BHP Annual Report 2024
Underlying EBITDA margin
Year ended 30 June 2024
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations1
Total Group
Revenue – Group production
16,545
27,927
7,666
1,470
53,608
Revenue – Third-party products
2,021
25
−
4
2,050
Revenue
18,566
27,952
7,666
1,474
55,658
Underlying EBITDA – Group production
8,490
18,916
2,290
(753)
28,943
Underlying EBITDA – Third-party products
74
(3)
−
2
73
Underlying EBITDA2
8,564
18,913
2,290
(751)
29,016
Segment contribution to the Group’s Underlying EBITDA3
29%
64%
7%
100%
Underlying EBITDA margin4
51%
68%
30%
54%
Year ended 30 June 2023
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations1
Total Group
Revenue – Group production
14,164
24,791
10,958
2,009
51,922
Revenue – Third-party products
1,863
21
−
11
1,895
Revenue
16,027
24,812
10,958
2,020
53,817
Underlying EBITDA – Group production
6,635
16,693
4,998
(387)
27,939
Underlying EBITDA – Third-party products
18
(1)
−
−
17
Underlying EBITDA2
6,653
16,692
4,998
(387)
27,956
Segment contribution to the Group’s Underlying EBITDA3
23%
59%
18%
100%
Underlying EBITDA margin4
47%
67%
46%
54%
Year ended 30 June 2022
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations1
Total Group
Revenue – Group production
13,946
30,748
15,549
1,860
62,103
Revenue – Third-party products
2,903
19
−
73
2,995
Revenue
16,849
30,767
15,549
1,933
65,098
Underlying EBITDA – Group production
8,529
21,707
9,504
858
40,598
Underlying EBITDA – Third-party products
36
−
−
−
36
Underlying EBITDA2
8,565
21,707
9,504
858
40,634
Segment contribution to the Group’s Underlying EBITDA3
22%
54%
24%
100%
Underlying EBITDA margin4
61%
71%
61%
65%
1. Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (which comprises the Nickel West operations and, following the
OZL acquisition on 2 May 2023, the West Musgrave project), legacy assets and consolidation adjustments.
2. We differentiate sales of our production (which may include third-party product feed) from direct sales of third-party products to better measure our operational profitability as a percentage
of revenue. We may buy and sell third-party products to ensure a steady supply of product to our customers where there is occasional production variability or shortfalls from our assets.
3. Percentage contribution to Group Underlying EBITDA, excluding Group and unallocated items.
4. Underlying EBITDA margin excludes third-party products.
Effective tax rate
2024
2023
2022
Year ended 30 June
Profit
before
taxation
US$M
Income
tax
expense
US$M
%
Profit
before
taxation
US$M
Income
tax
expense
US$M
%
Profit
before
taxation
US$M
Income
tax
expense
US$M
%
Statutory effective tax rate
16,048
(6,447)
40.2
21,401
(7,077)
33.1
33,137
(10,737)
32.4
Adjusted for:
Exchange rate movements
−
(79)
−
94
−
(233)
Exceptional items1
6,600
(837)
340
266
620
454
Adjusted effective tax rate
22,648
(7,363)
32.5
21,741
(6,717)
30.9
33,757
(10,516)
31.2
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
89
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
10 Non-IFRS financial information continued
Non-IFRS financial information derived from Consolidated Cash Flow Statement
Capital and exploration expenditure
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Capital expenditure (purchases of property, plant and equipment)
8,816
6,733
5,855
Add: Exploration and evaluation expenditure
457
350
256
Capital and exploration expenditure (cash basis) – Continuing operations
9,273
7,083
6,111
Capital expenditure (purchases of property, plant and equipment) – Discontinued operations
−
−
1,050
Add: Exploration and evaluation expenditure – Discontinued operations
−
−
384
Capital and exploration expenditure (cash basis) – Discontinued operations
−
−
1,434
Capital and exploration expenditure (cash basis) – Total operations
9,273
7,083
7,545
Free cash flow
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Net operating cash flows from Continuing operations
20,665
18,701
29,285
Net investing cash flows from Continuing operations
(8,762)
(13,065)
(4,973)
Free cash flow – Continuing operations
11,903
5,636
24,312
Net operating cash flows from Discontinued operations
−
−
2,889
Net investing cash flows from Discontinued operations
−
−
(904)
Net cash completion payment on merger of Petroleum with Woodside
−
−
(683)
Cash and cash equivalents disposed on merger of Petroleum with Woodside
−
−
(399)
Free cash flow – Discontinued operations
−
−
903
Free cash flow – Total operations
11,903
5,636
25,215
Non-IFRS financial information derived from Consolidated Balance Sheet
Net debt and gearing ratio
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Interest bearing liabilities – Current
2,084
7,173
2,622
Interest bearing liabilities – Non-current
18,634
15,172
13,806
Total interest bearing liabilities
20,718
22,345
16,428
Comprising:
Borrowing
17,602
19,326
13,852
Lease liabilities
3,116
3,019
2,576
Less: Lease liability associated with index-linked freight contracts
511
287
274
Less: Cash and cash equivalents
12,501
12,428
17,236
Less: Net debt management related instruments1
(1,395)
(1,572)
(1,688)
Less: Net cash management related instruments2
(19)
36
273
Less: Total derivatives included in net debt
(1,414)
(1,536)
(1,415)
Net debt
9,120
11,166
333
Net assets
49,120
48,530
48,766
Gearing
15.7%
18.7%
0.7%
1. Represents the net cross currency and interest rate swaps included within current and non-current other financial assets and liabilities.
2. Represents the net forward exchange contracts related to cash management included within current and non-current other financial assets and liabilities.
90
BHP Annual Report 2024
Net debt waterfall
Year ended 30 June
2024
US$M
2023
US$M
Net debt at the beginning of the period
(11,166)
(333)
Net operating cash flows
20,665
18,701
Net investing cash flows
(8,762)
(13,065)
Net financing cash flows
(11,669)
(10,315)
Net increase/(decrease) in cash and cash equivalents from Continuing and Discontinued operations
234
(4,679)
Carrying value of interest bearing liability net repayments/(proceeds)
2,236
(4,893)
Carrying value of debt related instruments settlements
321
677
Carrying value of cash management related instruments proceeds
(361)
(331)
Fair value change on hedged loans
214
803
Fair value change on hedging derivatives
(188)
(691)
Foreign currency exchange rate changes on cash and cash equivalents
(159)
(134)
Lease additions (excluding leases associated with index-linked freight contracts)
(429)
(472)
Acquisition of subsidiaries and operations1
−
(1,111)
Divestment of subsidiaries and operations2
60
−
Other
118
(2)
Non-cash movements
(384)
(1,607)
Net debt at the end of the period
(9,120)
(11,166)
1. US$1,111 million of Interest bearing liabilities were acquired on 2 May 2023 as part of the acquisition of OZL. Excludes US$104 million cash acquired which is included in Net investing
cash flows.
2. Relates to leases disposed as part of the Blackwater and Daunia mines divestment completed on 2 April 2024. Refer to Financial Statements note 3 ‘Exceptional items’ for further information.
Net operating assets
The following table reconciles Net operating assets for the Group to Net assets on the Consolidated Balance Sheet.
Year ended 30 June
2024
US$M
2023
US$M
Net assets
49,120
48,530
Less: Non-operating assets
Cash and cash equivalents
(12,501)
(12,428)
Trade and other receivables1
(306)
(26)
Other financial assets2
(1,398)
(996)
Current tax assets
(314)
(508)
Deferred tax assets
(67)
(56)
Add: Non-operating liabilities
Trade and other payables3
297
277
Interest bearing liabilities
20,718
22,345
Other financial liabilities4
1,558
1,764
Current tax payable
884
611
Non-current tax payable
40
68
Deferred tax liabilities
3,332
4,299
Net operating assets
61,363
63,880
Net operating assets
Copper
36,368
34,229
Iron Ore
13,812
16,956
Coal
6,472
7,266
Group and unallocated items5
4,711
5,429
Total
61,363
63,880
1. Represents external finance receivable, receivables related to divestment of subsidiaries and operations and accrued interest receivable included within other receivables.
2. Represents cross currency and interest rate swaps, forward exchange contracts related to cash management and investment in shares, other investments, deferred receivable from
divestment of subsidiaries and operations and associated receivables contingent on outcome of future events relating to realised commodity prices.
3. Represents accrued interest payable included within other payables.
4. Represents cross currency and interest rate swaps and forward exchange contracts related to cash management.
5. Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (which comprises the Nickel West operations and, following the
OZL acquisition on 2 May 2023, the West Musgrave project), legacy assets and consolidation adjustments.
91
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
10 Non-IFRS financial information continued
Other non-IFRS financial information
Principal factors that affect Revenue, Profit from operations and Underlying EBITDA
The following table describes the impact of the principal factors that affected Revenue, Profit from operations and Underlying EBITDA for FY2024 and
relates them back to our Consolidated Income Statement.
For information on the method of calculation of the principal factors that affect Revenue, Profit from operations and Underlying EBITDA refer to OFR 10.2
Revenue
US$M
Total expenses,
Other income
and Profit/(loss)
from equity
accounted
investments
US$M
Profit from
operations
US$M
Depreciation,
amortisation and
impairments and
Exceptional
Items
US$M
Underlying
EBITDA
US$M
Year ended 30 June 2023
Revenue
53,817
Other income
394
Expenses excluding net finance costs
(31,873)
Profit/(loss) from equity accounted investments, related impairments
and expenses
594
Total other income, expenses excluding net finance costs and Profit/(loss)
from equity accounted investments, related impairments and expenses
(30,885)
Profit from operations
22,932
Depreciation, amortisation and impairments1
5,136
Exceptional item included in Depreciation, amortisation and impairments
−
Exceptional items
(112)
Underlying EBITDA
27,956
Change in sales prices
1,476
−
1,476
−
1,476
Price-linked costs
−
108
108
−
108
Net price impact
1,476
108
1,584
−
1,584
Change in volumes
55
(45)
10
−
10
Operating cash costs
−
(655)
(655)
−
(655)
Exploration and business development
−
(118)
(118)
−
(118)
Change in controllable cash costs2
−
(773)
(773)
−
(773)
Exchange rates
(1)
254
253
−
253
Inflation on costs
−
(686)
(686)
−
(686)
Fuel, energy and consumable price movements
−
487
487
−
487
Non-cash
−
(301)
(301)
−
(301)
One-off items
−
316
316
−
316
Change in other costs
(1)
70
69
−
69
Asset sales
−
38
38
−
38
Ceased and sold operations
(983)
473
(510)
−
(510)
New and acquired operations
918
(390)
528
−
528
Other
376
(262)
114
−
114
Depreciation, amortisation and impairments
−
(249)
(249)
249
−
Exceptional items
−
(6,206)
(6,206)
6,206
−
Year ended 30 June 2024
Revenue
55,658
Other income
1,285
Expenses excluding net finance costs
(36,750)
(Loss)/profit from equity accounted investments, related impairments
and expenses
(2,656)
Total other income, expenses excluding net finance costs and (loss)/profit
from equity accounted investments, related impairments and expenses
(38,121)
Profit from operations
17,537
Depreciation, amortisation and impairments1
9,185
Exceptional item included in Depreciation, amortisation and impairments
(3,800)
Exceptional items
6,094
Underlying EBITDA
29,016
1. Depreciation and impairments that we classify as exceptional items are excluded from depreciation, amortisation and impairments. Depreciation, amortisation and impairments includes
non-exceptional impairments of US$90 million (FY2023: US$75 million).
2. Collectively, we refer to the change in operating cash costs and change in exploration and business development as Change in controllable cash costs. Operating cash costs by definition
do not include non-cash costs. The change in operating cash costs also excludes the impact of exchange rates and inflation, changes in fuel, energy costs and consumable costs, changes
in exploration and evaluation and business development costs and one-off items. These items are excluded so as to provide a consistent measurement of changes in costs across all
segments, based on the factors that are within the control and responsibility of the segment.
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BHP Annual Report 2024
Underlying return on capital employed (ROCE)
Year ended 30 June
2024
US$M
2023
US$M
2022
US$M
Profit after taxation from Continuing and Discontinued operations
9,601
14,324
33,055
Exceptional items1
5,763
606
(7,085)
Subtotal
15,364
14,930
25,970
Adjusted for:
Net finance costs
1,489
1,531
1,128
Exceptional items included within net finance costs1
(506)
(452)
(290)
Income tax expense on net finance costs
(303)
(342)
(287)
Profit after taxation excluding net finance costs and exceptional items
16,044
15,667
26,521
Net assets at the beginning of the period
48,530
48,766
55,605
Net debt at the beginning of the period
11,166
333
4,121
Capital employed at the beginning of the period
59,696
49,099
59,726
Net assets at the end of the period
49,120
48,530
48,766
Net debt at the end of the period
9,120
11,166
333
Capital employed at the end of the period
58,240
59,696
49,099
Average capital employed
58,968
54,398
54,413
Underlying return on capital employed
27.2%
28.8%
48.7%
1. For more information refer to Financial Statements note 3 ‘Exceptional items’.
Underlying return on capital employed (ROCE) by segment
Year ended 30 June 2024
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations1
Total Group
Profit after taxation excluding net finance
costs and exceptional items
4,099
11,877
1,254
(1,186)
16,044
Average capital employed
31,205
14,259
6,529
6,975
58,968
Underlying return on capital employed
13%
83%
19%
−
27.2%
Year ended 30 June 2023
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations1
Total Group
Profit after taxation excluding net finance
costs and exceptional items
3,293
10,300
2,970
(896)
15,667
Average capital employed
27,594
15,467
6,281
5,056
54,398
Underlying return on capital employed
12%
67%
47%
–
28.8%
1. Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (which comprises the Nickel West operations and, following the
OZL acquisition on 2 May 2023, the West Musgrave project), legacy assets and consolidation adjustments.
Underlying return on capital employed (ROCE) by asset
Year ended
30 June 2024
US$M
Western
Australia
Iron Ore
Antamina
Escondida
BHP
Mitsubishi
Alliance
Pampa
Norte
Copper
South
Australia1
Western
Australia
Nickel2
Potash3
New South
Wales
Energy
Coal4
Other
Total
Group
Profit after taxation
excluding net finance costs
and exceptional items
11,939
440
2,912
1,038
296
671
(369)
(265)
277
(895)
16,044
Average capital employed
19,732
1,404
10,677
6,731
4,224
14,578
1,269
5,303
(364)
(4,586)
58,968
Underlying return on
capital employed
61%
31%
27%
15%
7%
5%
−
−
−
−
27.2%
Year ended
30 June 2023
US$M
Western
Australia
Iron Ore
Antamina
Escondida
BHP
Mitsubishi
Alliance
Pampa
Norte
Copper
South
Australia1
Western
Australia
Nickel2
Potash3
New South
Wales
Energy
Coal4
Other
Total
Group
Profit after taxation
excluding net finance costs
and exceptional items
10,318
426
2,808
1,837
131
166
(51)
(137)
1,212
(1,043)
15,667
Average capital employed
19,420
1,314
10,183
6,672
4,278
11,681
1,635
4,020
(591)
(4,214)
54,398
Underlying return on
capital employed
53%
32%
28%
28%
3%
1%
(3%)
−
−
−
28.8%
1. Includes Olympic Dam as well as Prominent Hill and Carrapateena which were acquired on 2 May 2023 as part of the acquisition of OZ Minerals Ltd.
2. Western Australia Nickel comprises the Nickel West operations and, following the OZL acquisition on 2 May 2023, the West Musgrave project. Western Australia Nickel ROCE has not
been shown following the Group’s decision, announced on 11 July 2024, to temporarily suspend Nickel West operations and the West Musgrave project at Western Australia Nickel.
3. Potash ROCE has not been shown because it is distorted as the asset is non-producing and in its development phase.
4. NSWEC ROCE has not been shown as it is distorted by negative capital employed due to the rehabilitation provision being the primary balance remaining on Balance Sheet following
previous impairments.
93
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
10 Non-IFRS financial information continued
Unit costs
Unit costs do not include the re-allocation to assets in FY2024 of the costs associated with the employee entitlements and allowances review conducted
in FY2023, which were reported in Group and Unallocated in that period.
The calculation of Escondida, Spence and Copper South Australia unit costs are set out in the tables below.
US$M
Escondida unit costs
Spence unit costs
FY2024
FY2023
FY2024
FY2023
Revenue
10,013
8,847
2,271
2,072
Underlying EBITDA
5,759
4,934
961
767
Gross costs
4,254
3,913
1,310
1,305
Less: by-product credits
523
459
105
137
Less: freight
194
202
49
48
Less: royalties
54
–
−
–
Net costs
3,483
3,252
1,156
1,120
Sales (kt)
1,087
1,051
246
241
Sales (Mlb)
2,396
2,317
543
531
Cost per pound (US$)1
1.45
1.40
2.13
2.11
1. FY2024 based on average realised exchange rates of USD/CLP 907 (FY2023 USD/CLP 864).
US$M
Copper South
Australia
unit costs
FY2024
Revenue
4,085
Underlying EBITDA
1,568
Gross costs
2,517
Less: by-product credits
1,354
Less: freight
57
Less: royalties
141
Less: re-allocation of costs associated with the employee entitlements and allowances review
14
Net costs
951
Sales (kt)
314
Sales (Mlb)
692
Cost per pound (US$)1,2
1.37
1. FY2024 based on an average realised exchange rate of AUD/USD 0.66.
2. FY2023 comparative is not disclosed as Copper South Australia includes Olympic Dam as well as Prominent Hill and Carrapateena which were acquired on 2 May 2023 as part of the
acquisition of OZL which only contributed to the performance of the business from the date of acquisition.
The calculation of WAIO unit costs is set out in the table below.
US$M
WAIO unit costs
FY2024
FY2023
Revenue
27,805
24,678
Underlying EBITDA
18,964
16,660
Gross costs
8,841
8,018
Less: freight
2,182
1,876
Less: royalties
1,954
1,714
Less: re-allocation of costs associated with the employee entitlements and allowances review
48
−
Net costs
4,657
4,428
Sales (kt, equity share)
255,977
248,883
Cost per tonne (US$)1
18.19
17.79
1. FY2024 based on an average realised exchange rate of AUD/USD 0.66 (FY2023 AUD/USD 0.67).
The calculation of BMA unit costs is set out in the table below.
US$M
BMA unit costs
FY2024
FY2023
Revenue
5,873
7,652
Underlying EBITDA
1,914
3,197
Gross costs
3,959
4,455
Less: freight
29
32
Less: royalties
1,260
1,667
Less: re-allocation of costs associated with the employee entitlements and allowances review
5
−
Net costs
2,665
2,756
Sales (kt, equity share)
22,294
28,571
Cost per tonne (US$)1
119.54
96.46
1. FY2024 based on an average realised exchange rate of AUD/USD 0.66 (FY2023 AUD/USD 0.67).
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BHP Annual Report 2024
10.1 Definition and calculation of non-IFRS financial information
Non-IFRS financial
information
Reasons why we believe the non-IFRS
financial information are useful
Calculation methodology
Underlying attributable profit Allows the comparability of underlying financial performance by
excluding the impacts of exceptional items.
Allows the comparability of underlying financial performance by
excluding the impacts of exceptional items and the contribution of
Discontinued operations and is also the basis on which our dividend
payout ratio policy is applied.
Profit after taxation from Continuing and Discontinued
operations attributable to BHP shareholders excluding any
exceptional items attributable to BHP shareholders.
Underlying attributable profit
– Continuing operations
Underlying attributable profit from Continuing operations
also excludes the contribution of Discontinued operations
from the above metrics.
Underlying basic earnings
per share
On a per share basis, allows the comparability of underlying financial
performance by excluding the impacts of exceptional items.
On a per share basis, allows the comparability of underlying financial
performance by excluding the impacts of exceptional items and the
contribution of Discontinued operations.
Underlying attributable profit divided by the weighted basic
average number of shares.
Underlying basic earnings
per share
– Continuing operations
Underlying attributable profit – Continuing operations
divided by the weighted basic average number of shares.
Underlying EBITDA
Used to help assess current operational profitability excluding the
impacts of sunk costs (i.e. depreciation from initial investment). Each is
a measure that management uses internally to assess the performance
of the Group’s segments and make decisions on the allocation of
resources.
Earnings before net finance costs, depreciation,
amortisation and impairments, taxation expense,
Discontinued operations and exceptional items.
Underlying EBITDA includes BHP’s share of profit/(loss)
from investments accounted for using the equity method
including net finance costs, depreciation, amortisation and
impairments and taxation expense/(benefit).
Underlying EBITDA margin
Underlying EBITDA excluding third-party product EBITDA,
divided by revenue excluding third-party product revenue.
Underlying EBIT
Used to help assess current operational profitability excluding net
finance costs and taxation expense (each of which are managed at the
Group level) as well as Discontinued operations and any exceptional
items.
Earnings before net finance costs, taxation expense,
Discontinued operations and any exceptional items.
Underlying EBIT includes BHP’s share of profit/(loss)
from investments accounted for using the equity method
including net finance costs and taxation expense/(benefit).
Profit from operations
Earnings before net finance costs, taxation expense and
Discontinued operations. Profit from operations includes
Revenue, Other income, Expenses excluding net finance
costs and BHP’s share of profit/(loss) from investments
accounted for using the equity method including net
finance costs and taxation expense/(benefit).
Capital and exploration
expenditure
Used as part of our Capital Allocation Framework to assess efficient
deployment of capital. Represents the total outflows of our operational
investing expenditure.
Represents the total outflows of our operational investing expenditure
excluding the contribution of Discontinued operations.
Purchases of property, plant and equipment and
exploration and evaluation expenditure including the
contribution of Discontinued operations.
Capital and exploration
expenditure
– Continuing operations
Purchases of property, plant and equipment and
exploration and evaluation expenditure.
Free cash flow
It is a key measure used as part of our Capital Allocation Framework.
Reflects our operational cash performance inclusive of investment
expenditure, which helps to highlight how much cash was generated
in the period to be available for the servicing of debt and distribution to
shareholders.
Reflects our operational cash performance inclusive of investment
expenditure, but excluding the contribution of Discontinued operations.
Net operating cash flows less net investing cash flows.
Free cash flow
– Continuing operations
Net operating cash flows from Continuing operations less
net investing cash flows from Continuing operations.
Net debt
Net debt shows the position of gross debt less index-linked freight
contracts offset by cash immediately available to pay debt if required
and any associated derivative financial instruments. Liability associated
with index-linked freight contracts, which are required to be remeasured
to the prevailing freight index at each reporting date, are excluded from
the net debt calculation due to the short-term volatility of the index they
relate to not aligning with how the Group uses net debt for decision
making in relation to the Capital Allocation Framework. Net debt
includes the fair value of derivative financial instruments used to hedge
cash and borrowings to reflect the Group’s risk management strategy
of reducing the volatility of net debt caused by fluctuations in foreign
exchange and interest rates.
Net debt, along with the gearing ratio, is used to monitor the Group’s
capital management by relating net debt relative to equity from
shareholders.
Interest bearing liabilities less liability associated with
index-linked freight contracts less cash and cash
equivalents less net cross currency and interest rate
swaps less net cash management related instruments for
the Group at the reporting date.
Gearing ratio
Ratio of Net debt to Net debt plus Net assets.
Net operating assets
Enables a clearer view of the assets deployed to generate earnings by
highlighting the net operating assets of the business separate from the
financing and tax balances. This measure helps provide an indicator of
the underlying performance of our assets and enhances comparability
between them.
Operating assets net of operating liabilities, including
the carrying value of equity accounted investments
and predominantly excludes cash balances, loans to
associates, interest bearing liabilities, derivatives hedging
our net debt, assets held for sale, liabilities directly
associated with assets held for sale and tax balances.
95
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
Non-IFRS financial
information
Reasons why we believe the non-IFRS
financial information are useful
Calculation methodology
Underlying return on capital
employed (ROCE)
Indicator of the Group’s capital efficiency and is provided on an
underlying basis to allow comparability of underlying financial
performance by excluding the impacts of exceptional items.
Profit after taxation excluding exceptional items and net
finance costs (after taxation) divided by average capital
employed.
Profit after taxation excluding exceptional items and
net finance costs (after taxation) is profit after taxation
from Continuing and Discontinued operations excluding
exceptional items, net finance costs and the estimated
taxation impact of net finance costs. These are annualised
for a half year end reporting period.
The estimated tax impact is calculated using a prima facie
taxation rate on net finance costs (excluding any foreign
exchange impact).
Average capital employed is calculated as the average of
net assets less net debt for the last two reporting periods.
Adjusted effective tax rate
Provides an underlying tax basis to allow comparability of underlying
financial performance by excluding the impacts of exceptional items.
Total taxation expense/(benefit) excluding exceptional
items and exchange rate movements included in taxation
expense/(benefit) divided by Profit from Continuing
operations before taxation excluding exceptional items.
Unit costs
Used to assess the controllable financial performance of the Group’s
assets for each unit of production. Unit costs are adjusted for site
specific non-controllable factors to enhance comparability between the
Group’s assets.
Ratio of net costs of the assets to the equity share of sales
tonnage. Net costs is defined as revenue less Underlying
EBITDA and excludes freight, re-allocation of the costs
associated with the employee entitlements and allowance
review in FY2023, and other costs, depending on the
nature of each asset. Freight is excluded as the Group
believes it provides a similar basis of comparison to our
peer group. The re-allocation to assets in FY2024 of the
costs associated with the employee entitlements and
allowances review in FY2023 are excluded in asset unit
costs as these costs were already recognised in Group
and Unallocated in FY2023.
Escondida, Spence and Copper South Australia unit costs
exclude:
– by-product credits being the favourable impact of
by-products (such as gold or silver) to determine the
directly attributable costs of copper production
– royalties, as these are costs that are not deemed to be
under the Group’s control and the Group believes exclusion
provides a similar basis of comparison to our peer group
WAIO and BMA unit costs exclude:
– royalties, as these are costs that are not deemed to be
under the Group’s control and the Group believes exclusion
provides a similar basis of comparison to our peer group
10.2 Definition and calculation of principal factors
The method of calculation of the principal factors that affect the period on period movements of Revenue, Profit from operations and Underlying EBITDA
are as follows:
Principal factor
Method of calculation
Change in sales prices
Change in average realised price for each operation from the prior period to the current period, multiplied by current period
sales volumes.
Price-linked costs
Change in price-linked costs (mainly royalties) for each operation from the prior period to the current period, multiplied by
current period sales volumes.
Change in volumes
Change in sales volumes for each operation multiplied by the prior year average realised price less variable unit cost.
Controllable cash costs
Total of operating cash costs and exploration and business development costs.
Operating cash costs
Change in total costs, other than price-linked costs, exchange rates, inflation on costs, fuel, energy and consumable
price movements, non-cash costs and one-off items as defined below for each operation from the prior period to the
current period.
Exploration and evaluation and
business development
Exploration and evaluation and business development expense in the current period minus exploration and business
development expense in the prior period.
Exchange rates
Change in exchange rate multiplied by current period local currency revenue and expenses.
Inflation on costs
Change in inflation rate applied to expenses, other than depreciation and amortisation, price-linked costs, exploration and
business development expenses, expenses in ceased and sold operations and expenses in new and acquired operations.
Fuel, energy and consumable
price movements
Fuel and energy expense and price differences above inflation on consumables in the current period minus fuel and energy
expense in the prior period.
Non-cash
Change in net impact of capitalisation and depletion of deferred stripping from the prior period to the current period.
One-off items
Change in costs exceeding a pre-determined threshold associated with an unexpected event that had not occurred in the
last two years and is not reasonably likely to occur within the next two years.
Asset sales
Profit/(loss) on the sale of assets or operations in the current period minus profit/(loss) on sale of assets or operations in the
prior period.
Ceased and sold operations
Underlying EBITDA for operations that ceased or were sold in the current period minus Underlying EBITDA for operations
that ceased or were sold in the prior period.
New and acquired operations
Underlying EBITDA for operations that were acquired in the current period minus Underlying EBITDA for operations that
were acquired in the prior period.
Share of profit/(loss) from equity
accounted investments
Share of profit/(loss) from equity accounted investments for the current period minus share of profit/(loss) from equity
accounted investments in the prior period.
Other
Variances not explained by the above factors.
10 Non-IFRS financial information continued
96
BHP Annual Report 2024
11.1 Company details
BHP Group Limited’s registered office and global headquarters are at
171 Collins Street, Melbourne, Victoria 3000, Australia. ‘BHP’, the
‘Company’, the ‘Group’, ‘BHP Group’, ‘our business’, ‘organisation’, ‘we’,
‘us’, ‘our’ and ‘ourselves’ refer to BHP Group Limited, and except where the
context otherwise requires, our subsidiaries. Refer to Financial Statements
note 30 ‘Subsidiaries’ for a list of our significant subsidiaries. Those terms
do not include non-operated assets.
This Report covers functions and assets (including those under exploration,
projects in development or execution phases, sites and operations that
are closed or in the closure phase) that have been wholly owned and
operated by BHP or that have been owned as a BHP-operated joint
venture1 (referred to in this Report as ‘operated assets’ or ‘operations’) from
1 July 2023 to 30 June 2024 unless otherwise stated. Certain sections of
this Report include data in relation to the Daunia and Blackwater mines,
which were divested during the year. Data in relation to the Daunia and
Blackwater mines is shown for the period up to completion on 2 April 2024,
unless stated otherwise. Some of the land and tenements related to the
Daunia and Blackwater mines are pending transfer following completion,
however given that the assets are no longer under BMA’s control or
operated for BMA’s benefit (except for periods prior to completion or
where specifically stated) data related to the land and tenements has been
excluded from this Report.
BHP also holds interests in assets that are owned as a joint venture but not
operated by BHP (referred to in this Report as ‘non-operated joint ventures’
or ‘non-operated assets’). Notwithstanding that this Report 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.
BHP Group Limited has a primary listing on the Australian Securities
Exchange. BHP holds an international secondary listing on the London
Stock Exchange, a secondary listing on the Johannesburg Stock Exchange
and an ADR program listed on the New York Stock Exchange.
11.2 Forward-looking statements
This Report contains forward-looking statements, which involve risks and
uncertainties. Forward-looking statements include all statements, other than
statements of historical or present facts, including: statements regarding
trends in commodity prices and currency exchange rates; demand for
commodities; global market conditions, reserves and resources estimates;
development and production forecasts; guidance; expectations, plans,
strategies and objectives of management; climate scenarios; approval of
projects and consummation of transactions; closure, divestment, acquisition
or integration of certain assets, operations or facilities (including associated
costs or benefits); anticipated production or construction commencement
dates; capital costs and scheduling; operating costs and availability of
materials and skilled employees; anticipated productive lives of projects,
mines and facilities; the availability, implementation and adoption of new
technologies, including artificial intelligence; provisions and contingent
liabilities; and tax, legal and other regulatory developments.
Forward-looking statements may be identified by the use of terminology,
including, but not limited to, ‘aim’, ‘ambition’, ‘anticipate’, ‘aspiration’, ‘believe’,
‘commit’, ‘continue’, ‘could’, ‘ensure’, ‘estimate’, ‘expect’, ‘forecast’, ‘goal’,
‘guidance’, ‘intend’, ‘likely’, ‘may’, ‘milestone’, ‘must’, ‘need’, ‘objective’,
‘outlook’, ‘pathways’, ‘plan’, ‘project’, ‘schedule’, ‘seek’, ‘should’, ‘target’,
‘trend’, ‘will’, ‘would’, or similar words. These statements discuss future
expectations or performance, or provide other forward-looking information.
Examples of forward-looking statements contained in this Report include,
without limitation, statements describing (i) our strategy, Our Values and
how we define our success; (ii) our expectations regarding future demand
for certain commodities, in particular copper, nickel, iron ore, steelmaking
coal, potash and steel, and our intentions, commitments or expectations with
respect to our supply of certain commodities, including copper, nickel, iron
ore, potash, uranium and gold; (iii) our future exploration and partnership
plans and perceived benefits and opportunities, including our focus to
grow our copper and potash assets; (iv) our business outlook, including
our outlook for long-term economic growth and other macroeconomic and
industry trends; (vi) our projected and expected production and performance
levels and development projects; (vii) our expectations regarding our
investments, including in potential growth options and technology and
innovation, and perceived benefits and opportunities; (viii) our reserves
and resources estimates; (ix) our plans for our major projects and related
budget and capital allocations; (x) our expectations, commitments and
objectives with respect to sustainability, decarbonisation, natural resource
management, climate change and portfolio resilience and timelines and
plans to seek to achieve or implement such objectives including our
approach to equitable change and transitions, our Climate Transition Action
Plan, climate change adaptation strategy and goals, targets, pathways
and strategies to seek to reduce or support the reduction of greenhouse
gas emissions, and related perceived costs, benefits and opportunities for
BHP; (xi) the assumptions, beliefs and conclusions in our climate change
related statements and strategies, including in our Climate Change Report
2020, for example, in respect of future temperatures, energy consumption
and greenhouse gas emissions, and climate-related impacts; (xii) our
commitment to social value; (xiii) our commitments to sustainability reporting,
frameworks, standards and initiatives; (xiv) our commitments to improve
or maintain safe tailings storage management; (xv) our commitments to
achieve certain inclusion and diversity targets, aspirations and outcomes;
(xvi) our commitments to achieve certain targets and outcomes with respect
to Indigenous peoples and the communities where we operate; and (xvii) our
commitments to achieve certain health and safety targets and outcomes.
Forward-looking statements are based on management’s expectations
and reflect judgements, assumptions, estimates and other information
available, as at the date of this Report. These statements do not represent
guarantees or predictions of future financial or operational 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
Report. BHP cautions against reliance on any forward-looking statements.
For example, our future revenues from our assets, projects or mines
described in this Report will be based, in part, on the market price of the
commodities produced, which may vary significantly from current levels or
those reflected in our reserves and resources estimates. These variations,
if materially adverse, may affect the timing or the feasibility of the
development of a particular project, the expansion of certain facilities
or mines, or the continuation of existing assets.
Other factors that may affect our future operations and performance,
including the actual construction or production commencement dates,
revenues, costs or production output and anticipated lives of assets,
mines or facilities include: (i) our ability to profitably produce and deliver
the products extracted to applicable markets; (ii) the impact of economic
and geopolitical factors, including foreign currency exchange rates on
the market prices of the commodities we produce and competition in the
markets in which we operate; (iii) activities of government authorities in the
countries where we sell our products and in the countries where we are
exploring or developing projects, facilities or mines, including increases in
taxes and royalties or implementation of trade or export restrictions;
(iv) changes in environmental and other regulations; (v) political or
geopolitical uncertainty; (vi) labour unrest; (vii) weather, climate variability
or other manifestations of climate change; and (viii) other factors identified
in the risk factors set out in OFR 8.1.
In addition, there are limitations with respect to scenario analysis, including
any climate-related scenario analysis, and it is difficult to predict which,
if any, of the scenarios might eventuate. Scenario analysis is not an
indication of probable outcomes and relies on assumptions that may or
may not prove to be correct or eventuate.
Except as required by applicable regulations or by law, BHP does not
undertake to publicly update or review any forward-looking statements,
whether as a result of new information or future events.
Past performance cannot be relied on as a guide to future performance.
Emissions and energy consumption data
Due to the inherent uncertainty and limitations in measuring GHG
emissions and operational energy consumption under the calculation
methodologies used in the preparation of such data, all GHG emissions
and operational energy consumption data or references to GHG emissions
and operational energy consumption volumes (including ratios or
percentages) in this Report are estimates. There may also be differences
in the manner that third parties calculate or report GHG emissions or
operational energy consumption data compared to BHP, which means
third-party data may not be comparable to our data.
For information on how we calculate our GHG emissions and
operational energy consumption, refer to the BHP GHG Emissions
Calculation Methodology 2024 available at bhp.com/climate
This Report is made in accordance with a resolution of the Board.
Ken MacKenzie
Chair
Dated: 27 August 2024
11 Other information
1. References in this Annual Report to a ‘joint venture’ are used for convenience to collectively describe assets that are not wholly owned by BHP. Such references are not intended to
characterise the legal relationship between the owners of the asset.
97
Overview
Additional Information
Financial Statements
Governance
Contents
Operating and Financial Review
1. Corporate governance at BHP
Good corporate governance underpins the way we conduct business.
This Corporate Governance Statement sets out the corporate governance
framework currently in place for the Group, including the key policies
and practices.
BHP was fully compliant with the Recommendations of the fourth edition
of the ASX Corporate Governance Council’s Corporate Governance
Principles and Recommendations (ASX Fourth Edition) throughout
FY2024. The ASX Fourth Edition is available at asx.com.au.
BHP is also subject to governance requirements from our London Stock
Exchange (LSE) and New York Stock Exchange (NYSE) listings and our
registration with the Securities and Exchange Commission (SEC) in the
United States.
This Corporate Governance Statement is current as at 27 August 2024 and
has been approved by the Board.
More information on our corporate governance framework and practices is
available at bhp.com/governance, which includes links to our Appendix 4G
and each of the publicly available documents referenced in this Corporate
Governance Statement.
2. FY2024 corporate governance highlights
Corporate Governance Statement
Governance
Corporate Governance Statement
1
Corporate governance at BHP
98
2
FY2024 corporate governance highlights
98
3
BHP’s governance structure
99
4
Board composition and succession
100
5
Board Committees
105
6
Management
107
7
Shareholders and reporting
108
8
Culture and conduct
109
9
Risk management and assurance
110
10
US requirements
111
Directors’ Report
1
Review of operations, principal activities and state of affairs
112
2
Directors
112
3
Share interests
113
4
Share capital and buy-back programs
113
5
Group Company Secretary
113
6
Indemnities and insurance
113
7
Dividends
113
8
Auditors
113
9
Non-audit services
114
10
Exploration, research and development
114
11
ASIC Instrument 2016/191
114
12
Proceedings on behalf of BHP Group Limited
114
13
Performance in relation to environmental regulation
114
14
Additional information
114
Remuneration Report
People and Remuneration Committee Chair letter
to shareholders
116
1
Remuneration governance
118
2
Executive KMP remuneration framework
119
3
Remuneration for the CEO and other Executive KMP
121
4
Remuneration for Non-executive Directors
126
5
Statutory KMP remuneration and other disclosures
127
Our Values
The Board approved the refreshed BHP values which were
updated in May 2024. Our Values reflect what we stand for
and who we aspire to be.
BHP Board updates
Our Board welcomed two new Non-executive Directors, Ross
McEwan and Don Lindsay in FY2024, following the retirement
of Non-executive Directors Terry Bowen and Ian Cockerill.
Investor engagement
We facilitated several investor engagement events and
held presentations and briefings on key topics, for example
decarbonisation, preparation of our Climate Transition Action
Plan 2024 and key ESG themes at our ESG roundtable.
Diversity
Our Board continued to be gender balanced in FY2024 (which
we define as a minimum 40 per cent women and 40 per cent
men in line with the definition used by entities such as the
International Labour Organization).
98
BHP Annual Report 2024
Board
The Board has ultimate responsibility for overseeing BHP’s governance.
The role of the Board, as set out in the Board Governance Document, is
to represent shareholders and promote and protect the interests of BHP in
the short and long term.
The Board Governance Document outlines the Board’s responsibilities
and processes, including the matters specifically reserved for the Board,
the authority delegated to the Chief Executive Officer (CEO) and the
accountability of the CEO for that authority, and provides guidance on
the management of the relationship between the Board and the CEO.
The Board Governance Document was updated in FY2023 and took effect
from 1 July 2023.
The matters reserved for the Board as set out in the revised Board
Governance Document include:
– appointing the CEO and determining the terms of the appointment
– approving the appointment of Executive Leadership Team (ELT)
members and material changes to the organisational structure involving
direct reports to the CEO
– succession planning for the CEO and direct reports to the CEO
– monitoring the performance of the CEO and the Group
– monitoring Board composition, processes and performance
– approving the Group’s values, Our Code of Conduct, purpose and
risk appetite
– establishing, approving and assessing measurable objectives for
achieving gender diversity in the composition of the Board, senior
executives and workforce generally and assessing the Group’s progress
in achieving those measurable objectives
– approving strategy, annual budgets, balance sheet management and
funding strategy
– approving commitments, capital and non‑capital items, acquisitions and
divestments above specified limits
– approving the dividend policy and determining dividends
– approving significant social, community and sustainability policies,
including those related to climate change and public sustainability goals
and targets
– reviewing and monitoring the effectiveness of the Group’s systems of
principal and emerging financial and non‑financial risk management
and internal control, and making sure there is an appropriate risk
management framework in place
– determining and adopting documents (including the publication of
reports and statements to shareholders) that are required by BHP’s
Constitution, statute or by other external regulation
– determining and approving matters that are required by BHP’s
Constitution, statute or by other external regulation to be determined
or approved by the Board
The Board Governance Document is available at bhp.com/governance
Committees
The Board has established Committees to assist it in exercising
its authority, including monitoring the performance of BHP, to gain
assurance that progress is being made towards our purpose within the
limits delegated by the Board. There are four standing Committees:
the Nomination and Governance Committee, Risk and Audit Committee,
Sustainability Committee and People and Remuneration Committee.
Each Committee is delegated authority by the Board under its Charter.
These Charters are available at bhp.com/governance
For more information on each of the Committees refer to section 5
Chair
The Chair is responsible for leading the Board and ensuring it operates
to high governance standards. In particular, the Chair facilitates
constructive Board relations and the effective contribution of all
Non‑executive Directors.
Group Company Secretary
The Group Company Secretary is accountable to the Board and
advises the Chair, the Board and individual Directors on all matters
of governance process.
Chief Executive Officer
The CEO is accountable to the Board for the authority that is delegated
to the CEO and for the performance of the Group. The CEO works in a
constructive partnership with the Board and is required to report regularly
to the Board on progress.
Access to management
The Board has extensive access to members of senior management who
frequently attend Board and Committee meetings. Management makes
presentations and engages in discussions with Directors, answers
questions and provides input and perspective on their areas
of responsibility. The Board also engages with members of management
at site visits.
The Board also holds discussions in the absence of management
as required.
3. BHP’s governance structure
Shareholders
Risk and Audit
Committee
Sustainability
Committee
Nomination and
Governance
Committee
People and
Remuneration
Committee
Board
CEO
Executive
Leadership
Team
Our People
99
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
Corporate Governance Statement continued
4.1 Board of Directors
and Company Secretary
The Board currently has
10 members. The Directors’
qualifications, experience and
special responsibilities are
listed below.
Key to Committee membership
Committee Chair
Committee member
RA
Risk and Audit
NG
Nomination and Governance
PR
People and Remuneration
S
Sustainability
Ken MacKenzie
BEng, FIEA, FAICD
NG
Appointment
Independent Non‑executive
Director since September 2016
Chair since 1 September 2017
Skills and experience
Ken MacKenzie has global
executive experience and a deeply
strategic approach, with a focus
on operational excellence, capital
discipline and the creation of
long‑term shareholder value.
Ken was the Managing Director
and Chief Executive Officer of
Amcor Limited, a global packaging
company with operations in over 40
countries, from 2005 until 2015.
Ken brings business management
and leadership skills in global
supply chains and governance,
gained during his career in
developed and emerging markets
in the Americas, Australia, Asia
and Europe. Ken has experience
in leading strategic transformation
at a business and enterprise‑wide
level. His commitment to
continuous learning and skills
development provides valuable
insights to Board deliberations and
guidance to BHP’s leadership team
in navigating the fast-changing
dynamics of the global economy
and markets.
Current appointments
Ken is the Chair of Melbourne
Business School Limited (since
June 2023), sits on the Advisory
Board of American Securities
Capital Partners LLC (since
January 2016), and is a part‑time
adviser at Barrenjoey (since
April 2021).
Mike Henry
BSc (Chemistry)
Appointment
Non‑independent Director since
January 2020
Chief Executive Officer since
1 January 2020
Skills and experience
Mike Henry has over 30 years’
experience in the global mining
and petroleum industry, spanning
operational, commercial, safety,
technology and marketing roles.
Mike joined BHP in 2003 and has
been a member of the Executive
Leadership Team since 2011.
Prior to joining BHP, Mike worked in
the resources industry in Canada,
Japan and Australia.
Mike brings deep operational and
market knowledge across a range
of commodities and a strategic
approach to resource and skills
development to implement BHP’s
strategy and future growth options
that will support global economic
growth and decarbonisation.
He is focused on creating a
safe, high-performance culture,
enabled by an inclusive workplace
in which people are empowered
at every level through the BHP
Operating System.
Mike is committed to building strong
relationships with governments,
Indigenous partners, community
stakeholders and business
partners to ensure BHP’s activities
deliver mutual benefit to these
stakeholders while driving strong
value for shareholders. Mike brings
a disciplined approach to the
Board’s considerations of capital
allocation in assets, technology,
commodities and risk management.
Xiaoqun Clever‑Steg
Diploma in Computer Science and
International Marketing, MBA
RA
Appointment
Independent Non‑executive
Director since October 2020
Skills and experience
Xiaoqun Clever‑Steg has
over 20 years’ experience in
technology with a focus on
software engineering, data and AI,
cybersecurity and digitalisation.
Xiaoqun was formerly Chief
Technology Officer of Ringier AG
and ProSiebenSat.1 Media SE
and Chief Operating Officer of
Technology and Innovation at SAP
and President of SAP Labs China.
Xiaoqun brings significant
expertise in the development,
selection and implementation of
business transforming technology,
innovation and assessment of
opportunities and risks in digital
disruption. She has knowledge
and relationships across the
technology and innovation start‑up
sector across Europe, Asia and
North America and brings depth
to the Board’s review of managing
cybersecurity risks as well as
assessment of opportunities to
invest in proven and emerging
technologies in the discovery of
new mineral deposits, safer and
more cost‑effective processing,
and technologies to reduce
GHG emissions and support the
energy transition.
Current appointments
Xiaoqun is a Non‑executive
Director of Amadeus IT Group
SA (since June 2020), a Non-
executive Director of Straumann
Group (since April 2024) and
on the Supervisory Board
of Infineon Technologies AG
(since February 2020).
4. Board composition and succession
100
BHP Annual Report 2024
Gary Goldberg
BS (Mining Engineering), MBA
S NG
Appointment
Independent Non‑executive
Director since February 2020
Senior Independent Director
since 21 December 2020
Skills and experience
Gary Goldberg has over 40 years’
global executive experience,
including deep experience in
mining, strategy, risk, commodity
value chain, capital allocation
discipline and public policy.
Gary was the Chief Executive
Officer of Newmont Corporation
(from 2013 to 2019), and prior
to that, President and Chief
Executive Officer of Rio Tinto
Minerals. Gary has also been a
Non‑executive Director of Port
Waratah Coal Services Limited
and Rio Tinto Zimbabwe, and
served as Vice Chair of the World
Gold Council, Treasurer of the
International Council on Mining
and Metals, Co-Chair of the
World Economic Forum Mining
and Metals Industry community
and Chair of the National Mining
Association in the United States.
Gary is recognised for his
leadership in bringing the
mining industry together to
raise standards in safety and
environmental performance in
conjunction with community
and government partnerships in
America and around the world.
He has management experience
in implementing strategies focused
on safety, decarbonisation and
transformational investment
for commodities with long-
dated cycles, along with
his contribution to policy
development in environmental
management globally.
Current appointments
Gary is a Director of Imperial Oil
Limited (since May 2023).
Michelle Hinchliffe
BCom, FCA, ACA
RA NG
Appointment
Independent Non‑executive
Director since March 2022
Skills and experience
Michelle Hinchliffe has over 20
years’ experience as a partner in
KPMG’s financial services division.
Michelle was formerly a partner
of KPMG and held a number of
roles, including as the UK Chair
of Audit, a member of the KPMG
UK Executive Committee, and led
KPMG’s financial services practice
in Australia and was a member of
the KPMG Australia Board.
Michelle has expertise and
experience in understanding the
complexities of multi‑national firms
operating in multiple reporting
and regulatory frameworks across
Europe, the Americas, Asia and
Africa. Her financial expertise and
audit experience across a range
of industries and businesses,
including in Australia, bring insights
to the Board on BHP’s assessment
of risk, returns and its long‑term
capital plan to create financial
strength and support BHP’s
future growth.
Current appointments
Michelle is a Non‑executive
Director of Santander UK plc and
Santander UK Group Holdings Plc
(since June 2023) and Macquarie
Group Limited and Macquarie Bank
Limited (since March 2022).
Don Lindsay
BS (Hons), MBA
RA
S
Appointment
Independent Non‑executive
Director since May 2024
Skills and experience
Don Lindsay has more than
40 years’ global experience,
including in mining and resource
development, financial markets,
transformational leadership, growth
and value creation.
Don was the President and
Chief Executive Officer of Teck
Resources Limited (from 2005 to
2022) and prior to that, worked for
almost 20 years with CIBC World
Markets Inc., where he served as
President, Head of Investment and
Corporate Banking and Head of
the Asia Pacific Region. Don also
served as Chair of the Board of
Governors for Mining and Metals
for the World Economic Forum,
Chair of the Business Council
of Canada and Chair of the
International Council on Mining
and Metals.
Don brings extensive experience
in global resource development as
well as sustainability, community
health, safety and global education
and business forums. His technical
and management experience
across a range of commodities and
mining jurisdictions brings a unique
understanding of prospective
resources, cost of development and
operations, and the assessment
of opportunities to strengthen the
portfolio of world-class assets.
Current appointments
Don is Chair of the Board of
Manulife Financial Corporation
(since February 2023) and the
Invictus Games Vancouver Whistler
2025 (since November 2022).
Ross McEwan
BBus
RA PR
Appointment
Independent Non‑executive
Director since April 2024
Skills and experience
Ross McEwan has over 30 years’
global executive experience,
including in the financial services
industry, with deep expertise in
capital allocation, risk management
and value creation in complex
regulatory environments.
Ross was the CEO of National
Australia Bank (from 2019 to
April 2024) and Group CEO of
the Royal Bank of Scotland (from
2013 to 2019). Prior to that, he held
executive roles at Commonwealth
Bank of Australia, First NZ Capital
Securities and National Mutual Life
Association of Australasia/AXA
New Zealand.
Ross brings a strong focus on
people and culture, technology
and innovation and has extensive
experience in capital allocation
and value creation. He has worked
closely with a wide range of
stakeholders, including customers,
governments and regulators
and brings a global perspective.
Ross has a deep understanding
of organisational transformation
and brings a very strong focus on
the customer and technology as a
driver of change.
Current appointments
Ross is currently on the Board of
QinetiQ Group Plc (since March
2024) and Ruminant Biotech Corp
Limited (since June 2021).
101
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
Christine O’Reilly
BBus
PR
RA NG
Appointment
Independent Non‑executive
Director since October 2020
Skills and experience
Christine O’Reilly has over 30
years’ experience in the financial
and infrastructure sectors, with
deep financial and public policy
expertise and experience in
large‑scale capital projects and
transformational strategy.
Christine was the Chief Executive
Officer of the GasNet Australia
Group and Co‑Head of Unlisted
Infrastructure Investments at
Colonial First State Global Asset
Management, following an early
career in investment banking
and audit at Price Waterhouse.
Christine has also served as
a Non‑executive Director of
Medibank Private Limited (from
March 2014 to November 2021),
Transurban Group (from April 2012
to October 2020), CSL Limited
(from February 2011 to October
2020) and Energy Australia
Holdings Limited (from September
2012 to August 2018).
Christine has a deep understanding
of financial drivers of the
businesses and experience in
capital allocation discipline across
sectors that have long‑dated
paybacks for shareholders and
stakeholders. Her insights into
cost efficiency and cash flow as
well as the impact of policy on
innovation, investment and project
development are key inputs for
the Board.
Current appointments
Christine is a Non-executive
Director of Australia and New
Zealand Banking Group (since
November 2021), Stockland
Limited (since August 2018) and
Infrastructure Victoria (since
November 2023).
Catherine Tanna
LLB, Honorary Doctor of Business
S NG PR
Appointment
Independent Non‑executive
Director since April 2022
Skills and experience
Catherine Tanna has more than
30 years’ experience in the
resources, oil and gas, power
generation and retailing sectors.
Catherine was formerly Managing
Director of Energy Australia
between 2014 and 2021. Prior to
this, she held senior executive
roles with Shell and BG Group
with responsibility for international
operations across Africa, North
Asia, Russia, North America,
Latin America and Australia.
Catherine was also a member of
the Board of the Reserve Bank of
Australia (from 2011 to 2021) and a
Director of the Business Council of
Australia (from 2016 to 2021).
Catherine has a track record
in leading cultural change and
sponsoring gender equity,
diversity and inclusion across
business and more broadly.
She brings an understanding
of and contribution to complex
regulatory and policy environments.
Catherine’s experience in seeking
to align customer and community
expectations, particularly
Indigenous communities, with
those of the enterprise and
regulators, provides unique
insight and input to the Board.
Current appointments
Catherine is a Non-executive
Director at Bechtel Corporation
(since May 2023), Chair of Bechtel
Australia (since December 2023),
Senior Advisor at McKinsey &
Company Inc (since April 2022)
and a member of the Advisory
Board of Fujitsu Australia (since
February 2022).
Dion Weisler
BASc (Computing),
Honorary Doctor of Laws
PR
S
Appointment
Independent Non‑executive
Director since June 2020
Skills and experience
Dion Weisler has extensive global
executive experience, including
transformation and commercial
experience in the global information
technology sector, with a
focus on capital discipline and
stakeholder engagement.
Dion was formerly a Director and
the President and Chief Executive
Officer of HP Inc. (from 2015 to
2019) and continued as a Director
and Senior Executive Adviser (until
May 2020). He previously held
senior executive roles at Lenovo
Group Limited, was General
Manager Conferencing and
Collaboration at Telstra Corporation
and held various positions at
Acer Inc., including as Managing
Director, Acer UK.
Dion brings experience in
transforming megatrends into
opportunities and growth and
valuable insight on the power of
innovation, technology and data.
His experience also demonstrates
insights into strategy development
in the global energy transition,
where safety, decarbonisation
and stakeholder management
are critical.
Current appointments
Dion is a Non-executive Director
of Intel Corporation (since June
2020) and a Non-executive Director
of Thermo Fisher Scientific Inc.
(since March 2017).
Stefanie Wilkinson
BA, LLB (Hons), LLM, FGIA
Appointment
Group Company Secretary since
March 2021
Skills and experience
Stefanie Wilkinson was appointed
Group Company Secretary
effective March 2021 and Group
General Counsel effective
2 April 2024. Prior to joining
BHP, Stefanie was a Partner at
Herbert Smith Freehills, a firm she
was with for 15 years, specialising
in corporate law and governance
for listed companies. Earlier in
her career, Stefanie was a solicitor
at Allen & Overy in the Middle East.
Stefanie is a fellow of the
Governance Institute of Australia.
Corporate Governance Statement continued
102
BHP Annual Report 2024
4.2 Director independence
The Board is committed to ensuring that a majority of Directors
are independent.
The Board has adopted a policy that it uses to determine the independence
of its Directors.
The Policy on the Independence of Directors is available at
bhp.com/governance
Determination of Director independence
The Board confirms that it considers all current Non‑executive Directors,
including the Chair, to be independent of management and free of any
interest, position or relationship that might influence, or reasonably be
perceived to influence, in a material respect their capacity to bring an
independent judgement to bear on issues before the Board and to act
in the best interests of BHP as a whole rather than in the interests of an
individual security holder or other party.
A determination of independence is carried out upon a Director’s
appointment and re-election, annually, and when any new interests,
positions or relationships are disclosed by a Director. Some Directors hold
or have previously held positions in companies that BHP has commercial
relationships with.
The Board has assessed the relationships between BHP and the
companies in which Directors hold or held positions and has concluded
that the relationships do not interfere with the Directors’ capacity to bring
an independent judgement to bear on issues before the Board, or their
ability to act in the best interests of BHP as a whole.
Conflicts of interest
In accordance with Australian law, if a situation arises for consideration
where a Director has a material personal interest, the affected Director
takes no part in decision-making unless approval is provided by the
non‑interested Directors. Provisions for Directors’ interests are set out in
the Constitution of BHP Group Limited.
4.3 Board appointments and succession planning
BHP adopts a structured and rigorous approach to Board succession
planning to guard against the consequences of unforeseen departures and
facilitate the orderly replacement of current Directors and oversees the
development of a diverse pipeline. This process is continuous, with the aim
of allowing the Board to determine an appropriate balance on the Board
between experience and fresh perspectives, and the Board continues to be
fit for purpose.
As part of this process, Ross McEwan was appointed to the Board in April
2024 and Don Lindsay was appointed to the Board in May 2024 following
the retirements of independent Non-executive Directors, Terry Bowen in
November 2023 and Ian Cockerill in April 2024.
Before the Board formally appoints a person or puts a person forward
for election, the Board, with the assistance of external consultants, will
conduct appropriate background and reference checks as to that person’s
character, experience, education and criminal and bankruptcy history.
The Board has adopted a letter of appointment that contains the terms
on which Non‑executive Directors will be appointed, including the
basis upon which they will be indemnified by the Group. The letter of
appointment defines the role of Directors, including the expectations
in terms of independence, participation, time commitment and
continuous improvement. Written agreements are in place for all
Non‑executive Directors.
4.4 Director induction, training and development
Upon appointment, each new Non‑executive Director undertakes an
induction program tailored to their needs. Non‑executive Directors also
undertake an induction program when they join a new Committee, which
is tailored to the areas specific to that Committee’s role and the Director’s
previous experience.
Following the induction program, Non‑executive Directors participate in
continuous improvement activities through a training and development
program, which is overseen by the Nomination and Governance
Committee to help Directors, individually and collectively, develop and
maintain the skills and knowledge to assist them in performing their role
effectively. The training and development program is periodically reviewed
to maximise effectiveness and to tailor the program to the Directors’ needs
and the Board’s areas of focus.
Throughout the year, the Chair discusses development areas with each
Director. Board Committees review and agree their needs for more
briefings. The benefit of this approach is that induction and learning
opportunities can be tailored to Directors’ Committee memberships, as
well as the Board’s specific areas of focus. This approach is also intended
to ensure a coordinated process for succession planning, Board renewal,
training and development and Committee composition. In turn, these
processes are relevant to the Nomination and Governance Committee’s
role in identifying appropriate Non‑executive Director candidates.
Examples of activities in the training and development program include:
– briefings and development sessions and deep dives to provide each
Director with a deeper understanding of the activities, environment, key
issues and direction of BHP assets, along with broader sustainability,
climate‑related, geopolitical and cybersecurity considerations
– training on crisis management
– site visits to provide insights into key issues at BHP’s sites and to
provide an opportunity for direct engagement with a cross‑section of
workforce, community members, contractors, Indigenous and First
Nations representatives and other stakeholders
– engagement with external experts to discuss views on current and
emerging trends and risks (threats and opportunities)
4.5 Director skills, experience and attributes
Overarching statement of Board requirements
At BHP, we know inclusive and diverse teams are safer and more
productive. This is because people in these teams feel safe to speak up,
share their ideas and different points of view, and work together to solve
problems and make better decisions.
The BHP Board is no different and believes its members should comprise
Directors with a broad range of skills and diversity for the Board to:
– provide the breadth and depth of understanding necessary to effectively
create long‑term shareholder value
– protect and promote the interests of BHP and the creation of social value
– ensure the talent, capability and culture of BHP support the long‑term
delivery of our strategy
Attributes and commitment to role
All Directors are expected to comply with Our Code of Conduct, act with
integrity, lead by example and promote the desired culture.
The Board believes each Non‑executive Director has demonstrated the
attributes of sufficient time to undertake the responsibilities of the role,
honesty and integrity, and a preparedness to question, challenge and
critique throughout the year through their participation in Board meetings,
and the other activities they have undertaken in their roles.
Skills matrix
The Board, supported by the Nomination and Governance Committee,
reviews the skills and diversity represented by the Directors on the Board
and determines whether the composition and mix of those skills remains
appropriate to achieve BHP’s purpose and strategy.
The Board maintains a skills matrix that identifies the skills and experience
the Board needs for the next period of BHP’s development, considering
BHP’s circumstances and the changing external environment.
The Board skills matrix identifies the future‑facing skills the Board intends
to build, acquire and retain over the medium term in anticipation of its
needs as it pursues its strategy of securing growth options in future‑facing
commodities. The Board skills matrix not only indicates the skills the Board
currently possesses, but also provides an illustration of the new skills
the Board intends to acquire. An external service provider is engaged to
assess the relevant skills and experience of the Directors on the Board set
out in the skills matrix.
The Board collectively possesses all the skills and experience set out in
the skills matrix, and each Director satisfies the Board requirements and
attributes discussed above.
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Skills and attributes
Number of
Directors
Mining
Senior executive who has deep operating or technical
mining experience with a large company operating in
multiple countries; successfully optimised and led a suite of
large, global, complex operating assets that have delivered
consistent and sustaining levels of high performance (related
to cost, returns and throughput); successfully led exploration
projects with proven results and performance; delivered
large capital projects that have been successful in terms of
performance and returns; and a proven record in terms of
health, safety and environmental performance and results.
3
Global experience
Global experience gained from working, managing business
units and residing in multiple geographies over an extended
period of time, including a deep understanding of and
experience with global markets, and the geopolitical and
economic environment.
9
Strategy
Senior executive who has had accountability for
enterprise‑wide strategy development and implementation
in industries with long cycles and developing and leading
business transformation strategies.
10
Commodity value chain and customers
End‑to‑end value or commodity chain experience –
understanding of consumers and customers, marketing
demand drivers (including specific geographic markets) and
other aspects of commodity chain development.
8
Financial acumen
Extensive financial experience and the capability to evaluate
financial statements and understand key financial drivers of the
business, bringing a deep understanding of corporate finance
and internal financial controls.
10
Operating risk
Extensive experience with the development and oversight of
complex frameworks focused on the identification, assessment
and assurance of operational workplace health, safety,
environment, climate and community risks.
9
Technology
Recent experience and expertise with the development,
selection, and implementation of leading and business
transforming technology and innovation and responding to
digital disruption.
8
Capital allocation and cost efficiency
Extensive direct experience gained through a senior executive
role in capital allocation discipline, cost efficiency and cash
flow, with proven long‑term performance.
8
Social value, community, and stakeholder engagement
Extensive track record of positive external stakeholder
engagement including in relation to community issues and
social responsibility. In depth understanding of public policy,
government relations and the intersection between value
generation and corporate reputation.
7
Sustainability and decarbonisation transition
Understanding of, and experience with the identification
and management of threats and opportunities related to
sustainability, and decarbonisation transition.
8
People and talent
Extensive experience in talent and capability strategies,
including for development, recruitment and retention, and
industrial relations, managing workforce transitions and
upskilling workforce during periods of rapid change.
8
4.6 Diversity
BHP has adopted an Inclusion and Diversity Position Statement,
which sets out our diversity policy and our priorities to accelerate the
delivery of a more inclusive work environment and to enhance overall
workplace diversity.
BHP’s Inclusion and Diversity Position Statement is available at
bhp.com/careers/inclusion‑diversity and is summarised in OFR 6.6
Our aspiration is to achieve gender balance within our employee workforce
globally by the end of CY2025. We define gender balance as a minimum
40 per cent women and 40 per cent men, in line with the definitions used
by entities such as the International Labour Organization.
The Board is responsible for approving the measurable objectives for
achieving diversity in the composition of the Board, senior executives and
workforce generally and assessing the Group’s progress in achieving
those measurable objectives, which are set out below. The Nomination
and Governance Committee reviews and makes recommendations to the
Board on the diversity and measurable objectives for achieving diversity in
the composition of the Board and reviews the progress in achieving those
measurable objectives.
Measurable objectives for FY2024:
1. Increase female employee representation to 40 per cent by the end
of FY2025
Progress in FY2024: In FY2024, the Board approved the objective
to increase the representation of women across the BHP employee
workforce by 3 per cent from the FY2023 objective of 35.2 per cent.
During FY2024, BHP increased the representation of women working
at BHP by 1.9 percentage points, with women now representing
37.1 per cent of the global employee workforce as at 30 June 2024.1
2. Maintain balanced representation for the Board and senior executives
(defined as ELT and direct reports to the ELT in grade 15 and
above roles)
Progress in FY2024: Our Board continued to be gender balanced
in FY2024.
Our senior executive ranks remain consistent and represent
40.9 per cent women in FY2024.
For more information on our focus areas for diversity during FY2024
and the respective proportions of men and women on the Board, in
senior executive positions and across the employee workforce refer
to OFR 6.6
More diversity data is available in the BHP ESG Standards and
Databook 2024 available at bhp.com/ESGStandards2024
The Board’s composition reflects gender balance and a diversity of
experience, education and geographic background.
As at 30 June 2024, 40 per cent of Directors are female and the BHP
Board satisfies the target in the UK Listing Rules and the guidance of
having at least 30 per cent of Directors of each gender in accordance
with the ASX Fourth Edition. BHP also satisfies the UK Listing Rule target
of having at least one Director from a minority ethnic background on
the Board.
BHP does not currently satisfy the UK Listing Rule target that at least one
of the senior positions on the Board (which for BHP is the Chair, Chief
Executive Officer and Senior Independent Director) is held by a woman.
The UK Listing Rule target also includes the Chief Financial Officer in the
category of a senior position on the Board. Vandita Pant was appointed as
Chief Financial Officer in March 2024, but, in common with Australian listed
company practice, the Chief Financial Officer is not a Director on the Board
of BHP. As part of its succession planning, the Board reviews the skills and
diversity (including gender, age, personal strengths and social and ethnic
Corporate Governance Statement continued
Board tenure and diversity
Tenure
Region of nationality
Gender diversity
0>3 years
40%
Australia/NZ
60%
Female
40%
3>6 years
50%
Europe/UK
10%
Male
60%
6>9 years
10%
North America
30%
1. Progress does not include data from the Daunia and Blackwater mines which were divested during the year.
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backgrounds) represented by Directors on the Board and determines
whether the composition and mix of those skills and diversity remains
appropriate to achieve BHP’s purpose and strategy.
The tables in Additional information 7 set out the information required
under the UK Listing Rules on diversity as at 30 June 2024. The data
presented in these tables was collected by requesting all members of the
Board, ELT and Group Company Secretary self‑report in questionnaires
that include the tables prescribed by the UK Listing Rules.
4.7 Board evaluation
The Board is committed to transparency in assessing the performance
of Directors. The Board conducts regular evaluations of its performance,
the performance of its Committees, the Group Chair, Directors and the
governance processes that support the Board’s work.
The evaluation considers the balance of skills, experience, independence
and knowledge of the Group on the Board, its diversity and culture, and the
operation of governance processes.
In FY2024, an internal evaluation was conducted with the assistance
of external service provider, Lintstock. An external Board evaluation
is conducted approximately every three years and was last conducted
in FY2023.
Review of individual Director performance
The Board has adopted a policy for all Non‑executive Directors to seek
re‑election annually. The Board uses the results of Director performance
evaluations in considering whether to nominate a Director for re‑election by
shareholders. In FY2024, an assessment was conducted of each Director’s
performance prior to their nomination for re-election with the assistance
of external service provider, Lintstock. Lintstock does not have any other
connection with the Group or individual Directors.
The assessment of Directors focused on the contribution of each Director
to the work of the Board and its Committees, and the expectations of
Directors as set out in BHP’s governance framework. In addition, the
assessment focused on how each Director contributes to Board cohesion
and effective relationships with fellow Directors, commits the time
required to fulfil their role and effectively performs their responsibilities.
Directors were asked to comment on areas where their fellow Directors
contribute the greatest value and potential areas for development.
Lintstock provided feedback received to the Chair, which was then
discussed with Directors. Feedback relating to the Chair was discussed
with the Chair by the Senior Independent Director. As a result of these
outcomes, the review supported the Board’s decision to recommend each
Director standing for re-election.
Committee assessments
Following an assessment of its work, each Committee concluded that it
had met the requirements under its Charter in FY2024.
5. Board Committees
The Board has four standing Committees and has delegated a number
of duties to each Committee to assist the Board in exercising its
responsibilities and discharging its duties. Each Committee’s Charter
sets out the Committee’s roles and responsibilities. These Charters
were reviewed and updated in FY2023 as part of the governance review.
The aim was to review Board and Committee responsibilities and
streamline and modernise the documents in order to best support BHP’s
strategy and purpose.
The updated Charters took effect from 1 July 2023 and are available
at bhp.com/governance
BHP’s Board and Committee governance structure facilitates a considered
and integrated approach on key matters, for example:
– Climate change is a Board‑level issue. The Board is responsible for
the governance and oversight of climate change issues, including
in relation to our strategic approach, risk management and public
disclosures. The Board approves significant social, community and
sustainability policies, including those related to climate change and
public sustainability goals and targets, and oversees performance
against our strategy, goals and targets. The Board is supported by each
of its Committees:
– The Nomination and Governance Committee reviews and makes
recommendations to the Board on the Group’s significant social,
community and sustainability policies, including those related
to climate change. The Committee also reviews and makes
recommendations to the Board on the Group’s public sustainability
targets and goals.
– The Risk and Audit Committee is responsible for assisting the Board
in overseeing and reviewing emerging and principal risks facing the
Group, including climate risks. The Risk and Audit Committee also
reviews and recommends to the Board public financial disclosures
regarding sustainability matters.
– The Sustainability Committee reviews and advises the Board on the
adequacy of the Group’s governance and performance in relation to
climate matters. The Committee also reviews and recommends to
the Board disclosures regarding sustainability matters in the Annual
Report and other public documents related to the Group’s reporting
on climate matters.
– The People and Remuneration Committee is responsible for
reviewing and recommending to the Board for approval of
performance measures and performance outcomes against those
performance measures for the ELT. In doing so, the Committee
considers recommendations from the Sustainability Committee in
relation to climate measures.
– Sexual harassment is a Board‑level issue, supported by the Risk
and Audit Committee on the risk and compliance aspects and the
Sustainability Committee on the safety, operational aspects and
security controls.
– Technology and cyber risk are Board‑level issues, supported by the Risk
and Audit Committee, which reviews emerging and principal risks facing
the Group, including cyber risk.
The Board appoints the members and Chair of each Committee.
Only independent Non-executive Directors can be Committee Chairs.
The members and key roles and responsibilities of each Committee are set
out below.
For Committee attendance and members during FY2024 refer to
Directors’ Report 2
5.1 Nomination and Governance Committee
Members
Ken MacKenzie (Chair), Terry Bowen (until 1 November 2023),
Gary Goldberg, Michelle Hinchliffe (from 1 November 2023),
Christine O’Reilly, Catherine Tanna (from 1 July 2024)
Key responsibilities/role and focus:
The role of the Nomination and Governance Committee is to support the Board
in relation to governance and nomination matters.
The Committee oversees the Group’s corporate governance framework
and practices, succession planning and processes, Board and Director
performance evaluation, Director training and development, and advises
and makes recommendations to the Board on the Group’s existing corporate
governance policies, structures or practices.
The Committee also supports the Board with sustainability-related matters
that encompass issues that affect the whole of the Group, including areas
of strategy, risk and reporting, people and remuneration by reviewing and
recommending to the Board for approval the Group’s:
– significant social, community and sustainability policies, including those
related to climate change, industry associations and charitable contributions
– public sustainability targets and goals
Key activities in FY2024:
Succession planning processes
– Board and Committee succession
– Identification of suitable Non-executive Director candidates
– Partnering with search firms regarding candidate searches
Evaluation and training
– Board evaluation and Director performance evaluation
– Director development program and training
– Assessment of independence of Non-executive Directors
Governance practices
– Crisis management
– Review of the Climate Transition Action Plan 2024
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5.2 Risk and Audit Committee
Members
Michelle Hinchliffe (Chair since 1 November
2023, and a member of the Committee prior to
this date), Terry Bowen (Chair until 1 November
2023), Xiaoqun Clever-Steg, Ian Cockerill
(until 4 April 2024), Don Lindsay (from 1 May
2024), Ross McEwan (from 3 April 2024),
Christine O’Reilly
Key responsibilities/role and focus:
The role of the Risk and Audit Committee is
to support and advise the Board in relation to
financial reporting, external and internal audit,
capital management and risk management. The
Committee also oversees and assists the Board in
reviewing the emerging and principal risks facing
the Group, including financial and non-financial
risks that could threaten the Group’s business
model, future performance, solvency, liquidity
or reputation.
US committee membership requirements
The Board is satisfied that Michelle Hinchliffe, who
serves as Chair on the Risk and Audit Committee,
meets the financial expert requirements under
the US Securities and Exchange Commission
(SEC) Rules and is independent under applicable
NYSE rules. The Board is also satisfied that the
Committee meets the independence criteria under
Rule 10A-3 of the Exchange Act.
Key activities in FY2024:
Integrity of Financial Statements and funding
matters
– Accounting matters for consideration, materiality
limits, half‑year and full‑year results
– Sarbanes‑Oxley Act of 2002 (SOX) compliance
– Financial governance procedures
– Funding and guarantee updates
– Samarco dam failure provision, including related
provisions and contingent liabilities
– Carrying value of BHP’s assets
– Climate‑related financial statement and
risk disclosures
– Closure and rehabilitation provisions
– Disputes and litigation updates
External Auditor and integrity of the audit
process
– Status and results of the external audit
– Management and External Auditor
closed sessions
– Audit plan and review of the External
Auditor’s performance
– External Auditor independence and
non‑audit services
Effectiveness of systems of internal control
and risk management
– Reports on the significant risks facing the Group
and the Group’s systems of risk management
and internal control (including cybersecurity and
data privacy)
– Internal audit reports, annual internal audit
plan and review of performance of the Internal
Audit team
– Reports on sexual harassment, racism and
bullying, serious breaches of business conduct,
regulatory compliance and grievance and
investigation processes
– Reserves and resources updates
5.3 Sustainability Committee
Members
Catherine Tanna (Chair from 1 July 2024),
Gary Goldberg (Chair until 1 July 2024),
Ian Cockerill (until 4 April 2024), Don Lindsay
(from 1 May 2024), Dion Weisler
Key responsibilities/role and focus:
The role of the Sustainability Committee
is to support and advise the Board on
sustainability matters.
The Committee oversees the Group’s health,
safety, environment, climate and community
performance, including implementation of the
Group’s strategy, policies and processes in relation
to these matters.
The Committee also reviews and advises the Board
on the adequacy of the Group’s governance of
health, safety, environment, climate and community
matters, including consideration of emerging
areas of risk related to the Group’s operations
and its engagement with customers, suppliers
and communities.
Key activities in FY2024:
Sustainability
– Operational decarbonisation, water stewardship,
cultural heritage and Indigenous engagement,
biodiversity, closure and rehabilitation, fatality
elimination program and integrated contractor
management program updates
– Site visits
– Reports on material health, safety, environment,
climate and community risks, including tailings,
occupational safety and sexual harassment
– Health, safety and security function plan
– Internal audit reports and annual internal audit
plan related to health, safety, environment,
and community
Disclosure
– Health, safety and environment
compliance updates
– Sustainability disclosures
– Group Modern Slavery Statement
– Disclosures for Global Industry Standard on
Tailings Management
Performance
– Monitor health, safety, environment, climate and
community performance, including progress
against 2030 goals
– Safety and sustainability measures and
performance outcomes for the ELT FY2024
CDP scorecard
– Review health, safety and environment function
and performance of the Group Health, Safety
and Security Officer
Members
Christine O’Reilly (Chair), Ross McEwan (from
3 April 2024), Catherine Tanna, Dion Weisler
Key responsibilities/role and focus:
The role of the People and Remuneration
Committee is to support and advise the Board on
people and remuneration matters.
The Committee oversees the Group’s key
strategies and policies relating to people, including
for attraction, recruitment, motivation and retention,
employee engagement, leadership and talent
development, industrial relations and employee
conduct, and monitors the effectiveness of the
Group’s people and culture strategy and its
alignment with the Group’s purpose and values.
The Committee oversees and monitors the
remuneration framework and practices, including
the adoption of incentive plans, levels of reward
for the CEO and other ELT members and any
major changes in employee benefits structures
in the Group.
For information on BHP’s remuneration
practices and policies, including on hedging
BHP shares and equity instruments, refer
to the Remuneration Report
Key activities in FY2024:
Remuneration
– Executive remuneration strategies
– Group Chair, CEO, ELT members and Group
Company Secretary remuneration
People
– People culture and strategy, people policies
and governance, material workforce trends
– Employee engagement, leadership and
talent development
– Diversity and inclusion policies and
measurable objectives (below Board level)
Incentive plans
– BHP’s employee incentive plans
Corporate Governance Statement continued
5.4 People and Remuneration Committee
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6. Management
Below the level of the Board, key management decisions are made by the CEO, the ELT, management committees and members of management in
accordance with their delegated authority.
6.1 Executive Leadership Team
Edgar Basto
Caroline Cox
Brandon Craig
Chief Operating Officer
(BSc, Metallurgy)
Edgar Basto joined BHP in 1989 and was appointed
Chief Operating Officer in October 2022. Edgar is
responsible for Group Health, Safety and Security, the
BHP Operating System (BOS) and global Performance
and Improvement. Edgar’s accountability also
includes Copper South Australia and its long-term
growth pathway following the recent integration
of the former OZ Minerals operations into our business.
Edgar has previously held senior roles at BHP,
including President Minerals Australia, Asset President
of Western Australia Iron Ore and Asset President
Escondida (Chile).
Chief Legal, Governance and
External Affairs Officer
(BA (Hons), MA, LLB, BCL)
Caroline Cox joined BHP in 2014 and was appointed
Chief Legal, Governance and External Affairs Officer
in November 2020. Caroline is responsible for Legal,
Governance, Ethics and Investigations, Compliance,
Global Corporate Affairs and Communications
and Sustainability and Social Value. Caroline has
previously held senior roles at BHP, including Vice
President Legal, Group General Counsel, and Group
General Counsel & Company Secretary. Prior to joining
BHP, Caroline was a Partner at Herbert Smith Freehills.
President Americas
(BSc Engineering (Mechanical), MBL)
Brandon Craig joined BHP in 1999 and was appointed
President of BHP Americas effective 1 March 2024.
Brandon is responsible for BHP’s copper operations
in Chile, joint venture interests in the Americas, and
potash operations in Canada. Immediately prior to his
appointment as President Americas, Brandon was
Asset President for BHP’s iron ore business in Western
Australia. Brandon’s expertise with BHP extends more
than 20 years, holding various leadership roles spanning
the fields of maintenance, marketing and human resources.
Vandita Pant
Catherine Raw
Geraldine
Slattery
Chief Financial Officer
(BCom (Hons), MBA)
Vandita Pant joined BHP in 2016 and was appointed
Chief Financial Officer effective 1 March 2024.
Vandita is responsible for overseeing the Group’s
Reporting, Tax, Treasury, Investor Relations, Financial
Planning, Risk and Internal Audit teams. Vandita has
previously held senior roles at BHP, including as Chief
Commercial Officer from July 2019 to 29 February
2024, Group Treasurer and Head of Europe. Prior
to joining BHP, Vandita had more than 20 years’
experience in executive banking roles across India,
Singapore, Japan and the United Kingdom. Vandita
brings strong global financial market, commodity,
strategy, capital allocation and business development
experience to the role.
Chief Development Officer
(MA (Cantab.), Natural Sciences, MSc,
Mineral Project Appraisal, CFA)
Catherine Raw joined BHP on 29 April 2024 as Chief
Development Officer. Catherine is responsible for
strategy, acquisitions and divestments, securing
early-stage growth options and ventures. Prior to
joining BHP, Catherine held senior roles in resources
and finance industries, including at SSE Thermal (a
business unit of SSE plc) as Managing Director, Barrick
Gold Corporation as Chief Operating Officer for North
America and as Chief Financial Officer, and BlackRock
as Managing Director, Natural Resources Team.
President Australia
(BSc, Physics, MSc, International Management)
Geraldine Slattery joined BHP in 1994 and was
appointed President Australia in October 2022.
Geraldine leads BHP’s Australian operations in
Western Australia, Queensland and New South Wales.
Geraldine has previously held senior roles at BHP,
including President Petroleum from March 2019 to
31 May 2022. Geraldine has 30 years’ experience
with BHP, including as President Petroleum, Asset
President Conventional and prior to that in several
senior operational and business leadership roles
across the Petroleum business in the United Kingdom,
Australia and the United States.
Ragnar Udd
Johan
van Jaarsveld
Jad Vodopija
Chief Commercial Officer
(BAppSc (Mining Engineering), MEng, MBA)
Rag Udd joined BHP in 1997 and was appointed Chief
Commercial Officer effective 1 March 2024. Rag
has global accountability for Sales and Marketing,
Procurement, Maritime and for developing BHP’s
views on global commodities markets and macro
trends. Rag has over 25 years’ experience in the global
resources industry, including in Australia, Asia and
North and South America. He has held senior roles at
BHP in operations, logistics, projects and technology,
including President Americas from November 2020 to
29 February 2024, Acting Chief Technology Officer and
Asset President of BHP Mitsubishi Alliance.
Chief Technical Officer
(BEng (Chem), MCom, Applied Finance, PhD
(Eng), Extractive Metallurgy)
Johan van Jaarsveld joined BHP in 2016 and
was appointed Chief Technical Officer effective
1 March 2024. Johan is responsible for Technology,
Minerals Exploration, Innovation and the Centres of
Excellence for Projects, Maintenance, Resources
and Engineering. Johan has previously held senior
executive roles at BHP, including Chief Development
Officer from September 2020 to 29 April 2024. Prior to
joining BHP, Johan held executive positions in resources
and finance, including at Barrick Gold Corporation,
Goldman Sachs and The Blackstone Group.
Chief People Officer
(BA, PGDip (Industrial Relations and Human
Resource Management), MComm)
Jad Vodopija rejoined BHP in 2019 and was appointed
Chief People Officer in July 2022. Jad is responsible
for organisational strategy, talent and resource
management, leadership development and workforce
performance. Jad has previously held senior roles at
BHP, including Vice President, Human Resources.
Prior to rejoining BHP, Jad was Vice President
Human Resources at Orica from 2016, before which
she had built her career at BHP and earlier on at Ford
Motor Company.
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6.2 Senior management succession
A senior management succession process is conducted to support pipeline
stability for critical roles. A talent deep dive is conducted by the Board at
least once a year to evaluate these pipelines, including the diversity of
the pipeline.
Senior management succession is viewed from a five‑year perspective
that considers the readiness of successors across time horizons, contexts
and future capability demands. Select Board members are involved
in the interview process for executive‑level appointments one level
below the CEO and occasionally for roles two levels below the CEO.
Appropriate checks are undertaken before appointing a member of the
ELT. BHP has a written agreement with each ELT member setting out the
terms of their appointment.
In December 2023, BHP announced the following changes to the ELT:
– Vandita Pant was appointed as the Chief Financial Officer, effective
1 March 2024
– Ragnar Udd was appointed as the Chief Commercial Officer, effective
1 March 2024
– Brandon Craig was appointed as the President Americas, effective
1 March 2024
– Johan van Jaarsveld was appointed as the Chief Technical Officer,
effective 1 March 2024
– Catherine Raw was appointed as the Chief Development Officer,
effective 29 April 2024
Laura Tyler (the former Chief Technical Officer) retired from BHP on
29 February 2024 and David Lamont ceased as Chief Financial Officer
on 29 February 2024 and commenced as Senior Executive Officer in
an advisory and projects capacity, reporting directly to the CEO until
February 2025.
6.3 Performance evaluation of executives
The performance of executives and other senior employees is reviewed
on an annual basis. The annual performance review process considers
the performance of executives against criteria designed to capture
‘what’ is achieved and ‘how’ it is achieved. All performance assessments
of executives include how effective they have been in undertaking
their role and what they have achieved against their specified key
performance indicators.
A performance evaluation was conducted for all members of the ELT
during FY2024. For the CEO, the performance evaluation was led by the
Chair of the Board on behalf of all the Non‑executive Directors and was
discussed with the People and Remuneration Committee and considered
by the Board.
7. Shareholders and reporting
7.1 Shareholder and stakeholder engagement
BHP shareholder engagement practices
BHP engages regularly with our shareholders to understand their views
and feedback and we have an investor relations program to provide
avenues for effective and timely two‑way communication with investors.
We encourage shareholders to make their views known to us.
Shareholders can contact us at any time through our Investor Relations
team, with contact details available at bhp.com. In addition, shareholders
can communicate with us and our registrar electronically.
Shareholder engagement practices
Direct engagement
We engage directly with institutional shareholders and
investor representative organisations around the world
to discuss strategy and governance and to enable our
management, Board and Committees to regularly hear
investor expectations, which can then be used to refine
and develop, and continuously improve, the governance
processes of BHP. We also engage directly with retail
shareholders and their representatives.
Engagement on key sustainability themes
In addition to our regular investor meetings program, in
FY2024 we held direct engagement sessions with lead
investors, including from Climate Action 100+, Nature Action
100 and Principles for Responsible Investment’s (PRI)
Advance initiative. We also held engagement sessions on
preparation of our Climate Transition Action Plan 2024 to
obtain feedback from investors on our approach.
Webcasts and Q&A sessions
We provide webcasts and Q&A sessions as
forums to update shareholders on results or other
key announcements.
Website
All relevant corporate governance information, including
our Annual Report, is available on our website at bhp.com.
All ASX announcements are promptly posted to the website.
BHP encourages direct contact from shareholders and our
website has a ‘Contact Us’ form for contact with our Investor
Relations team. Anyone who is interested in receiving news
from BHP can subscribe to receive email alerts.
Chair and Non‑executive Director investor meetings
The Chair and Senior Independent Director regularly
meet with investors to discuss Board priorities and seek
shareholder feedback. The People and Remuneration
Committee Chair also meets with investors and proxy
advisors to discuss remuneration.
Annual General Meeting
We facilitate and encourage shareholder participation at
our Annual General Meeting (AGM). The meeting provides
an opportunity for all investors to hear about BHP’s
performance and to question and engage with the Board
and vote on the resolutions. The External Auditor is also
available to answer questions at the AGM.
Information on our AGM is available at bhp.com/meetings
Before the AGM, shareholders are provided with all material
information in BHP’s possession relevant to their decision
on whether to elect or re‑elect a Director. Copies of the
speeches delivered by the Chair and CEO at the AGM are
released to the relevant stock exchanges and posted on
our website.
Proceedings at shareholder meetings are webcast live from
our website. Resolutions at general meetings are decided by
a poll rather than by a show of hands.
A summary of proceedings and the outcome of voting on
the items of business are released to the relevant stock
exchanges and posted on our website as soon as they
are available.
Corporate Governance Statement continued
108
BHP Annual Report 2024
Stakeholder engagement
The Board considers effective stakeholder engagement a key element
of its governance and oversight role. Our strategy, our 2030 goals, our
purpose and our Risk Appetite Statement reflect the significance of
external partners and stakeholders in decision‑making.
There are multiple ways the views of partners and stakeholders, beyond
shareholders, are brought to the Board and its Committees.
Examples of reports that are provided to the Board include Employee
Perception Survey findings, gender pay gap reports and updates from the
CEO and Chief People Officer. In addition, the Risk and Audit Committee
and Sustainability Committee receive reports on engagement with
regulators. The Risk and Audit Committee receives reports on material
litigation and disputes with third parties and misconduct concerns raised
through confidential reporting platforms. The Sustainability Committee
receives updates on Community Perception Survey findings.
Stakeholder engagement
Site visits
Site visits provide an opportunity for Directors
to engage directly with the workforce, partners,
community members, Indigenous and First Nations
representatives and contractors and gain a greater
understanding of the Group’s operations, culture,
material risks and risk management processes, and
other issues relevant to the specific site. Site visits in
FY2024 included to Nickel West and BMA (November
2023), New South Wales Energy Coal (February
2024), Spence (April 2024) and Jansen (June 2024).
Workforce
Directors also have the opportunity to engage directly
with a cross-section of the workforce at Board and
Committee meetings, at Director briefing sessions and
during visits to our sites and offices.
Presentations and briefings
Presentation materials for briefings and speeches
related to financial results, strategy, decarbonisation
and other key topics are available at bhp.com for
all stakeholders.
Events
Various events throughout the year, such as retail
shareholder events in Australia and the UK and the
AGM, provide opportunities for engagement with
a range of partners and stakeholders, including
government officials, community members,
Traditional Owners and other Indigenous partners and
non‑government organisations.
7.2 Market disclosure
BHP is committed to timely and balanced disclosure of market
sensitive information.
BHP’s Market Disclosure and Communications policy sets out the
processes designed to ensure compliance with BHP’s relevant disclosure
obligations and outlines the way in which information is communicated
to shareholders, the investment community and the market. It outlines
how we identify and distribute information to shareholders and market
participants and sets out the role of the Disclosure Committee in managing
compliance with market disclosure obligations.
The Board receives copies of material market announcements promptly
after they have been released.
Where BHP gives a new and substantive investor or analyst presentation,
it releases a copy of the presentation materials to the market ahead of
the presentation.
The Market Disclosure and Communications policy is available
at bhp.com/governance
In addition, we have disclosure controls in place for periodic disclosures,
including the Operational Review, our results announcements, debt
investor documents (such as the prospectus for the Euro or Australian
Medium-Term Notes) and Annual Report documents, which must comply
with relevant regulatory requirements.
More information about these verification processes can be found
in the Disclosure Controls for Periodic Disclosure document
available at bhp.com/governance
8. Culture and conduct
Code of Conduct
We are committed to the highest level of governance and strive to foster a
culture that values and rewards exemplary ethical standards, personal and
corporate integrity and respect for others.
The Board, together with management, plays a critical role in setting and
reinforcing the culture of the Group.
Our Code of Conduct is approved by the Board and is based on Our
Values: Do what’s right, Seek better ways and Make a difference. It applies
to all our Directors, senior executives and employees.
Our Code of Conduct includes our policies on speaking up and anti‑bribery
and corruption, sets out standards of behaviour for our people and is an
important statement of the culture at BHP.
For more information on our policies on speaking up and our
commitment against corruption refer to OFR 6.8
Our Code of Conduct is available at bhp.com/about/
operating-ethically/our-code/
BHP’s channels to raise misconduct concerns
We have mechanisms in place for anyone to raise a query about Our
Code of Conduct or make a report if they feel Our Code of Conduct
has been breached. BHP’s reporting channels to raise misconduct
concerns comprise an online portal and 24-hour multilingual call service.
These channels are confidential and accessible to all employees,
contractors and external partners and stakeholders, including members
of the public, to raise concerns about misconduct that may be unethical,
illegal or inconsistent with Our Code of Conduct. All misconduct concerns
raised through our reporting channels are reviewed and categorised by the
Ethics and Investigations team. Once categorised, reports are assigned
in accordance with internal policy and processes to an investigator, line
leader or appropriate team for resolution. All significant Our Code of
Conduct matters and key trends from investigations are reported to the
Risk and Audit Committee. These are then reported to the Board as part of
its report‑out process.
For more information on ethics and business conduct
refer to OFR 6.8
More information on ethics and business conduct is available
at bhp.com/ethics
109
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
9. Risk management and assurance
9.1 Risk management governance structure
Risk governance
The Risk and Audit Committee (RAC) oversees and assists the Board in
risk management and reviewing the emerging and principal risks facing
the Group, including financial and non‑financial risks that could threaten
the Group’s business model, future performance, solvency, liquidity or
reputation. This includes business risk, financial reporting risk, insurance
risk, tax risk, technology security and cyber risk, climate risk and ethical
compliance programs. The Board requires the CEO to implement a system
of control for identifying and managing risk. The Risk team is accountable
for this system, known as BHP’s Risk Framework, and also supports,
challenges and verifies risk management activities to give assurance to
management and the Board. The Directors, with support from the RAC,
monitor and, at least annually, will review the effectiveness of the Group’s
systems of risk management and internal control. The RAC, in undertaking
this review, makes a recommendation to the Board on whether the systems
of risk management and internal control continue to be sound and whether
the Group is operating with due regard to the risk appetite set by the Board.
For more information refer to OFR 8
Internal audit
The Internal Audit team provides assurance to the Board, CEO and
Executive Leadership Team on whether risk management, internal control
and governance processes are adequate and functioning. The Internal
Audit team is independent of the External Auditor. The RAC evaluates and,
if thought fit, approves the Terms of Reference of the Internal Audit team
and the annual internal audit plan and monitors the effectiveness of the
internal audit activities.
The RAC approves the appointment and dismissal of the Chief Audit
Officer (which is currently the Chief Risk and Audit Officer) and assesses
their performance, independence and objectivity. During FY2024, the Chief
Risk and Audit Officer reported directly to the RAC and functional oversight
of the Internal Audit team was provided by the Chief Financial Officer.
Effectiveness of systems of internal control
and risk management
In delegating authority to the CEO, the Board has established CEO limits,
outlined in the Board Governance Document. These limits require the CEO
to ensure there is a system of control in place for identifying and managing
risk in BHP. Through the RAC, the Directors regularly review these
systems for their effectiveness. These reviews include assessing whether
processes continue to meet evolving external governance requirements.
The RAC oversees and reviews the internal controls and risk management
systems (including procedures, processes and systems for, among
other things, financial controls, financial reporting, reporting of reserves
and resources, closure and rehabilitation, legal and ethical compliance,
preventing fraud and serious breaches of business conduct, speak-up
procedures, information technology security and cyber risk). Any material
breaches of Our Code of Conduct, including breaches of our anti-bribery
and corruption requirements and any material incidents reported under
our speak-up procedures are reported quarterly to the RAC by the Chief
Compliance Officer. These reports are then communicated to the Board
through the report-out process.
During FY2024, management presented an assessment of the material
risks facing BHP and the effectiveness of the Group’s systems of risk
management. The reviews were overseen by the RAC, with findings and
recommendations reported to the Board. In addition to considering key
risks facing BHP, the Board assessed the effectiveness of internal controls
over key risks identified through the work of the Board Committees.
Having carried out a review during FY2024, the Board is satisfied with the
effectiveness of BHP’s risk management and internal control systems.
Environmental and social risks
BHP’s risk factors (including material exposure to environmental and social
risks) and how we manage these risks are described in OFR 8.
9.2 External audit and financial reporting
Integrity of Financial Statements
The RAC assists the Board in assuring the integrity of the Financial
Statements. The RAC evaluates and makes recommendations to the
Board about the appropriateness of accounting policies and practices,
areas of judgement, compliance with accounting standards, stock
exchange and legal requirements and the results of the external audit.
CEO and CFO assurance
For the FY2024 full year and half year, the CEO and CFO have provided
a declaration that in their opinion, BHP’s financial records have been
properly maintained and those Financial Statements comply with
accounting standards and applicable regulatory requirements and give
a true and fair view of the financial position and performance of BHP,
and that the opinion was formed on the basis of a sound system of risk
management and internal control, which is operating effectively. The RAC
considered these certifications when recommending the Financial
Statements to the Board for approval.
External Auditor
The RAC manages the relationship with the External Auditor on behalf
of the Board. It considers the independence and reappointment of the
External Auditor each year, as well as remuneration and other terms of
engagement and makes a recommendation to the Board.
Evaluation of External Auditor and external audit process
The RAC evaluates the objectivity and independence of the External
Auditor and the quality and effectiveness of the external audit
arrangements, including through:
– reviewing the terms of engagement of the External Auditor
– considering the external audit plan, in particular to gain assurance that
it is tailored to reflect changes in circumstances from the prior year and
reviewing the plan during the audit engagement
– meeting with the audit partners, particularly the lead audit engagement
partners, throughout the year and without management present
– discussing with the audit engagement partners the skills and experience
of the broader audit team
– considering the quality of the External Auditor’s performance following
the completion of the audit
In addition, the RAC reviews the integrity, independence and objectivity
of the External Auditor and assesses whether there is any element of
the relationship that impairs or appears to impair the External Auditor’s
judgement or independence. The External Auditor also certifies its
independence to the RAC.
Non‑audit services
Although the External Auditor provides some non‑audit services to the
Group, the objectivity and independence of the External Auditor are
safeguarded through restrictions on the provision of these services with
some services prohibited from being undertaken.
Pre‑approved services
The RAC has adopted a policy titled Provision of Audit and Other Services
by the External Auditor covering the RAC’s pre‑approval policies and
procedures to maintain the independence of the External Auditor.
The categories of ‘pre‑approved’ services are:
– Audit services – work that constitutes the agreed scope of the statutory
audit and includes the statutory audits of BHP and its entities (including
interim reviews). The RAC monitors the audit services engagements and
if necessary, approves any changes in terms and conditions resulting
from changes in audit scope, Group structure or other relevant events.
– Audit‑related and other assurance services – work that is outside the
scope of the statutory audit but is consistent with the role of the external
statutory auditor. This category includes work that is reasonably related
to the performance of an audit or review and is a logical extension of the
audit or review scope, is of an assurance or compliance nature and is
work that the external auditors must or are best placed to undertake and
is permissible under the relevant applicable standard.
– Tax services – identification of public subsidies and tax incentives and
support regarding tax inspections by tax authorities, but only when
support from the external auditor or audit firm is required by law.
Corporate Governance Statement continued
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BHP Annual Report 2024
Activities outside the scope of the categories above are not ‘pre‑approved’
and must be approved by the RAC prior to engagement, regardless of the
dollar value involved. In addition, any engagement for other services with a
value over US$250,000, even if listed as a ‘pre‑approved’ service, requires
the approval of the RAC.
All engagements for non‑audit services, whether ‘pre‑approved’ or not and
regardless of the dollar value involved, are reported quarterly to the RAC.
While not prohibited by BHP’s policy, any proposed engagement of the
External Auditor relating to internal control requires specific prior approval
from the RAC. In addition, while the categories of ‘pre‑approved’ services
include a list of certain pre‑approved services, the use of the External
Auditor to perform these services will always be subject to our overriding
governance practices as articulated in the policy.
In addition, the RAC did not approve any services during the year ended
30 June 2024 pursuant to paragraph (c)(7)(i)(C) of Rule 2‑01 of SEC
Regulation S‑X (provision of services other than audit).
Fees paid to BHP’s External Auditor during FY2024 for audit and other
services were US$15.722 million, of which 71 per cent comprised audit
fees (including in relation to SOX matters), 12 per cent for audit‑related
fees and 17 per cent for all other fees. US$10,000 fees were paid in
relation to tax services. For information on the fees paid refer to Financial
Statements note 36 ‘Auditor’s remuneration’.
Our Provision of Audit and Other Services by the External Auditor
policy is available at bhp.com/governance
Management’s assessment of internal control over
financial reporting
Management is responsible for establishing and maintaining adequate
internal control over financial reporting (as defined in Rule 13a‑15(f) and
Rule 15d‑15(f) under the Exchange Act).
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements and, even when determined to be
effective, can only provide reasonable assurance with respect to financial
statement preparation and presentation. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions, or the degree of
compliance with the policies or procedures may deteriorate.
Under the supervision and with the participation of our management,
including our CEO and CFO, the effectiveness of BHP’s internal control
over financial reporting was evaluated based on the framework and
criteria established in Internal Controls – Integrated Framework (2013),
issued by the Committee of the Sponsoring Organizations of the Treadway
Commission. Based on this evaluation, management concluded that
internal control over financial reporting was effective as at 30 June 2024.
There were no material weaknesses in BHP’s internal controls over
financial reporting identified by management as at 30 June 2024.
BHP has engaged independent registered public accounting firm, Ernst &
Young, to issue an audit report on the effectiveness of our internal control
over financial reporting for inclusion in the Annual Report on Form 20-F as
filed with the SEC.
There were no changes in our internal control over financial reporting
during FY2024 that materially affected or were reasonably likely to
materially affect our internal control over financial reporting.
During FY2024, the RAC reviewed our compliance with the obligations
imposed by SOX, including evaluating and documenting internal controls
as required by section 404 of SOX.
Management’s assessment of disclosure controls
and procedures
Management, with the participation of our CEO and CFO, performed
an evaluation of the effectiveness of the design and operation
of our disclosure controls and procedures as at 30 June 2024.
Disclosure controls and procedures are designed to provide reasonable
assurance that the material financial and non‑financial information required
to be disclosed by BHP, including in the reports it files or submits under
the Exchange Act, is recorded, processed, summarised and reported
on a timely basis. This information is accumulated and communicated to
BHP’s management, including our CEO and CFO, as appropriate, to allow
timely decisions regarding required disclosure. Based on the evaluation,
management (including the CEO and CFO) concluded that as at 30 June
2024, our disclosure controls and procedures are effective in providing that
reasonable assurance.
There are inherent limitations to the effectiveness of any system of
disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Even effective disclosure controls and procedures can only provide
reasonable assurance of achieving their control objectives.
In the design and evaluation of our disclosure controls and procedures,
management was required to apply its judgement in evaluating the
cost‑benefit relationship of possible controls and procedures.
10. US requirements
BHP Group Limited is a registrant with the SEC in the United States. It is
classified as a foreign private issuer and has American Depositary Shares
listed on the New York Stock Exchange (NYSE).
We have reviewed the governance requirements applicable to foreign
private issuers under SOX, including the rules promulgated by the
SEC and the rules of the NYSE, and are satisfied that we comply with
those requirements.
Under NYSE rules, foreign private issuers such as BHP are required
to disclose any significant ways our corporate governance practices
differ from those followed by US companies under the NYSE corporate
governance standards. After a comparison of our corporate governance
practices with the requirements of Section 303A of the NYSE‑Listed
Company Manual followed by US companies, two significant differences
were identified:
Rule 10A‑3 of the Exchange Act requires NYSE‑listed companies
to ensure their audit committees are directly responsible for the
appointment, compensation, retention and oversight of the work of the
External Auditor unless the company’s governing law or documents or
other home country legal requirements require or permit shareholders
to ultimately vote on or approve these matters. Under the terms of
our Constitution, our shareholders are ultimately responsible for the
appointment and retention of the External Auditor and are required to
vote on the appointment of the External Auditor from time to time (as
required under Australian law). The RAC remains directly responsible for
the compensation and oversight of the work of the External Auditor.
Under Section 303A.08 of the NYSE Listed Company Manual,
shareholders must be given the opportunity to vote on all
equity‑compensation plans and material revisions thereto, with certain
exemptions. Under Australian law, BHP Group Limited is not required
to provide for shareholder votes on all equity‑compensation plans or
revisions thereto. Shareholder approval is required for issues of shares
to Directors and accordingly is sought only for certain incentive awards
to the CEO. The Remuneration Report voted on by shareholders at the
Annual General Meeting describes Board and executive remuneration.
All incentive programs offered to the Board and/or Executives are
intended to comply with our remuneration framework.
We have a Securities Dealing policy and procedures that cover the
purchase, sale and other dealings of our securities by Directors, senior
management and employees that seek to promote compliance with
applicable insider trading laws, rules and regulations.
111
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
The information presented by the Directors in this Directors’ Report
relates to BHP Group Limited and its subsidiaries. The Operating and
Financial Review (OFR), the Remuneration Report and the ‘Lead Auditor’s
Independence Declaration’ are incorporated by reference into and form
part of this Directors’ Report.
1. Review of operations, principal activities
and state of affairs
A review of the operations of BHP during FY2024, the results of those
operations during FY2024 and the expected results of those operations in
future financial years are set out in the OFR 1‑7, 9 and 11. Information on
the likely developments in BHP’s operations in future years and the
expected results of those operations also appears in that section.
We have excluded certain information from the OFR, to the extent
permitted by Australian law, on the basis that such information relates
to impending developments or matters in the course of negotiation and
disclosure would be seriously prejudicial to the interests of BHP. This is
because such disclosure could be misleading due to the fact it is premature
or preliminary in nature, relates to commercially sensitive contracts, would
undermine confidentiality between BHP and our suppliers and clients, or
would otherwise unreasonably damage BHP. The categories of information
omitted include forward-looking estimates and projections prepared for
internal management purposes, information regarding BHP’s assets and
projects that is developing and susceptible to change, and information
relating to commercial contracts and pricing modules.
Our principal activities, including significant changes in the nature of BHP’s
principal activities during FY2024 are disclosed in the OFR.
There were no significant changes in BHP’s state of affairs that
occurred during FY2024 and no significant post balance date events
other than as disclosed in the OFR and Financial Statements note 35
‘Subsequent events’.
No other matter or circumstance has arisen since the end of FY2024
that has significantly affected or is expected to significantly affect
the operations, the results of operations or state of affairs of BHP in
future years.
2. Directors
The Directors who served at any time during FY2024 or up until
the date of this Directors’ Report are listed in the Board and Board
Committee attendance table below. Information on the current Directors,
including their terms of service, qualifications, experience and special
responsibilities, and directorships of other listed companies held in the
last three years, is set out in the Corporate Governance Statement.
This information is incorporated by reference into and forms part of this
Directors’ Report.
Director attendances at meetings
The Board meets as often as required. During FY2024, the Board met
16 times.
Members of the Executive Leadership Team and other members of
senior management attend meetings of the Board by invitation.
Each Board Committee provides a standing invitation for any Non-
executive Director to attend Committee meetings (rather than just limiting
attendance to Committee members). Committee agendas and papers are
provided to all Directors concerning matters to be considered. The table
below excludes the attendance of Directors at Committee meetings where
they were not a Committee member.
Board and Board Committee attendance in FY2024
Board
Attended/Held
Risk and Audit
Committee
Attended/Held
Nomination and
Governance
Committee
Attended/Held
People and
Remuneration
Committee
Attended/Held
Sustainability
Committee
Attended/Held
Terry Bowen1
7/7
4/4
3/3
Xiaoqun Clever‑Steg
16/16
8/8
Ian Cockerill3
11/11
8/8
3/3
Gary Goldberg
16/16
6/6
4/4
Mike Henry
16/16
Michelle Hinchliffe2
16/16
8/8
3/3
Don Lindsay5
4/4
1/1
1/1
Ken MacKenzie
16/16
6/6
Ross McEwan4
5/5
1/1
1/1
Christine O’Reilly
16/16
8/8
6/6
6/6
Catherine Tanna
16/16
6/6
4/4
Dion Weisler
16/16
6/6
4/4
1. Terry Bowen served as a Non-executive Director from 1 October 2017 until his retirement on 1 November 2023 and was a member of the Risk and Audit and Nomination and Governance
Committees until 1 November 2023.
2. Michelle Hinchliffe was appointed Chair of the Risk and Audit Committee and a member of the Nomination and Governance Committee from 1 November 2023.
3. Ian Cockerill served as a Non-executive Director from 1 April 2019 until his retirement on 4 April 2024 and was a member of the Risk and Audit and Sustainability Committees until
4 April 2024.
4. Ross McEwan was appointed as a Non-executive Director and a member of the Risk and Audit and People and Remuneration Committees from 3 April 2024.
5. Don Lindsay was appointed as a Non-executive Director and a member of the Risk and Audit and Sustainability Committees from 1 May 2024.
Directors’ Report
112
BHP Annual Report 2024
3. Share interests
Directors’ shareholdings
Subject to securities dealing constraints, Non-executive Directors have
agreed to apply at least 25 per cent of their remuneration (base fees
plus Committee fees) to the purchase of BHP shares until they achieve
a minimum shareholding requirement equivalent in value to one year of
remuneration (base fees plus Committee fees).
Details of Directors’ shareholdings in BHP as at the date of this Directors’
Report are shown in the table below. All Directors have met the minimum
shareholding requirement under their Terms of Appointment as at 30 June
2024, with the exception of Don Lindsay and Ross McEwan who joined the
Board on 1 May 2024 and 3 April 2024, respectively. No rights or options
over shares in BHP Group Limited are held by any of the Non-executive
Directors. We have not made available to any Directors any interest in a
registered scheme. No shareholder possesses voting rights that differ from
those attaching to all of BHP Group Limited’s voting securities.
Director
Number
of shares held1
Xiaoqun Clever‑Steg
8,539
Gary Goldberg
18,000
Mike Henry2
410,001
Michelle Hinchliffe
10,107
Don Lindsay
–
Ken MacKenzie
58,446
Ross McEwan
–
Christine O’Reilly
9,420
Catherine Tanna
10,400
Dion Weisler
7,544
1. The number of shares held refers to shares held either directly, indirectly or beneficially by
Directors as at 27 August 2024. Where applicable, the information includes shares held in
the name of a spouse, superannuation fund, nominee and/or other controlled entities.
2. As at 27 August 2024, Mike Henry also holds 973,178 rights and options over shares
in BHP Group Limited. For more information refer to the Equity awards section in the
Remuneration Report 5.2.
Executive Key Management Personnel
Interests held by members of the Executive Key Management Personnel
(KMP) under employee equity plans as at 30 June 2024 are set out in
the tables contained in the Equity awards section in the Remuneration
Report 5.2.
The table below sets out the relevant interests in shares in BHP Group
Limited held directly, indirectly or beneficially, as at the date of this
Directors’ Report by those senior executives who were Executive
KMP (other than the Executive Director) on that date.
Executive KMP member
Number
of shares held1
Brandon Craig
25,665
Vandita Pant
170,688
Geraldine Slattery
195,011
1. The number of shares held refers to shares held either directly, indirectly or beneficially as
at 27 August 2024. Where applicable, the information includes shares held in the name of
a spouse, superannuation fund, nominee and/or other controlled entities.
4. Share capital and buy‑back programs
During FY2024, we did not make any on‑market or off‑market purchases
of BHP Group Limited ordinary shares under any share buy‑back program.
As at the date of this Directors’ Report, there were no current on‑market
buy‑backs.
Some of our executives receive rights over BHP shares as part of their
remuneration arrangements. Entitlements may be satisfied by the transfer
of existing shares, which are acquired on‑market by the Employee Share
Ownership Plan Trusts or, in respect of some entitlements, by the issue
of shares. During FY2024, no shares were purchased on-market for the
Employee Share Ownership Plan Trusts.
As at the date of this Directors’ Report, there were 14,700,777 unvested
equity awards outstanding in relation to BHP Group Limited ordinary shares
held by 24,462 holders. The expiry dates of these unvested equity awards
range between August 2024 and August 2028 and there is no exercise
price. 5,710,261 fully paid ordinary shares in BHP Group Limited were
issued as a result of the exercise of rights over unissued shares during or
since the end of FY2024. No options over unissued shares or unissued
interests in BHP have been granted during or since the end of FY2024 and
no shares or interests were issued as a result of the exercise of an option
over unissued shares or interests during or since the end of FY2024.
For more information refer to Financial Statements note 26
‘Employee share ownership plans’. For information on movements
in share capital during and since the end of FY2024 refer to
Financial Statements note 17 ‘Share capital’.
5. Group Company Secretary
Stefanie Wilkinson is the Group Company Secretary. For details of her
qualifications and experience refer to Corporate Governance Statement
4.1. Stefanie Wilkinson has experience in a company secretariat role or
other relevant fields arising from time spent advising other large-listed
companies or other relevant entities.
6. Indemnities and insurance
Rule 146 of the BHP Group Limited Constitution requires the company
to indemnify, to the extent permitted by law, each Officer of BHP Group
Limited against liability incurred in or arising out of the conduct of the
business of BHP or the discharge of the duties of the Officer. The Directors
named in 4.1 of the Corporate Governance Statement, and the Company
Secretary and other Officers of BHP Group Limited have the benefit of this
requirement, as do individuals who formerly held one of those positions.
In accordance with this requirement, BHP Group Limited has entered into
Deeds of Indemnity, Access and Insurance (Deeds of Indemnity) with
its Directors.
Under BHP’s Deed Poll for Indemnification, BHP Group Limited and BHP
Group (UK) Ltd (formerly BHP Group Plc) must, to the extent permitted by
law, indemnify current and former employees of the Group against liability
to third parties incurred in or arising out of the conduct of the business of
the Group or the discharge of the duties of these employees, including
where an employee performs a role at another entity at the request of
the Group. The indemnity is subject to certain limitations and does not
apply where the liability has arisen in circumstances involving dishonesty,
recklessness, wilful misconduct or lack of good faith by the employee
seeking indemnification.
In addition, as part of the arrangements to effect the demerger of South32,
we agreed to indemnify certain former Officers of BHP who transitioned
to South32 from certain claims and liabilities incurred in their capacity as
Directors or Officers of South32.
The terms of engagement for certain services include that we must
compensate and reimburse EY for and protect EY against any loss,
damage, expense or liability incurred by EY in respect of third‑party
claims arising from a breach by BHP of any obligation under the
engagement terms.
We have insured against amounts that we may be liable to pay to Directors,
Company Secretaries or certain employees (including former Officers)
pursuant to Rule 146 of the Constitution of BHP Group Limited or that we
otherwise agree to pay by way of indemnity. The insurance policy also
insures Directors, Company Secretaries and some employees (including
former Officers) against certain liabilities (including legal costs) they may
incur in carrying out their duties. For this Directors’ and Officers’ insurance,
we paid premiums of US$17,535,690 excluding taxes during FY2024.
No indemnity in favour of a current or former Officer of BHP Group Limited
or in favour of the External Auditor was called on during FY2024.
7. Dividends
A final dividend of 74 US cents per share will be paid on 3 October 2024,
resulting in total cash dividends determined in respect of FY2024
of 146 US cents per share.
For information on the dividends paid refer to Financial Statements
note 19 ‘Dividends’
8. Auditors
A copy of the declaration given by our External Auditor to the Directors in
relation to the auditors’ compliance with the independence requirements
of the Australian Corporations Act 2001 and the Professional Code of
Conduct for External Auditors is set out in Financial Statements 4.
No current Officer of BHP has held the role of director or partner of the
Group’s current External Auditor.
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Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
9. Non‑audit services
For information on the non-audit services undertaken by BHP’s External
Auditor, including the amounts paid for non-audit services, refer to
Financial Statements note 36 ‘Auditor’s remuneration’. All non-audit
services were approved in accordance with the process set out in the
Policy on Provision of Audit and Other Services by the External Auditor.
No non-audit services were carried out that were specifically excluded
by the Policy on Provision of Audit and Other Services by the External
Auditor. Based on advice provided by the Risk and Audit Committee, the
Directors have formed the view that the provision of non-audit services is
compatible with the general standard of independence for auditors, and
that the nature of non-audit services means that auditor independence
was not compromised. The reason for this view is that the objectivity and
independence of the External Auditor are safeguarded through restrictions
on the provision of these services with some services prohibited from
being undertaken.
For more information about our policy in relation to the provision of
non‑audit services by the external auditor refer to ‘External audit and
financial reporting’ in our Corporate Governance Statement 9.2
10. Exploration, research and development
Companies within the Group carry out exploration and research and
development necessary to support their activities.
For more information refer to OFR 5 ‘Our assets’, OFR 9 ‘Performance
by commodity’ and Additional information 6 ‘Mineral Resources
and Ore Reserves’
11. ASIC Instrument 2016/191
BHP Group Limited is an entity to which the Australian Securities and
Investments Commission (ASIC) Corporations (Rounding in Financial/
Directors’ Reports) Instrument 2016/191 applies. Amounts in this
Directors’ Report and the Financial Statements, except estimates of future
expenditure or where otherwise indicated, have been rounded to the
nearest million dollars in accordance with ASIC Instrument 2016/191.
12. Proceedings on behalf of
BHP Group Limited
No proceedings have been brought on behalf of BHP Group Limited,
nor has any application been made, under section 237 of the Australian
Corporations Act 2001.
13. Performance in relation to
environmental regulation
BHP seeks to be compliant with all applicable environmental laws and
regulations relevant to its operations. We monitor compliance on a regular
basis, including through external and internal means, to minimise the risk
of non‑compliance.
For more information on BHP’s performance in relation to health, safety
and the environment refer to OFR 6.7, 6.1, 6.9 and 6.10
For the purposes of section 299(1)(f) of the Australian Corporations Act
2001, in FY2024 BHP was levied nine fines in relation to environmental
laws and regulations at our operated assets, the total amount payable
being US$86,850.58.
14. Additional information
BHP Group Limited has a branch registered in the United Kingdom.
The Group, through various subsidiaries, has also established branches
in a number of other countries.
The Directors’ Report is approved in accordance with a resolution of
the Board.
Ken MacKenzie
Chair
Dated: 27 August 2024
Mike Henry
Chief Executive Officer
Directors’ Report continued
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BHP Annual Report 2024
Abbreviation
Item
AGM
Annual General Meeting
CDP
Cash and Deferred Plan
CEO
Chief Executive Officer
DEP
Dividend equivalent payment
ELT
Executive Leadership Team
GHG
Greenhouse gas
HSEC
Health, safety, environment and community
IFRS
International Financial Reporting Standards
KMP
Key Management Personnel
LTIP
Long-Term Incentive Plan
MAP
Management Award Plan
MSR
Minimum shareholding requirement
ROCE
Return on capital employed
S&S
Safety and sustainability
TSR
Total shareholder return
Remuneration Report
People and Remuneration Committee
Chair letter to shareholders
116
1
Remuneration governance
118
2
Executive KMP remuneration framework
119
2.1 How the remuneration framework is set
119
2.2 Remuneration framework operation
119
2.3 Remuneration mix
120
3
Remuneration for the CEO and other Executive KMP
121
3.1 FY2024 remuneration received by the CEO
121
3.2 FY2024 CDP performance outcomes
121
3.3 FY2024 LTIP performance outcomes
124
3.4 Overarching discretion and vesting underpin
124
3.5 LTIP allocated during FY2024
125
3.6 FY2025 remuneration for the CEO and other
Executive KMP
125
4
Remuneration for Non-executive Directors
126
4.1 Remuneration framework of Non-executive Directors
126
4.2 Non-executive Directors’ remuneration in FY2024
and FY2025
126
5
Statutory KMP remuneration and other disclosures
127
5.1 KMP remuneration table
127
5.2 Equity awards
128
5.3 Estimated value range of equity awards
130
5.4 Ordinary shareholdings and transactions
130
5.5 Prohibition on hedging of BHP shares
and equity instruments
131
5.6 Share ownership guidelines and the MSR
131
5.7 Transactions with KMP
131
115
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
Governance
Operating and Financial Review
Overview
Contents
Dear Shareholders,
I am pleased to provide BHP’s Remuneration Report for FY2024.
Our approach and framework
During FY2024, the People and Remuneration Committee (Committee)
focused on achieving remuneration outcomes that fairly reflect the
performance of BHP and the contribution of our employees while aligning
with the interests of shareholders and other key stakeholders.
The objectives of our remuneration framework are to support the execution
of the Group’s global strategy, encourage and sustain a culture aligned
with the Group’s values and BHP’s purpose and risk appetite, and provide
competitive remuneration, linked to performance, sufficient to attract, retain
and motivate our executives on a global basis. This is critical to delivering
the best outcomes for all BHP shareholders.
FY2024 reflections
We delivered strong operational and financial performance in FY2024.
We achieved record production at Spence, Carrapateena and Western
Australia Iron Ore and widened our lead as the lowest cost major iron
ore producer.
The safety of our people remains our absolute priority. FY2024 was
overshadowed by the fatality of Luke O’Brien, a team member working
with one of our contracting partners at BMA, who was fatally injured
at the Saraji mine in Queensland. We remain committed to eliminating
fatalities and serious injuries at BHP. In a year where we have reported a
fatality, it is important this has a flow-on impact on our performance-based
remuneration framework outcomes for BHP executives, which reinforces
our unwavering commitment to zero fatalities and serious injuries at BHP.
Appropriately, there has been an impact on remuneration outcomes from
this event.
We continued to make meaningful progress towards a more inclusive
and diverse workforce, which is critical for productive and safer teams.
We increased female participation across the Group to over 37 per cent,
up almost 2 percentage points from last year.
In FY2023 we identified and disclosed two issues with certain allowances
and entitlements affecting some current and former employees in Australia.
We self-reported these issues to Australia’s Fair Work Ombudsman (FWO)
and engaged Protiviti, a global assurance firm, to undertake a review of our
payroll systems. The Board and CEO have taken these issues seriously.
A range of consequences have been implemented for employees in
connection with these issues. For the CEO, a reduction has been applied
to his FY2024 CDP outcome (refer further below).
FY2024 Cash and Deferred Plan scorecard
BHP’s Cash and Deferred Plan (CDP) is an annual cash and equity
incentive scheme, with awards provided as cash and deferred shares that
vest in two and five years. The FY2024 CDP scorecard used to assess
the CEO’s and other ELT members’ annual performance comprised
stretching performance measures based on three elements – safety
and sustainability, financial and personal performance elements. A key
aspect of the CDP is that vesting of the five-year deferred share awards is
underpinned by a holistic review of performance at the end of the five-year
vesting period, including a review of safety and sustainability performance
over the five-year period.
Climate change CDP measures also play a meaningful role in the
determination of our remuneration outcomes for our CEO and other ELT
members. Each year since FY2020, climate change scorecard targets
have represented 10 per cent in BHP’s CDP scorecard. Our Climate
Transition Action Plan (CTAP) 2024 provides an update on our climate
strategy and our progress and plan in relation to our GHG emissions goals
and targets.
FY2024 Cash and Deferred Plan outcomes for the CEO
The Committee assessed the CEO’s performance against the CDP
scorecard elements, which resulted in a FY2024 CDP outcome of 71.7 per
cent against a target of 100 per cent (and 47.8 per cent of the maximum).
The Board and Committee believe this overall outcome is appropriately
aligned with BHP’s values, the shareholder experience and the interests of
the Group's other key stakeholders.
Safety and sustainability measures have a 25 per cent total weighting.
People and Remuneration Committee Chair letter to shareholders
There is a 10 per cent measure for significant HSEC events. The outcome
took into account the fatality at the Saraji mine in FY2024 and the 10 per
cent measure for significant HSEC events was reduced to zero in FY2024
for the CEO. For other sustainability measures, good progress was made
against the scorecard’s climate change targets and our outcomes with
respect to Indigenous partnerships was broadly aligned to target. As a
result, the CDP scorecard assessment for the safety and sustainability
measures overall was 15 per cent out of a target of 25 per cent.
For the financial measures, after fully eliminating the impacts of commodity
prices during the year, operating performance at our operated assets was
below the challenging internal targets set at the commencement of the
year, particularly with respect to production volumes, despite achieving
record production at some assets. The CDP scorecard assessment for the
financial measure was 37 per cent out of a target of 50 per cent.
From a personal contribution perspective, the Committee considered
Mike Henry’s performance against his Group measures. These included
projects and initiatives in respect of people, performance and portfolio.
The Committee considered Mike’s performance against his Group
objectives was slightly below expectations and assessed it as 24 per cent
against the target of 25 per cent.
This assessment against scorecard objectives gave an FY2024 CDP
outcome for Mike of 76 per cent based on performance during the year.
Subsequent to this assessment, the Board also took into account the
CEO’s ultimate accountability for the operations of BHP, specifically payroll
issues, and made the decision to reduce Mike’s overall FY2024 outcome
by 4.3 percentage points from 76 per cent to 71.7 per cent.
The CDP scorecard outcomes for other ELT members and the short-term
incentive pool applicable to the majority of BHP employees below the ELT
level, were, like the CEO, below the 100 per cent target and, for certain
executives, the CDP scorecard outcomes included downward adjustments
reflecting accountability for BHP’s payroll issues.
2019 Long-Term Incentive Plan award
The vesting outcome for the 2019 Long-Term Incentive Plan (LTIP)
award was 50 per cent. The LTIP performance condition is relative total
shareholder return against two separate index measures – a sector peer
group and the MSCI World Index. BHP outperformed both the sector peer
group and the MSCI World Index requirements for threshold vesting (at
which 25 per cent of the award would vest) but performance was below
the requirements for maximum vesting (at which 100 per cent of the award
would vest).
In considering vesting of the 2019 LTIP award, the Board and Committee
have also conducted their normal holistic review of business performance
over the five years since the award was granted to ensure this level of
vesting was appropriate. More information on the 2019 LTIP vesting
outcome is included in 3.3 FY2024 LTIP performance outcomes and 3.4
Overarching discretion and vesting underpin.
Having considered the overall remuneration outcome for the CEO carefully,
the Committee concluded it was a fair reflection of performance and
the experience of shareholders, and the application of any downwards
discretion to the vesting of the LTIP was not warranted. More information
on the overall remuneration outcomes for the CEO for the year, and how
the outcomes are aligned to performance during FY2024, is provided in 3.1
FY2024 remuneration received by the CEO.
Our shareholders will
see that our executives’
remuneration outcomes
are aligned with
our business
performance
during FY2024.”
116
BHP Annual Report 2024
FY2025 remuneration
For FY2025, the Committee determined that the CEO’s base salary
would increase by 4 per cent, effective 1 September 2024. In making
this decision, we have conducted benchmarking and considered the
external market demand for global senior executive talent. We benchmark
the CEO’s and other executives’ remuneration against CEO and senior
executive roles in other global companies of similar complexity, reach and
scale. This detailed benchmarking is intended to ensure BHP’s executive
remuneration remains competitive to attract, motivate and retain key
talented senior executives and is consistent with the global market.
The Committee considers the CEO’s base salary increase to be
appropriate in this context, and it is below the average salary increase
applied for other BHP employees. Other components of the CEO’s total
target remuneration (pension contributions, benefits, CDP and LTIP)
remain unchanged and, where relevant, as percentages of base salary.
A summary of the CEO’s arrangements for FY2025 is set out in the
above table.
The majority of the CEO’s remuneration package continues to be
delivered in BHP equity, not in cash. The CEO’s remuneration is linked
to the performance of the business. In addition, the CEO has a minimum
shareholding requirement of five times pre-tax base salary and this applies
for two years post-retirement. This ensures the CEO’s remuneration
is aligned to the experience of BHP’s shareholders. As at the date of
this Report, the CEO’s BHP shareholding is in excess of his minimum
shareholding requirement.
The Committee has also reviewed the base salaries and total target
remuneration packages for other executive key management personnel.
The Committee determined an increase of 8 per cent for the President
Australia, reflecting performance and development in role. Given recent
appointments, no other changes are being made for other executive key
management personnel at this time, and this will be the subject of future
reviews. It is vital that we provide competitive remuneration to attract and
retain highly skilled global executive talent, and our reviews are based on
updated global benchmarking data. Other aspects of other executive key
management personnel remuneration arrangements remain unchanged.
Remuneration outcomes for the Group Chair and
Non‑executive Directors
Fees for the Group Chair and Non-executive Directors are reviewed
annually and are benchmarked against global companies of similar
complexity, reach and scale. Following an assessment of the updated
benchmarking, global market positioning and peer company relativities, a
decision has been made that the Group Chair's fee and the Non-executive
Directors' base fee will increase by 4 per cent with effect from 1 July 2024.
The increases are considered appropriate given current benchmarking
and the expectations, accountabilities and workloads of each of the Group
Chair and Non-executive Directors. Having conducted this review, it was
determined that there would be no change to the fees for other Committee
roles or other allowances.
People
From 1 July 2023, the remit of the Committee expanded to include
oversight of BHP’s people and culture strategy, the organisation’s
alignment with the Group’s purpose and values, employee engagement,
leadership and talent development.
During the year, we engaged with management on our people policies
and governance, performance management system and the launch and
embedment of Our refreshed Values. Committee members also monitored
culture through Board visits to our sites and offices, management
presentations and by considering trends and results from our Engagement
and Perception Surveys. Our aspiration to achieve gender balance within
our employee workforce globally by the end of CY2025 remains a key
aspect of our broader focus on diversity and inclusion.
Summary
We continue to provide a significant component of executive remuneration
as at-risk variable remuneration to align remuneration with performance.
This year, we are confident the outcomes are consistent with the
performance of BHP and the experience of our shareholders, while also
recognising our critical need to attract, motivate and retain our executives
in order to progress our strategic objectives and deliver the best outcomes
for all of our shareholders.
We look forward to ongoing dialogue with and the support of BHP’s
shareholders. As always, we welcome your feedback and comments on
any aspect of this Report.
Christine O’Reilly
Chair, People and Remuneration Committee
27 August 2024
CEO FY2025 fixed remuneration
CEO FY2025 CDP
CEO FY2025 LTIP
– Base salary US$1.893 million per annum,
an increase of 4% from 1 September 2024.
– Target cash award of 80% of base salary
(maximum 120%).
– The LTIP grant is based on a face value of 200%
of base salary.
– Pension contribution 10% of base salary.
– Two awards of deferred shares each of equivalent
value to the cash award, vesting in two and
five years, respectively.
– LTIP awards have challenging relative TSR
performance hurdles measured over five years.
– Three performance measures:
– S&S – 25%
– Financial – 50%
– Group – 25%
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Overview
Additional Information
Financial Statements
Contents
Governance
1.1 Board oversight
The Board oversees the structure of remuneration for the Group (including the CEO) and ensures it is aligned with BHP’s values, purpose, strategy and
risk appetite, including in relation to non-financial risk and with the long-term interests of BHP and its shareholders.
The Board approves the remuneration framework for the Group Chair, CEO and other members of the ELT on recommendation from the Committee.
The remuneration of Non-executive Directors (excluding the Group Chair) is a matter for the Group Chair and the Executive Director, and is reviewed by
them each year having regard to the remuneration framework. No Director or executive is involved in deciding their own remuneration.
The objective of the remuneration framework is to:
– support the execution of the Group’s business strategy
– encourage and sustain a culture aligned to BHP’s values, purpose and risk appetite, including in relation to non-financial risk
– provide competitive remuneration, which is linked to performance, to attract, motivate and retain highly skilled executives on a global basis
The Board approves the remuneration arrangements and outcomes for the Group Chair and CEO on recommendation from the Committee.
1.2 People and Remuneration Committee
The Board has established the Committee to support and advise the Board on people and remuneration matters, as set out in the Committee Charter
available at bhp.com. Each of the Committee members are independent Non-executive Directors. The current members of the Committee are Christine
O’Reilly (Chair), Ross McEwan, Catherine Tanna and Dion Weisler.
The Committee has unrestricted access to members of senior management as appropriate and invites them to attend meetings to provide reports and
updates. However, members of management are not present when decisions are considered or taken concerning their own remuneration. The Committee
can also draw on services from a range of external sources, including independent remuneration advisers. The Committee also receives input from other
Board committees as required, in relation to financial performance and safety and sustainability matters.
The Committee makes recommendations to the Board on the remuneration framework for the Group Chair, the CEO and other members of the ELT,
including Executive KMP. The Committee is briefed on and considers prevailing market and economic conditions where our Executive KMP are based,
the competitive environment and the positioning and relativities of pay and employment conditions across the wider BHP workforce.
From 1 July 2023, the remit of the Committee expanded to include oversight of BHP’s people and culture strategy, the organisation’s alignment with the
Group’s purpose and values, employee engagement, leadership and talent development. More information on the role and focus of the Committee can
be found in Corporate Governance Statement 5.4, and details of meeting attendances can be found in Directors’ Report 2.
The Committee’s approach is that remuneration outcomes, which are linked to performance, attract, motivate and retain highly skilled executives on
a global basis. Remuneration should be fair to the individual and remuneration levels should accurately reflect the CEO’s and other Executive KMP’s
responsibilities and contributions, while considering the positioning and relativities of pay and employment conditions across the wider BHP workforce.
The Committee also considers shareholder views and those of the wider community when setting this remuneration framework. We proactively engage
with our global institutional and investor representative shareholders regularly to discuss remuneration and governance matters. This feedback assists
Directors to have a deep understanding of current shareholder and other stakeholder views when making remuneration decisions.
1.3 Engagement of independent remuneration advisers
The Committee may appoint and instruct expert advisers who are advisers solely to the Committee, including remuneration consultants, to assist
the Committee with advice in relation to the Group’s remuneration strategy, framework and policies. The Committee may meet with external advisers
without management being present. Potential conflicts of interest are taken into account when remuneration consultants are selected and their terms of
engagement regulate their level of access to, and require their independence from, BHP’s management.
PwC was appointed to act as an independent remuneration adviser in FY2016 and is currently the only remuneration adviser appointed by the Committee.
In that capacity, PwC may provide remuneration recommendations in relation to KMP, however, it did not provide any remuneration recommendations
in FY2024.
1.4 Service contracts
The terms of employment for the CEO and Executive KMP are formalised in their employment contracts. The current contracts of the CEO and Executive
KMP are not fixed term. BHP may choose to terminate a contract on up to 12 months’ notice. BHP can require an executive to work through the notice
period or may terminate the individual’s contract immediately by paying base salary plus pension contributions in lieu of the notice period. The CEO and
Executive KMP must provide up to 12 months’ notice for voluntary resignation.
1.5 KMP for FY2024
This Remuneration Report describes the remuneration policies, practices, outcomes and governance for the KMP of BHP during FY2024. At BHP,
KMP consists of the Directors (including the CEO), as well as certain members of our ELT who have authority and responsibility for planning, directing
and controlling the activities of the Group directly or indirectly. In FY2024, Brandon Craig and Vandita Pant moved into new KMP roles within the BHP
Group, and David Lamont and Ragnar Udd moved into new non-KMP roles within the BHP Group, all effective 1 March 2024. After due consideration, the
Committee determined the Chief Operating Officer was no longer a KMP role effective 1 March 2024 as, since the successful integration of OZ Minerals
into the BHP Group, the role no longer meets the threshold necessary for classification as KMP. Accordingly, for FY2024, the KMP comprised the
following individuals:
– Mike Henry, CEO and Executive Director
– Edgar Basto, Chief Operating Officer (from 1 July 2023 to 29 February 2024)
– Brandon Craig, President Americas (from 1 March 2024 to 30 June 2024)
– David Lamont, Chief Financial Officer (from 1 July 2023 to 29 February 2024)
– Vandita Pant, Chief Financial Officer (from 1 March 2024 to 30 June 2024)
– Geraldine Slattery, President Australia
– Ragnar Udd, President Americas (from 1 July 2023 to 29 February 2024)
– All Non-executive Directors – for details of Non-executive Directors, including dates of appointment or cessation (where relevant),
refer to Directors’ Report 2
These individuals have held their positions and were KMP for the whole of FY2024, unless stated otherwise.
1 Remuneration governance
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BHP Annual Report 2024
BHP has an overarching remuneration framework for Executive KMP that guides the Committee’s decisions and is designed to support our strategy and
reinforce our culture and values.
2.1 How the remuneration framework is set
The four principles that underpin the remuneration framework for Executive KMP are:
Market competitive
to attract, motivate
and retain high-quality
and experienced executives
Reinforce BHP’s purpose
and support the delivery of our
strategy and behaviours aligned
to Our Values
Rewards achievement of
outperformance that balances
long-term sustainability and
risk appetite with shareholder
wealth creation
Simple and
transparent
2.2 Remuneration framework operation
These principles are the same as those that apply to other employees, however, Executive KMP arrangements have a greater emphasis on and a higher
proportion of remuneration that is at-risk as performance-related variable pay.
The table below shows the key components of our remuneration framework:
Fixed remuneration
CDP
LTIP
Purpose and link
to strategy
Market competitive fixed remuneration is paid
to attract, motivate and retain high-quality and
experienced executives, and provide appropriate
remuneration for these important roles in the Group.
The CDP is an annual cash and equity award
that encourages and focuses executives’ efforts
for the relevant financial year on the delivery
of the Group’s strategic priorities, balancing
financial and non-financial performance, to deliver
short-, medium- and long-term success aligned
to our purpose and Our Values, and to motivate
executives to strive to achieve stretch
performance objectives.
The LTIP is a long-term equity award
that focuses executives’ efforts on the
achievement of sustainable long-term value
creation and success of the Group (including
appropriate management of business risks).
Components
Base salary, pension contributions and benefits.
Cash and deferred shares.
Performance rights.
Approach and link to performance
Competitive fixed remuneration is aligned to
global complexity, reach and scale, and reflects
executives’ responsibilities, location, skills,
performance, qualifications and experience.
Annual variable pay opportunity provided in cash
and two- and five- year deferred shares with
the outcome determined by the assessment of
performance against a balanced scorecard linked
to execution of business strategy. A balanced
scorecard of short-, medium- and long-term
elements including S&S (25% weighting), financial
(50% weighting) and Group and individual
performance measures (25% weighting) are
chosen on the basis that they are expected to have
a significant short-, medium- and long-term impact
on the success of the Group, with appropriate
targets for each measure that will appropriately
motivate executives to achieve outperformance
that contributes to the long-term sustainability of
the Group and shareholder wealth creation.
Annual long-term variable pay opportunity
allocated as awards of performance rights,
which are subject to a five-year relative TSR
performance condition. The performance
rights are designed to align executives’
reward with sustained shareholder wealth
creation in excess of relevant comparator
group(s), through the relative TSR
performance condition.
Relative TSR has been chosen as an
appropriate measure as it enables an
objective external assessment over a
sustained period on a basis that is familiar
to shareholders.
2 Executive KMP remuneration framework
119
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
2.2 Remuneration framework operation continued
CDP
LTIP
Assessment of performance
A CDP award is determined based on the assessment of each scorecard
measure by the Committee and the Board, with guidance provided by other
relevant Board Committees (including the Sustainability Committee and
Risk and Audit Committee) in respect of S&S, financial and other measures.
If performance is below the threshold level for any measure, no CDP award
will be provided in respect of that portion of the CDP award opportunity.
The Committee retains discretion to adjust all or part of any CDP award
in the event the Committee does not consider the outcomes to be a true
reflection of the performance of the Group or considers that individual
performance or other circumstances makes this an inappropriate outcome.
This mitigates the risk of unintended award outcomes.
Vesting of the LTIP award is dependent on BHP’s TSR relative to the TSR of
relevant comparator group(s) over a five-year performance period.
Achievement against each TSR hurdle is assessed by the Committee and
the Board, based on external data reviewed and confirmed by independent
remuneration consultants.
BHP’s TSR performance
% of the LTIP award that will vest
Below the 50th percentile
0%
Equal to the 50th percentile
25%
Between the 50th percentile and the
weighted 80th percentile
Sliding scale between 25%
and 100%
Equal to or exceeds the 80th percentile
(outperformance)
100%
Where the TSR performance condition is not met, there is no retesting and
awards will lapse.
The Committee retains discretion to lapse any portion or all of the award where
it considers the vesting outcome is not appropriate given Group or individual
performance, or other circumstances apply that makes the vesting outcome an
inappropriate outcome. This mitigates the risk of unintended outcomes.
Delivery and vesting
CDP awards are provided as cash and two awards of deferred shares, each of
equivalent value to the cash award, vesting in two and five years, respectively.
Awards of deferred shares comprise rights to receive ordinary BHP shares
at the end of the deferral periods subject to continued employment with
BHP until the vesting date. Before the awards vest, these rights are not
ordinary shares and do not carry entitlements to ordinary dividends or
other shareholder rights, however, a DEP is provided on vested awards.
The Committee also has a discretion to settle CDP deferred shares in cash.
Vesting of five-year deferred shares under the CDP is underpinned by a holistic
review of performance at the end of the five-year vesting period, including a
review of S&S performance, profitability, cash flow, balance sheet health, returns
to shareholders, corporate governance and conduct over the five-year period.
LTIP awards consist of rights to receive ordinary BHP shares in the future if
the performance and service conditions are met.
Before vesting, these rights are not ordinary shares and do not carry
entitlements to ordinary dividends or other shareholder rights, however, a
DEP is provided on vested awards. The Committee has a discretion to settle
LTIP awards in cash.
Vesting of five-year performance rights under the LTIP is underpinned by
a holistic review of performance at the end of the five-year performance
period, including a review of S&S performance, profitability, cash flow,
balance sheet health, returns to shareholders, corporate governance and
conduct over the five-year period.
Cessation of
employment
On cessation of employment, a ‘good leaver’1 may receive a pro-rated
cash award based on performance for that year. For a ‘good leaver’, their
unvested CDP deferred awards generally remain on foot (wholly or in part)
unless the Committee determines otherwise. If the executive is not a ‘good
leaver’, all unvested CDP deferred awards will lapse.
On cessation of employment, for a ‘good leaver’1 their unvested LTIP awards
generally remain on foot and are pro-rated for the portion of the vesting period
served, unless the Committee determines otherwise. These awards are eligible for
vesting in the ordinary course, subject to any applicable performance conditions.
If the executive is not a ‘good leaver’, all unvested LTIP awards will lapse.
Malus and
clawback
In certain circumstances, including to prevent an executive obtaining an inappropriate benefit, the Committee may determine that some or all awards
(including equity, cash and deferred share awards) are lapsed, forfeited or clawed back. The Committee may also suspend or delay vesting of awards if an
investigation is underway, until the outcome of any investigation is known. BHP also has a Malus and Clawback Policy that applies to all equity awards.
1. ‘Good leaver’ treatment may apply where the reason for the cessation of employment with BHP is due to retirement, retrenchment or redundancy, termination by mutual agreement or such
other circumstances that do not constitute resignation or termination for cause.
2.3 Remuneration mix
The diagram below provides the scenarios for the potential total remuneration of the CEO and other Executive KMP at different levels of performance.
Remuneration mix for the CEO and other Executive KMP
Minimum
CEO and other Executive KMP
100%
Consists of fixed remuneration, which comprises base salary, pension contributions
(10 per cent of base salary) and other benefits (notional 10 per cent of base salary), the
details of which are set out in 5.1 KMP remuneration table.
Target
CEO
26%
17%
17%
17%
23%
Consists of fixed remuneration, target CDP (a cash award of 80 per cent of base salary
plus two awards of deferred shares each of equivalent value to the cash award, vesting in
two and five years, respectively) and LTIP. The LTIP value in the chart is based on the fair
value of the award, which is 50 per cent of the face value of 200 per cent of base salary for
the CEO and 175 per cent for other Executive KMP. The potential impact of future share
price movements is not included in the value of deferred CDP shares or LTIP awards.
Other Executive KMP
27%
18%
18%
18%
19%
Maximum
CEO
17%
17%
17%
17%
32%
Consists of fixed remuneration, maximum CDP (a cash award of 120 per cent of base
salary plus two awards of deferred shares each of equivalent value to the cash award,
vesting in two and five years respectively), and LTIP (in the chart based on the face value
of 200 per cent of base salary for the CEO and 175 per cent for other Executive KMP).
The potential impact of future share price movements is not included in the value of
deferred CDP shares or LTIP awards.
Other Executive KMP
18%
18%
18%
18%
28%
Fixed remuneration
CDP (cash)
CDP (2-year deferred shares)
CDP (5-year deferred shares)
LTIP
The maximum opportunity represented above is the most that could potentially be paid for each remuneration component. It does not reflect any intention
by the Group to award that amount.
2 Executive KMP remuneration framework continued
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BHP Annual Report 2024
The amount of remuneration actually received by the CEO and other Executive KMP each year under the CDP and LTIP depends on the achievement
of business and individual performance measures. The Board and Committee applies its overarching discretion to determine fair and commensurate
remuneration that reflects the objectives of the remuneration framework and takes into account shareholder expectations and market conditions.
3.1 FY2024 remuneration received by the CEO
The table below is a voluntary non-statutory disclosure of the remuneration received by the CEO during FY2024 and FY2023. This table is unaudited
and differs from the audited remuneration calculated in accordance with the Australian Accounting Standards (refer to 5.1 KMP remuneration table and
Financial Statements note 26 ‘Employee share ownership plans’). This table is designed to provide greater transparency for shareholders and reflects
actual remuneration received, with the CDP and LTIP included below representing those amounts that have been received as a consequence of satisfying
performance conditions in the relevant financial year.
The difference between the disclosure in the table below and the remuneration disclosed in 5.1 KMP remuneration table relates to the CDP and LTIP.
The remuneration calculated in accordance with Australian Accounting Standards requires the fair value of the CDP and LTIP to be calculated at the time
of grant and to be amortised over the relevant vesting periods regardless of the performance outcome. This may not reflect what the executive receives.
In the table below, the CDP and LTIP values relate to the performance outcomes and actual amount received each year under the CDP (i.e. against the
CDP scorecard) and the LTIP (i.e. based on the LTIP vesting outcome).
Details of the components of remuneration are contained in 2 Executive KMP remuneration framework and the values in the table are explained further in
the notes below.
US$(’000)
Base salary
Benefits1
Pension2
CDP3
LTIP4
Total
Mike Henry
FY2024
1,808
35
181
3,113
3,376
8,513
FY2023
1,742
7
174
3,762
7,645
13,330
1. Benefits are non-pensionable and include net movements in leave balances, private health insurance, car parking, fringe benefits tax and personal tax return preparation in
required countries.
2. FY2024 and FY2023 pension contributions were provided based on 10 per cent of base salary.
3. The values shown are the full CDP value (cash and deferred shares) earned based on performance during FY2024 and FY2023. The FY2024 CDP award will be provided one-third in cash
in September 2024 and two-thirds in deferred shares, with one-third due to vest at the end of FY2026 and one-third due to vest at the end of FY2029 (on the terms of the FY2024 CDP
award). The FY2023 CDP award was provided one-third in cash in September 2023 and two-thirds in deferred shares, with one-third due to vest at the end of FY2025 and one-third due to
vest at the end of FY2028 (on the terms of the FY2023 CDP award).
4. The LTIP award values for FY2024 and FY2023 are based on the full awards Mike Henry received in 2019 and 2018, respectively, when he was President Operations Minerals Australia
(prior to becoming and with no proration applied for time as CEO), and 50 per cent of the 2019 awards vesting and 100 per cent of the 2018 awards vesting. The 2019 LTIP award value
in FY2024 is an estimate calculated on the average share price for the month of July 2024 (which will be updated for the actual share price on the vesting date in the 2025 Remuneration
Report); whereas the 2018 LTIP award value in FY2023 was calculated on the actual share price on the vesting date (and updated from the 2023 Remuneration Report in which the value
was an estimate calculated on the average share price for the month of July 2023).
A revised remuneration framework took effect from 1 July 2019 and significantly reduced the LTIP grant size for the CEO from 400 per cent of base salary
(on a face value basis) to 200 per cent and a rebalancing to a CDP award with a long-term focus. As a result, the remuneration for Mike Henry reported
above reflects the transition to this structure and includes the full amounts of the CDP award earned during FY2024 and FY2023 (i.e. irrespective that
some elements of the CDP award are deferred) together with the full amounts of pre-existing LTIP awards vesting at the end of FY2024 and the pre-
existing LTIP awards vesting at the end of FY2023 that were granted in 2019 and 2018, respectively. The LTIP award sizes granted in 2019 and 2018 were
double the current grant size.
Had the current remuneration framework been in place when Mike’s 2019 and 2018 LTIP awards were granted and a reduced size awarded, the reported
LTIP values would have been US$1.688 million for FY2024 and US$3.827 million for FY2023 (instead of US$3.376 million and US$7.645 million in the
table above). The reported total remuneration would have therefore been US$6.825 million for FY2024 and US$9.512 million for FY2023 (instead of
US$8.513 million and US$13.330 million in the table above).
3.2 FY2024 CDP performance outcomes
The Board and the Committee assessed the Executive KMP’s CDP outcomes in light of the Group’s performance in FY2024 and took into account
performance against the measures in each Executive KMP’s CDP scorecard.
For the CEO, the Board's and the Committee's assessment against the CDP scorecard measures resulted in a CDP outcome for FY2024 at 76 per cent
against the target of 100 per cent (or 51 per cent against maximum). As noted in the Chair letter, BHP has self-reported certain payroll issues to the FWO
and is reviewing its payroll systems. The Board has determined that the CEO’s FY2024 CDP outcome will include a 4.3 percentage point reduction from
76 per cent to 71.7 per cent to reflect his ultimate accountability for BHP’s payroll systems.
The CEO’s final CDP scorecard outcome for FY2024 is summarised in the following tables, including a narrative description of each performance
measure and the CEO’s level of achievement, as determined by the Committee and approved by the Board. The level of performance for each measure is
determined based on a range of threshold (the minimum necessary to qualify for any reward outcome), target (where the performance requirements are
met) and maximum (where the performance requirements are significantly exceeded).
Summary of outcomes for the CEO
Performance measure
Weighting
for FY2024
Threshold
Target
Maximum
Percentage outcome
Mike Henry
S&S
Significant HSEC events
10%
0%
Sustainability
15%
15%
Financial
50%
37%
Group
25%
24%
Sub-total
100%
76%
Committee discretion
-4.3%
Total
100%
71.7%
3 Remuneration for the CEO and other Executive KMP
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Overview
Additional Information
Financial Statements
Contents
Governance
3.2 FY2024 CDP performance outcomes continued
Safety and sustainability
The safety and sustainability (S&S) targets for the CEO are aligned to the Group’s 2030 goals. As it has done for several years, when assessing S&S
performance against the scorecard targets, the Committee seeks guidance from the Sustainability Committee. The Committee has taken a holistic view
of Group performance in critical areas, including considering any additional matters outside the scorecard targets that the Sustainability Committee has
provided and considers relevant.
The performance commentary below is provided against the significant HSEC events (including fatalities) scorecard targets, which were set on the basis
of operated assets only.
Significant HSEC events
Measure outcome
Zero
Scorecard targets
No significant (actual level 4) health,
safety (including fatalities), environment or
community events during the year.
Performance against scorecard targets
– In what is clearly a tragic and unacceptable outcome, we lost a colleague in January 2024 at our Saraji coal
mine, which is part of our BHP Mitsubishi Alliance coal operations in Queensland, Australia. Our imperative is to
continue to build our focus on fatality elimination and safety through field leadership, hazard identification and
effective risk management.
– The weighting of fatalities is 10 percentage points of the total 25 percentage points allocated to the whole S&S
category. This results in a zero outcome for this measure.
– No other significant health, environment or community incidents occurred during FY2024.
The performance commentary below is provided against the sustainability scorecard targets, which were set on the basis of operated assets only.
Climate change
Measure outcome
Slightly below target
Scorecard targets
Reported Scopes 1 and 2 GHG emissions
at our operated assets in FY2024 are at
10.8 MtCO2-e.
Deliver the FY2024 actions in the approved
climate adaptation work program.
Performance against scorecard targets
– For FY2024, we bettered our operational GHG emissions scorecard target of 10.8 MtCO2-e by 4%, with an
outcome of 10.3 MtCO2-e.1 This was just below the performance which was required for a maximum outcome
of 5% or more below the target. However, having reviewed actual production levels at certain operated assets
compared to budget targets, the outcome for this measure was determined by the Committee to be slightly
below target.
– All actions required in the approved climate adaptation work program were delivered during FY2024.
Indigenous partnerships
Measure outcome
Slightly above target
Scorecard targets
No significant (actual level 4) cultural
heritage events during the year.
Achieve significant uplift from FY2023
total global spend on Indigenous,
Traditional Owner and First Nations
vendor procurement and achieve
FY2024 Indigenous employment
participation targets.
Performance against scorecard targets
– No significant cultural heritage incidents occurred during FY2024.
– Indigenous, Traditional Owner and First Nations vendor procurement significantly exceeded targets set with
US$609 million in Indigenous procurement spend in FY2024 (an 83% uplift from FY2023). Our overall FY2024
Indigenous employment participation was slightly behind target.
1. The operational GHG emissions outcome is different from our reported figures in 6.9 Climate change and our CTAP 2024. This is primarily due to annualisation (over 366 days) of
production and GHG emissions for Blackwater and Daunia to reflect the FY2024 scorecard methodology.
The overall outcome against the total S&S measures for FY2024 was 15 per cent out of the target of 25 per cent, with a zero outcome against a target of
10 per cent for the significant HSEC events measure and an outcome of 15 per cent against a target of 15 per cent for sustainability measures.
Financial
ROCE is underlying profit after taxation (excluding after-taxation finance costs and exceptional items) divided by average capital employed. ROCE is the
key financial measure against which CDP outcomes for our senior executives are measured and is, in our view, a relevant measure to assess the financial
performance of the Group for this purpose. While ROCE excludes exceptional items, the Committee reviews each exceptional item to assess if it should
be included in the result when determining the ROCE CDP outcome.
When assessing management’s performance, we make adjustments to the ROCE result to allow for changes in commodity prices, foreign exchange
movements and other material items (from the levels assumed in setting the targets). This ensures the assessment appropriately measures outcomes that
are within the control and influence of the Group and its executives. Of these adjustments, changes in commodity prices have historically been the most
material due to volatility in prices and the impact on Group revenue and ROCE. As it has done for several years, the Committee seeks guidance each
year from the Risk and Audit Committee when assessing financial performance against scorecard targets.
3 Remuneration for the CEO and other Executive KMP continued
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BHP Annual Report 2024
ROCE
Measure outcome
Below target
Scorecard targets
For FY2024, the target for ROCE was 20.1%, with a threshold of
17.1% and a maximum of 22.6%.
Achievement of the ROCE target will result in a target CDP
outcome. The ROCE target considers the upside opportunities
and downside risks inherent in BHP’s businesses, and is an
outcome the Committee believes would be a level of performance
that shareholders would view positively. The maximum and
threshold are an appropriate range of ROCE outcomes, given
the upside opportunities and downside risks, which represent an
upper limit of stretch outperformance that would represent the
maximum CDP award, and a lower limit of underperformance
below which no CDP award should be made.
The performance range around target is subject to a greater level
of downside risk than there is upside opportunity, mainly due
to physical and regulatory asset constraints. Accordingly, the
range between threshold and target is somewhat greater than
that between target and maximum. For maximum, the Committee
takes care not to create leveraged incentives that encourage
executives to push for short-term performance that goes beyond
our risk appetite and current operational capacity.
Performance against scorecard targets
ROCE of 27.2% was reported by BHP for FY2024. Adjusted for the factors outlined below,
ROCE is 18.5%, which is below target. The following adjustments were made to ensure the
outcomes appropriately reflect the performance of management for the year:
– The full elimination of the impacts of movements in commodities prices and exchange rates
decreased ROCE by 7.7 percentage points.
– Adjustments for other material items made to ensure the outcomes reflect the performance
of management for the year decreased ROCE by 1 percentage point. This was mainly due
to the elimination of the positive effect on reported ROCE outcomes of lower asset values in
the closing balance sheet due to the disposals of the Daunia and Blackwater mines in late
FY2024. This adjustment was necessary to ensure the basis of the ROCE outcome for CDP
purposes was the same as the basis upon which the ROCE target for FY2024 was set.
– Having reviewed the FY2024 exceptional items (as described in Financial Statements note
3 ‘Exceptional items’), the Committee determined these should not be considered for the
purposes of determining the FY2024 ROCE CDP outcome and that no further action was
required in respect of exceptional items.
The key driver of the FY2024 ROCE outcome of 18.5% being below the target for
FY2024 of 20.1% set at the commencement of the year was that actual production
volumes at several assets during FY2024 were lower than the internal budgets set at the
commencement of the year.
The outcome against the ROCE measure for FY2024 was 37 per cent out of the target of 50 per cent.
Group measures for the CEO
Group measures for the CEO are determined at the start of the financial year and are an important element of effective performance management.
These measures seek to balance financial and non-financial performance requirements and incentivise a high-performance culture. The CEO’s group
measures for FY2024 included contribution to BHP’s overall performance and the management team, and the delivery of key projects and initiatives, as
set out in the table below.
People
Measure outcome
Slightly below target
Scorecard targets
Increase in female leadership representation by 3
percentage points.
Accelerate cultural change by launching refreshed
BHP values, implementing a refreshed performance
management framework and delivery of Operating
Model changes.
Progress ELT succession and development activities.
Performance against scorecard targets
– Female leadership increased in FY2024 by 2 percentage points to 31.7% at 30 June 2024,
compared to 29.7% at 30 June 2023.
– Refreshed Our Values were designed and launched, a refreshed performance management
framework is being implemented, and the Operating Model was reviewed, and changes completed.
– Succession and development activities completed in accordance with expectations.
Performance
Measure outcome
Slightly below target
Scorecard targets
Asset operational sites to complete formal BHP
Operating System (BOS) deployment in FY2024 (>90%
schedule adherence throughout). 90% of Sites in
Sustain to demonstrate Assessment on Assessment
improvement in Operational Excellence Indicator (OEI)
scores.
Drive material progress in our Brazil strategy, including
delivery of Renova priority programs (Resettlement and
Indemnification), Judicial Reorganisation, progress with
the National Council of Justice (CNJ) negotiations and
UK class action.
Finalise the development of the CTAP 2024.
Implement our Reconciliation Action Plan commitments
in Australia.
Performance against scorecard targets
– 94% of asset operational sites completed formal BOS deployment in FY2024 (against the target of
>90%). There has been an improvement in OEI scores Assessment on Assessment for 64% of all
Sites in Sustain (against the target of >90%).
– Significant progress has been made on the Renova priority programs with 91% of resettlement
cases now completed. Compensation and financial assistance to support approximately 430,000
people affected by the dam failure has been paid as at 30 June 2024. Samarco successfully
concluded its Judicial Reorganisation process with the approval by the courts. The CNJ negotiations
are progressing and judicial proceedings in connection with the dam failure are ongoing.
– The CTAP 2024 has progressed according to plan, being approved by the Board and published as
part of the FY2024 Annual Reporting suite of documents.
– All FY2024 Reconciliation Action Plan commitments in Australia were achieved, including developing
and embedding an integrated planning, tracking and reporting approach, which is driving accountability
and transparency and has been recognised by Reconciliation Australia as best practice. We have made
progress on Indigenous procurement spend and employment participation, and listening sessions have
been held as part of the Cultural Safety Review and priority improvement identified and underway.
Portfolio
Measure outcome
On target
Scorecard targets
As agreed by the Board, execute against the strategy
and plan with respect to OZ Minerals integration and
other portfolio activities.
Investments in early-stage growth options.
Performance against scorecard targets
– The OZ Minerals integration program was successfully completed at the end of March 2024. The sale of
the Daunia and Blackwater coal mines to Whitehaven Coal was successfully completed in April 2024.
– A number of growth options were progressed, evaluated and approved, and progress was made
with an early-stage investment in FY2024, which provides future growth optionality.
Overall, the performance of the CEO against the group measures for FY2024 was assessed as slightly below expectations and warranted an outcome of
24 per cent against the target of 25 per cent.
The CDP performance measures for other Executive KMP for FY2024 are similar to those of the CEO outlined above. However, for the other Executive
KMP, the weighting of each performance measure will vary to reflect the focus required from each Executive KMP role. As with the CEO, individual
performance measures are determined at the start of the financial year. These include the other Executive KMP’s contribution to the delivery of projects
and initiatives within the scope of their role and the overall performance of the Group. Individual performance of other Executive KMP was reviewed
against these measures by the Committee and, on average, were considered to have marginally exceeded expectations and warranted an outcome
slightly above target.
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Overview
Additional Information
Financial Statements
Contents
Governance
3.2 FY2024 CDP performance outcomes continued
The diagram below represents the FY2024 CDP weightings and outcomes against the original scorecard for other Executive KMP.
Performance categories
Other Executive
KMP with region
responsibility
Other Executive
KMP without region
responsibility
Threshold
Target
Maximum
S&S
Group
12.5%
12.5%
Region
12.5%
12.5%
Financial
Group
25.0%
50.0%
Region
25.0%
0%
Individual
25.0%
25.0%
BHP
Minerals Australia
Minerals America
COO1
1. COO is the region comprising operated assets under the responsibility of the Chief Operating Officer.
3.3 FY2024 LTIP performance outcomes
The five-year performance period for the 2019 LTIP award for relevant Executive KMP ended on 30 June 2024. Vesting is subject to the achievement
of the relative TSR performance conditions and any discretion applied by the Committee (refer to 3.4 Overarching discretion and vesting underpin).
For the 2019 LTIP award to vest in full, BHP’s TSR over the performance period from 1 July 2019 to 30 June 2024 must have been at or exceeded the
80th percentile of the Sector Group TSR and the MSCI World Index TSR (World TSR). TSR includes returns to BHP shareholders in the form of share
price movements along with dividends paid and reinvested in BHP (including cash and in-specie dividends).
BHP’s TSR performance was positive 92 per cent over the five-year period from 1 July 2019 to 30 June 2024. This is above the 50th percentile of the
Sector Group TSR of positive 86 per cent but below the 80th percentile of the Sector Group TSR of positive 113 per cent, and above the 50th percentile
of the World TSR of positive 58 per cent but below the 80th percentile of the World TSR of positive 117 per cent over the same period. This level of
performance results in 50 per cent vesting for the 2019 LTIP award. The value of the CEO’s vested 2019 LTIP award has been reported in 3.1 FY2024
remuneration received by the CEO.
The graph below shows BHP’s performance relative to comparator groups.
BHP vs. Sector Group and MSCI World TSR over 2019 LTIP cycle
TSR since 1 July 2019 (%)
Jun-2019
Jun-2020
Jun-2021
Jun-2022
Jun-2023
Jun-2024
BHP TSR
Sector Group 50th percentile TSR
Sector Group 80th percentile TSR
World (MSCI) 50th percentile TSR
World (MSCI) 80th percentile TSR
250%
200%
150%
100%
50%
0
The value of the vested 2019 LTIP award is higher than the value of the vested award at the time it was granted in 2019. The share price has risen
appreciably during the five-year period and there have been strong dividends. Of the value realised, 57 per cent is due to the value at the time the awards
were granted and 43 per cent is due to share price appreciation and dividends. This value increment due to share price appreciation and dividends is
consistent with the experience of shareholders over the period.
3.4 Overarching discretion and vesting underpin
The rules of the CDP and LTIP and the terms and conditions of the awards provide the Committee with an overarching discretion to reduce the number of
awards that will vest, notwithstanding that the performance conditions or the relevant service conditions have been met.
This overarching discretion is a holistic, qualitative judgement ('look back') and is applied as an underpin test before final vesting is confirmed. It is an
important risk management tool to ensure vesting is not simply driven by a formula or the passage of time that may give unexpected or unintended
remuneration outcomes.
The Committee considers its discretion carefully each year ahead of the scheduled vesting of CDP and LTIP equity awards in August. For the five-year
CDP deferred awards, it considers performance holistically over the five-year period, including a five-year ‘look back’ on S&S performance, profitability,
cash flow, balance sheet health, returns to shareholders, corporate governance and conduct. For the five years from FY2020 to FY2024, the Committee
noted BHP’s continued progress in S&S outcomes (noting, however, the two fatalities in FY2023 and one in FY2024 have been taken into account in
determining CDP outcomes for those years), strong operational performance with improving production and cost performance, and significant returns
to shareholders.
In respect of the vesting of CDP two-year deferred shares (granted in November 2022 in respect of performance in FY2022), the Committee did not
identify any reason to exercise its downwards discretion.
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BHP Annual Report 2024
In respect of the vesting of the 2019 LTIP five-year performance rights, the formulaic outcome of the 2019 LTIP was 50 per cent vesting.
Having undertaken the ‘look back’ review described above, the Committee concluded the vesting outcome was appropriate given Group and individual
performance, and that no reasons were identified to warrant the exercise of its downwards discretion. There is no upwards discretion available to the
Committee in respect of the 2019 LTIP and the overarching discretion may only reduce the number of awards that may vest.
In FY2023 BHP identified and disclosed two issues with certain allowances and entitlements affecting some current and former employees in Australia.
We self-reported these issues to the FWO and engaged Protiviti, a global assurance firm, to undertake a review of our payroll systems. In August 2023,
ELT members had a negative 3 percentage point impact on the FY2023 CDP outcomes due to the costs of remediating the two employee entitlements
and allowances issues. We also confirmed that we would monitor the outcome of the review and engagement with the regulatory authorities and that this
may impact remuneration outcomes in the future.
The Board and CEO have taken these issues seriously. A range of consequences have been implemented for employees in relation to these matters.
In relation to remuneration outcomes, this year the Board has determined that the CEO’s FY2024 CDP outcome will include a 4.3 percentage point
reduction to reflect his ultimate accountability for BHP’s payroll systems. This CDP reduction for the CEO in FY2024 is US$185,000 and is equivalent to
25 per cent of the CEO’s target annual short term incentive pro-rated for the portion of the relevant period that he was CEO. For others with accountability
for BHP’s payroll issues (including current and prior ELT members) there have been reductions determined in variable remuneration outcomes ranging
between 25 per cent to 100 per cent of relevant annual target variable pay. Accountability has been determined based on a number of factors, including
tenure in relevant roles.
3.5 LTIP allocated during FY2024
Following shareholder approval at the 2023 AGM, 125,124 LTIP awards (in the form of performance rights) were granted to the CEO on 8 November
2023. The face value of the CEO’s award was 200 per cent of his base salary of US$1.820 million at the time of grant. The fair value of the awards were
calculated by multiplying the face value of the award by the fair value factor of 41 per cent at the time (as determined by the independent adviser to the
Committee). The 125,124 LTIP awards for the CEO was determined based on the US$ face value of the LTIP awards of US$3.640 million and calculated
using the average share price and US$/A$ exchange rate over the 12 months up to and including 30 June 2023. LTIP awards granted to other Executive
KMP during FY2024 were determined on the same basis as described above for the CEO, except that awards for other Executive KMP had a face value
of 175 per cent of base salary.
In addition to the LTIP terms set out in 2 Executive KMP remuneration framework, the Committee determined the following terms for the 2023 LTIP:
Performance period
– 1 July 2023 to 30 June 2028
Performance conditions
– Vesting is conditional on two relative TSR performance measures.
– An averaging period of six months will be used in the TSR calculations.
– BHP’s TSR relative to the median TSR of the MSCI World Metals and Mining Index (Sector Group TSR) and the MSCI World
Index (World TSR) will determine the vesting of 67% and 33% of the award, respectively.
– For each portion of the award to vest in full, BHP’s TSR must be at or exceed the 80th percentile of the Sector Group TSR
or the World TSR (as applicable). Threshold vesting (25% of each portion of the award) occurs where BHP’s TSR equals the
50th percentile (i.e. the median) of the Sector Group TSR or the World TSR (as applicable). Vesting occurs on a sliding scale
between the 50th and 80th percentiles.
3.6 FY2025 remuneration for the CEO and other Executive KMP
The remuneration for the CEO and other Executive KMP in FY2025 will be in accordance with the remuneration framework operation and the main
elements are set out in the table below.
Base salary
CDP
LTIP
Base salaries are reviewed and benchmarked
annually against external market demand for senior
executive talent to ensure they remain competitive.
Following the review, if the Board and Committee
assess and determine a base salary increase
should apply to the CEO and/or other Executive
KMP, the increase will be applicable from 1
September.
For FY2025, the Committee determined that the
CEO’s base salary would increase by 4%, effective
1 September 2024, to US$1.893 million. The
Committee has also reviewed the base salaries
and total target remuneration packages for other
Executive KMP. The Committee determined an
increase of 8% for the President Australia, reflecting
performance and development in role. Given recent
appointments, no other changes are being made for
other Executive KMP at this time, and this will be
the subject of future reviews.
The Board and the Committee set the CDP
scorecard performance categories and measures
each year.
For FY2025, the balanced scorecard includes S&S
measures (25% weighting) such as elimination of
significant harm (including safety), climate change
and Indigenous partnerships, a ROCE financial
measure (50% weighting), and Group and individual
measures (25% weighting) relating to projects
and initiatives in respect of people, performance
and portfolio. The specific Group and individual
performance measures vary for Executive KMP
to reflect the focus required from each of them in
their role.
Notably, certain S&S, Group and individual
measures have a long-term focus where they are
set with a view to achieving longer-term ambitions.
For example, annual GHG emission reduction
targets reflect the ultimate achievement of BHP’s
medium-term target of at least a 30% reduction in
operational GHG emissions from FY2020 levels
by FY2030, however, progress towards this is not
expected to be linear. As a consequence, vesting
of five-year deferred shares under the CDP is
underpinned by a holistic review of performance at
the end of the five-year vesting period, allowing for
performance against the longer-term ambitions to
be considered.
The LTIP award to be granted to the CEO in FY2025
has a maximum face value of US$3.786 million,
being 200% of the CEO’s base salary at the time of
grant. The number of LTIP awards expected to be
granted to the CEO in FY2025 is 127,848 and has
been determined using the share price and US$/A$
exchange rate over the 12 months up to and including
30 June 2024. The granting of this LTIP award is
subject to the approval of shareholders at the 2024
AGM. If approved, the award will be granted following
the AGM (i.e. in or around November 2024, subject
to securities dealing considerations). The LTIP award
granted in FY2025 will use the same performance
and service conditions as the LTIP award granted in
FY2024.
LTIP awards granted to other Executive KMP during
FY2025 will be calculated on the same basis as
described above for the CEO, except that awards for
other Executive KMP will have a maximum face value
of 175% of salary.
125
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
Our remuneration framework for Non-executive Directors aligns with the Australian Securities Exchange Corporate Governance Council’s Principles and
Recommendations (4th Edition). Non-executive Directors do not have any performance-based at-risk remuneration or receive any equity awards as part of
their remuneration, therefore the totals shown below are total remuneration and total fixed fees. The maximum aggregate fees payable to Non‑executive
Directors (including the Group Chair) were approved by shareholders at the 2008 AGMs at US$3.800 million per annum. This sum includes base fees,
Committee fees and pension contributions. Travel allowances and non-monetary benefits are not included in this limit.
4.1 Remuneration framework of Non-executive Directors
The following table shows the components for Non-executive Directors’ remuneration. Non-executive Directors are not eligible to participate in any CDP
or LTIP awards.
Descriptions
Purpose and link
to strategy
Competitive fees and benefits are paid to Non-executive Directors in order to attract and retain high-quality individuals, and to provide
appropriate remuneration for the role undertaken.
Fees
The Group Chair is paid a single fee for all responsibilities. All other Non-executive Directors are paid a base fee and relevant Committee
membership fees. Committee Chairs and the Senior Independent Director are paid an additional fee to reflect their extra responsibilities.
All fee levels are reviewed annually and any changes are ordinarily effective from 1 July. Annual reviews take into account global
benchmarking and advice provided by external advisers, as required.
Fee levels reflect the size and complexity of the Group and the geographies where the Group operates. The economic environment and
the financial performance of the Group are taken into account. Consideration is also given to salary reviews across the rest of the Group.
Where the payment of pension contributions is required by law, these contributions are deducted from the Director’s overall fee entitlements.
Benefits
BHP is a global organisation and there is a considerable travel burden required of Non-executive Directors to travel to Board meetings
and site visits. Travel allowances are paid on a per trip basis.
As a consequence of our prior dual listed company structure, Non-executive Directors are required to prepare personal tax returns in
Australia and the UK, regardless of whether they reside in one or neither of those countries. They are accordingly reimbursed for the
costs of personal tax return preparation in whichever of the UK and/or Australia is not their place of residence (including payment of the
tax cost associated with the provision of the benefit).
Letters of appointment
The Board has adopted a letter of appointment that contains the terms on which Non-executive Directors will be appointed, including the basis upon
which they will be indemnified by the Group. The Board has adopted a policy under which all Non-executive Directors must seek re-election at the AGM
each year. As a result of requiring re-election each year, Non-executive Directors do not have a fixed term in their letter of appointment.
Payments on early termination or loss of office
There are no provisions in any of the Non-executive Directors’ appointment arrangements for compensation payable on early termination of their
directorship. A Non-executive Director may resign on reasonable notice. No payments are made to Non-executive Directors on loss of office.
4.2 Non-executive Directors’ remuneration in FY2024 and FY2025
The remuneration for the Non-executive Directors was paid in FY2024 and will be paid in FY2025 in accordance with the remuneration framework set out
above. Fee levels for the Group Chair and the Non-executive Directors are reviewed annually and are benchmarked against peer companies of similar
complexity, reach and scale with the assistance of external advisers (but not by the Committee-appointed independent remuneration adviser).
Following an assessment of the updated benchmarking, global market positioning and peer company relativities, a decision has been made that the
Group Chair's fee and the Non-executive Directors' base fee will increase by 4 per cent with effect from 1 July 2024. The increases are considered
appropriate given current benchmarking and the expectations, accountabilities and workloads of each of the Group Chair and Non-executive Directors.
Having conducted this review, it was determined that there would be no change to the fees for other Committee roles or other allowances.
The below table sets out the annualised total remuneration and total fixed fees for FY2024 and FY2025 (including the increases from 1 July 2024).
Levels of fees and travel allowances for Non-executive Directors (in US$)
FY2024
FY2025
Base annual fee
168,000
175,000
Plus additional fees for:
Senior Independent Director
53,000
53,000
Committee Chair:
Risk and Audit
People and Remuneration
Sustainability
Nomination and Governance
66,000
45,000
45,000
No additional fee
66,000
45,000
45,000
No additional fee
Committee membership:
Risk and Audit
People and Remuneration
Sustainability
Nomination and Governance
32,500
27,500
27,500
18,000
32,500
27,500
27,500
18,000
Travel allowance:1
In excess of 3 hours and less than 10 hours
10 hours or more
7,000
15,000
7,000
15,000
Group Chair’s fee2
925,000
962,000
1. In relation to travel for Board and shareholder meetings, the time thresholds relate to a flight time in excess of three hours to travel to the meeting location (i.e. one-way flight time). Only
one travel allowance is paid per round trip.
2. The Group Chair is paid a single fee for all responsibilities (i.e. no base annual fee or Committee fees).
4 Remuneration for Non-executive Directors
126
BHP Annual Report 2024
5.1 KMP remuneration table
The table below has been prepared in accordance with relevant accounting standards. Remuneration data for KMP are for the periods of FY2023 and
FY2024 that they were KMP. More information on the framework and operation of each element of remuneration is provided earlier in this Report.
Share-based payments
The figures included in the shaded columns of the statutory table below for share-based payments were not actually provided to the Executive KMP,
including the CEO, during FY2023 or FY2024. These amounts are calculated in accordance with accounting standards and are the amortised IFRS fair
values at grant date of equity and equity-related instruments that have been granted to the executives. For information on awards that were allocated
and vested during FY2023 and FY2024, refer to 5.2 Equity awards.
US$(‘000)
Financial
year
Base
salary/
fees1
Short-term benefits
Post-
employment
benefits
Share-based payments
Total
Annual
cash
incentive2
Non-
monetary
benefits3
Other
benefits4
Retirement
benefits5
Value
of CDP
awards2,6
Value of
LTIP
awards6
CEO
Mike Henry
FY2024
1,808
1,038
35
–
181
2,177
2,096
7,335
FY2023
1,742
1,254
7
–
174
2,107
2,206
7,490
Other Executive KMP
Edgar Basto7
FY2024
673
425
–
–
67
668
617
2,450
FY2023
975
704
2
–
98
1,030
820
3,629
Brandon Craig8
FY2024
267
173
28
378
27
33
254
1,160
David Lamont7
FY2024
673
425
1
–
67
649
641
2,456
FY2023
975
733
15
–
98
960
608
3,389
Vandita Pant8
FY2024
340
223
29
–
34
329
228
1,183
Geraldine Slattery
FY2024
1,013
592
26
297
101
1,182
1,049
4,260
FY2023
950
665
113
400
95
1,117
947
4,287
Ragnar Udd7
FY2024
665
431
48
–
67
644
575
2,430
FY2023
917
711
49
–
92
911
748
3,428
Non-executive Directors
Terry Bowen9
FY2024
78
–
–
–
7
–
–
85
FY2023
241
–
–
40
17
–
–
298
Malcolm Broomhead9
FY2023
61
–
–
15
6
–
–
82
Xiaoqun Clever-Steg
FY2024
188
–
–
77
13
–
–
278
FY2023
181
–
–
79
12
–
–
272
Ian Cockerill9
FY2024
162
–
–
46
12
–
–
220
FY2023
208
–
–
106
12
–
–
326
Gary Goldberg
FY2024
284
–
–
99
–
–
–
383
FY2023
284
–
–
101
–
–
–
385
Michelle Hinchliffe
FY2024
235
–
–
45
–
–
–
280
FY2023
186
–
–
37
6
–
–
229
Don Lindsay10
FY2024
38
–
–
–
–
–
–
38
Ken MacKenzie
FY2024
907
–
–
67
18
–
–
992
FY2023
863
–
–
63
17
–
–
943
Ross McEwan10
FY2024
51
–
–
45
4
–
–
100
John Mogford9
FY2023
63
–
–
33
–
–
–
96
Christine O’Reilly
FY2024
263
–
–
37
–
–
–
300
FY2023
268
–
–
55
–
–
–
323
Catherine Tanna
FY2024
205
–
–
44
18
–
–
267
FY2023
198
–
–
52
17
–
–
267
Dion Weisler
FY2024
205
–
–
22
18
–
–
245
FY2023
198
–
–
55
17
–
–
270
1. Base salaries and fees shown in this table reflect the amounts paid over the 12-month period from 1 July 2023 to 30 June 2024 for each Executive KMP and Non-executive Director. In FY2024, the
Executive KMP base salaries were increased from 1 September 2023 as follows: Mike Henry's to US$1.820 million, Edgar Basto's to US$1.020 million, David Lamont's to US$1.020 million, Geraldine
Slattery's to US$1.020 million and Ragnar Udd's to US$1.020 million. The other changes to Executive KMP base salaries during the year were as follows: Brandon Craig who was appointed President
Americas on 1 March 2024 on an annual salary of US$0.800 million and Vandita Pant who was appointed Chief Financial Officer on 1 March 2024 on an annual salary of US$1.020 million.
2. Annual cash incentive in this table is the cash portion of CDP awards each Executive KMP earned in respect of performance during each financial year. CDP is provided one-third in cash
and two-thirds in deferred shares (which are included in the share-based payments columns of the table). The cash portion of CDP awards is paid in September of the year following the
relevant financial year. The minimum possible value awarded to each individual is nil, the target is 240 per cent of base salary (80 per cent in cash and 160 per cent in deferred shares) and
the maximum is 360 per cent of base salary (120 per cent in cash and 240 per cent in deferred shares). For FY2024, Executive KMP earned the following CDP awards as a percentage of
the target and maximum (the remaining portion has been forfeited): Mike Henry 71.7 per cent of target and 47.8 per cent of maximum, Edgar Basto 79 per cent of target and 53 per cent of
maximum, Brandon Craig 81 per cent of target and 54 per cent of maximum, David Lamont 79 per cent of target and 53 per cent of maximum, Vandita Pant 82 per cent of target and 55 per
cent of maximum, Geraldine Slattery 73 per cent of target and 49 per cent of maximum and Ragnar Udd 81 per cent of target and 54 per cent of maximum.
3. Non-monetary benefits are non-pensionable and include items such as net leave accruals, private family health insurance, car parking, fringe benefits tax and personal tax return
preparation in required countries.
4. Other benefits are non-pensionable and for FY2024 include a one-off relocation allowance provided to Brandon Craig relating to his international relocation from Australia to Chile and one-off
reimbursement to Geraldine Slattery associated with her house sale/purchase for international relocation from the United States to Australia. The majority of the amounts disclosed for benefits
for Non-executive Directors are usually travel allowances: amounts of between US$ nil and US$105,000 for FY2024 and FY2023. For FY2024, amounts of between US$ nil and US$1,500
(US$ nil and US$3,000 for FY2023) are included in respect of tax return preparation, and amounts of between US$ nil and US$800 for FY2024 (US$ nil and US$1,400 for FY2023) are
included in respect of the reimbursement of the tax cost associated with the provision of taxable benefits.
5. Retirement benefits for each Executive KMP in FY2023 and FY2024 were 10 per cent of base salary as per the remuneration framework. Non-executive Director fees are inclusive of
minimum superannuation contributions of up to 11 per cent of remuneration for FY2024 (10.5 per cent for FY2023) in accordance with Australian superannuation legislation. No other
pension contributions were paid.
6. The IFRS fair value of CDP and LTIP awards is estimated at grant date. Refer to Financial Statements note 26 ‘Employee share ownership plans’.
7. The FY2024 remuneration reported for Edgar Basto, David Lamont and Ragnar Udd reflects services as Executive KMP up to 29 February 2024.
8. The FY2024 remuneration reported for Brandon Craig and Vandita Pant reflects services as Executive KMP from 1 March 2024.
9. The FY2024 remuneration for Terry Bowen and Ian Cockerill relates to part of the year only, as they retired from the Board on 1 November 2023 and 4 April 2024, respectively. The
FY2023 remuneration for Malcolm Broomhead and John Mogford relates to part of the year only, as they retired from the Board on 10 November 2022 and 31 October 2022, respectively.
10. The FY2024 remuneration reported for Don Lindsay and Ross McEwan relates to part of the year only, as they joined the Board on 1 May 2024 and 3 April 2024, respectively.
5 Statutory KMP remuneration and other disclosures
127
Operating and Financial Review
Overview
Additional Information
Financial Statements
Contents
Governance
5.2 Equity awards
The interests held by Executive KMP under the Group’s employee equity plans are set out in the table below. Each equity award is a right to acquire
one ordinary share in BHP Group Limited upon satisfaction of the vesting conditions. Our mandatory minimum performance requirements for securities
dealing governs and restricts dealing arrangements and the provision of shares on vesting or exercise of awards. No interests under the Group’s
employee equity plans are held by related parties of Executive KMP.
Approval from BHP’s shareholders for the issue of equity awards to the CEO under the CDP and LTIP was obtained under ASX Listing Rule 10.14 at the
2023 AGM.
DEP applies to awards provided to Executive KMP under the CDP and LTIP as detailed in 2 Executive KMP remuneration framework. No DEP is
generally payable on MAP awards previously provided to Executive KMP.
Executive KMP received or will receive awards under the CDP and LTIP. The terms and conditions of CDP and LTIP awards, including the performance
conditions, are described in 2 Executive KMP remuneration framework.
BHP senior management who are not KMP receive awards under the MAP. While no MAP awards were granted to Executive KMP after becoming KMP,
as noted in the table below, Edgar Basto, Brandon Craig, Vandita Pant, Geraldine Slattery and Ragnar Udd hold or held MAP awards that were allocated
to them prior to commencing their Executive KMP service.
Award
type
Date
of grant
At
1 July
2023
Granted
Vested
Lapsed
At
30 June
2024
Award
vesting
date1
Market price on date of:
Gain on
awards
(‘000)4
DEP on
awards
(‘000)
Grant2
Vesting3
Mike Henry
CDP
8-Nov-23
–
43,106
–
–
43,106
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
–
43,106
–
–
43,106
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
44,335
–
–
–
44,335
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
44,335
–
–
–
44,335
Aug 24
A$43.48
–
–
–
CDP
23-Nov-21
55,246
–
–
–
55,246
Aug 26
A$38.05
–
–
–
CDP
23-Nov-21
55,246
–
55,246
–
–
25 Aug 23
A$38.05
A$43.02
A$2,377
A$527
CDP
20-Oct-20
49,692
–
–
–
49,692
Aug 25
A$35.90
–
–
–
LTIP
8-Nov-23
–
125,124
–
–
125,124
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
118,853
–
–
–
118,853
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
120,099
–
–
–
120,099
Aug 26
A$38.05
–
–
–
LTIP
20-Oct-20
157,138
–
–
–
157,138
Aug 25
A$35.90
–
–
–
LTIP
20-Nov-19
172,144
–
–
–
172,144
Aug 24
A$37.24
–
–
–
LTIP
18-Dec-18
193,189
–
193,189
–
–
25 Aug 23
A$33.50
A$43.02
A$8,311
A$3,397
Edgar Basto5
CDP
8-Nov-23
–
24,201
–
–
24,201
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
–
24,201
–
–
24,201
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
21,936
–
–
–
21,936
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
21,936
–
–
–
21,936
Aug 24
A$43.48
–
–
–
CDP
23-Nov-21
30,604
–
–
–
30,604
Aug 26
A$38.05
–
–
–
CDP
23-Nov-21
30,604
–
30,604
–
–
25 Aug 23
A$38.05
A$43.02
A$1,317
A$292
LTIP
8-Nov-23
–
61,359
–
–
61,359
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
58,237
–
–
–
58,237
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
58,725
–
–
–
58,725
Aug 26
A$38.05
–
–
–
LTIP
20-Oct-20
76,835
–
–
–
76,835
Aug 25
A$35.90
–
–
–
MAP
19-May-20
31,649
–
–
–
31,649
Aug 24
A$35.05
–
–
–
MAP
19-May-20
31,649
–
31,649
–
–
25 Aug 23
A$35.05
A$43.02
A$1,362
–
Brandon Craig6
MAP
8-Dec-23
23,600
–
–
–
23,600
Aug 28
A$47.74
–
–
–
MAP
8-Dec-23
23,600
–
–
–
23,600
Aug 27
A$47.74
–
–
–
MAP
27-Sep-23
23,600
–
–
–
23,600
Aug 26
A$43.49
–
–
–
MAP
21-Sep-22
19,938
–
–
–
19,938
Aug 25
A$37.96
–
–
–
MAP
29-Sep-21
19,945
–
–
–
19,945
Aug 24
A$36.39
–
–
–
5 Statutory KMP remuneration and other disclosures continued
128
BHP Annual Report 2024
Award
type
Date
of grant
At
1 July
2023
Granted
Vested
Lapsed
At
30 June
2024
Award
vesting
date1
Market price on date of:
Gain on
awards
(‘000)4
DEP on
awards
(‘000)
Grant2
Vesting3
David Lamont5
CDP
8-Nov-23
–
25,203
–
–
25,203
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
–
25,203
–
–
25,203
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
24,775
–
–
–
24,775
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
24,775
–
–
–
24,775
Aug 24
A$43.48
–
–
–
CDP
23-Nov-21
18,009
–
–
–
18,009
Aug 26
A$38.05
–
–
–
CDP
23-Nov-21
18,009
–
18,009
–
–
25 Aug 23
A$38.05
A$43.02
A$775
A$172
LTIP
8-Nov-23
–
61,359
–
–
61,359
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
58,237
–
–
–
58,237
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
58,725
–
–
–
58,725
Aug 26
A$38.05
–
–
–
LTIP
1-Dec-20
76,835
–
–
–
76,835
Aug 25
A$38.56
–
–
–
Vandita Pant6
CDP
8-Nov-23
22,682
–
–
–
22,682
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
22,682
–
–
–
22,682
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
17,834
–
–
–
17,834
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
17,834
–
–
–
17,834
Aug 27
A$43.48
–
–
–
CDP
23-Nov-21
20,347
–
–
–
20,347
Aug 26
A$38.05
–
–
–
LTIP
8-Nov-23
45,632
–
–
–
45,632
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
43,296
–
–
–
43,296
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
34,440
–
–
–
34,440
Aug 26
A$38.05
–
–
–
MAP
20-Oct-20
27,731
–
–
–
27,731
Aug 25
A$35.90
–
–
–
MAP
20-Nov-19
26,197
–
–
–
26,197
Aug 24
A$37.24
–
–
–
Geraldine Slattery
CDP
8-Nov-23
–
22,870
–
–
22,870
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
–
22,870
–
–
22,870
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
23,784
–
–
–
23,784
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
23,784
–
–
–
23,784
Aug 24
A$43.48
–
–
–
CDP
23-Nov-21
28,258
–
–
–
28,258
Aug 26
A$38.05
–
–
–
CDP
23-Nov-21
28,258
–
28,258
–
–
25 Aug 23
A$38.05
A$43.02
A$1,216
A$269
CDP
20-Oct-20
28,562
–
–
–
28,562
Aug 25
A$35.90
–
–
–
LTIP
8-Nov-23
–
61,359
–
–
61,359
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
58,237
–
–
–
58,237
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
52,543
–
–
–
52,543
Aug 26
A$38.05
–
–
–
LTIP
20-Oct-20
60,660
–
–
–
60,660
Aug 25
A$35.90
–
–
–
LTIP
20-Nov-19
117,371
–
–
–
117,371
Aug 24
A$37.24
–
–
–
MAP
21-Feb-19
31,965
–
31,965
–
–
25 Aug 23
A$34.83
A$43.02
A$1,375
–
Ragnar Udd5
CDP
8-Nov-23
–
24,452
–
–
24,452
Aug 28
A$44.70
–
–
–
CDP
8-Nov-23
–
24,452
–
–
24,452
Aug 25
A$44.70
–
–
–
CDP
22-Nov-22
22,167
–
–
–
22,167
Aug 27
A$43.48
–
–
–
CDP
22-Nov-22
22,167
–
–
–
22,167
Aug 24
A$43.48
–
–
–
CDP
23-Nov-21
18,415
–
–
–
18,415
Aug 26
A$38.05
–
–
–
CDP
23-Nov-21
18,415
–
18,415
–
–
25 Aug 23
A$38.05
A$43.02
A$792
A$176
LTIP
8-Nov-23
–
61,359
–
–
61,359
Aug 28
A$44.70
–
–
–
LTIP
22-Nov-22
55,266
–
–
–
55,266
Aug 27
A$43.48
–
–
–
LTIP
23-Nov-21
52,543
–
–
–
52,543
Aug 26
A$38.05
–
–
–
LTIP
2-Nov-20
68,748
–
–
–
68,748
Aug 25
A$33.81
–
–
–
MAP
21-Aug-20
23,790
–
–
–
23,790
Aug 24
A$38.36
–
–
–
MAP
21-Aug-20
23,790
–
23,790
–
–
25 Aug 23
A$38.36
A$43.02
A$1,023
–
1. Where the vesting date is not yet known, the estimated vesting month is shown. Where awards lapsed (if any), the lapse date is shown. If the vesting conditions are met, awards will vest on
or as soon as practicable after the first non-prohibited period date occurring after 30 June of the preceding year, subject to the terms of the award. The year of vesting is the second (CDP
two-year deferred share awards), third (MAP), fourth (MAP) or fifth (MAP, CDP five-year deferred share awards and LTIP) financial year after grant. All awards are conditional awards
and have no exercise period or exercise price; instead, ordinary fully paid shares are automatically allocated upon vesting (subject to a discretion to provide cash in lieu). Where vesting
conditions are not met, the conditional awards will immediately lapse.
2. The market price shown is the closing price of BHP shares on the relevant date of grant. No price is payable by the individual to receive a grant of awards. The IFRS fair value of the CDP
and LTIP awards granted in FY2024 at the grant date of 8 November 2023 are as follows: CDP – A$45.95 and LTIP – A$30.33.
3. The market price shown is the closing price of BHP shares on the relevant date of vest.
4. The gain on awards is calculated using the market price on date of vesting or exercise (as applicable) less any exercise price payable. The amounts that vested for the awards during
FY2024 are as follows: CDP – 100 per cent vested; LTIP – 100 per cent vested; MAP – 100 per cent vested.
5. Awards shown as held by Edgar Basto, David Lamont and Ragnar Udd at 30 June 2024 are their balances at the date they ceased being KMP, being 29 February 2024.
6. The opening balances of awards for Brandon Craig and Vandita Pant reflect their holdings on the date that each became KMP, being 1 March 2024.
129
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Financial Statements
Contents
Governance
5.3 Estimated value range of equity awards
The current face value (and estimate of the maximum possible total value) of equity awards allocated during FY2024 and yet to vest are the awards as
set out in the previous table multiplied by the current share price of BHP Group Limited. The minimum possible total value of the awards is nil. The actual
value that may be received by participants in the future cannot be determined as it is dependent on and therefore fluctuates with the share price of BHP
Group Limited at the date that any particular award vests or is exercised.
Five-year share price, dividend and earnings history
The table below provides the five-year share price history for BHP Group Limited, history of dividends paid and the Group’s earnings.
FY2024
FY2023
FY2022
FY2021
FY2020
Share price at beginning of year (A$)
45.26
40.05
48.22
35.82
41.68
Share price at end of year (A$)
42.68
44.99
41.25
48.57
35.82
Dividends paid (A$)
2.35
3.92
10.181
2.07
2.13
Attributable profit (US$ million, as reported)
7,897
12,921
30,900
11,304
7,956
1 The FY2022 dividends paid includes A$5.38 in respect of the in-specie dividend associated with the merger of the Petroleum business with Woodside.
The highest and lowest closing share price during FY2024 were A$50.72 and A$41.95, respectively.
5.4 Ordinary shareholdings and transactions
The number of ordinary shares in BHP Group Limited held directly, indirectly or beneficially by each individual (including shares held in the name of all
close members of the Director’s or Executive KMP’s family and entities over which either the Director or Executive KMP or the family member has directly
or indirectly, control, joint control or significant influence) is shown below. No shares are held nominally by any KMP or their related parties. These are
ordinary shares held without performance conditions or restrictions and are included in MSR calculations for each individual.
Held at
1 July 2023
Purchased
Received as
remuneration1
Sold
Held at
30 June 2024
Mike Henry
677,218
–
248,435
515,652
410,001
Edgar Basto2
146,806
–
62,253
22,560
186,499
Brandon Craig3
25,665
–
–
–
25,665
David Lamont2
86,235
–
21,932
45,000
63,167
Vandita Pant3
170,688
–
–
–
170,688
Geraldine Slattery4
164,088
–
60,223
29,300
195,011
Ragnar Udd2
131,559
–
42,205
42,205
131,559
Terry Bowen5
11,000
–
–
–
11,000
Xiaoqun Clever-Steg
8,539
–
–
–
8,539
Ian Cockerill5
14,299
–
–
–
14,299
Gary Goldberg4
16,000
2,000
–
–
18,000
Michelle Hinchliffe
8,508
1,599
–
–
10,107
Don Lindsay6
–
–
–
–
–
Ken MacKenzie
58,446
–
–
–
58,446
Ross McEwan6
–
–
–
–
–
Christine O’Reilly
9,420
–
–
–
9,420
Catherine Tanna
10,400
–
–
–
10,400
Dion Weisler
7,544
–
–
–
7,544
1. Includes DEP in the form of shares on equity awards vesting, where applicable, as disclosed in 5.2 Equity awards.
2. Shares shown as held by Edgar Basto, David Lamont and Ragnar Udd at 30 June 2024 are their balances at the date they ceased being KMP on 29 February 2024.
3. The opening balances for Brandon Craig and Vandita Pant reflect their shareholdings on the date that each became KMP being 1 March 2024.
4. The following BHP Group Limited shares were held in the form of American Depositary Shares: 2,042 for Geraldine Slattery and 9,000 for Gary Goldberg.
5. Shares shown as held by Terry Bowen and Ian Cockerill at 30 June 2024 are their balances at the date of their retirement from the Board on 1 November 2023 and 4 April 2024, respectively.
6. The opening balances for Don Lindsay and Ross McEwan reflect their shareholdings on the date they became Non-executive Directors being 1 May 2024 and 3 April 2024, respectively.
5 Statutory KMP remuneration and other disclosures continued
130
BHP Annual Report 2024
5.5 Prohibition on hedging of BHP shares and
equity instruments
The Executive KMP may not use unvested BHP equity awards as collateral
or hedge the value of any unvested BHP equity awards or the value of
shares and securities held as part of meeting the MSR.
Any securities that have vested and are no longer subject to restrictions,
or not held as part of meeting the MSR, may be subject to hedging
arrangements or used as collateral, provided that prior consent is obtained.
5.6 Share ownership guidelines and the MSR
The share ownership guidelines and the MSR help to ensure the interests
of Directors, executives and shareholders remain aligned.
The CEO and other Executive KMP are expected to grow their holdings to
the MSR from the scheduled vesting of their employee awards over time.
The MSR is tested at the time that shares are to be sold. Shares may be
sold to satisfy tax obligations arising from the granting, holding, vesting,
exercise or sale of the employee awards or the underlying shares whether
the MSR is satisfied at that time or not.
For FY2024:
– The MSR for the CEO was five times annual pre-tax base salary. At the
end of FY2024, the CEO met the MSR.
– The MSR for other Executive KMP was three times annual pre-tax
base salary. At the end of FY2024, the other Executive KMP met the
MSR except for Brandon Craig, as he was appointed to the ELT and as
Executive KMP on 1 March 2024.
– No Executive KMP sold or purchased shares during FY2024, other than
sales to satisfy taxation obligations, except for Mike Henry, who sold
shares due to marital divorce, including reorganisation of holdings, and
Ragnar Udd, who sold shares in order to partially fund the purchase of a
residential dwelling.
A two-year post-retirement shareholding requirement for the CEO applies
from the date of retirement, which will be the lower of the CEO’s MSR or
the CEO’s actual shareholding at the date of retirement.
Subject to securities dealing constraints, Non-executive Directors have
agreed to apply at least 25 per cent of their remuneration (base fees plus
Committee fees) to the purchase of BHP shares until they achieve an MSR
equivalent in value to one year of remuneration (base fees plus Committee
fees). Thereafter, they must maintain at least that level of shareholding
throughout their tenure. At the end of FY2024, each Non-executive Director
met the MSR except for Don Lindsay and Ross McEwan, as they joined the
Board on 1 May 2024 and 3 April 2024, respectively.
5.7 Transactions with KMP
During the financial year, there were no transactions between the
Group and its subsidiaries and KMP (including their related parties)
(2023: US$ nil; 2022: US$ nil). There were no amounts payable by or loans
with KMP (including their related parties) at 30 June 2024 (2023: US$ nil;
2022: US$ nil).
A number of KMP hold or have held positions in other companies
(i.e. personally related entities) where it is considered they control or
significantly influence the financial or operating policies of those entities.
There have been no transactions with those entities and no amounts
were owed by the Group to personally related entities or any other related
parties (2023: US$ nil; 2022: US$ nil).
This Remuneration Report was approved by the Board on 27 August 2024
and signed on its behalf by:
Christine O’Reilly
Chair, People and Remuneration Committee
27 August 2024
131
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Overview
Additional Information
Financial Statements
Contents
Governance
Financial Statements
1
Consolidated Financial Statements
1.1
Consolidated Income Statement
133
1.2 Consolidated Statement of Comprehensive Income
133
1.3 Consolidated Balance Sheet
134
1.4 Consolidated Cash Flow Statement
135
1.5 Consolidated Statement of Changes in Equity
136
1.6
Notes to the Financial Statements
139
2
Consolidated entity disclosure statement
194
3
Directors’ declaration
198
4
Lead Auditor’s Independence Declaration under
Section 307C of the Australian Corporations Act 2001
199
5
Independent auditor’s report to the members of
BHP Group Limited
200
Notes to the Financial Statements
Performance
1
Segment reporting
139
2
Revenue
141
3
Exceptional items
141
4
Significant events – Samarco dam failure
144
5
Expenses and other income
149
6
Income tax expense
150
7
Earnings per share
152
Working capital
8
Trade and other receivables
153
9
Trade and other payables
153
10
Inventories
153
Resource assets
11
Property, plant and equipment
154
12
Intangible assets
156
13
Impairment of non-current assets
156
14
Deferred tax balances
159
15
Closure and rehabilitation provisions
160
16
Climate change
162
Capital structure
17
Share capital
166
18
Other equity
166
19
Dividends
167
20
Provisions for dividends and other liabilities
168
Financial management
21
Net debt
169
22
Leases
171
23
Net finance costs
173
24
Financial risk management
173
Employee matters
25
Key management personnel
179
26
Employee share ownership plans
179
27
Employee benefits, restructuring and post-retirement
employee benefits provisions
181
Group and related party information
28
Discontinued operations
183
29
Business combinations
184
30
Subsidiaries
185
31
Investments accounted for using the equity method
185
32
Interests in joint operations
188
33
Related party transactions
188
Unrecognised items and uncertain events
34
Contingent liabilities
189
35
Subsequent events
189
Other items
36
Auditor’s remuneration
190
37
BHP Group Limited
190
38
Deed of Cross Guarantee
191
39
New and amended accounting standards and
interpretations and changes to accounting policies
193
132
BHP Annual Report 2024
1.1 Consolidated Income Statement
for the year ended 30 June 2024
Notes
2024
US$M
2023
US$M
2022
US$M
Continuing operations
Revenue
2
55,658
53,817
65,098
Other income
5
1,285
394
1,398
Expenses excluding net finance costs
5
(36,750)
(31,873)
(32,371)
(Loss)/profit from equity accounted investments, related impairments and expenses
31
(2,656)
594
(19)
Profit from operations
17,537
22,932
34,106
Financial expenses
(2,198)
(2,060)
(1,050)
Financial income
709
529
81
Net finance costs
23
(1,489)
(1,531)
(969)
Profit before taxation
16,048
21,401
33,137
Income tax expense
(6,015)
(6,691)
(10,430)
Royalty-related taxation (net of income tax benefit)
(432)
(386)
(307)
Total taxation expense
6
(6,447)
(7,077)
(10,737)
Profit after taxation from Continuing operations
9,601
14,324
22,400
Discontinued operations
Profit/(loss) after taxation from Discontinued operations
28
–
–
10,655
Profit after taxation from Continuing and Discontinued operations
9,601
14,324
33,055
Attributable to non-controlling interests
1,704
1,403
2,155
Attributable to BHP shareholders
7,897
12,921
30,900
Basic earnings per ordinary share (cents)
7
155.8
255.2
610.6
Diluted earnings per ordinary share (cents)
7
155.5
254.7
609.3
Basic earnings from Continuing operations per ordinary share (cents)
7
155.8
255.2
400.0
Diluted earnings from Continuing operations per ordinary share (cents)
7
155.5
254.7
399.2
The accompanying notes form part of these Financial Statements.
1.2 Consolidated Statement of Comprehensive Income
for the year ended 30 June 2024
Notes
2024
US$M
2023
US$M
2022
US$M
Profit after taxation from Continuing and Discontinued operations
9,601
14,324
33,055
Other comprehensive income
Items that may be reclassified subsequently to the income statement:
Hedges:
(Losses)/gains taken to equity
(33)
95
(914)
Losses/(gains) transferred to the income statement
49
(148)
881
Loss transferred to initial carrying amount of hedged item
–
35
–
Exchange fluctuations on translation of foreign operations taken to equity
–
–
(5)
Exchange fluctuations on translation of foreign operations transferred to income statement
–
–
(54)
Tax recognised within other comprehensive income
6
(5)
5
10
Total items that may be reclassified subsequently to the income statement
11
(13)
(82)
Items that will not be reclassified to the income statement:
Re-measurement gains/(losses) on pension and medical schemes
41
(18)
24
Equity investments held at fair value
(30)
17
(8)
Tax recognised within other comprehensive income
6
(13)
7
(9)
Total items that will not be reclassified to the income statement
(2)
6
7
Total other comprehensive income/(loss)
9
(7)
(75)
Total comprehensive income
9,610
14,317
32,980
Attributable to non-controlling interests
1,708
1,400
2,160
Attributable to BHP shareholders
7,902
12,917
30,820
The accompanying notes form part of these Financial Statements.
1 Consolidated Financial Statements
133
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
1.3 Consolidated Balance Sheet
as at 30 June 2024
Notes
2024
US$M
2023
US$M
ASSETS
Current assets
Cash and cash equivalents
21
12,501
12,428
Trade and other receivables
8
5,169
4,594
Other financial assets
24
381
470
Inventories
10
5,828
5,220
Current tax assets
314
508
Other
145
131
Total current assets
24,338
23,351
Non-current assets
Trade and other receivables
8
170
148
Other financial assets
24
1,229
1,115
Inventories
10
1,211
1,403
Property, plant and equipment
11
71,629
71,818
Intangible assets
12
1,718
1,610
Investments accounted for using the equity method
31
1,662
1,620
Deferred tax assets
14
67
56
Other
338
175
Total non-current assets
78,024
77,945
Total assets
102,362
101,296
LIABILITIES
Current liabilities
Trade and other payables
9
6,719
6,296
Interest bearing liabilities
21
2,084
7,173
Other financial liabilities
24
512
402
Current tax payable
884
611
Provisions
4,15,20,27
4,007
4,514
Deferred income
90
47
Total current liabilities
14,296
19,043
Non-current liabilities
Trade and other payables
9
45
4
Interest bearing liabilities
21
18,634
15,172
Other financial liabilities
24
1,759
2,157
Non-current tax payable
40
68
Deferred tax liabilities
14
3,332
4,299
Provisions
4,15,20,27
15,088
11,973
Deferred income
48
50
Total non-current liabilities
38,946
33,723
Total liabilities
53,242
52,766
Net assets
49,120
48,530
EQUITY
Share capital
17
4,899
4,737
Treasury shares
17
(36)
(41)
Reserves
18
(15)
13
Retained earnings
39,963
39,787
Total equity attributable to BHP shareholders
44,811
44,496
Non-controlling interests
18
4,309
4,034
Total equity
49,120
48,530
The accompanying notes form part of these Financial Statements.
The Financial Statements were approved by the Board of Directors on 27 August 2024 and signed on its behalf by:
Ken MacKenzie
Mike Henry
Chair
Chief Executive Officer
1 Consolidated Financial Statements continued
134
BHP Annual Report 2024
1.4 Consolidated Cash Flow Statement
for the year ended 30 June 2024
Notes
2024
US$M
2023
US$M
2022
US$M
Operating activities
Profit before taxation from Continuing operations
16,048
21,401
33,137
Adjustments for:
Depreciation and amortisation expense
5,295
5,061
5,683
Impairments of property, plant and equipment, financial assets and intangibles
3,890
75
515
Net finance costs
1,489
1,531
969
Loss/(profit) from equity accounted investments, related impairments and expenses
2,656
(594)
19
Other
(243)
546
(350)
Changes in assets and liabilities:
Trade and other receivables
(290)
867
(703)
Inventories
(530)
(44)
(865)
Trade and other payables
(27)
(1,086)
727
Provisions and other assets and liabilities
(469)
131
(248)
Cash generated from operations
27,819
27,888
38,884
Dividends received
397
347
1,018
Interest received
724
545
58
Interest paid
(1,680)
(1,090)
(657)
Proceeds of cash management related instruments
361
331
378
Net income tax and royalty-related taxation refunded
547
232
105
Net income tax and royalty-related taxation paid
(7,503)
(9,552)
(10,501)
Net operating cash flows from Continuing operations
20,665
18,701
29,285
Net operating cash flows from Discontinued operations
28
–
–
2,889
Net operating cash flows
20,665
18,701
32,174
Investing activities
Purchases of property, plant and equipment
(8,816)
(6,733)
(5,855)
Exploration and evaluation expenditure
(457)
(350)
(256)
Exploration and evaluation expenditure expensed and included in operating cash flows
399
294
199
Investment in subsidiaries, operations and joint operations, net of cash
29
–
(5,868)
–
Net investment and funding of equity accounted investments
(701)
(557)
(266)
Proceeds from sale of assets
149
444
221
Proceeds from sale of subsidiaries, operations and joint operations net of their cash
1,072
82
1,255
Other investing
(408)
(377)
(271)
Net investing cash flows from Continuing operations
(8,762)
(13,065)
(4,973)
Net investing cash flows from Discontinued operations
28
–
–
(904)
Net cash completion payment on merger of Petroleum with Woodside
28
–
–
(683)
Cash and cash equivalents disposed on merger of Petroleum with Woodside
28
–
–
(399)
Net investing cash flows
(8,762)
(13,065)
(6,959)
Financing activities
Proceeds from interest bearing liabilities
5,091
8,182
1,164
Settlements of debt related instruments
(321)
(677)
–
Repayment of interest bearing liabilities
(7,327)
(3,289)
(3,358)
Distributions to non-controlling interests
(13)
–
–
Purchase of shares by Employee Share Ownership Plan (ESOP) Trusts
–
(88)
(149)
Dividends paid
(7,675)
(13,268)
(17,851)
Dividends paid to non-controlling interests
(1,424)
(1,175)
(2,540)
Net financing cash flows from Continuing operations
(11,669)
(10,315)
(22,734)
Net financing cash flows from Discontinued operations
28
–
–
(33)
Net financing cash flows
(11,669)
(10,315)
(22,767)
Net increase/(decrease) in cash and cash equivalents from Continuing operations
234
(4,679)
1,578
Net increase in cash and cash equivalents from Discontinued operations
–
–
1,952
Net cash completion payment on merger of Petroleum with Woodside
–
–
(683)
Cash and cash equivalents disposed on merger of Petroleum with Woodside
–
–
(399)
Cash and cash equivalents, net of overdrafts, at the beginning of the financial year
12,423
17,236
15,246
Foreign currency exchange rate changes on cash and cash equivalents
(159)
(134)
(458)
Cash and cash equivalents, net of overdrafts, at the end of the financial year
21
12,498
12,423
17,236
The accompanying notes form part of these Financial Statements.
135
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Overview
Additional Information
Governance
Contents
Financial Statements
1.5 Consolidated Statement of Changes in Equity
for the year ended 30 June 2024
Attributable to BHP shareholders
BHP Group Limited
US$M
Share
capital
Treasury
shares
Reserves
Retained
earnings
Total equity
attributable
to BHP
shareholders
Non-
controlling
interests
Total
equity
Balance as at 1 July 2023
4,737
(41)
13
39,787
44,496
4,034
48,530
Total comprehensive income
–
–
(18)
7,920
7,902
1,708
9,610
Transactions with owners:
Shares issued
162
(162)
–
–
–
–
–
Purchase of shares by ESOP Trusts
–
–
–
–
–
–
–
Employee share awards exercised net of employee contributions net of tax
–
167
(134)
(33)
–
–
–
Vested employee share awards that have lapsed, been cancelled or forfeited
–
–
(1)
1
–
–
–
Accrued employee entitlement for unexercised awards net of tax
–
–
129
–
129
–
129
Dividends
–
–
–
(7,712)
(7,712)
(1,424)
(9,136)
Distribution to non-controlling interests
–
–
(4)
–
(4)
(9)
(13)
Balance as at 30 June 2024
4,899
(36)
(15)
39,963
44,811
4,309
49,120
Balance as at 1 July 2022
4,638
(31)
12
40,338
44,957
3,809
48,766
Total comprehensive income
–
–
4
12,913
12,917
1,400
14,317
Transactions with owners:
Shares issued
99
(99)
–
–
–
–
–
Purchase of shares by ESOP Trusts
–
(88)
–
–
(88)
–
(88)
Employee share awards exercised net of employee contributions net of tax
–
177
(132)
(45)
–
–
–
Vested employee share awards that have lapsed, been cancelled or forfeited
–
–
(1)
1
–
–
–
Accrued employee entitlement for unexercised awards net of tax
–
–
130
–
130
–
130
Dividends
–
–
–
(13,420)
(13,420)
(1,175)
(14,595)
Balance as at 30 June 2023
4,737
(41)
13
39,787
44,496
4,034
48,530
Attributable to BHP shareholders
Share capital
Treasury shares
US$M
BHP
Group
Limited
BHP
Group
Plc
BHP
Group
Limited
BHP
Group
Plc
Reserves
Retained
earnings
Total equity
attributable
to BHP
shareholders
Non-
controlling
interests
Total
equity
Balance as at 1 July 2021
1,111
1,057
(32)
(1)
2,350
46,779
51,264
4,341
55,605
Total comprehensive income
–
–
–
–
(90)
30,910
30,820
2,160
32,980
Transactions with owners:
BHP Group Limited shares issued
172
–
(172)
–
–
–
–
–
–
Purchase of shares by ESOP Trusts
–
–
(148)
(1)
–
–
(149)
–
(149)
Employee share awards exercised net
of employee contributions net of tax
–
–
321
2
(207)
(116)
–
–
–
Vested employee share awards that have
lapsed, been cancelled or forfeited
–
–
–
–
(30)
30
–
–
–
Accrued employee entitlement for
unexercised awards net of tax
–
–
–
–
143
–
143
–
143
Corporate structure unification
3,355
(1,057)
–
–
(2,298)
–
–
–
–
Dividends
–
–
–
–
–
(17,720)
(17,720)
(2,540)
(20,260)
In specie dividend on merger of
Petroleum with Woodside
–
–
–
–
–
(19,559)
(19,559)
–
(19,559)
Divestment of subsidiaries, operations
and joint operations
–
–
–
–
–
–
–
(157)
(157)
Transfers within equity on divestment of
subsidiaries, operations and joint operations
–
–
–
–
(14)
14
–
–
–
Equity contributed net of tax
–
–
–
–
158
–
158
5
163
Balance as at 30 June 2022
4,638
–
(31)
–
12
40,338
44,957
3,809
48,766
The accompanying notes form part of these Financial Statements.
1 Consolidated Financial Statements continued
136
BHP Annual Report 2024
Basis of preparation
The Consolidated Financial Statements (Financial Statements) comprise
BHP Group Limited (BHP or the Company) together with its controlled
entities (Group) for the year ended 30 June 2024. BHP Group Limited,
incorporated and domiciled in Australia, is a for-profit company limited by
shares which are publicly traded on the Australian Securities Exchange.
BHP Group Limited also has an international secondary listing on the
London Stock Exchange (LSE), a secondary listing on the Johannesburg
Stock Exchange and is listed on the New York Stock Exchange (NYSE) in
the United States.
Prior to 31 January 2022, BHP Group Limited and BHP Group Plc, an
incorporated UK-listed company, operated together as a single-for-profit
economic entity under a Dual Listed Company (DLC) structure comprising
a common Board of Directors, unified management structure and joint
objectives. On 31 January 2022, BHP unified its corporate structure under
BHP Group Limited.
Directors of BHP have included information in the Financial Statements
they deem to be material and relevant to the understanding of the
Financial Statements. Disclosure may be considered material and relevant
if the dollar amount is significant due to its size or nature, or the information
is important to understand the:
– Group’s current year results
– impact of significant changes in the Group’s business or
– aspects of the Group’s operations that are important to
future performance
The Board of Directors resolved to authorise the issue of the financial
report on 27 August 2024.
Basis of preparation and measurement
The Group’s Financial Statements as at and for the year ended 30 June 2024:
– are a consolidated general purpose financial report
– have been prepared in accordance with the requirements of:
– the Australian Corporations Act 2001 (Corporations Act 2001)
– Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board
(AASB) and International Financial Reporting Standards as
issued by the International Accounting Standards Board (IASB)
(collectively referred to as IFRS)
– are prepared on a going concern basis as the Directors:
– have made an assessment of the Group’s ability to continue as a
going concern for the 12 months from the date of this report
– consider it appropriate to adopt the going concern basis of accounting
in preparing the Group’s Financial Statements
– measure items on the basis of historical cost principles, except for the
following items:
– derivative financial instruments and certain other financial assets and
liabilities, which are carried at fair value
– non-current assets or disposal groups that are classified as
held-for-sale or held-for-distribution, which are measured at the lower
of carrying amount and fair value less costs to sell
– include material accounting policies in the notes to the Financial
Statements, specifically where accounting policy choices have been
made in relation to the recognition and measurement basis used and
are relevant to an understanding of the Financial Statements
– apply a presentation currency of US dollars, consistent with the
predominant functional currency of the Group’s operations. Amounts are
rounded to the nearest million dollars, unless otherwise stated, in
accordance with ASIC (Rounding in Financial/Directors’ Reports)
Instrument 2016/191
– present reclassified comparative information where required for
consistency with the current year’s presentation
– adopt all new and amended standards and interpretations under IFRS
that are mandatory for application in periods beginning on 1 July 2023.
None had a significant impact on the Financial Statements. Refer note
39 ‘New and amended accounting standards and interpretations and
changes to accounting policies’ for details
– have not early adopted any standards and interpretations that have been
issued or amended but are not yet effective, other than as outlined in
note 39 ‘New and amended accounting standards and interpretations
and changes to accounting policies’
The accounting policies are consistently applied by all entities included
in the Financial Statements.
In assessing the appropriateness of the going concern assumption
over the going concern period, management has stress tested BHP’s
most recent financial projections to incorporate a range of potential
future outcomes by considering BHP’s principal risks. The Group’s
financial forecasts, including downside commodity price and production
scenarios, demonstrate that the Group believes that it has sufficient
financial resources to meet its obligations as they fall due throughout the
going concern period. As such, the Financial Statements continue to be
prepared on the going concern basis.
Principles of consolidation
A list of significant entities in the Group, including subsidiaries, joint
arrangements and associates at 30 June 2024 is contained in note 30
‘Subsidiaries’, note 31 ‘Investments accounted for using the equity method’
and note 32 ‘Interests in joint operations’.
Subsidiaries: The Financial Statements of the Group include the
consolidation of BHP Group Limited (the Company or parent entity) and
its subsidiaries, being the entities controlled by the parent entity during the
year (and prior to 31 January 2022, BHP Group Plc and its subsidiaries
while the DLC was in effect). Control exists where the Group:
– has power over the investee
– is exposed to, or has rights to, variable returns from its involvement
with the entity
– has the ability to affect those returns through its power to direct the
activities of the entity
The ability to approve the operating and capital budget of an entity and
the ability to appoint key management personnel are decisions that
demonstrate that the Group has the existing rights to direct the relevant
activities of an entity.
The results of subsidiaries acquired or disposed of during the year are
included in profit or loss from the date the Company gains control until the
date when the Company ceases to control the subsidiary. When the Group
loses control of a subsidiary, the gain or loss on disposal is recognised in
profit or loss.
Where the Group’s interest is less than 100 per cent, the interest
attributable to outside shareholders is reflected in non-controlling interests.
Changes in the Group’s interests in subsidiaries that do not result in a
loss of control are accounted for as equity transactions. The carrying
amount of the Group’s interests and the non-controlling interests are
adjusted to reflect the changes in their relative interests in the subsidiaries.
Any difference between the amount by which the non-controlling interests
are adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to the owners of the Company.
The financial information of subsidiaries is prepared for the same reporting
period as the Group. The acquisition method of accounting is used to
account for the Group’s business combinations.
Joint arrangements: The Group undertakes a number of business
activities through joint arrangements, which exist when two or more
parties have joint control. Joint arrangements are classified as either
joint operations or joint ventures, based on the contractual rights and
obligations between the parties to the arrangement:
– Joint operations: A joint operation is an arrangement in which the Group
shares joint control, primarily via contractual arrangements with other
parties. In a joint operation, the Group has rights to the underlying
assets and obligations for the liabilities relating to the arrangement.
This includes situations where the parties benefit from the joint activity
through a share of the output, rather than by receiving a share of the
results of trading. In relation to the Group’s interest in a joint operation,
the Group recognises: its assets and liabilities, including its share of
any assets and liabilities held or incurred jointly; revenue from the sale
of its share of the output and its share of any revenue generated from
the sale of the output by the joint operation; and its expenses including
its share of expenses incurred jointly. All such amounts are allocated
in accordance with the terms of the arrangement, which is usually in
proportion to the Group’s interest in the joint operation.
The Group accounts for the assets, liabilities, revenue and expenses
relating to its interest in a joint operation in accordance with the IFRS
Standards applicable to the particular assets, liabilities, revenue
and expenses.
137
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
1 Consolidated Financial Statements continued
– Joint ventures: A joint venture is a joint arrangement in which the parties that share joint control have rights to the net assets of the arrangement.
A separate vehicle, not the parties, will have the rights to the assets and obligations for the liabilities relating to the arrangement. More than an
insignificant share of output from a joint venture is sold to third parties, which indicates the joint venture is not dependent on the parties to the
arrangement for funding, nor do the parties have an obligation for the liabilities of the arrangement. Joint ventures are accounted for using the equity
method as outlined below.
Associates: The Group accounts for investments in associates using the equity method as outlined below. An entity is considered an associate where
the Group is deemed to have significant influence but not control or joint control. Significant influence is presumed to exist where the Group:
– has over 20 per cent but less than 50 per cent of the voting rights of an entity, unless it can be clearly demonstrated that this is not the case or
– holds less than 20 per cent of the voting rights of an entity; however, has the power to participate in the financial and operating policy decisions
affecting the entity
The Group uses the term ‘equity accounted investments’ to refer to joint ventures and associates collectively.
Under the equity method, an investment in an associate or a joint venture is recognised initially at cost and adjusted thereafter to recognise the Group’s
share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group’s share of losses of an associate or a joint
venture exceeds the Group’s interest in that associate or joint venture, the Group discontinues recognising its share of further losses. Additional losses are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture.
Foreign currencies
Transactions related to the Group’s worldwide operations are conducted in a number of foreign currencies. The majority of the subsidiaries, joint
arrangements and associates within each of the operations have assessed US dollars as the functional currency. Subsidiaries, joint arrangements and
associates that have functional currencies other than US dollars are not material to the financial performance or the financial position of the Group.
Foreign exchange gains and losses are recognised in the income statement, except for qualifying cash flow hedges (which are deferred to equity) and
foreign exchange gains or losses on foreign currency provisions for site closure and rehabilitation costs (which are capitalised in property, plant and
equipment for operating sites).
Significant judgements and estimates
The Group’s accounting policies require the
use of judgement, estimates and assumptions.
All judgements, estimates and assumptions
are based on the most current facts and
circumstances and are reassessed on an
ongoing basis. Actual results in future reporting
periods may differ for these estimates under
different assumptions and conditions.
Further information regarding the Group’s
significant judgements and key estimates and
assumptions, being those where changes
may materially affect financial results and
the carrying amount of assets and liabilities
to be reported in the next reporting period,
are embedded within the following notes:
Note
4
Significant events – Samarco dam failure
6
Taxation
11
Overburden removal costs
11
Depreciation of property, plant and equipment
13
Impairment of non-current assets
15
Closure and rehabilitation provisions
22
Leases
29 Business combinations
Additional information including sensitivity
analysis, where appropriate, has been
provided in the relevant notes to enhance an
understanding of the impact of key estimates
and assumptions on the Group’s financial
position and performance.
Reserve estimates
Reserves are estimates of the amount of
product that can be demonstrated to be able
to be economically and legally extracted from
the Group’s properties. In order to estimate
reserves, assumptions are required about
a range of technical and economic factors,
including quantities, qualities, production
techniques, recovery efficiency, production
and transport costs, commodity supply and
demand, commodity and carbon prices and
exchange rates.
Estimating the quantity and/or quality of
reserves requires the size, shape and depth
of ore bodies to be determined by analysing
geological data, such as drilling samples
and geophysical survey interpretations.
Economic assumptions used to estimate
reserves change from period-to-period as
additional technical and operational data
is generated. This process may require
complex and difficult geological judgements
to interpret the data.
Reserve impact on financial reporting
Estimates of reserves may change from
period-to-period as the economic assumptions
used to estimate reserves change and
additional geological data is generated
during the course of operations. Changes in
reserves may affect the Group’s financial
results and financial position in a number of
ways, including:
– asset carrying values may be affected
due to changes in estimated future
production levels
– depreciation, depletion and amortisation
charged to the income statement may
change where such charges are determined
on the units of production basis, or where
the useful economic lives of assets change
– overburden removal costs recorded on the
balance sheet or charged to the income
statement may change due to changes in
stripping ratios or the units of production
basis of depreciation
– closure and rehabilitation provisions may
change where changes in estimated
reserves affect expectations about the
timing or cost of these activities
– the carrying amount of deferred tax assets
may change due to changes in estimates of
the likely recovery of the tax benefits
138
BHP Annual Report 2024
1.6 Notes to the Financial Statements
Performance
1 Segment reporting
Reportable segments
The Group operated three reportable segments during FY2024, which are aligned with the commodities that are extracted and marketed and reflect the
structure used by the Group’s management to assess the performance of the Group.
Reportable segment
Principal activities
Copper
Mining of copper, uranium, gold, zinc, molybdenum and silver
Iron Ore
Mining of iron ore
Coal
Mining of steelmaking coal and energy coal
Group and unallocated items includes functions, other unallocated operations including Potash, Western Australia Nickel (which comprises the Nickel
West operations and, following the OZ Minerals Ltd (OZL) acquisition on 2 May 2023, the West Musgrave project), legacy assets and consolidation
adjustments. Revenue not attributable to reportable segments comprises the sale of freight and fuel to third parties, as well as revenues from unallocated
operations. Exploration and technology activities are recognised within relevant segments.
Year ended 30 June 2024
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations
Group total
Revenue
18,566
27,952
7,666
1,474
55,658
Inter-segment revenue
–
–
–
–
–
Total revenue
18,566
27,952
7,666
1,474
55,658
Underlying EBITDA
8,564
18,913
2,290
(751)
29,016
Depreciation and amortisation
(2,023)
(2,027)
(611)
(634)
(5,295)
Impairment losses1
(17)
(61)
(2)
(10)
(90)
Underlying EBIT
6,524
16,825
1,677
(1,395)
23,631
Exceptional items2
–
(3,066)
880
(3,908)
(6,094)
Net finance costs
(1,489)
Profit before taxation
16,048
Capital expenditure (cash basis)
3,711
2,033
646
2,426
8,816
(Loss)/profit from equity accounted investments,
related impairments and expenses
377
(3,032)
–
(1)
(2,656)
Investments accounted for using the equity method
1,573
–
–
89
1,662
Total assets
42,145
25,569
9,528
25,120
102,362
Total liabilities
5,777
11,757
3,056
32,652
53,242
Year ended 30 June 2023
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations
Group total
Revenue
16,027
24,812
10,958
2,020
53,817
Inter-segment revenue
–
–
–
–
–
Total revenue
16,027
24,812
10,958
2,020
53,817
Underlying EBITDA
6,653
16,692
4,998
(387)
27,956
Depreciation and amortisation
(1,810)
(1,993)
(697)
(561)
(5,061)
Impairment losses1
(33)
(28)
(6)
(8)
(75)
Underlying EBIT
4,810
14,671
4,295
(956)
22,820
Exceptional items2
–
176
–
(64)
112
Net finance costs
(1,531)
Profit before taxation
21,401
Capital expenditure (cash basis)
2,698
1,966
657
1,412
6,733
(Loss)/profit from equity accounted investments,
related impairments and expenses
383
215
–
(4)
594
Investments accounted for using the equity method
1,530
–
–
90
1,620
Total assets
39,864
25,527
11,087
24,818
101,296
Total liabilities
5,635
8,571
3,821
34,739
52,766
139
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
1 Consolidated Financial Statements continued
1 Segment reporting continued
Year ended 30 June 2022
US$M
Copper
Iron Ore
Coal
Group and
unallocated
items/
eliminations
Group total
Revenue
16,849
30,767
15,549
1,933
65,098
Inter-segment revenue
–
–
–
–
–
Total revenue
16,849
30,767
15,549
1,933
65,098
Underlying EBITDA
8,565
21,707
9,504
858
40,634
Depreciation and amortisation
(1,765)
(2,203)
(762)
(953)
(5,683)
Impairment losses1
(470)
(33)
(9)
(3)
(515)
Underlying EBIT
6,330
19,471
8,733
(98)
34,436
Exceptional items2
–
(729)
849
(450)
(330)
Net finance costs
(969)
Profit before taxation
33,137
Capital expenditure (cash basis)
2,528
1,848
621
858
5,855
(Loss)/profit from equity accounted investments,
related impairments and expenses
658
(676)
–
(1)
(19)
Investments accounted for using the equity method
1,415
–
–
5
1,420
Total assets
32,693
24,682
11,524
26,267
95,166
Total liabilities
5,248
7,884
3,874
29,394
46,400
1. Impairment losses exclude exceptional items of US$3,800 million (2023: US$ nil; 2022: US$ nil).
2. Exceptional items reported in Group and unallocated include Samarco dam failure related costs of US$(105) million (2023: US$(64) million; 2022: US$(13) million). Refer to note 3
‘Exceptional items’ for further information.
Geographical information
Revenue by location of customer
2024
US$M
2023
US$M
2022
US$M
Australia
2,393
1,702
1,649
Europe
1,702
1,961
2,129
China
34,752
31,205
36,618
Japan
4,557
6,971
8,401
India
3,371
3,447
5,215
South Korea
3,069
2,997
4,786
Rest of Asia
3,749
3,583
4,303
North America
1,601
1,382
1,282
South America
464
569
715
55,658
53,817
65,098
Non-current assets by location of assets
2024
US$M
2023
US$M
2022
US$M
Australia
48,991
51,961
43,250
North America
6,979
5,081
3,964
South America
19,927
19,047
18,280
Rest of world
831
685
150
Unallocated assets1
1,296
1,171
858
78,024
77,945
66,502
1. Unallocated assets comprise deferred tax assets and other financial assets.
Underlying EBITDA
Underlying EBITDA is earnings before net finance costs, depreciation, amortisation and impairments, taxation expense, Discontinued operations and any
exceptional items. Underlying EBITDA includes BHP’s share of profit/(loss) from investments accounted for using the equity method including net finance
costs, depreciation, amortisation and impairments and taxation expense/(benefit).
Exceptional items are excluded from Underlying EBITDA in order to enhance the comparability of such measures from period-to-period and provide
investors with further clarity in order to assess the performance of the Group’s operations. Management monitors exceptional items separately.
Refer to note 3 ‘Exceptional items’ for additional detail.
Segment assets and liabilities
Total segment assets and liabilities of reportable segments represents operating assets and operating liabilities, including the carrying amount of
equity accounted investments and predominantly excludes cash balances, loans to associates, interest bearing liabilities and deferred tax balances.
The carrying value of investments accounted for using the equity method represents the balance of the Group’s investment in equity accounted
investments, with no adjustment for any cash balances, interest bearing liabilities or deferred tax balances of the equity accounted investment.
140
BHP Annual Report 2024
2 Revenue
Revenue by segment and asset
2024
US$M
2023
US$M
2022
US$M
Escondida
10,013
8,847
9,500
Pampa Norte
2,375
2,491
2,670
Copper South Australia1
4,085
2,806
1,776
Third-party products
2,021
1,863
2,903
Other
72
20
–
Total Copper2
18,566
16,027
16,849
Western Australia Iron Ore
27,805
24,678
30,632
Third-party products
25
21
19
Other
122
113
116
Total Iron Ore
27,952
24,812
30,767
BHP Mitsubishi Alliance
5,873
7,652
10,254
New South Wales Energy Coal
1,793
3,306
3,035
Other3
–
–
2,260
Total Coal4
7,666
10,958
15,549
Group and unallocated items5
1,474
2,020
1,933
Inter-segment adjustment
–
–
–
Total revenue
55,658
53,817
65,098
1. Includes Olympic Dam as well as Prominent Hill and Carrapateena since acquisition on 2 May 2023.
2. Total Copper revenue includes: copper US$17,229 million (2023: US$14,902 million; 2022: US$15,992 million) and other US$1,337 million (2023: US$1,125 million; 2022: US$857 million).
Other consists of direct sales of uranium, gold, zinc, molybdenum and silver.
3. FY2022 includes revenue related to BHP Mitsui Coal (BMC) divested in May 2022.
4. Total Coal revenue includes: steelmaking coal US$5,793 million (2023: US$7,430 million; 2022: US$11,990 million) and energy coal US$1,873 million (2023: US$3,528 million;
2022: US$3,559 million).
5. Group and unallocated items revenue includes: Western Australia Nickel US$1,473 million (2023: US$2,009 million; 2022: US$1,926 million) and other revenue US$1 million
(2023: US$11 million; 2022: US$7 million).
Revenue consists of revenue from contracts with customers of US$55,375 million (2023: US$53,910 million; 2022: US$65,504 million) and other revenue
predominantly relating to provisionally priced sales of US$283 million (2023: US$(93) million; 2022: US$(406) million).
Recognition and measurement
The Group generates revenue from the production and sale of commodities. Revenue is recognised when or as control of the promised goods or services
passes to the customer. In most instances, control passes when the goods are delivered to a destination specified by the customer, typically on board
the customer’s appointed vessel. Revenue from the provision of services is recognised over time as the services are provided, but does not represent
a significant proportion of total revenue and is aggregated with the respective asset and product revenue for disclosure purposes.
The amount of revenue recognised reflects the consideration to which the Group expects to be entitled in exchange for transferring goods or services.
Where the Group’s sales are provisionally priced, the final price depends on future index prices. The amount of revenue initially recognised is based on
the relevant forward market price. Adjustments between the provisional and final price are accounted for under IFRS 9/AASB 9 ‘Financial Instruments’
(IFRS 9), separately recorded as other revenue and presented as part of the total revenue of each asset. The period between provisional pricing and final
invoicing is typically between 60 and 120 days.
Revenue from the sale of significant by-products is included within revenue.
The Group applies the following practical expedients:
– expected consideration is not adjusted for the effects of the time value of money if the period between the delivery and when the customer pays for the
promised good or service is one year or less
– no disclosure is provided for information relating to unfulfilled performance obligations, either due to the expected duration of the contract term being
one year or less, or for longer term contracts, because the entity has a right to consideration (and can recognise revenue) for goods delivered
3 Exceptional items
Exceptional items are those gains or losses where their nature, including the expected frequency of the events giving rise to them, and impact is
considered material to the Financial Statements. Such items included within the Group’s profit from Continuing operations for the year are detailed below.
Exceptional items attributable to Discontinued operations are detailed in note 28 ‘Discontinued operations’.
Year ended 30 June 2024
Gross
US$M
Tax
US$M
Net
US$M
Exceptional items by category
Samarco dam failure
(3,677)
(85)
(3,762)
Impairment of Western Australia Nickel assets
(3,800)
1,125
(2,675)
Blackwater and Daunia gain on divestment
877
(203)
674
Total
(6,600)
837
(5,763)
Attributable to non-controlling interests
–
–
–
Attributable to BHP shareholders
(6,600)
837
(5,763)
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3 Exceptional items continued
Samarco Mineração S.A. (Samarco) dam failure
The loss of US$3,762 million (after tax) relates to the Samarco dam failure, which occurred in November 2015, and comprises the following:
Year ended 30 June 2024
US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure
(139)
(Loss)/profit from equity accounted investments, related impairments and expenses:
Samarco dam failure provision
(2,833)
Fair value change on forward exchange derivatives
(199)
Net finance costs
(506)
Income tax expense
(85)
Total1
(3,762)
1. Refer to note 4 ‘Significant events – Samarco dam failure’ for further information.
Western Australia Nickel impairment
The Group recognised an impairment charge of US$2,675 million (after tax) in relation to the Western Australia Nickel assets. The impairment charge
reflects the oversupply in the global nickel market that has seen a sharp decline in forward nickel prices in the short to medium term, escalation in
capital costs for Western Australia Nickel, and changes to development plans including the Group’s decision, announced on 11 July 2024, to temporarily
suspend Nickel West operations and the West Musgrave project at Western Australia Nickel. Refer to note 13 ‘Impairment of non-current assets’ for
further information.
Blackwater and Daunia gain on divestment
On 2 April 2024 BHP and Mitsubishi Development Pty Ltd (MDP) completed the divestment of the Blackwater and Daunia mines (which were part of the
BHP Mitsubishi Alliance (BMA)) to Whitehaven Coal. Each of BHP and MDP hold a 50% interest in BMA.
Whitehaven Coal paid a US$100 million deposit on signing of the Asset Sale Agreement on 18 October 2023 and a further US$2 billion cash on
completion plus a preliminary completion adjustment of US$44.1 million for working capital and other agreed adjustments (100% interest basis).
US$1.1 billion in cash remains payable over 3 years after completion and a potential additional amount up to US$0.9 billion in a price-linked earnout may
also be payable over 3 years (100% interest basis). The price-linked earnout is subject to a cap of US$350 million each year and depends on average
realised pricing exceeding agreed thresholds for each of the 3 years following completion on 2 April 2024.
The total cash consideration for the transaction could be up to US$4.1 billion plus the final completion adjustment amount (100% interest basis).
Details of the gain on divestment is as follows:
US$M
Assets
Inventories
113
Property, plant and equipment
1,453
Intangible assets
45
Other
3
Total assets
1,614
Liabilities
Interest bearing liabilities
60
Other financial liabilities
43
Provisions
691
Total liabilities
794
Net assets disposed
820
Cash consideration – BHP share
1,072
Deferred and contingent consideration1
690
Transaction and other directly attributable costs
(65)
Income tax expense
(203)
Gain on divestment
674
1. Includes the fair value of contingent payments based on 35% revenue share to BMA, subject to average realised prices achieved by the Assets exceeding thresholds of
US$159/tonne in the 12 month period 12 months post completion, US$134/tonne in the 12 month period 24 months post completion and US$134/tonne in the 12 month period 36
months post completion.
The exceptional items relating to the years ended 30 June 2023 and 30 June 2022 are detailed below.
30 June 2023
Year ended 30 June 2023
Gross
US$M
Tax
US$M
Net
US$M
Exceptional items by category
Samarco dam failure
(340)
17
(323)
Chilean tax reform
–
(283)
(283)
Total
(340)
(266)
(606)
Attributable to non-controlling interests
–
(107)
(107)
Attributable to BHP shareholders
(340)
(159)
(499)
1 Consolidated Financial Statements continued
142
BHP Annual Report 2024
Samarco Mineração S.A. (Samarco) dam failure
The loss of US$323 million (after tax) related to the Samarco dam failure, which occurred in November 2015, and comprised the following:
Year ended 30 June 2023
US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure
(103)
(Loss)/profit from equity accounted investments, related impairments and expenses:
Samarco dam failure provision
(256)
Fair value change on forward exchange derivatives
471
Net finance costs
(452)
Income tax benefit
17
Total1
(323)
1. Refer to note 4 ‘Significant events – Samarco dam failure’ for further information.
Chilean tax reform
On 17 May 2023, the Chilean Lower House approved a Royalty Bill which would implement a 1 per cent royalty on revenues, a margin based tax with
rates ranging between 8 per cent and 26 per cent, and a 46.5 per cent cap to the overall Chilean tax burden of mining companies.
The President of the Lower House formally declared the legislative process complete on 12 June 2023, following receipt of the Chilean President’s formal
confirmation that he had waived his veto power to oppose any of the provisions of the Royalty Bill. On 13 July 2023, the Constitutional Court finalised its
review of certain aspects of the Royalty Bill, relating only to the distribution of proceeds.
Applying judgement, it was determined that the proposed tax rates were substantively enacted prior to 30 June 2023, as the scope of the Constitutional
Court review did not extend to reviewing the tax rates.
While the timing of when the Group’s operations will be impacted by the reform depends on existing stability agreements, relevant deferred tax positions
were remeasured by US$283 million in the Group’s FY2023 Financial Statements.
30 June 2022
Year ended 30 June 2022
Gross
US$M
Tax
US$M
Net
US$M
Exceptional items by category
Samarco dam failure
(1,032)
(31)
(1,063)
Impairment of US deferred tax assets
–
(423)
(423)
Corporate structure unification costs
(428)
–
(428)
BHP Mitsui Coal (BMC) gain on disposal
840
–
840
Total
(620)
(454)
(1,074)
Attributable to non-controlling interests
–
–
–
Attributable to BHP shareholders
(620)
(454)
(1,074)
Samarco Mineração S.A. (Samarco) dam failure
The loss of US$1,063 million (after tax) related to the Samarco dam failure, which occurred in November 2015, and comprises the following:
Year ended 30 June 2022
US$M
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure
(66)
(Loss)/profit from equity accounted investments, related impairments and expenses:
Samarco dam failure provision
(595)
Fair value change on forward exchange derivatives
(81)
Net finance costs
(290)
Income tax expense
(31)
Total1
(1,063)
1. Refer to note 4 ‘Significant events – Samarco dam failure’ for further information.
Impairment of US deferred tax assets
The Group recognised an impairment charge of US$423 million (after tax) in relation to deferred tax assets where the recoverability had historically been
reliant on Petroleum earnings in the same tax group. While these tax assets remained with the Group following the merger of the Group’s oil and gas
portfolio with Woodside, the impairment charge reflected the extent of other forecasted future earnings against which the assets can be recovered.
Corporate structure unification costs
The Group incurred transaction costs associated with the unification of the Group corporate structure under its existing Australian parent company,
BHP Group Limited, which was completed on 31 January 2022.
BHP Mitsui Coal (BMC) gain on disposal
On 3 May 2022 the Group sold its 80 per cent interest in BHP Mitsui Coal Pty Ltd (BMC) to Stanmore SMC Holdings Pty Ltd, a wholly owned subsidiary
of Stanmore Resources Limited (Stanmore Resources).
Stanmore Resources paid US$1.1 billion cash consideration at completion plus a preliminary completion adjustment of US$218 million for working capital.
Deferred consideration of US$222 million comprised US$100 million in cash, outstanding at 30 June 2022 and subsequently received on 3 November 2022,
with potential for an additional amount of up to US$150 million (US$122 million discounted) in a price-linked earnout payable in the 2024 calendar year.
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3 Exceptional items continued
Details of the gain on disposal is as follows:
US$M
BHP share of net assets disposed
631
Gross consideration
1,318
Transaction and other directly applicable costs
(69)
Income tax expense
–
Deferred consideration
222
Gain on disposal
840
4 Significant events – Samarco dam failure
On 5 November 2015, the Samarco Mineração S.A. (Samarco) iron ore operation in Minas Gerais, Brazil, experienced a tailings dam failure that resulted
in a release of mine tailings, flooding the communities of Bento Rodrigues, Gesteira and Paracatu and impacting other communities downstream
(the Samarco dam failure). Refer to section on ‘Samarco’ in the Operating and Financial Review.
Samarco is jointly owned by BHP Billiton Brasil Ltda (BHP Brasil) and Vale S.A. (Vale). BHP Brasil’s 50 per cent interest is accounted for as an equity
accounted joint venture investment. BHP Brasil does not separately recognise its share of the underlying assets and liabilities of Samarco, but instead
records the investment as one line on the balance sheet. Each period, BHP Brasil recognised its 50 per cent share of Samarco’s profit or loss and
adjusted the carrying value of the investment in Samarco accordingly. Such adjustment continued until the investment carrying value was reduced to
US$ nil, with any additional share of Samarco losses only recognised to the extent that BHP Brasil has an obligation to fund the losses. After applying
equity accounting, any remaining carrying value of the investment is tested for impairment.
Any charges relating to the Samarco dam failure incurred directly by BHP Brasil or other BHP entities are recognised 100 per cent in the Group’s results.
The financial impacts of the Samarco dam failure on the Group’s income statement, balance sheet and cash flow statement for the year ended 30 June
2024 are shown in the tables below and have been treated as an exceptional item.
Financial impacts of Samarco dam failure
2024
US$M
2023
US$M
2022
US$M
Income statement
Expenses excluding net finance costs:
Costs incurred directly by BHP Brasil and other BHP entities in relation to the Samarco dam failure1
(139)
(103)
(66)
(Loss)/profit from equity accounted investments, related impairments and expenses:
Samarco dam failure provision2
(2,833)
(256)
(595)
Fair value change on forward exchange derivatives3
(199)
471
(81)
(Loss)/profit from operations
(3,171)
112
(742)
Net finance costs4
(506)
(452)
(290)
Loss before taxation
(3,677)
(340)
(1,032)
Income tax (expense)/benefit5
(85)
17
(31)
Loss after taxation
(3,762)
(323)
(1,063)
Balance sheet movement
Other financial assets6
(280)
337
(160)
Trade and other payables
(4)
(6)
(1)
Tax liabilities
(85)
17
(31)
Provisions
(2,824)
(260)
(629)
Net (increase)/decrease in liabilities
(3,193)
88
(821)
1 Consolidated Financial Statements continued
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BHP Annual Report 2024
2024
US$M
2023
US$M
2022
US$M
Cash flow statement
Loss before taxation
(3,677)
(340)
(1,032)
Adjustments for:
Samarco dam failure provision2
2,833
256
595
Fair value change on forward exchange derivatives3
199
(471)
81
Proceeds of cash management related instruments
218
134
79
Net finance costs4
506
452
290
Changes in assets and liabilities:
Trade and other payables
4
6
1
Net operating cash flows
83
37
14
Net investment and funding of equity accounted investments7
(640)
(448)
(256)
Net investing cash flows
(640)
(448)
(256)
Net decrease in cash and cash equivalents
(557)
(411)
(242)
1. Includes legal and advisor costs incurred.
2. US$3,700 million (2023: US$(33) million; 2022: US$691 million) change in estimate and US$(867) million (2023: US$289 million; 2022: US$(96) million) exchange translation.
3. The Group enters into forward exchange contracts to limit the Brazilian reais exposure on the dam failure provision. While not applying hedge accounting, the fair value changes in the
forward exchange instruments are recorded within (Loss)/profit from equity accounted investments, related impairments and expenses in the Income Statement.
4. Amortisation of discounting of provision.
5. Includes tax on forward exchange derivatives and other taxes incurred during the period.
6. Includes forward exchange contracts described in item 3 above, and Senior notes issued by Samarco as part of its Judicial Reorganisation.
7. Includes US$(515) million (2023: US$(448) million; 2022: US$(256) million) utilisation of the Samarco dam failure provision and US$(125) million provided to Samarco following approval of
the Judicial Reorganisation (2023: US$ nil; 2022: US$ nil).
Equity accounted investment in Samarco
BHP Brasil’s investment in Samarco remains at US$ nil. No dividends have been received by BHP Brasil from Samarco during the period and Samarco
currently does not have profits available for distribution.
Provision related to the Samarco dam failure
2024
US$M
2023
US$M
At the beginning of the financial year
3,681
3,421
Movement in provision
2,824
260
Comprising:
Utilised
(515)
(448)
Adjustments charged to the income statement:
Change in cost estimate
3,700
(33)
Amortisation of discounting impacting net finance costs
506
452
Exchange translation
(867)
289
At the end of the financial year
6,505
3,681
Comprising:
Current
1,500
1,876
Non-current
5,005
1,805
At the end of the financial year
6,505
3,681
Samarco dam failure provision and contingencies
As at 30 June 2024, BHP Brasil has identified a provision and certain contingent liabilities arising as a consequence of the Samarco dam failure.
The provision related to the Samarco dam failure recognised as at 30 June 2024 is US$6,505 million and reflects the Group’s best estimate of the
potential outflows necessary to resolve all aspects of the Federal Public Prosecution Office BRL$155 billion claim and Framework Agreement obligations
(see below).
Contingent liabilities will only be resolved when one or more uncertain future events occur or related impacts become capable of reliable measurement
and, as such, determination of contingent liabilities disclosed in the Financial Statements requires significant judgement regarding the outcome of
future events. A number of the claims below do not specify the amount of damages sought and, where this is specified, amounts could change as the
matter progresses.
Ultimately, future changes in any matters for which a provision has been recognised or contingent liability disclosed could have a material adverse impact
on BHP’s business, competitive position, cash flows, prospects, liquidity and shareholder returns.
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4 Significant events – Samarco dam failure continued
The following table summarises the current status of significant ongoing matters relating to the Samarco dam failure, along with developments during the
financial year, and the associated treatment in the Financial Statements:
Item
Provision
Contingent
liability
Samarco dam failure – Framework Agreement
On 2 March 2016, BHP Brasil, Samarco and Vale S.A. (Vale) entered into a Framework Agreement with the Federal Government
of Brazil, the states of Espirito Santo and Minas Gerais, and certain other public authorities to establish a foundation (Fundação
Renova) that is developing and executing environmental and socio-economic programs (Programs) to remediate and provide
compensation for damage caused by the Samarco dam failure (the Framework Agreement).
Key Programs include those for financial assistance and compensation of impacted persons and those for remediation of impacted
areas and resettlement of impacted communities.
Uncertainty exists around the scope and cost of the Programs, including as a result of ongoing legal actions in relation to the number
of individuals eligible for compensation and the amount of damages to which they are entitled. Further information on the key areas of
estimation uncertainty is provided in the ‘Key judgements and estimates’ section below.
Samarco has primary responsibility for funding Fundação Renova with each of BHP Brasil and Vale having secondary funding
obligations in proportion to their 50 per cent shareholding in Samarco. While Samarco has recommenced operations, Samarco’s
long-term cash flow generation remains highly sensitive to factors including returning to full production capacity, commodity prices
and foreign exchange rates.
Further, under the Samarco Judicial Reorganisation (refer to Samarco Judicial Reorganisation (JR) below), Samarco’s funding of
obligations to remediate and compensate the damages resulting from the dam failure, including funding Fundação Renova, is capped
at US$1 billion for the period CY2024 to CY2030. Notwithstanding this cap, and subject to certain conditions, to the extent that
Samarco each year has a positive cash balance after meeting its various obligations, during this period Samarco’s shareholders are
able to direct 50 per cent of Samarco’s year end excess cash balance to fund remediation and compensation obligations.
Execution of the Programs is a key component in the resolution of the reparation process, including the Federal Public Prosecution
Office claim and, therefore, the expected cost of executing the Programs and Samarco’s potential ability to contribute to remediation
and compensation obligations have been considered when determining BHP Brasil’s provision in relation to the Samarco dam failure
at 30 June 2024 (as outlined below).
Federal Public Prosecution Office claim
BHP Brasil is among the defendants named in a claim brought by the Brazilian Federal Public Prosecution Office on 3 May 2016, seeking
R$155 billion (approximately US$28 billion) for reparation, compensation and moral damages in relation to the Samarco dam failure.
Since early CY2021, BHP Brasil, Samarco and Vale have been engaging in negotiations with the Brazilian State and Federal
Government and other public entities to seek a settlement of obligations under the Framework Agreement, the Federal Public
Prosecution Office Claim, and other claims by government entities relating to the Samarco dam failure (the ‘Settlement
Negotiations’). The Settlement Negotiations are ongoing and the outcome is uncertain.
As at 30 June 2023, the Group disclosed a contingent liability in relation to the Federal Public Prosecution Office claim as, given the
status of the claim and ongoing settlement negotiations, it was not possible to reliably estimate the potential outcomes of the claim
beyond the estimated costs of completing the Programs under the Framework Agreement, which are being executed in relation to
financial assistance and compensation of impacted persons, remediation of impacted areas and resettlement of impacted communities.
On 25 January 2024, the Federal Court of Brazil issued a decision in relation to the Federal Public Prosecution Office Claim finding
Samarco, Vale and BHP Brasil jointly and severally liable to pay collective moral damages arising from the Samarco dam failure in
the amount of R$47.6 billion (US$8.6 billion) (to be adjusted for interest and inflation). The decision also determined that payment
will only occur when any and all appeals are finally determined.
In March 2024, the Federal Court found that the correct historical amount due of collective moral damages is R$46.7 billion (instead
of R$47.6 billion). In April and May 2024, Samarco, Vale, BHP Brasil and various governmental parties appealed the decision. The
appeal process is estimated to take approximately two to five years. The Federal Court issued rulings on 8 May 2024 and 20 May
2024 denying the requests for early enforcement.
On 27 June 2024, the Federal Court dismissed without prejudice certain claims directed at the Companies in the Federal Public
Prosecution Office Claim, on the grounds that they are already covered by previous agreements and decisions (such as the Framework
Agreement). This decision did not dismiss the collective moral damages decision outlined above and is also subject to appeal.
In June 2024, the Public Prosecutors’ Office and the Public Defense Office filed a public civil claim against Samarco, BHP Brasil, Vale
and Fundação Renova for alleged gender discrimination against women in the reparation process. They requested certain changes in
Fundação Renova’s registration program, damages and an injunctive relief to implement emergency measures. On 14 August 2024, the
Federal Court partially granted the injunctive relief request and ordered Fundação Renova to allow the review of the registration of all
women who are either registered or have pending registration applications in Fundação Renova. The decision is subject to appeal.
The Group has considered the additional information available from the status of the Settlement Negotiations (including all offers
made by BHP Brasil, Samarco and Vale to date), updates to the estimated costs of executing the Framework Agreement Programs,
the extent to which Samarco may be in a position to fund any future outflows and the judicial decision regarding collective moral
damages to increase the provision related to the Samarco dam failure to US$6,505 million at 30 June 2024.
The provision at 30 June 2024 reflects the Group’s best estimate of outflows required to resolve all aspects of the Federal Public
Prosecution Office claim, being reparation, compensation and moral damages, and the Framework Agreement.
Significant uncertainty remains around the resolution of the Federal Public Prosecution Office Claim and the Framework Agreement
obligations, and there is a risk that outcomes may be materially higher or lower than amounts reflected in BHP Brasil’s provision for
the Samarco dam failure.
Key areas of uncertainty include the terms of any potential future outcome of the Settlement Negotiations, the extent to which
Samarco is able to directly fund any future obligations relating to reparation, compensation and moral damages and the outcomes
of appeals relating to the judicial decision regarding collective moral damages. Further information on the key areas of estimation
uncertainty is provided in the ‘Key judgements and estimates’ section below.
BHP Brasil, Samarco and Vale continue to maintain security, as required by a Governance Agreement, ratified on 8 August 2018,
with the security currently comprising insurance bonds and a charge over certain Samarco assets.
1 Consolidated Financial Statements continued
146
BHP Annual Report 2024
Item
Provision
Contingent
liability
Australian class action complaint
BHP Group Limited is named as a defendant in a shareholder class action filed in the Federal Court of Australia on behalf of
persons who acquired shares in BHP Group Limited or BHP Group Plc (now BHP Group (UK) Ltd) in periods prior to the Samarco
dam failure.
The amount of damages sought is unspecified. A trial is scheduled to commence in September 2025.
United Kingdom group action complaint and Vale and Samarco’s Netherlands collective action complaint
BHP Group (UK) Ltd (formerly BHP Group Plc) and BHP Group Limited (BHP Defendants) are named as defendants in group
action claims for damages filed in the courts of England. These claims were filed on behalf of certain individuals, municipalities,
businesses, faith-based institutions and communities in Brazil allegedly impacted by the Samarco dam failure.
The amount of damages sought in these claims is unspecified. A trial in relation to the BHP Defendants’ liability for the dam failure
is listed to commence in October 2024 and therefore a present obligation in relation to this matter is yet to be determined.
In December 2022, the BHP Defendants filed their defence and a contribution claim against Vale. The contribution claim contended
that if the BHP Defendants’ defence is not successful and the BHP Defendants are ordered to pay damages to the claimants, Vale
should contribute to any amount payable. Vale contested the jurisdiction of the English courts to determine the contribution claim,
with those challenges ultimately dismissed in December 2023.
In January 2024, the BHP Defendants were served with a new group action filed in the courts of England on behalf of additional
individuals and businesses in Brazil allegedly impacted by the Samarco dam failure. The new action makes broadly the same
claims as the original action and the amount of damages sought in these claims is unspecified.
In March 2024, a collective action complaint was filed in the Netherlands against Vale and a Dutch subsidiary of Samarco for
compensation relating to the Fundão Dam failure. The claim filed in the Netherlands indicates that these claims were filed on behalf of
certain individuals, municipalities, businesses, associations and faith-based institutions allegedly impacted by the Samarco dam failure
who are not also claimants in the UK group action claims referred to above. BHP is not a defendant in the Netherlands proceedings.
In July 2024, the BHP Defendants, BHP Brasil and Vale entered into an agreement – without any admission of liability in any
proceedings – whereby: (i) Vale will pay 50% of any amounts that may be payable by the BHP Defendants to the claimants in the
UK group action claims (or by the BHP Defendants, BHP Brasil or their related parties to claimants in any other proceedings in
Brazil, England or the Netherlands covered by the agreement); and (ii) BHP Brasil will pay 50% of any amounts that may be payable
by Vale to the claimants in the Netherlands proceedings (or by Vale or its related parties to claimants in any other proceedings in
Brazil, England or the Netherlands covered by the agreement). The agreement reinforces the terms of the Framework Agreement
entered into in 2016 which require BHP Brasil and Vale to each contribute 50% to the funding of the Renova Foundation for
compensation of persons impacted by the Fundão Dam failure where Samarco is unable to contribute that funding. The BHP
Defendants withdrew the contribution claim against Vale in England as it is no longer necessary given this agreement.
Criminal charges
The Federal Prosecutors’ Office has filed criminal charges against BHP Brasil, Samarco and Vale and certain employees and
former employees of BHP Brasil (Affected Individuals) in the Federal Court of Ponte Nova, Minas Gerais.
BHP Brasil rejects outright the charges against the company and the Affected Individuals and is defending itself from all charges
while fully supporting each of the Affected Individuals in their defence of the charges.
Civil public action commenced by Associations concerning the use of TANFLOC for water treatment
The Vila Lenira Residents Association, State of Espirito Santo Rural Producers and Artisans Association, Colatina Velha
Neighbourhood Residents Association, and United for the Progress of Palmeiras Neighbourhood Association have filed a lawsuit
against Samarco, BHP Brasil and Vale and others, including the State of Minas Gerais, the State of Espirito Santo and the
Federal Government.
The plaintiffs allege that the defendants carried out a clandestine study on the citizens of the locations affected by the Fundão Dam
Failure, using TANFLOC – a tannin-based flocculant/coagulant – that is currently used for wastewater treatment applications. The
plaintiffs claim that this product allegedly put the population at risk due to its alleged experimental qualities.
The plaintiffs are seeking multiple kinds of relief – material damages, moral damages, loss of profits – and that the defendants
should pay for water supply in all locations where there is no water source other than the Doce River.
On 17 November 2023, the Federal Court dismissed the lawsuit without prejudice considering the Association’s lack of standing to
sue and the defectiveness of the complaint. The Associations filed a motion for clarification and the decision is still subject to appeal.
Other claims
BHP Brasil is among the companies named as defendants in a number of legal proceedings initiated by individuals, non-governmental
organisations, corporations and governmental entities in Brazilian Federal and State courts following the Samarco dam failure. The
other defendants include Vale, Samarco and Fundação Renova.
The lawsuits include claims for compensation, environmental reparation and violations of Brazilian environmental and other laws,
among other matters. The lawsuits seek various remedies including reparation costs, compensation to injured individuals and
families of the deceased, recovery of personal and property losses, moral damages and injunctive relief.
Certain of these legal proceedings are outside the scope of the negotiations currently in progress aimed at resolving all aspects of
the Federal Public Prosecution Office BRL$155 billion claim and Framework Agreement obligations.
In addition, government inquiries, studies and investigations relating to the Samarco dam failure have been commenced by
numerous agencies and individuals of the Brazilian government and are ongoing.
Additional lawsuits and government investigations relating to the Samarco dam failure could be brought against BHP Brasil and
other Group entities in Brazil or other jurisdictions.
The outcomes of these claims, investigations and proceedings remain uncertain and continue to be disclosed as contingent liabilities.
147
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4 Significant events – Samarco dam failure continued
Commitments
Under the terms of the Samarco joint venture agreement, BHP Brasil does not have an existing obligation to fund Samarco.
However, BHP Brasil has agreed to fund a total of up to US$925 million for the Fundação Renova programs during calendar year 2024, with
US$194 million being funded in the six month period to 30 June 2024. Any additional requests for funding or future investment provided would be subject
to a future decision by BHP Brasil, accounted for at that time.
Samarco judicial reorganisation
Samarco filed for Judicial Reorganisation (JR) in April 2021, with the Second Business State Court for the Belo Horizonte District of Minas Gerais, State of
Minas Gerais, Brazil (JR Court), following enforcement actions taken by certain financial creditors of Samarco which threatened Samarco’s operations.
The JR was an insolvency proceeding that provided a means for Samarco to restructure its financial debts and establish a stable financial position
to allow Samarco to continue to rebuild its operations and strengthen its ability to meet obligations in relation to reparation, compensation and moral
damages in relation to the Samarco dam failure. Samarco’s operations continued during the JR proceeding.
On 28 July 2023, Samarco and one of its supporting creditors jointly filed a consensual Judicial Reorganisation Plan (Consensual Plan) with the JR Court,
which provided, among other things, that the agreements entered into between Samarco and Brazilian public authorities in connection with the Fundão
dam failure will not be impaired by the Consensual Plan and Samarco will continue to have the primary obligation to fund Fundação Renova.
On 1 September 2023, the JR Court ratified the Consensual Plan. Following the ratification, Samarco entered into definitive debt restructure agreements
with its financial creditors to implement the debt restructure, including the exchange of Samarco’s existing financial debt for US$3.6 billion of long-term
unsecured debt that matures in June 2031 and remains non-recourse to Samarco’s shareholders. Further, as part of the agreement Samarco issued
Senior notes to its Shareholders which also mature in June 2031.
Samarco has paid the majority of labour claims, suppliers and other non-financial creditors as required by the Consensual Plan.
The debt restructure does not impact Fundação Renova’s ability to undertake the Programs under the Framework Agreement. Samarco continues to
have primary responsibility for funding Fundação Renova and each of BHP Brasil and Vale will continue to have secondary responsibility to fund 50% of
Fundação Renova if Samarco does not meet its funding obligations under the Framework Agreement. Under the Consensual Plan, Samarco’s funding
obligation to remediate and compensate the damages resulting from the dam failure, including funding Fundação Renova, is capped at US$1 billion for
the period CY2024 to CY2030 (Renova Cap). Notwithstanding the Renova Cap, and subject to certain conditions, to the extent that Samarco each year
has a positive cash balance after meeting its various obligations including operating capital requirements, debt service and Renova Cap requirements,
Samarco’s shareholders are able to direct 50% of Samarco’s year end excess cash balance to fund remediation and compensation obligations.
BHP Brasil has considered the extent to which Samarco may be in a position to fund any future outflows, when determining the dam failure related
provision at 30 June 2024.
Key judgements and estimates
Judgements
The outcomes of litigation are inherently
difficult to predict and significant judgement
has been applied in assessing the likely
outcome of legal claims and determining which
legal claims require recognition of a provision
or disclosure of a contingent liability. The facts
and circumstances relating to these cases are
regularly evaluated in determining whether a
provision for any specific claim is required.
Management has determined that a provision
can be recognised at 30 June 2024 to reflect
the estimated costs to resolve all aspects of
the Federal Public Prosecution Office claim
and the Framework Agreement. It is not
yet possible to provide a range of possible
outcomes or a reliable estimate of potential
future exposures to BHP in connection to
the contingent liabilities noted above, given
their status.
Estimates
The provision for the Samarco dam failure
reflects the Group’s estimate of the costs
to resolve all aspects of the Federal Public
Prosecution Office claim and Framework
Agreement and requires the use of significant
judgements, estimates and assumptions.
While the provision has been measured based
on the latest information available, changes
in facts and circumstances are likely in future
reporting periods and may lead to material
revisions to these estimates and there is a
risk that outcomes may be materially higher or
lower than amounts currently reflected in the
provision. However, it is currently not possible
to determine what facts and circumstances may
change, therefore revisions in future reporting
periods due to the key estimates and factors
outlined below cannot be reliably measured.
The key estimates that may have a material
impact upon the provision in the next and
future reporting periods include:
– the terms of any potential future settlement
agreement seeking a definitive and
substantive settlement of claims relating
to the Samarco dam failure, including
amounts payable, obligations of the parties
to perform ongoing Programs of work in
relation to reparation and compensation,
and the period of time over which any
settlement amounts may be payable. A one
year increase or decrease, in isolation, to
the period over which amounts payable
have been estimated to be settled would
result in a change to the dam failure
provision of approximately US$125 million;
– the scope and cost of executing the
Programs under the Framework Agreement,
including as a result of ongoing legal
actions in relation to the number of people
eligible for compensation and the amount of
damages to which they are entitled;
– the outcomes of appeals relating to the
judicial decision regarding collective moral
damages, including any appeals that may
be lodged by the Brazilian Federal Public
Prosecution Office; and
– the extent to which Samarco is able to
directly fund any future obligations relating
to reparation, compensation or moral
damages. Samarco’s long-term cash flow
generation remains highly sensitive to
factors including its ability to return to full
production capacity, commodity prices and
foreign exchange rates.
The provision may also be affected by factors
including but not limited to updates to discount
and foreign exchange rates. A 0.5% increase
in the discount rate would, in isolation, reduce
the provision by approximately US$130 million.
In addition, the provision may be impacted
by decisions in, or resolution of, existing
and potential legal claims in Brazil and other
jurisdictions, including the outcome of the
United Kingdom group action claims, the
Australian class action and the claim filed in
the Netherlands against Vale and a Dutch
subsidiary of Samarco.
Given these factors, future actual cash
outflows may differ from the amounts
currently provided and changes to any of
the key assumptions and estimates outlined
above could result in a material impact
to the provision in the next and future
reporting periods.
The following section provides disclosure of
matters to which Samarco (and not the Group)
is a party.
Samarco
Dam failure related provision and
contingencies
In addition to its provisions in relation to
the Framework Agreement and the Federal
Public Prosecution Office claim as at 30 June
2024, Samarco has recognised provisions of
US$0.4 billion (30 June 2023: US$0.4 billion),
based on currently available information,
in relation to other dam failure related
matters to which BHP Brasil is not a party.
The magnitude, scope and timing of these
additional costs are subject to a high degree
of uncertainty and Samarco has indicated
that it anticipates that it will incur future costs
beyond those provided. These uncertainties
are likely to continue for a significant period
and changes to key assumptions could result
in a material change to the amount of the
provision in future reporting periods. Any such
unrecognised obligations are therefore
contingent liabilities and, at present, it is not
practicable to estimate their magnitude or
possible timing of payment. Accordingly, it is
also not possible to provide a range of possible
outcomes or a reliable estimate of total
potential future exposures at this time.
1 Consolidated Financial Statements continued
148
BHP Annual Report 2024
Samarco is also named as a defendant in a
number of other legal proceedings initiated by
individuals, non-governmental organisations,
corporations and governmental entities in
Brazilian Federal and State courts following
the Samarco dam failure. The lawsuits include
claims for compensation, environmental
rehabilitation and violations of Brazilian
environmental and other laws, among other
matters. The lawsuits seek various remedies
including rehabilitation costs, compensation
to injured individuals and families of the
deceased, recovery of personal and property
losses, moral damages and injunctive
relief. In addition, government inquiries and
investigations relating to the Samarco dam
failure have been commenced by numerous
agencies of the Brazilian government and are
ongoing. Given the status of proceedings it
is not possible to provide a range of possible
outcomes or a reliable estimate of total
potential future exposures to Samarco.
Additional lawsuits and government
investigations relating to the Samarco dam
failure could be brought against Samarco.
Samarco has also identified a number of
individually immaterial tax-related uncertainties
which have been reflected, where appropriate,
in the Group’s share of associate and joint
venture contingent liabilities presented in note
34 ‘Contingent liabilities’.
Samarco insurance
Samarco has standalone insurance
policies in place with Brazilian and global
insurers. Insurers’ loss adjusters or claims
representatives continue to investigate and
assist with the claims process for matters not
yet settled. As at 30 June 2024, an insurance
receivable has not been recognised by
Samarco in respect of ongoing matters.
Samarco non-dam failure related
provisions and contingent liabilities
The following non-dam failure related matters
pre-date and are unrelated to the Samarco
dam failure. Samarco is currently contesting
aspects of both of these matters in the
Brazilian courts. Given the status of these tax
matters, the timing of resolution and potential
economic outflow for Samarco is uncertain.
Brazilian Social Contribution Levy
Samarco has received tax assessments for
the alleged non-payment of Brazilian Social
Contribution Levy for the calendar years
2007-2014. Based on its assessment of
currently available information as at 30 June
2024, Samarco recognised gross provisions
of US$0.4 billion, US$0.2 billion net of
US$0.2 billion court deposits paid (30 June
2023: gross provisions of US$1.1 billion,
US$0.9 billion net of US$0.2 billion court
deposits paid) and disclosed contingent
liabilities of US$0.2 billion (30 June 2023:
US$0.2 billion). As at 30 June 2024, BHP
Brasil’s 50% share of the impact of the
provision recognised by Samarco is reflected
in the Group’s equity accounting for Samarco.
Brazilian corporate income tax rate
Samarco has received tax assessments, and
disclosed contingent liabilities, for alleged
incorrect calculation of Corporate Income Tax
(IRPJ) in respect of the 2000-2003 and 2007-
2014 income years totalling approximately
US$1.0 billion (30 June 2023: US$1.1 billion).
5 Expenses and other income
2024
US$M
2023
US$M
2022
US$M
Employee benefits expense:
Wages and salaries
4,633
4,539
4,197
Employee share awards
112
97
109
Social security costs
5
4
4
Pension and other post-retirement obligations
374
339
338
Less employee benefits expense classified as exploration and evaluation expenditure
(49)
(35)
(30)
Changes in inventories of finished goods and work in progress
(289)
301
(774)
Raw materials and consumables used
6,536
6,710
5,991
Freight and transportation
2,270
2,299
2,319
External services
5,795
4,768
4,525
Third-party commodity purchases
1,977
1,878
2,959
Net foreign exchange losses/(gains)
23
(197)
(326)
Fair value change on derivatives1
84
135
(29)
Government royalties paid and payable
3,571
3,841
4,014
Exploration and evaluation expenditure incurred and expensed in the current period
399
294
199
Depreciation and amortisation expense
5,295
5,061
5,683
Net impairments:
Property, plant and equipment
3,833
73
515
Goodwill and other intangible assets
57
2
–
All other operating expenses
2,124
1,764
2,677
Total expenses
36,750
31,873
32,371
(Gain)/loss on disposal of subsidiaries and operations2
(915)
(8)
(840)
Dividend income3
(1)
(19)
(241)
Other income4
(369)
(367)
(317)
Total other income
(1,285)
(394)
(1,398)
1. Fair value change on derivatives is principally related to commodity price contracts, foreign exchange contracts and embedded derivatives used in the ordinary course of business as well
as derivatives used as part of the funding of dividends.
2. Mainly relates to the divestment of Blackwater and Daunia mines in FY2024 and BMC in FY2022. Refer to note 3 ‘Exceptional items’ for further information.
3. During FY2022, the Group received dividends of US$238 million from Cerrejón. On 11 January 2022, BHP completed the sale of its 33.33 per cent interest in Cerrejón to joint venture
partner, Glencore plc. In accordance with the sale agreement, the final sale proceeds were adjusted for the dividends received to a final number of US$50 million.
4. Other income is generally income earned from transactions outside the course of the Group’s ordinary activities and may include certain management fees from non-controlling interests
and joint arrangements, royalties and commission income.
Recognition and measurement
Other income is recognised when it is probable that the economic benefits associated with a transaction will flow to the Group and can be reliably
measured. Dividend income is recognised upon declaration.
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Additional Information
Governance
Contents
Financial Statements
6 Income tax expense
2024
US$M
2023
US$M
2022
US$M
Total taxation expense comprises:
Current tax expense
7,435
6,690
10,673
Deferred tax (benefit)/expense
(988)
387
64
Total taxation expense
6,447
7,077
10,737
2024
US$M
2023
US$M
2022
US$M
Factors affecting income tax expense for the year
Income tax expense differs to the standard rate of corporation tax as follows:
Profit before taxation
16,048
21,401
33,137
Tax on profit at Australian prima facie tax rate of 30 per cent
4,814
6,420
9,941
Tax effect of (loss)/profit from equity accounted investments, related impairments and expenses1
737
(37)
(19)
Derecognition of deferred tax assets and current year tax losses2
666
526
1,087
Tax on remitted and unremitted foreign earnings
224
137
441
Amounts (over)/under provided in prior years
(25)
(18)
(80)
Foreign exchange adjustments
(79)
94
(233)
Recognition of previously unrecognised tax assets
(110)
(109)
(3)
Impact of tax rates applicable outside of Australia
(556)
(558)
(801)
Other
344
236
97
Income tax expense
6,015
6,691
10,430
Royalty-related taxation (net of income tax benefit)3
432
386
307
Total taxation expense
6,447
7,077
10,737
1. This item removes the prima facie tax effect on (loss)/profit from equity accounted investments, related impairments and expenses that are net of tax, with the exception of the Samarco
forward exchange derivatives described in note 4 ‘Significant events – Samarco dam failure’, which are taxable.
2. Includes the tax impacts related to the exceptional impairments of US deferred tax assets in the year ended 30 June 2022 as presented in note 3 ‘Exceptional items’.
3. Includes the revaluation of deferred tax balances in the year ended 30 June 2023, following the substantive enactment of the Chilean Royalty Bill, as presented in note 3
‘Exceptional items’.
Income tax recognised in other comprehensive income is as follows:
2024
US$M
2023
US$M
2022
US$M
Income tax effect of:
Items that may be reclassified subsequently to the income statement:
Hedges:
(Losses)/gains taken to equity
10
(29)
274
Losses/(gains) transferred to the income statement
(15)
45
(264)
Others
–
(11)
–
Income tax (charge)/credit relating to items that may be reclassified subsequently to the income statement
(5)
5
10
Items that will not be reclassified to the income statement:
Re-measurement gains/(losses) on pension and medical schemes
(13)
7
(9)
Income tax (charge)/credit relating to items that will not be reclassified to the income statement
(13)
7
(9)
Total income tax (charge)/credit relating to components of other comprehensive income1
(18)
12
1
1. Included within total income tax relating to components of other comprehensive income is US$(18) million relating to deferred taxes and US$ nil relating to current taxes
(2023: US$12 million and US$ nil; 2022: US$1 million and US$ nil).
1 Consolidated Financial Statements continued
150
BHP Annual Report 2024
Recognition and measurement
Taxation on the profit/(loss) for the year comprises current and deferred tax. Taxation is recognised in the income statement except to the extent
that it relates to items recognised directly in equity or other comprehensive income, in which case the tax effect is also recognised in equity or other
comprehensive income.
Current tax
Deferred tax
Royalty-related taxation
Current tax is the
expected tax on the
taxable income for the
year, using tax rates
and laws enacted
or substantively
enacted at the
reporting date, and
any adjustments to
tax payable in respect
of previous years.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation
of taxable profit, and is accounted for in accordance with IAS 12/AASB 112 ‘Income Taxes’ (IAS 12).
Deferred tax is generally provided on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the Financial Statements. Deferred tax assets are recognised to the
extent that it is probable that future taxable profits will be available against which the temporary differences
can be utilised.
Deferred tax is not recognised for temporary differences relating to:
– initial recognition of goodwill
– initial recognition of assets or liabilities in a transaction that is not a business combination and that affects
neither accounting nor taxable profit, except where the transaction gives rise to equal and offsetting taxable
and deductible temporary differences
– investment in subsidiaries, associates and jointly controlled entities where the Group is able to control
the timing of the reversal of the temporary difference and it is probable that they will not reverse in the
foreseeable future
Deferred tax is measured at the tax rates that are expected to be applied when the asset is realised or the
liability is settled, based on the laws that have been enacted or substantively enacted at the reporting date.
Current and deferred tax assets and liabilities are offset when the Group has a legally enforceable right
to offset and when the tax balances are related to taxes levied by the same tax authority and the Group
intends to settle on a net basis, or realise the asset and settle the liability simultaneously.
Royalties are treated as
taxation arrangements
(impacting income
tax expense/(benefit))
when they are imposed
under government
authority and the amount
payable is calculated
by reference to revenue
derived (net of any
allowable deductions)
after adjustment for
temporary differences.
Obligations arising from
royalty arrangements
that do not satisfy these
criteria are recognised
as current liabilities and
included in expenses.
International Tax Reform – Pillar Two Model Rules
The Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting previously
published the Pillar Two model rules designed to address the tax challenges arising from the digitalisation of the global economy, including the
implementation of a global minimum tax. The Group has a presence in jurisdictions that have enacted or substantively enacted legislation in relation to the
OECD/G20 BEPS Pillar Two model rules.
The enacted or substantively enacted rules apply to income years commencing on or after 1 January 2024 and, on this basis, there is no current tax
impact for the income year ended 30 June 2024. The temporary exception to recognising and disclosing information about deferred tax assets and
liabilities related to Pillar Two income taxes has been applied at 30 June 2024, pursuant to the amendments to IAS 12 issued on 23 May 2023 and
27 June 2023 by the IASB and AASB respectively.
The Group continues to monitor and evaluate the domestic implementation of the Pillar Two rules in the jurisdictions in which it operates. The Group’s
potential exposure to Pillar Two taxes, based on legislation that is enacted or substantively enacted, is not expected to be material.
Uncertain tax and royalty matters
The Group operates across many tax jurisdictions. Application of tax law can be complex and requires judgement to assess risk and estimate outcomes.
These judgements are subject to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which may impact
the amount of tax assets and tax liabilities, including deferred tax, recognised on the balance sheet and the amount of other tax losses and temporary
differences not yet recognised. The evaluation of tax risks considers both amended assessments received and potential sources of challenge from
tax authorities. The status of proceedings for these matters will impact the ability to determine the potential exposure and in some cases, it may not be
possible to determine a range of possible outcomes or a reliable estimate of the potential exposure.
Tax and royalty matters with uncertain outcomes arise in the normal course of business and occur due to changes in tax law, changes in interpretation
of tax law, periodic challenges and disagreements with tax authorities and legal proceedings.
Tax and royalty obligations assessed as having probable future economic outflows capable of reliable measurement are provided for as at 30 June 2024.
Matters with a possible economic outflow and/or presently incapable of being measured reliably are contingent liabilities and disclosed in note 34
‘Contingent liabilities’. Details of uncertain tax and royalty matters relating to Samarco are disclosed in note 4 ‘Significant events – Samarco dam failure’.
Key judgements and estimates
Income tax classification
Judgements: The Group’s accounting policy for taxation, including royalty-related taxation, requires management’s judgement as to the types
of arrangements considered to be a tax on income in contrast to an operating cost.
Deferred tax
Judgements: Judgement is required in:
– determining the amount of deferred tax assets to be recognised based on the likely timing and the level of future taxable profits;
– assessing whether changes in tax regimes or applicable tax rates are substantively enacted at the reporting date;
– recognising deferred tax liabilities arising from temporary differences in investments. These deferred tax liabilities caused principally by retained
earnings held in foreign tax jurisdictions are recognised unless repatriation of retained earnings can be controlled and is not expected to occur
in the foreseeable future.
In FY2023, judgement was applied in determining the Chilean Royalty Bill was substantively enacted at the reporting date. It was considered that
the process of enactment was complete and the remaining steps for enactment would not change the outcome of the tax rates to be applied in
measuring the deferred tax assets and liabilities.
Estimates: The Group assesses the recoverability of recognised and unrecognised deferred taxes, including losses in Australia, the United States
and Canada on a consistent basis. Estimates and assumptions relating to projected earnings and cash flows as applied in the Group impairment
process are used for operating assets.
These forecasts are also used to estimate the royalty-related tax rates to apply when the deferred tax assets are realised and deferred tax liabilities
are settled.
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Governance
Contents
Financial Statements
7 Earnings per share
2024
2023
2022
Earnings attributable to BHP shareholders (US$M)
– Continuing operations
7,897
12,921
20,245
– Total
7,897
12,921
30,900
Weighted average number of shares (Million)
– Basic
5,068
5,064
5,061
– Diluted
5,077
5,073
5,071
Basic earnings per ordinary share (US cents)
– Continuing operations
155.8
255.2
400.0
– Total
155.8
255.2
610.6
Diluted earnings per ordinary share (US cents)
– Continuing operations
155.5
254.7
399.2
– Total
155.5
254.7
609.3
Headline earnings per ordinary share (US cents)
– Basic
195.9
256.1
439.0
– Diluted
195.6
255.7
438.1
Refer to note 28 ‘Discontinued operations’ for basic earnings per share and diluted earnings per share for Discontinued operations.
Earnings on American Depositary Shares represent twice the earnings for BHP Group Limited ordinary shares.
Headline earnings is a Johannesburg Stock Exchange defined performance measure and is reconciled from earnings attributable to ordinary
shareholders as follows:
2024
US$M
2023
US$M
2022
US$M
Earnings attributable to BHP shareholders
7,897
12,921
30,900
Adjusted for:
(Gain)/loss on sales of property, plant and equipment, intangibles and investments
(29)
(9)
(95)
Impairments of property, plant and equipment and intangibles
3,905
75
515
Gain on disposal of subsidiaries and operations
(915)
–
(840)
Gain on merger of Petroleum
–
–
(8,167)
Tax effect of above adjustments
(928)
(17)
(97)
Subtotal of adjustments
2,033
49
(8,684)
Headline earnings
9,930
12,970
22,216
Diluted headline earnings
9,930
12,970
22,216
Recognition and measurement
Diluted earnings attributable to BHP shareholders are equal to the earnings attributable to BHP shareholders.
Following unification of the BHP corporate structure on 31 January 2022, the aggregate weighted average number of ordinary shares of only BHP Group
Limited is considered in the composition of basic earnings per share. The calculation of the number of ordinary shares used in the computation of basic
earnings per share is the weighted average number of ordinary shares of BHP Group Limited outstanding during the period after deduction of the number
of shares held by the BHP Group Limited Employee Equity Trust.
For the purposes of calculating diluted earnings per share, the effect of 9 million dilutive shares has been taken into account for the year ended 30 June
2024 (2023: 9 million shares; 2022: 10 million shares). The Group’s only potential dilutive ordinary shares are share awards granted under the employee
share ownership plans for which terms and conditions are described in note 26 ‘Employee share ownership plans’. Diluted earnings per share calculation
excludes instruments which are considered antidilutive.
At 30 June 2024, there are no instruments which are considered antidilutive (2023: nil; 2022: nil).
1 Consolidated Financial Statements continued
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BHP Annual Report 2024
Working capital
8 Trade and other receivables
2024
US$M
2023
US$M
Trade receivables
3,687
3,418
Other receivables
1,652
1,324
Total
5,339
4,742
Comprising:
Current
5,169
4,594
Non-current
170
148
Recognition and measurement
Trade receivables are recognised initially at their transaction price or, for those receivables containing a significant financing component, at fair value.
Trade receivables are subsequently measured at amortised cost using the effective interest method, less an allowance for impairment, except for
provisionally priced receivables which are subsequently measured at fair value through profit or loss under IFRS 9.
The collectability of trade and other receivables is assessed continuously. At the reporting date, specific allowances are made for any expected credit
losses based on a review of all outstanding amounts at reporting period-end. Individual receivables are written off when management deems them
unrecoverable. The net carrying amount of trade and other receivables approximates their fair values.
Credit risk
Trade receivables generally have terms of less than 30 days. The Group has no material concentration of credit risk with any single counterparty and
is not dominantly exposed to any individual industry.
Credit risk can arise from the non-performance by counterparties of their contractual financial obligations towards the Group. To manage credit risk,
the Group maintains Group-wide procedures covering the application for credit approvals, granting and renewal of counterparty limits, proactive
monitoring of exposures against these limits and requirements triggering secured payment terms. As part of these processes, the credit exposures with
all counterparties are regularly monitored and assessed on a timely basis. The credit quality of the Group’s customers is reviewed and the solvency of
each debtor and their ability to pay the receivable is considered in assessing receivables for impairment.
The 10 largest customers represented 39 per cent (2023: 31 per cent) of total credit risk exposures managed by the Group.
Receivables are deemed to be past due or impaired in accordance with the Group’s terms and conditions. These terms and conditions are determined
on a case-by-case basis with reference to the customer’s credit quality, payment performance and prevailing market conditions. As at 30 June
2024, trade receivables of US$59 million (2023: US$8 million) were past due but not impaired. The majority of these receivables were less than
30 days overdue.
At 30 June 2024, trade receivables are stated net of provisions for expected credit losses of US$1 million (2023: US$9 million).
9 Trade and other payables
2024
US$M
2023
US$M
Trade payables
5,338
4,893
Other payables
1,426
1,407
Total
6,764
6,300
Comprising:
Current
6,719
6,296
Non-current
45
4
10 Inventories
2024
US$M
2023
US$M
Definitions
Raw materials and consumables
2,305
2,106
Spares, consumables and other supplies yet to be utilised in the production
process or in the rendering of services.
Work in progress
3,516
3,514
Commodities currently in the production process that require further processing
by the Group to a saleable form.
Finished goods
1,218
1,003
Commodities ready-for-sale and not requiring further processing by the Group.
Total1
7,039
6,623
Comprising:
Inventories classified as non-current are not expected to be utilised or sold within
12 months after the reporting date or within the operating cycle of the business.
Current
5,828
5,220
Non-current
1,211
1,403
1. Inventory write-downs of US$69 million were recognised during the year (2023: US$100 million; 2022: US$163 million). Inventory write-downs of US$19 million made in previous periods
were reversed during the year (2023: US$37 million; 2022: US$23 million).
Recognition and measurement
Regardless of the type of inventory and its stage in the production process, inventories are valued at the lower of cost and net realisable value. Cost is
determined primarily on the basis of average costs and involves estimates of expected metal recoveries and work in progress volumes, calculated using
available industry, engineering and scientific data. These estimates are periodically reassessed by the Group taking into account technical analysis and
historical performance.
For processed inventories, cost is derived on an absorption costing basis. Cost comprises costs of purchasing raw materials and costs of production,
including attributable mining and manufacturing overheads taking into consideration normal operating capacity.
Inventory quantities are assessed primarily through surveys and assays.
153
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Contents
Financial Statements
Resource assets
11 Property, plant and equipment
Land and
buildings
US$M
Plant and
equipment
US$M
Other mineral
assets
US$M
Assets under
construction
US$M
Exploration
and evaluation
US$M
Total
US$M
Net book value – 30 June 2024
At the beginning of the financial year
8,140
36,654
13,304
13,481
239
71,818
Additions1
27
1,206
795
8,840
58
10,926
Remeasurements of index-linked freight contracts2
–
230
–
–
–
230
Depreciation for the year
(637)
(4,287)
(264)
–
–
(5,188)
Impairments for the year3
(88)
(1,440)
(930)
(1,365)
(10)
(3,833)
Disposals
(1)
(15)
–
–
–
(16)
Divestment of subsidiaries and operations4
(293)
(1,093)
(23)
(44)
–
(1,453)
Transfers and other movements
417
3,249
(655)
(3,815)
(51)
(855)
At the end of the financial year5
7,565
34,504
12,227
17,097
236
71,629
– Cost
15,180
86,989
19,900
19,106
1,035
142,210
– Accumulated depreciation and impairments
(7,615)
(52,485)
(7,673)
(2,009)
(799)
(70,581)
Net book value – 30 June 2023
At the beginning of the financial year
8,079
35,500
8,494
9,031
191
61,295
Additions1
194
1,024
842
6,332
56
8,448
Acquisition of subsidiaries and operations6
88
2,256
4,612
720
–
7,676
Remeasurements of index-linked freight contracts2
–
53
–
–
–
53
Depreciation for the year
(586)
(4,156)
(225)
–
–
(4,967)
Impairments for the year3
–
(73)
–
–
–
(73)
Disposals
(2)
(6)
–
–
–
(8)
Transfers and other movements
367
2,056
(419)
(2,602)
(8)
(606)
At the end of the financial year5
8,140
36,654
13,304
13,481
239
71,818
– Cost
15,258
85,394
19,420
14,245
1,029
135,346
– Accumulated depreciation and impairments
(7,118)
(48,740)
(6,116)
(764)
(790)
(63,528)
1. Includes change in estimates and net foreign exchange gains/(losses) related to the closure and rehabilitation provisions for operating sites. Refer to note 15 ‘Closure and rehabilitation provisions’.
2. Relates to remeasurements of index-linked freight contracts including continuous voyage charters (CVCs). Refer to note 22 ‘Leases’.
3. Refer to note 13 ‘Impairment of non-current assets’ for information on impairments.
4. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
5. Includes the carrying value of the Group’s right-of-use assets relating to land and buildings and plant and equipment of US$2,708 million (2023: US$2,809 million). Refer to note 22
‘Leases’ for the movement of the right-of-use assets.
6. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
Recognition and measurement
Property, plant and equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment charges. Cost is the fair value of consideration given
to acquire the asset at the time of its acquisition or construction and includes the direct costs of bringing the asset to the location and the condition
necessary for operation and the estimated future costs of closure and rehabilitation of the facility.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. Refer to note 22 ‘Leases’ for further details. Right-of-use assets are presented within the category of property, plant and equipment according
to the nature of the underlying asset leased.
Exploration and evaluation
Exploration costs are incurred to discover mineral resources. Evaluation costs are incurred to assess the technical feasibility and commercial viability
of resources found.
Exploration and evaluation expenditure is charged to the income statement as incurred, except in the following circumstances in which case the
expenditure may be capitalised:
– the exploration and evaluation activity is within an area of interest that was previously acquired as an asset acquisition or in a business combination
and measured at fair value on acquisition or
– the existence of a commercially viable mineral deposit has been established
A regular review of each area of interest is undertaken to determine the appropriateness of continuing to carry forward costs in relation to that area.
Capitalised costs are only carried forward to the extent that they are expected to be recovered through the successful exploitation of the area of interest
or alternatively by its sale. To the extent that capitalised expenditure is no longer expected to be recovered, it is charged to the income statement.
Development expenditure
When proven mineral reserves are determined and development is sanctioned, capitalised exploration and evaluation expenditure is reclassified as
assets under construction within property, plant and equipment. All subsequent development expenditure is capitalised and classified as assets under
construction, provided commercial viability conditions continue to be satisfied.
1 Consolidated Financial Statements continued
154
BHP Annual Report 2024
The Group may use funds sourced from external parties to finance the acquisition and development of assets and operations. Finance costs are
expensed as incurred, except where they relate to the financing of construction or development of qualifying assets. Borrowing costs directly attributable
to acquiring or constructing a qualifying asset are capitalised during the development phase.
In the instance where saleable material is extracted prior to the commissioning of a project/site, sale proceeds are recognised as revenue, with associated
costs also recognised in the income statement. On completion of development, all assets included in assets under construction are reclassified as either
plant and equipment or other mineral assets and depreciation commences.
Other mineral assets
Other mineral assets comprise:
– capitalised exploration, evaluation and development expenditure for assets in production
– mineral rights acquired
– capitalised development and production stripping costs
Overburden removal costs
The process of removing overburden and other waste materials to access mineral deposits is referred to as stripping. Stripping is necessary to obtain
access to mineral deposits and occurs throughout the life of an open-pit mine. Development and production stripping costs are classified as other mineral
assets in property, plant and equipment.
Stripping costs are accounted for separately for individual components of an ore body. The determination of components is dependent on the mine plan
and other factors, including the size, shape and geotechnical aspects of an ore body. The Group accounts for stripping activities as follows:
Development stripping costs
These are initial overburden removal costs incurred to obtain access to mineral deposits that will be commercially produced. These costs are capitalised
when it is probable that future economic benefits (access to mineral ores) will flow to the Group and costs can be measured reliably.
Once the production phase begins, capitalised development stripping costs are depreciated using the units of production method based on the proven
and probable reserves of the relevant identified component of the ore body which the initial stripping activity benefits.
Production stripping costs
These are post initial overburden removal costs incurred during the normal course of production activity, which commences after the first saleable
minerals have been extracted from the component. Production stripping costs can give rise to two benefits, the accounting for which is outlined below:
Production stripping activity
Benefits of stripping activity Extraction of ore (inventory) in current period.
Improved access to future ore extraction.
Period benefited
Current period
Future period(s)
Recognition and
measurement criteria
When the benefits of stripping activities are realised in the form
of inventory produced; the associated costs are recorded in
accordance with the Group’s inventory accounting policy.
When the benefits of stripping activities are improved access to
future ore; production costs are capitalised when all the following
criteria are met:
– the production stripping activity improves access to a specific
component of the ore body and it is probable that economic
benefits arising from the improved access to future ore
production will be realised
– the component of the ore body for which access has been
improved can be identified
– costs associated with that component can be measured reliably
Allocation of costs
Production stripping costs are allocated between the inventory produced and the production stripping asset using a
life-of-component waste-to-ore (or mineral contained) strip ratio. When the current strip ratio is greater than the estimated
life-of-component ratio a portion of the stripping costs is capitalised to the production stripping asset.
Asset recognised from
stripping activity
Inventory
Other mineral assets within property, plant and equipment.
Depreciation basis
Not applicable
On a component-by-component basis using the units of
production method based on proven and probable reserves.
Key judgements and estimates
Judgements: Judgement is applied by management in determining the components of an ore body.
Estimates: Estimates are used in the determination of stripping ratios and mineral reserves by component. Changes to estimates related to
life-of-component waste-to-ore (or mineral contained) strip ratios and the expected ore production from identified components are accounted for
prospectively and may affect depreciation rates and asset carrying values.
Depreciation
Depreciation of assets, other than land, assets under construction and capitalised exploration and evaluation that are not depreciated, is calculated
using either the straight-line (SL) method or units of production (UoP) method, net of residual values, over the estimated useful lives of specific assets.
The depreciation method and rates applied to specific assets reflect the pattern in which the asset’s benefits are expected to be used by the Group.
The Group’s proved and probable reserves for minerals assets are used to determine UoP depreciation unless doing so results in depreciation charges
that do not reflect the asset’s useful life. Where this occurs, alternative approaches to determining reserves are applied, to provide a phasing of periodic
depreciation charges that better reflects the asset’s expected useful life.
Where assets are dedicated to a mine lease, the useful lives below are subject to the lesser of the asset category’s useful life and the life of the mine
lease, unless those assets are readily transferable to another productive mine.
Assets classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell and therefore not depreciated.
155
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
11 Property, plant and equipment continued
Key estimates
The determination of useful lives, residual values and depreciation methods involves estimates and assumptions and is reviewed annually.
Any changes to useful lives or any other estimates or assumptions, including the expected impact of climate change and the transition to a lower
carbon economy, may affect prospective depreciation rates and asset carrying values. The table below summarises the principal depreciation
methods and rates applied to major asset categories by the Group.
Category
Buildings
Plant and equipment
Mineral rights
Capitalised exploration, evaluation
and development expenditure
Typical depreciation methodology
SL
SL
UoP
UoP
Depreciation rate
25-50 years
3-30 years
Based on the rate of
depletion of reserves
Based on the rate of
depletion of reserves
Commitments
The Group’s commitments for capital expenditure were US$5,958 million as at 30 June 2024 (2023: US$3,975 million). The Group’s commitments related
to leases are included in note 22 ‘Leases’.
12 Intangible assets
2024
2023
Goodwill
US$M
Other
intangibles
US$M
Total
US$M
Goodwill
US$M
Other
intangibles
US$M
Total
US$M
Net book value
At the beginning of the financial year
1,389
221
1,610
1,197
172
1,369
Additions
–
101
101
–
51
51
Acquisition of subsidiaries and operations1
–
–
–
192
–
192
Amortisation for the year
–
(107)
(107)
–
(94)
(94)
Impairments for the year2
(50)
(7)
(57)
–
(2)
(2)
Disposals
–
(12)
(12)
–
(15)
(15)
Divestment of subsidiaries and operations3
–
(45)
(45)
–
–
–
Transfers and other movements
2
226
228
–
109
109
At the end of the financial year
1,341
377
1,718
1,389
221
1,610
– Cost
1,391
1,798
3,189
1,389
1,529
2,918
– Accumulated amortisation and impairments
(50)
(1,421)
(1,471)
–
(1,308)
(1,308)
1. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
2. Refer to note 13 ‘Impairment of non-current assets’ for information on impairments.
3. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
Recognition and measurement
Goodwill
Where the fair value of the consideration paid for a business acquisition exceeds the fair value of the identifiable assets, liabilities and contingent liabilities
acquired, the difference is treated as goodwill. Goodwill is not amortised and is measured at cost less any impairment losses.
Other intangibles
The Group capitalises amounts paid for the acquisition of identifiable intangible assets, such as software, licences and initial payments for the acquisition
of mineral lease assets, where it is considered that they will contribute to future periods through revenue generation or reductions in cost. These assets,
classified as finite life intangible assets, are carried in the balance sheet at the fair value of consideration paid (cost) less accumulated amortisation and
impairment charges. Intangible assets with finite useful lives are amortised on a straight-line basis over their useful lives. The estimated useful lives are
generally no greater than eight years.
Initial payments for the acquisition of intangible mineral lease assets are capitalised and amortised over the term of the permit. A regular review is
undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area. Capitalised costs are
only carried forward to the extent that they are expected to be recovered through the successful exploitation of the area of interest or alternatively by
its sale. To the extent that capitalised expenditure is no longer expected to be recovered, it is charged to the income statement.
Assets classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell and therefore not amortised.
13 Impairment of non-current assets
2024
Cash generating unit
Segment
Property,
plant and
equipment
US$M
Goodwill
and other
intangibles
US$M
Equity-
accounted
investment
US$M
Total
US$M
Western Australia Nickel
Group and unallocated
3,744
56
–
3,800
Other
Various
89
1
–
90
Total impairment of non-current assets
3,833
57
–
3,890
Reversal of impairment
–
–
–
–
Net impairment of non-current assets
3,833
57
–
3,890
1 Consolidated Financial Statements continued
156
BHP Annual Report 2024
2023
Cash generating unit
Segment
Property,
plant and
equipment
US$M
Goodwill
and other
intangibles
US$M
Equity-
accounted
investment
US$M
Total
US$M
Other
Various
73
2
–
75
Total impairment of non-current assets
73
2
–
75
Reversal of impairment
–
–
–
–
Net impairment of non-current assets
73
2
–
75
Recognition and measurement
Impairment tests for all non-financial assets (excluding goodwill) are performed when there is an indication of impairment. Goodwill is tested for impairment
at least annually. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the
cash generating unit (CGU) to which the asset belongs, being the smallest identifiable group of assets that generates cash inflows that are largely independent
of the cash inflows from other assets or groups of assets. If the carrying amount of the asset or CGU exceeds its recoverable amount, the asset or CGU is
impaired and an impairment loss is charged to the income statement so as to reduce the carrying amount in the balance sheet to its recoverable amount.
Previously impaired assets (excluding goodwill as impairment losses are not reversed in subsequent periods) are reviewed for possible reversal
of previous impairment at each reporting date. Impairment reversal cannot exceed the carrying amount that would have been determined (net of
depreciation) had no impairment loss been recognised for the asset or CGU. Such reversal is recognised in the income statement. There were no
reversals of impairment in the current or prior year.
How recoverable amount is calculated
The recoverable amount is the higher of an asset’s or CGU’s fair value less cost of disposal (FVLCD) and its value in use (VIU).
Fair value less cost of disposal
FVLCD is an estimate of the amount that a market participant would pay for an asset or CGU, less the cost of disposal. FVLCD for mineral assets is
generally determined using independent market assumptions to calculate the present value of the estimated future post-tax cash flows expected to arise
from the continued use of the asset, including the anticipated cash flow effects of any capital expenditure to enhance production or reduce cost, and
its eventual disposal where a market participant may take a consistent view. Cash flows are discounted using an appropriate post-tax market discount
rate to arrive at a net present value of the asset, which is compared against the asset’s carrying value. FVLCD may also take into consideration other
market-based indicators of fair value. FVLCD are based primarily on Level 3 inputs as defined in note 24 ‘Financial risk management’ unless otherwise noted.
Value in use
VIU is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and
its eventual disposal or closure. VIU is determined by applying assumptions specific to the Group’s continued use and cannot take into account future
development. These assumptions are different to those used in calculating FVLCD and consequently the VIU calculation is likely to give a different result
(usually lower) to a FVLCD calculation.
Impairment of non-current assets (excluding goodwill)
Impairment of non-current assets relating to the year ended 30 June 2024 are detailed below.
Western Australia Nickel
At 30 June 2024, the Group determined that the overall recoverable amount of the Western Australia Nickel CGU to be approximately negative
US$600 million including closure provisions. Considering the recoverable amount of individual assets within the CGU, this resulted in an aggregate
impairment to property, plant and equipment of US$3,744 million and intangible assets of US$56 million in FY2024. The impairment is driven by
oversupply in the global nickel market that has seen a sharp decline in forward nickel prices in the short to medium term, escalation in capital costs for
Western Australia Nickel, and changes to development plans including the Group’s decision, announced on 11 July 2024, to temporarily suspend Nickel
West operations and the West Musgrave project at Western Australia Nickel. The Western Australia Nickel CGU is part of the ‘Group and unallocated
items’ reportable segment.
The post-impairment carrying value of Western Australia Nickel property, plant and equipment is not material.
Recoverable amount used for the impairment assessment was determined using a fair value less costs of disposal methodology, applying discounted
cash flow techniques utilising a post-tax real discount rate of 7.5 per cent. The valuation is most sensitive to changes in the long-term nickel price outlook
and foreign exchange assumptions.
There were no material impairments of non-current assets for the year ended 30 June 2023.
Impairment test for goodwill
The carrying amount of goodwill has been allocated to the CGUs, or groups of CGUs, as follows:
Cash generating unit
2024
US$M
2023
US$M
Olympic Dam
–
1,010
OZ Minerals Limited provisional goodwill
–
192
Copper SA
1,154
–
Other
187
187
Total goodwill
1,341
1,389
For the purpose of impairment testing, goodwill has been allocated to CGUs or groups of CGUs, that are expected to benefit from the synergies of
previous business combinations, which represent the level at which management will monitor and manage goodwill.
In previous reporting periods the Olympic Dam goodwill has been tested for impairment as part of the Olympic Dam CGU. In the current reporting period,
and moving forward, the Olympic Dam goodwill has been tested for impairment at the Copper SA level, which comprises Olympic Dam, Carrapateena
and Prominent Hill.
157
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
13 Impairment of non-current assets continued
On 2 May 2023, the Group acquired OZ Minerals Limited (OZL) (refer to note 29 ‘Business combination’ for details). In 2024 following the acquisition
of OZL, the Group reorganised its reporting structure and established Copper SA, which comprises the Olympic Dam CGU as well as the acquired
Carrapateena and Prominent Hill CGUs. On completion of the OZL business combination accounting, the OZL goodwill of US$194 million was allocated
as follows:
– US$144 million to the Copper SA group of CGUs; and
– US$50 million to Western Australia Nickel CGU, which was written off at 31 December 2023 as part of the impairment of Western Australia
Nickel assets.
From FY2024, the Olympic Dam goodwill is tested for impairment as part of the Copper SA group of CGUs as this represents the level at which the Group
now monitors and manages the goodwill.
Goodwill held by other CGUs is US$187 million (2023: US$187 million). This represents less than one per cent of net assets at 30 June 2024
(2023: less than one per cent). There was no impairment of other goodwill in the year to 30 June 2024 (2023: US$ nil).
Copper SA goodwill
Impairment test
conclusion
The Group performed an impairment test of the Copper SA Group of CGUs, including goodwill, as at 30 June 2024 and an
impairment charge was not required.
How did the
goodwill arise?
Goodwill of US$1,010 million and US$144 million in relation to the acquisitions of WMC Resources Ltd (2005) and OZ Minerals Ltd
(2023), respectively.
Segment
Copper SA is part of the Copper reportable segment.
How were the
valuations calculated?
FVLCD methodology using DCF techniques has been applied in determining the recoverable amount of Copper SA.
Significant
assumptions and
sensitivities
The valuation of Copper SA exceeded its carrying amount by approximately US$8.4 billion and is most sensitive to changes in copper
commodity price, production volumes, operating costs and discount rates. It is considered that there are no reasonably possible
changes in these key assumptions that would, in isolation, result in the estimated recoverable amount being equal to the carrying
amount. The valuation applied a post-tax real discount rate of 7.0 per cent.
Key judgements and estimates that have been applied in the FVLCD valuation are disclosed further below.
Key judgements and estimates
Judgements: Assessment of indicators
of impairment or impairment reversal
and the determination of CGUs for
impairment purposes require significant
management judgement.
Indicators of impairment may include changes
in the Group’s operating and economic
assumptions, including those arising from
changes in reserves or mine planning, updates
to the Group’s commodity supply, demand
and price forecasts, or the possible additional
impacts from emerging risks including those
related to climate change and the transition to
a low-carbon economy.
Climate change
The Group’s impairment assessments may be
impacted by climate change and the transition
to a low-carbon economy. Further detail is
provided in note 16 ‘Climate change’.
Estimates: The Group performs a recoverable
amount determination for an asset or CGU
when there is an indication of impairment or
impairment reversal.
When the recoverable amount is measured
by reference to FVLCD, in the absence
of quoted market prices or binding sale
agreement, estimates are made regarding
the present value of future post-tax cash
flows. These estimates are made from the
perspective of a market participant and
include prices, future production volumes,
operating costs, capital expenditure, closure
and rehabilitation costs, taxes, risking factors
applied to cash flows and discount rates.
The cash flow forecasts may include net
cash flows expected from the extraction,
processing and sale of material that does not
currently qualify for inclusion in ore reserves.
Reserves and resources are included in the
assessment of FVLCD to the extent that it is
considered probable that a market participant
would attribute value to them.
When recoverable amount is measured using
VIU, estimates are made regarding the present
value of future cash flows based on internal
budgets and forecasts and life of asset plans.
Key estimates are similar to those identified for
FVLCD, although some assumptions and values
may differ as they reflect the perspective of
management rather than a market participant.
All estimates require judgements and
assumptions and are subject to risk and
uncertainty that may be beyond the control of
the Group; hence, there is a possibility that
changes in circumstances will materially alter
projections, which may impact the recoverable
amount of an asset or CGU at each reporting
date. With the exception of the Western
Australia Nickel CGU impairment mentioned
above, no indicators of impairment, or
impairment reversal, were identified across the
Group’s remaining CGUs at 30 June 2024.
The significant estimates impacting
the Group’s recoverable amount
determinations are:
Commodity prices
Commodity prices were based on latest
internal forecasts which assume short-term
market prices will revert to the Group’s
assessment of long-term price. These price
forecasts reflect management’s long-term
views of global supply and demand, built upon
past experience of the commodity markets
and are benchmarked with external sources
of information such as analyst forecasts.
Prices are adjusted based upon premiums or
discounts applied to global price markers to
reflect the location, nature and quality of the
Group’s production, or to take into account
contracted prices.
Future production volumes
Estimated production volumes were
based on detailed data and took into
account development plans established by
management as part of the Group’s long-term
planning process. When estimating FVLCD,
assumptions reflect all reserves and resources
that a market participant would consider
when valuing the respective CGU, which in
some cases are broader in scope than the
reserves that would be used in a VIU test.
In determining FVLCD, risk factors may be
applied to reserves and resources which do
not meet the criteria to be treated as proved.
Cash outflows (including operating
costs, capital expenditure, closure and
rehabilitation costs and taxes)
Cash outflows are based on internal budgets
and forecasts and life of asset plans.
Cost assumptions reflect management
experience and expectations. Tax assumptions
reflect existing and substantively enacted
tax and royalty regimes and rates applicable
in the jurisdiction of the CGU. In the case of
FVLCD, cash flow projections include the
anticipated cash flow effects of any capital
expenditure to enhance production or reduce
cost where a market participant may take a
consistent view. VIU does not take into account
future development.
Discount rates
The Group uses real post-tax discount
rates applied to real post-tax cash flows.
The discount rates are derived using the
weighted average cost of capital methodology.
Adjustments to the rates are made for any risks
that are not reflected in the underlying cash
flows, including country risk.
1 Consolidated Financial Statements continued
158
BHP Annual Report 2024
14 Deferred tax balances
The movement for the year in the Group’s net deferred tax position is as follows:
2024
US$M
2023
US$M
2022
US$M
Net deferred tax (liability)/asset
At the beginning of the financial year
(4,243)
(3,007)
(1,402)
Acquisition of subsidiaries and operations1
–
(867)
–
Income tax credit/(charge) recorded in the income statement2,3,4
988
(387)
(125)
Income tax (charge)/credit recorded directly in equity
(6)
6
(42)
Divestment of subsidiaries and operations5
(3)
–
(1,439)
Other movements
(1)
12
1
At the end of the financial year
(3,265)
(4,243)
(3,007)
1. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
2. Includes US$1,125 million income tax credit in the year ended 30 June 2024 as a result of an impairment of Western Australia Nickel Assets.
3. Includes US$(283) million revaluation of deferred tax balances in the year ended 30 June 2023, following the substantive enactment of the Chilean Royalty Bill. Refer to note 3 ‘Exceptional
items’ for more information.
4. Includes Discontinued operations income tax charge to the income statement in 2022 of US$(61) million.
5. Relates to the divestment of BMC and merger of Petroleum with Woodside in 2022. Refer to notes 3 ‘Exceptional items’ and 28 ‘Discontinued operations’ for more information.
For recognition and measurement refer to note 6 ‘Income tax expense’.
The composition of the Group’s net deferred tax assets and liabilities recognised in the balance sheet and the deferred tax expense (credited)/charged to
the income statement is as follows:
Deferred tax assets
Deferred tax liabilities
(Credited)/charged to the income statement
2024
US$M
2023
US$M
2024
US$M
2023
US$M
2024
US$M
2023
US$M
2022
US$M
Type of temporary difference
Depreciation1
(756)
(629)
5,221
6,259
(894)
452
554
Exploration expenditure
14
11
–
(1)
(2)
(2)
13
Employee benefits
23
27
(407)
(425)
6
(94)
20
Closure and rehabilitation
155
143
(1,770)
(1,753)
(29)
(296)
24
Resource rent tax
–
–
–
–
–
–
(129)
Other provisions
55
64
(196)
(210)
23
4
49
Deferred income
–
14
(23)
–
(9)
37
(31)
Deferred charges
(55)
(82)
522
644
(148)
85
7
Investments, including foreign tax credits
274
225
411
370
(6)
(54)
(298)
Foreign exchange gains and losses
(9)
(14)
80
190
(115)
42
33
Tax losses
364
276
(84)
(214)
40
37
28
Lease liability1
9
18
(730)
(767)
45
(83)
(10)
Other
(7)
3
308
206
101
259
(135)
Total
67
56
3,332
4,299
(988)
387
125
1. Includes deferred tax associated with the recognition of right-of-use assets and lease liabilities on adoption of IFRS 16. Refer to note 22 ‘Leases’.
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14 Deferred tax balances continued
The composition of the Group’s unrecognised deferred tax assets and liabilities is as follows:
2024
US$M
2023
US$M
Unrecognised deferred tax assets
Tax losses and tax credits1
9,126
8,572
Investments in subsidiaries2
1,533
1,661
Mineral rights3
3,216
3,287
Other deductible temporary differences4
1,978
1,912
Total unrecognised deferred tax assets
15,853
15,432
Unrecognised deferred tax liabilities
Investments in subsidiaries2
2,307
2,179
Total unrecognised deferred tax liabilities
2,307
2,179
1. At 30 June 2024, the Group had income and capital tax losses with a tax benefit of US$5,589 million (2023: US$5,709 million) and tax credits of US$3,537 million (2023: US$2,863 million),
which are not recognised as deferred tax assets, because it is not probable that future taxable profits or capital gains will be available against which the Group can utilise the benefits.
The gross amount of tax losses carried forward that have not been recognised is as follows:
Year of expiry
2024
US$M
2023
US$M
Income tax losses
Not later than one year
28
22
Later than one year and not later than two years
10
5
Later than two years and not later than five years
43
47
Later than five years and not later than 10 years
652
549
Later than 10 years and not later than 20 years
1,003
1,317
Unlimited
5,620
4,889
7,356
6,829
Capital tax losses
Not later than one year
–
–
Later than two years and not later than five years
–
–
Unlimited
13,494
13,870
Gross amount of tax losses not recognised
20,850
20,699
Tax effect of total losses not recognised
5,589
5,709
Of the US$3,537 million of tax credits, US$2,792 million expires not later than 10 years (2023: US$2,405 million) and US$745 million expires later than 10 years and not later than 20 years
(2023: US$458 million).
2. The Group has deferred tax assets and deferred tax liabilities associated with undistributed earnings of subsidiaries that have not been recognised because the Group is able to control the
timing of the reversal of the temporary differences and it is not probable that these differences will reverse in the foreseeable future. Where the Group has undistributed earnings held by
associates and joint interests, the deferred tax liability will be recognised as there is no ability to control the timing of the potential distributions.
3. The Group has deductible temporary differences relating to mineral rights for which deferred tax assets have not been recognised because it is not probable that future capital gains will be
available against which the Group can utilise the benefits. The deductible temporary differences do not expire under current tax legislation.
4. The Group has other deductible temporary differences for which deferred tax assets have not been recognised because it is not probable that future taxable profits will be available against
which the Group can utilise the benefits. The deductible temporary differences do not expire under current tax legislation.
15 Closure and rehabilitation provisions
2024
US$M
2023
US$M
At the beginning of the financial year
9,887
8,689
Capitalised amounts for operating sites:
Change in estimate
463
510
Exchange translation
(58)
(50)
Adjustments charged/(credited) to the income statement:
Change in estimate
85
12
Exchange translation
(47)
(8)
Other adjustments to the provision:
Amortisation of discounting impacting net finance costs
556
839
Acquisition of subsidiaries and operations1
–
168
Divestment of subsidiaries and operations2
(652)
–
Expenditure on closure and rehabilitation activities
(395)
(273)
Other movements
(2)
–
At the end of the financial year
9,837
9,887
Comprising:
Current
610
520
Non-current
9,227
9,367
Operating sites
6,349
7,366
Closed sites
3,488
2,521
1. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
2. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
1 Consolidated Financial Statements continued
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Profile of closure and rehabilitation cash flows
The table below indicates the estimated profile of the Group’s closure and rehabilitation provisions. The profile reflects the undiscounted forecast cash
flows that underpin the provisions. In some instances, the Group has an obligation to rehabilitate and maintain a closed site for an indefinite period.
For the purpose of this analysis, the cashflow period has been restricted to 100 years.
Proportion of the Group’s undiscounted forecast cashflows
2024
%
2023
%
In one year or less
3
3
In more than one year but not more than two years
3
4
In more than two years but not more than five years
8
8
In more than five years but not more than ten years
15
14
In more than ten years
71
71
Total
100
100
The Group is required to close and rehabilitate sites and associated facilities at the end of or, in some cases, during the course of production to a
condition acceptable to the relevant authorities, as specified in licence requirements and the Group’s closure performance requirements.
The key components of closure and rehabilitation activities are:
– the removal of all unwanted infrastructure associated with an operation
– the return of disturbed areas to a safe, stable and self-sustaining condition, consistent with the agreed post-closure land use
Recognition and measurement
Provisions for closure and rehabilitation are recognised by the Group when:
– it has a present legal or constructive obligation as a result of past events
– it is more likely than not that an outflow of resources will be required to settle the obligation
– the amount can be reliably estimated
Initial recognition and measurement Subsequent measurement
Closure and rehabilitation provisions
are initially recognised when an
environmental disturbance first
occurs. The individual site provisions
are an estimate of the expected
value of future cash flows required to
close the relevant site using current
standards and techniques and taking
into account risks and uncertainties.
Individual site provisions are
discounted to their present value
using currency specific discount rates
aligned to the estimated timing of
cash outflows.
When provisions for closure and
rehabilitation are initially recognised,
the corresponding cost is capitalised
as an asset, representing part of the
cost of acquiring the future economic
benefits of the operation.
The closure and rehabilitation asset, recognised within property, plant and equipment, is depreciated over the life of the
operations. The value of the provision is progressively increased over time as the effect of discounting unwinds, resulting
in an expense recognised in net finance costs.
The closure and rehabilitation provision is reviewed at each reporting date to assess if the estimate continues to reflect
the best estimate of the obligation. If necessary, the provision is remeasured to account for factors such as:
– additional disturbance during the period
– revisions to estimated reserves, resources and lives of operations including any changes to expected operating
lives arising from the Group’s latest assessment of the potential impacts of climate change and the transition to a
low-carbon economy
– developments in technology
– changes to regulatory requirements and environmental management strategies
– changes in the estimated extent and costs of anticipated activities, including the effects of inflation and movements in
foreign exchange rates
– movements in interest rates affecting the discount rate applied
Changes to the closure and rehabilitation estimate for operating sites are added to, or deducted from, the related asset
and amortised on a prospective basis over the remaining life of the operation, generally applying the units of production
method.
Costs arising from unforeseen circumstances, such as the contamination caused by unplanned discharges, are
recognised as an expense and liability when the event gives rise to an obligation that is probable and capable of reliable
estimation.
Closed sites
Where future economic benefits are no longer expected to be derived through operation, changes to the associated closure and remediation costs
are charged to the income statement in the period identified. This amounted to US$38 million in the year ended 30 June 2024 (2023: US$4 million;
2022: US$74 million).
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Financial Statements
15 Closure and rehabilitation provisions continued
Key estimates
Closure cost estimates are generally based on
conceptual level studies early in the operating
life of an asset with more detailed studies and
planning performed as closure risks (including
those related to climate change) are identified
and/or as an asset, or parts thereof, near closure.
As such, the recognition and measurement of
closure and rehabilitation provisions requires the
use of significant estimates and assumptions,
including, but not limited to:
– the extent (due to legal or constructive
obligations) of potential activities
required for the removal of infrastructure,
decharacterisation of tailings storage
facilities and rehabilitation activities
– costs associated with future
closure activities
– the extent and period of post-closure
monitoring and maintenance, including
water management
– applicable discount rates
– the timing of cash flows and ultimate closure
of operations
The extent, cost and timing of future
closure activities may also be impacted by
the potential physical impacts of climate
change and the transition to a low-carbon
economy. Further detail is provided in note 16
‘Climate change’.
Estimates for post-closure monitoring and
maintenance reflect the Group’s strategies for
individual sites, which may include possible
relinquishment. The period of monitoring
and maintenance included in the provision
requires judgement and considers regulatory
and licencing requirements, the outcomes
of studies and management’s current
assessment of stakeholder expectations.
While progressive closure is performed
across a number of operations, significant
activities are generally undertaken at the end
of the production life at the individual sites, the
estimated timing of which is informed by the
Group’s current assumptions relating to demand
for commodities and carbon pricing, and their
impact on the Group’s long-term price forecasts.
Approximately 52 per cent (2023: 51 per cent)
of the Group’s total undiscounted forecast
cashflows are expected to be incurred after
more than 30 years, reflecting the long-lived
nature of many of the Group’s operations which
have remaining production lives ranging from
5-87 years (2023: 1-103 years). The discount
rates applied to the Group’s closure and
rehabilitation provisions are determined by
reference to the currency of the closure cash
flows, the period over which the cash flows will
be incurred and prevailing market interest rates
(where available). The discount rates applied
to the Group’s closure and rehabilitation
provisions were revised during the year to
reflect increases in market interest rates.
The effect of changes to discount rates was a
decrease of approximatively US$336 million
in the closure and rehabilitation provision of
which US$167 million in respect of closed sites
was recognised in the income statement.
While the closure and rehabilitation provisions
reflect management’s best estimates based
on current knowledge and information, further
studies, trials and detailed analysis of relevant
knowledge and resultant closure activities for
individual assets continue to be performed
throughout the life of asset. Such studies
and analysis can impact the estimated costs
of closure activities. Estimates can also be
impacted by the emergence of new closure and
rehabilitation techniques, changes in regulatory
requirements and stakeholder expectations
for closure (including costs associated
with equitable transition), development of
new technologies, risks relating to climate
change and the transition to a low-carbon
economy, and experience at other operations.
These uncertainties may result in future
actual expenditure differing from the amounts
currently provided for in the balance sheet.
Sensitivity
A 0.5 per cent increase in the discount rates
applied at 30 June 2024 would result in a
decrease to the closure and rehabilitation
provision of approximately US$665 million, a
decrease in property, plant and equipment of
approximately US$457 million in relation to
operating sites and an income statement credit
of approximately US$208 million in respect of
closed sites. In addition, the change would result
in a decrease of approximately US$23 million
to depreciation expense and a US$21 million
increment in net finance costs due to unwind of
discount for the year ending 30 June 2025.
Given the long-lived nature of the majority of
the Group’s assets, the majority of final closure
activities are generally not expected to occur
for a significant period of time.
However, a one-year acceleration in
forecast cash flows of the Group’s closure
and rehabilitation provisions, in isolation,
would result in an increase to the provision
of approximately US$231 million, an
increase in property, plant and equipment
of US$148 million in relation to operating
sites and an income statement charge of
US$83 million in respect of closed sites.
16 Climate change
The Group recognises that warming of the climate is unequivocal, the human influence is clear and physical impacts are unavoidable. Identifying,
monitoring and assessing the actual and potential impacts of climate change is complex and the Group continues to develop its assessment of the actual
and potential financial impacts of climate-related risks (threats and opportunities), including the transition to a net zero economy and physical risk impacts.
The Group’s current climate change strategy focuses on:
– building a portfolio to support the megatrends shaping our world, including future-facing commodities (copper, nickel and potash) and steelmaking
materials (iron ore and steelmaking coal)
– reducing operational (Scopes 1 and 2 from operated assets) greenhouse gas (GHG) emissions
– investing in low to zero GHG emissions technologies
– supporting Scope 3 GHG emissions reductions in the Group’s value chain and promoting product stewardship
– managing climate-related risks
– working with others to enhance the global policy and market response
Areas of these Financial Statements that may be impacted in connection with this strategy throughout the value creation and delivery cycle of the Group’s
operations, include:
Phase
Areas of potential Financial Statement impact
Exploration and acquisition
– Financial impact of portfolio decisions
Development and mining /
Process and logistics
– Impact of transition risks on asset carrying values
– Physical climate-related risks and asset carrying values
– Application of carbon pricing assumptions and acquisition of carbon credits
– Useful economic lives of property, plant and equipment
– Expenditure on operational (Scopes 1 and 2 from operated assets) decarbonisation
Sales, marketing and
procurement
– Expenditure to support value chain (Scope 3) decarbonisation
Closure and rehabilitation
– Timing, scope and expected cost of closure and rehabilitation activities
At the date of issue of these Financial Statements, indicators show the appropriate measures are not in place globally to drive decarbonisation at the
pace or scale required to achieve the aim of the Paris Agreement to limit the global average temperature increase to 1.5°C above pre-industrial levels.
The significant judgements and key estimates used in the preparation of these Financial Statements reflect the Group’s current planning range (which
implies a projected global average temperature increase of approximately 2°C by CY2100), as described below.
1 Consolidated Financial Statements continued
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While not the basis of preparation of these Financial Statements, the
Group continues to perform sensitivity analysis under the Group’s 1.5°C
scenario to consider potential Financial Statement impacts of commodity
and carbon prices in a rapidly decarbonising world. The Group’s 1.5°C
scenario is not a forecast of what is likely to occur.
Future changes to the Group’s climate change strategy or global
decarbonisation trends may impact the Group’s significant judgements
and key estimates, and result in material changes to financial results,
cash flows and the carrying values of certain assets and liabilities in future
reporting periods.
Financial impact of portfolio decisions
Over recent years, the Group has repositioned its portfolio towards
commodities that can help enable and support the megatrends of
decarbonisation and electrification, urbanisation and population growth.
Refer to note 2 ‘Revenue’, which presents current and prior year
revenue by commodity. Key portfolio changes the Group has made in
FY2024 include:
– sanctioning of the Jansen Stage 2 potash investment (following approval
of Jansen Stage 1 in FY2022)
– further consolidation of the Group’s steelmaking coal portfolio
to concentrate on the higher-quality (grade) coals (which enable
steelmakers to be more efficient and operate with a lower GHG
emissions intensity) through the divestment of Blackwater and Daunia
mines from the BHP Mitsubishi Alliance (BMA) (following the divestment
of the Group’s interest in BHP Mitsui Coal in FY2022)
In recent years, the Group also:
– completed the acquisition of OZ Minerals in FY2023 to support the
creation of a South Australia copper basin
– completed the divestment of the Group’s Petroleum business through its
merger with Woodside in FY2022
– divested the Group’s interest in the Cerrejón non-operated energy coal
joint venture in FY2022
Also in FY2022, the Group announced that it would retain New South
Wales Energy Coal (NSWEC) in its portfolio, seek the relevant approvals
to continue mining beyond the current consent that expires at the end of
FY2026 and proceed with a managed process to cease mining at the asset
by the end of FY2030.
Following impairments recognised in previous periods, the net
carrying value of NSWEC at 30 June 2024 is approximately negative
US$200 million comprising property, plant and equipment (PP&E) of
approximately US$540 million and closure provisions and other liabilities of
approximately US$740 million. As at 30 June 2024, the potential exposure
to further impairment for NSWEC is limited to the book value of PP&E of
US$540 million, with the forecast cash flows over the proposed operating
period supporting the current carrying value. Further, the useful lives of
NSWEC PP&E do not exceed the remaining proposed operating period.
In July 2024, the Group announced that the Nickel West operations and
West Musgrave project (Western Australia Nickel) would be temporarily
suspended from October 2024. Refer to note 13 ‘Impairment of non-current
assets’ for further details.
Impact of transition risks on asset carrying values
Significant judgements and key estimates in relation to the preparation
of these Financial Statements, including asset carrying values and
impairment assessments, are impacted by the Group’s current assessment
of the range of economic and climate-related conditions that could exist
in the world’s transition to a net zero economy, considering the current
trajectory of society and the global economy as a whole.
For example, demand for the Group’s commodities may decrease
due to policy, regulatory (including carbon pricing mechanisms), legal,
technological, market or societal responses to climate change, resulting
in a proportion of a cash generating unit’s (CGU) reserves becoming
incapable of extraction in an economically viable fashion. Alternatively,
technological or market developments increasing demand for commodities
in the portfolio that help enable decarbonisation may have a positive
impact on prices for those commodities.
The Group has developed three unique planning cases which comprise
the Group’s planning range: a ‘most likely’ base case, used as the basis for
judgements and assumptions in these Financial Statements, and an upside
case and downside case that provide the range’s boundaries. The three cases
reflect proprietary forecasts for the global economy and associated sub-
sectors (i.e. energy, transport, agriculture and steel) and the resulting market
outlook for the Group’s core commodities.
Given the complexity and inherent uncertainty of long run forecasting,
these pathways are reviewed periodically to reflect new information, with
a process in place to assess the need to update internal long-term price
outlooks for developments in the periods between pathway updates.
The Group reflects the planning range and associated price
outlooks in the internal valuations used as the basis for the Group’s
impairment assessments.
The discount rate used in the internal valuations reflects a real post-tax
weighted average cost of capital (WACC), including country and state risk
premia where appropriate, and ranges from 7.0 per cent to 9.5 per cent
across the Group (2023: 7.0 per cent to 9.5 per cent). Cash flow forecasts
used as the basis for impairment testing include asset specific risks,
including climate-related risks such as operational interruptions as a result
of physical climate-related risks, and therefore the Group does not include
a separate climate-related risk adjustment in the Group’s WACC.
Further detail on the Group’s significant judgements and estimates that
inform the planning range and FY2024 impairment assessments, is
included in note 13 ‘Impairment of non-current assets’.
In addition to the planning range, and as described below in ‘Paris
Agreement and 1.5°C scenarios’, the Group uses its 1.5°C scenario, which
implies a global average temperature increase of 1.5°C by CY2100, to test
resilience of the Group’s portfolio in a rapidly decarbonising world.
Physical climate-related risks and asset carrying values
The Group’s operations are exposed to physical climate-related risks.
In FY2024, the Group continued to progress studies of physical climate-
related risks to better understand the potential impacts on safety, productivity
and cost, with the work to continue in FY2025.
The studies consider potential impacts of acute and chronic risks from
material climate hazards, which differ based on an operated asset’s
geographic region, asset infrastructure and operational processes.
The studies are ongoing and therefore the Group’s consideration
of physical climate-related risks, including factors such as potential
operational interruptions caused by extreme weather events, therefore
includes only the Group’s current best estimates of related potential
financial impacts.
Given the complexity of physical climate-related risk modelling and the
status of the Group’s ongoing physical risk assessment process, the
identification of additional risks and/or the detailed development of the
Group’s response may result in material changes to financial results and
the carrying values of assets and liabilities in future reporting periods.
Application of carbon pricing assumptions and
acquisition of carbon credits
The Group’s carbon credits and offsetting strategy is managed at the
Group level. However, investment decisions and asset valuations used for
the purposes of impairment testing consider carbon price assumptions
in relevant regions by applying a carbon price to estimated unmitigated
Scopes 1 and 2 GHG emissions over the life of the respective operation.
In determining the Group’s strategy and carbon price forecast, factors
including a country’s current and announced climate policies, targets
and societal factors, such as public acceptance and demographics, are
considered. As at the date of these Financial Statements, the carbon price
used in asset valuations reflects the following ranges:
US$ real (July 2024)
per tCO2-e
FY2030
Low
FY2030
High
FY2050
Low
FY2050
High
Australia
28
83
166
248
Brazil
6
55
138
221
Chile
9
44
166
248
Canada
71
110
221
248
Key customer countries1
1
193
28
276
1. Maximum low and high values found across China, India, European Union, United States,
Japan, Korea, Indonesia, South Africa, Other Latin and Central America and Other Asia.
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16 Climate change continued
The Group currently acquires carbon credits primarily for regulatory purposes.
The Group’s plan is to achieve its FY2030 operational (Scopes 1 and 2 from
operated assets) GHG emissions target through structural abatement, but if
there is an unanticipated shortfall in the pathway to achieve the target, there
may be a need to surrender voluntary carbon credits to close the performance
gap. The Group will not use regulatory carbon credits when determining
whether it has achieved its FY2030 target. The Group may also sell carbon
credits, depending on internal use requirements, or originate carbon credits
through project development or direct investment.
Acquired carbon credits are recognised as an asset initially at cost and are
subsequently subject to impairment and/or net realisable value assessments.
Classification of the asset reflects the intended manner of use:
– Inventory – where the intended use is uncertain or the carbon credit is
available for trading purposes (either separately or ‘bundled’ with sale of
a commodity); or
– Intangible asset – held for regulatory or voluntary surrender
Obligations arising from greenhouse gas emission schemes, such as the
Australian Safeguard Mechanism (which requires its largest industrial facilities
to surrender eligible carbon credits when their Scope 1 GHG emissions
exceed a progressively declining legislated limit, known as the baseline)
are recognised as a liability at the reporting date when the Group has
an obligation.
During FY2024, the Group surrendered approximately US$1 million in
carbon credits (~47,000 tCO2-e) to satisfy Australian assets’ FY2023
Safeguard Mechanism obligations. There were no voluntary surrenders.
As at 30 June 2024, the Group recognised:
– Approximately US$23 million in carbon credits within intangible assets
(with no carbon credits classified as inventory).
– An obligation of US$17 million, representing the FY2024 requirement
to surrender eligible carbon credits under the Safeguard Mechanism.
The Group intends to satisfy this liability through the surrender of carbon
credits in FY2025.
Useful economic lives of property, plant and equipment
The determination of useful lives of the Group’s PP&E requires judgement,
including consideration of the Group’s climate change strategy, targets and
goals, decarbonisation plans and the possible impact of transition risks on
demand for the Group’s commodities.
Useful lives are reviewed each reporting period, including to ensure they do
not exceed the remaining expected operating life of the operation in which
they are utilised. The remaining lives of the Group’s operations reflect the
Group’s planning range and its underlying climate-related assumptions.
A key component of the Group’s operational decarbonisation strategy
is the displacement of diesel within the Group’s operations, particularly
the haul truck fleet. The Group is supporting the development of new
equipment by original equipment manufacturers, including entering
into partnerships focused on the development and trialling of electric
locomotives and haul trucks.
While technical and commercial development of the technology needed is
progressing, the Group’s operational plans generally assume replacement
of haul trucks, and other diesel powered equipment, at the end of their
useful lives in line with the Group’s regular fleet renewal programs.
For example, a significant proportion of the Group’s existing WAIO mining
fleet is due for replacement prior to the expected availability of battery
electric vehicle solutions. As such, the Group’s decarbonisation plans have
not had a material impact on the estimated remaining useful lives of the
Group’s existing fleet of assets in FY2024.
Expenditure on operational (Scopes 1 and 2 from
operated assets) decarbonisation
The Group set a medium-term target to reduce its operational GHG
emissions (Scopes 1 and 2 from operated assets) by at least 30 per cent
from the Group’s FY2020 baseline levels by FY2030 and a long-term goal
to achieve net zero operational GHG emissions by CY2050. The FY2020
baseline for the medium-term target and subsequent performance is
adjusted for acquisitions, divestments and methodology changes.
While the Group’s operational GHG emissions increased in FY2024,
compared to FY2023, largely as emissions from organic growth exceeded
reductions from decarbonisation activities, the Group remains on track
to meet its FY2030 target. Operational decarbonisation activities during
FY2024 continued to focus on transitioning the Group’s electricity supply
to renewable sources and continuing to progress projects in relation to
displacement of diesel. Expenditure in relation to diesel displacement and
fugitive methane is expected to increase towards the second half of the
decade, with capital expenditure in these areas not material in FY2024.
A significant proportion of the Group’s renewable electricity is currently
sourced through power purchase agreements and judgement is required in
determining the appropriate accounting treatment of such arrangements.
Depending on the specific terms and conditions, power purchase
agreements may be recognised as an expense when incurred, a financial
derivative or a lease liability, with an associated right of use asset.
In addition to operational expenditure on renewable energy, the Group
recognised the following in relation to power purchase agreements at
30 June 2024:
– US$44 million of lease liabilities, with associated right of use assets
(2023: US$ nil)
– financial derivatives with a fair value of approximately US$92 million
(2023: US$50 million)
Estimated future cash flows for the Group’s assets include amounts
associated with projects aimed at contributing to the achievement of
the Group’s medium-term target and long-term goal. These cash flow
estimates form the basis of the Group’s impairment assessments as
outlined in further detail in note 13 ‘Impairment of non-current assets’.
The Group estimates up to US$4 billion (nominal terms) in spend
and commitments over the decade to FY2030 to execute the Group’s
operational decarbonisation plans. This amount incorporates capital
expenditure and lease commitments that were previously expected to
be classified as capital expenditure and reflects the incremental cost
to facilitate the Group’s reduction in operational GHG emissions (e.g.
the additional cost of buying or leasing an electric truck versus the diesel
combustion truck it would replace).
Many of the projects planned to commence before FY2030 are likely to
extend beyond the Group’s medium-term target period and are expected to
make a substantial contribution towards the Group’s long-term goal of net
zero operational GHG emissions by CY2050. Significant expenditure on
fleet renewal at certain assets, for example Olympic Dam, is expected to
occur after FY2030.
As the Group’s climate response is further integrated into business-
as-usual planning, the spending on climate initiatives is expected to
increasingly form part of ordinary course business expenditures.
Any change to the Group’s climate change strategy and future cash
flows could impact the expected level of expenditure on operational
decarbonisation and the associated Financial Statement significant
judgements and key estimates.
Expenditure to support value chain (Scope 3)
decarbonisation
The Group continues to invest, including through partnership with others, in
potential GHG emissions reduction opportunities in its value chain through
technology innovation and development to support GHG emissions
reductions by steelmaking customers and in the maritime industry.
However, while the Group seeks to influence reduction opportunities, Scope
3 emissions occur outside of the Group’s direct control. Reduction pathways
are dependent on the development, and upstream or downstream
deployment of, solutions and/or supportive policy and improvements in
Scope 3 emissions measurement. Where possible, the financial impact of
the Group’s activities in support of the development of Scope 3 emissions
reduction pathways is reflected in these Financial Statements. In FY2024,
this included expenditure of approximately US$30 million to support
collaborative partnerships, consortiums, research and development and
BHP Ventures investments.
Given the inherent uncertainty in future technology and policy
advancements, it is not currently possible to reliably estimate or measure
the full potential Financial Statement impacts of the Group’s pursuit of its
Scope 3 goals and targets.
Timing, scope and expected cost of closure and
rehabilitation activities
The extent, timing and cost of the Group’s future closure activities may
be impacted by potential physical and transition climate-related impacts.
In estimating the potential cost of closure activities, the Group considers
factors such as long-term weather outlooks, for example forecast
changes in rainfall patterns. Closure cost estimates also consider the
impact of the Group’s climate change strategy on the costs and timing
of performing closure activities and the impact of new technology where
appropriately developed and tested. For example, closure cost estimates
largely continue to reflect the use of existing fuel sources for the Group’s
equipment while the Group continues to invest in the development of
alternative fuel sources and fleet electrification.
1 Consolidated Financial Statements continued
164
BHP Annual Report 2024
The estimated cost of closure activities includes management’s current
best estimate in relation to post-closure monitoring and maintenance,
which may be required for significant periods beyond the completion of
other closure activities and is therefore exposed to potential long-term
climate-related impacts. While reflecting management’s current best
estimate, the cost of post-closure monitoring and maintenance may
change in future reporting periods as the understanding of, and potential
long-term impacts from a changing climate continue to evolve.
Given the long-lived nature of the majority of the Group’s assets, the
majority of final closure activities are not expected to occur for a significant
period of time. However:
– Acknowledging the wide range of potential energy transition impacts
for steelmaking coal demand and the impact of any significant changes
in demand on mine lives, for illustrative purposes only, a one-year
change in the mine life of the Group’s steelmaking coal assets would,
in isolation, change the closure and rehabilitation provisions for those
assets by approximately US$40 million.
– The Group announced in FY2022 the planned closure of NSWEC
by FY2030. As such, while the provision is subject to estimation and
assumptions, the timing of closure is no longer considered materially
susceptible to potential long-term climate-related transition risks.
Further, while the Group is evaluating the approach to the closure of
NSWEC and potential expenditure relating to an equitable change
and transition for its workforce, the Group continues to engage with its
employees and the community to understand and develop the most
appropriate transition plan. As the Group’s approach is currently under
development with impacted parties, it is not yet supported by a detailed,
formal plan or commitment and therefore no provision relating to equitable
change and transition costs can be recognised as at 30 June 2024.
More detail on the key judgements and estimates impacting the Group’s
closure and rehabilitation provisions is presented in note 15 ‘Closure and
rehabilitation provisions’.
Paris Agreement and 1.5°C scenarios
The Group acknowledges that there are a range of energy transition
scenarios, including those that are aligned with the goals of the
Paris Agreement, that may indicate different outcomes for individual
commodities. As noted, indicators show the appropriate measures are
not in place globally to drive decarbonisation pathways at a pace or
scale required to limit the global average temperature increase to 1.5°C
above pre-industrial levels (particularly in hard-to-abate sectors, like
steelmaking). However, to the extent governments, institutions, companies,
and society increasingly focus on addressing climate change, the potential
for a non‑linear and/or more rapid transition trajectory increases.
Accordingly, in addition to the Group’s planning range, which implies a
projected global average temperature increase of around 2°C by CY2100,
the Group utilises a range of scenarios, including a 1.5°C scenario, when
testing the resilience of its portfolio and major investment decisions.
In FY2024, the Group developed a new 1.5°C scenario, which does
not currently inform the Group’s planning range and intentionally uses
aggressive assumptions around political, technological and behavioural
change, particularly for hard-to-abate sectors, such as steelmaking. It is
designed to specifically test the Group’s current portfolio following changes
to its portfolio since the Group’s previous 1.5°C scenario published in the
BHP Climate Change Report 2020.
The Group’s 1.5°C scenario is not a forecast of what is likely to occur and
represents one of many hypothetical pathways for the future based on
different assumptions relating to world-wide economies, including global
energy systems. While the Group does not currently see a 1.5°C outcome
as likely, a 1.5°C scenario is utilised to inform the Group’s understanding of
the potential impacts of an acceleration in global decarbonisation. All 1.5°C
scenarios require steep global annual GHG emission reductions, sustained
for decades, to stay within a 1.5°C carbon budget (i.e. the total net amount
of GHG emissions that can be emitted worldwide to limit global average
temperature increase to 1.5°C by CY2100).
The Group continues to monitor global decarbonisation signposts and
updates its planning range, associated price outlooks and cost of carbon
assumptions. If such signposts indicate the appropriate measures are
in place for achievement of a 1.5°C outcome, this will be reflected in the
Group’s planning range.
Capital allocation
The Group includes a 1.5°C scenario sensitivity in capital allocation processes,
which compares the demand outlook for the Group’s products in the planning
range to that of a rapidly decarbonising global economy, should that eventuate.
Consideration of the Group’s 1.5°C scenario in the capital allocation
process is intended to test resilience of the Group’s portfolio and mitigate
the risk of stranded assets, and associated impairments, should global
measures to achieve a 1.5°C outcome be adopted.
Demand for the Group’s commodities
The Group acknowledges that there are a range of possible energy
transition scenarios, including those that are aligned with the aims of
the Paris Agreement, that may indicate different outcomes for individual
commodities. The Group examines the resilience of its portfolio to a 1.5°C
scenario (the Group’s 1.5°C scenario) by considering the impact of the
commodity and carbon prices under that scenario using the Group’s latest
operating plans.
There are inherent limitations with scenario analysis and it is difficult to
predict which, if any, of the range of scenarios the Group utilises might
eventuate and none of the scenarios considered constitutes a definitive
outcome for the Group. The Group’s 1.5°C scenario has a distinct impact
on each of its commodities with current trends impacting the degree
of likelihood of future outcomes aligning with different elements of the
scenario. However, based on current trends, it is considered unlikely that
the Group’s 1.5°C scenario would occur.
As the electrification megatrend is well underway, there is a higher
likelihood of a positive impact to demand reflected in the Group’s 1.5°C
scenario eventuating for commodities which stand to benefit from this
megatrend, including copper, nickel and uranium.
The Group’s 1.5°C pathway for potash is driven by increasing competition
for land and the need for agricultural productivity.
The long-term commodity prices for potash, copper, nickel and uranium
under the Group’s 1.5°C scenario are favourable to or materially consistent
with the price outlooks from the base case of the Group’s planning range.
Price-only sensitivities using the prices derived from the Group’s 1.5°C
scenario do not indicate an illustrative impairment for those commodities.
However, the global steelmaking sector, like many hard-to-abate sectors,
is not currently seeing the investment, policy settings or technological
progress needed to align with the trajectory in the Group’s 1.5°C scenario.
The Group’s 1.5°C scenario assumes an aggressive decarbonisation
pathway for the steelmaking sector as a result of increased scrap
collection, progression or acceleration of currently challenging, evolving
or early-stage decarbonisation technologies and top-down government
policies. The current signposts do not indicate progress in line with
this trajectory.
While GHG emissions intensity of steel production reduces significantly
in the Group’s 1.5°C scenario, underlying demand for steel (including the
proportion from ore-based steel production) remains strong. As such,
the price derived from the Group’s 1.5°C scenario for iron ore remains
materially aligned with the Group’s base case assumptions and does not
indicate an illustrative impairment.
The assumptions within the Group’s 1.5°C scenario result in a greater
relative impact to steelmaking coal prices, compared to the base case
assumptions. Under the Group’s base case assumptions within the
planning range, headroom in excess of US$6 billion exists between the
carrying value of the Group’s steelmaking coal assets and their estimated
valuation. In a price-only sensitivity, using the prices derived from the
Group’s 1.5°C scenario, while current headroom would reduce, no
illustrative impairment of the Group’s steelmaking coal assets is indicated.
In addition, to provide further analysis of the risk of potential impairment
in a 1.5°C scenario, the Group has also performed a price-only sensitivity
for steelmaking coal assets under a 1.5°C scenario published by Wood
Mackenzie, a research and consultancy business for the global energy,
power and renewables, subsurface, chemicals and metals and mining
industries. This further analysis acknowledges the wide range of potential
energy transition impacts for steelmaking coal.
Under the Wood Mackenzie 1.5°C scenario, reflecting the prices outlined
below, a price-only sensitivity would also reduce the current headroom
on the Group’s steelmaking coal assets, but does not indicate an
illustrative impairment.
Price source
CY2030 Price
(real, US$/tonne)
CY2050 Price
(real, US$/tonne)
Wood Mackenzie Net Zero
(1.5°C) Scenario (June 2024)
180
143
The Group considers that it is currently impracticable to fully assess all
potential Financial Statement impacts in scenario analysis. Accordingly,
these price-only sensitivities reflect different prices while assuming that
all other factors in the asset valuations, such as production and sales
volumes, capital and operating expenditures, carbon pricing and the
discount rate, remain unchanged from those used in the Group’s FY2024
impairment assessments. As such, the sensitivities do not attempt to
assess all potential impacts, including those on asset valuations, that may
arise under a 1.5°C scenario and do not consider any actions the Group
would take in respect of operating and investment plans to mitigate the
cash flow and valuation impacts that may arise in a 1.5°C scenario.
165
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
Capital structure
17 Share capital
BHP Group Limited
BHP Group Plc
2024
shares
2023
shares
2022
shares
2022
shares
Share capital issued
Opening number of shares
5,065,820,556
5,062,323,190
2,945,851,394
2,112,071,796
Issue of shares
5,710,261
3,497,366
4,400,000
–
Corporate structure unification1
–
–
2,112,071,796
(2,112,071,796)
Purchase of shares by ESOP Trusts
(5,687,667)
(6,442,571)
(8,704,669)
(63,567)
Employee share awards exercised following vesting
5,841,767
6,081,843
8,522,684
77,748
Movement in treasury shares under Employee Share Plans
(154,100)
360,728
181,985
(14,181)
Closing number of shares
5,071,530,817
5,065,820,556
5,062,323,190
–
Comprising:
Shares held by the public
5,070,273,143
5,064,408,782
5,061,272,144
–
Treasury shares
1,257,674
1,411,774
1,051,046
–
1. As a result of the corporate structure unification on 31 January 2022, 2,112,071,796 fully paid ordinary shares in BHP Group Limited were issued to BHP Group Plc shareholders in a one
for one exchange of their BHP Group Plc ordinary shares, resulting in BHP Group Limited becoming the sole parent company of the Group with a single set of shareholders.
In August 2023, BHP Group Limited issued 2,919,231 fully paid ordinary shares to the BHP Group Limited Employee Equity Trust and Solium Capital
(Australia) Pty Ltd at A$43.52 per share (2023: 3,497,366 fully paid ordinary shares issued at A$40.51 per share; 2022: 4,400,000 fully paid ordinary
shares issued at A$52.99 per share) and in March 2024, BHP Group Limited issued 2,791,030 fully paid ordinary shares to the BHP Group Limited
Employee Equity Trust and Computershare Nominees CI Ltd at A$43.79 per share to satisfy the vesting of employee share awards and related dividend
equivalent entitlements under those employee share plans.
Share capital of BHP Group Limited at 30 June 2024 is composed of the following categories of shares:
Ordinary shares fully paid
Treasury shares
Each fully paid ordinary share of BHP Group
Limited carries the right to one vote at a
meeting of the Company.
Treasury shares are fully paid ordinary shares of BHP Group Limited that are held by the ESOP Trusts for
the purpose of issuing shares to employees under the Group’s Employee Share Plans. Treasury shares are
recognised at cost and deducted from equity, net of any income tax effects. When the treasury shares are
subsequently sold or reissued, any consideration received, net of any directly attributable costs and income
tax effects, is recognised as an increase in equity. Any difference between the carrying amount and the
consideration, if reissued, is recognised in retained earnings.
18 Other equity
2024
US$M
2023
US$M
2022
US$M
Recognition and measurement
Common control reserve
(1,603)
(1,603)
(1,603)
The common control reserve arose on unification of the Group’s
corporate structure and represents the residual on consolidation
between BHP Group Ltd’s investment in BHP Group Plc (now known
as BHP Group (UK) Ltd) and BHP Group Plc’s share capital, share
premium and capital redemption reserve at the time of unification.
Employee share awards reserve
166
171
174
The employee share awards reserve represents the accrued employee
entitlements to share awards that have been charged to the income
statement and have not yet been exercised.
Once exercised, the difference between the accumulated fair value of
the awards and their historical on-market purchase price is recognised
in retained earnings.
Cash flow hedge reserve
27
10
41
The cash flow hedge reserve represents hedging gains and losses
recognised on the effective portion of cash flow hedges. The
cumulative deferred gain or loss on the hedge is recognised in the
income statement when the hedged transaction impacts the income
statement, or is recognised as an adjustment to the cost of non-
financial hedged items. The hedging reserve records the portion of
the gain or loss on a hedging instrument in a cash flow hedge that is
determined to be an effective hedge relationship.
Cost of hedging reserve
(7)
(1)
(19)
The cost of hedging reserve represents the recognition of certain
costs of hedging for example, basis adjustments, which have
been excluded from the hedging relationship and deferred in other
comprehensive income until the hedged transaction impacts the
income statement.
Foreign currency
translation reserve
(14)
(14)
(14)
The foreign currency translation reserve represents exchange
differences arising from the translation of non-US dollar functional
currency operations within the Group into US dollars.
Equity investments reserve
(21)
9
(8)
The equity investment reserve represents the revaluation of
investments in shares recognised through other comprehensive
income. Where a revalued financial asset is sold, the relevant portion
of the reserve is transferred to retained earnings.
Non-controlling interest
contribution reserve
1,437
1,441
1,441
The non-controlling interest contribution reserve represents the excess
of consideration received over the book value of net assets attributable
to equity instruments when acquired by non-controlling interests.
Total reserves
(15)
13
12
1 Consolidated Financial Statements continued
166
BHP Annual Report 2024
Summarised financial information relating to each of the Group’s subsidiaries with non-controlling interests (NCI) that are significant to the Group is
shown below:
2024
2023
US$M
Minera
Escondida
Limitada
Other
individually
immaterial
subsidiaries
Total
Minera
Escondida
Limitada
Other
individually
immaterial
subsidiaries
Total
Group share (per cent)
57.5
57.5
Current assets
3,683
3,144
Non-current assets
12,639
12,160
Current liabilities
(2,484)
(1,598)
Non-current liabilities
(4,989)
(5,413)
Net assets
8,849
8,293
Net assets attributable to NCI
3,761
548
4,309
3,525
509
4,034
Revenue
10,013
8,847
Profit after taxation
2,894
2,365
Other comprehensive income
13
(8)
Total comprehensive income
2,907
2,357
Profit after taxation attributable to NCI
1,230
474
1,704
1,005
398
1,403
Other comprehensive income attributable to NCI
6
(2)
4
(3)
–
(3)
Net operating cash flow
4,180
3,168
Net investing cash flow
(1,806)
(1,351)
Net financing cash flow
(2,415)
(1,620)
Dividends paid to NCI
993
431
1,424
712
463
1,175
While the Group controls Minera Escondida Limitada, the non-controlling interests hold certain protective rights that restrict the Group’s ability to sell
assets held by Minera Escondida Limitada, or use the assets in other subsidiaries and operations owned by the Group. Minera Escondida Limitada is also
restricted from paying dividends without the approval of the non-controlling interests.
19 Dividends
Year ended 30 June 2024
Year ended 30 June 2023
Year ended 30 June 2022
Per share
US cents
Total
US$M
Per share
US cents
Total
US$M
Per share
US cents
Total
US$M
Dividends paid during the period
Prior year final dividend
80
4,065
175
8,858
200
10,119
Interim dividend
72
3,647
90
4,562
150
7,601
152
7,712
265
13,420
350
17,720
Dividends paid during the period differs from the amount of dividends paid in the Consolidated Cash Flow Statement as a result of foreign exchange gains
and losses relating to the timing of equity distributions between the record date and the payment date. Additional derivative settlements of US$44 million
were made as part of the funding of the dividend paid during the period and is disclosed in Proceeds/(settlements) of cash management related
instruments in the Consolidated Cash Flow Statement.
Each American Depositary Share (ADS) represents two ordinary shares of BHP Group Limited. Dividends determined on each ADS represent twice the
dividend determined on each BHP Group Limited ordinary share.
Dividends are determined after period-end and announced with the results for the period. Interim dividends are determined in February and paid in
March. Final dividends are determined in August and paid in September or October. Dividends determined are not recorded as a liability at the end of
the period to which they relate. Subsequent to year-end, on 27 August 2024, BHP Group Limited determined a final dividend of 74 US cents per share
(US$3,752 million), which will be paid on 3 October 2024 (30 June 2023: final dividend of 80 US cents per share – US$4,052 million; 30 June 2022: final
dividend of 175 US cents per share – US$8,857 million).
BHP Group Limited dividends for all periods presented are, or will be, fully franked based on a tax rate of 30 per cent.
2024
US$M
2023
US$M
2022
US$M
Franking credits as at 30 June
9,165
7,953
7,007
Franking credits arising on the future payment/(refund) of taxes relating to the period
83
(261)
2,043
Total franking credits available1
9,248
7,692
9,050
1. The payment of the final 2024 dividend determined after 30 June 2024 will reduce the franking account balance by US$1,608 million.
167
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
20 Provisions for dividends and other liabilities
The disclosure below excludes closure and rehabilitation provisions (refer to note 15 ‘Closure and rehabilitation provisions’), employee benefits,
restructuring and post-retirement employee benefits provisions (refer to note 27 ‘Employee benefits, restructuring and post-retirement employee benefits
provisions’) and provision related to the Samarco dam failure (refer to note 4 ‘Significant events – Samarco dam failure’).
2024
US$M
2023
US$M
At the beginning of the financial year
769
674
Acquisition of subsidiaries and operations1
–
61
Dividends determined
7,712
13,420
Charge/(credit) for the year:
Underlying
180
156
Discounting
2
2
Exchange variations
(42)
(161)
Released during the year
(120)
(62)
Utilisation
(92)
(35)
Dividends paid
(7,675)
(13,268)
Transfers and other movements
(24)
(18)
At the end of the financial year
710
769
Comprising:
Current
220
384
Non-current
490
385
1. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
1 Consolidated Financial Statements continued
168
BHP Annual Report 2024
Financial management
21 Net debt
The Group seeks to maintain a strong balance sheet and deploys its capital with reference to the Capital Allocation Framework.
The Group monitors capital using the net debt balance and the gearing ratio, being the ratio of net debt to net debt plus net assets.
The net debt definition includes the fair value of derivative financial instruments used to hedge cash and borrowings which reflects the Group’s risk
management strategy of reducing the volatility of net debt caused by fluctuations in foreign exchange and interest rates.
Under IFRS 16/AASB16 ‘Leases’, certain vessel lease contracts are required to be remeasured at each reporting date to the prevailing freight index.
While these liabilities are included in the Group interest bearing liabilities, they are excluded from the net debt calculation as they do not align with how
the Group assesses net debt for decision making in relation to the Capital Allocation Framework. In addition, the freight index has historically been volatile
which creates significant short-term fluctuation in these liabilities.
2024
2023
US$M
Current
Non-current
Current
Non-current
Interest bearing liabilities
Bank loans
540
2,070
5,310
2,192
Notes and debentures
848
14,084
1,337
10,482
Lease liabilities
686
2,430
521
2,498
Bank overdraft and short-term borrowings
3
–
5
–
Other
7
50
–
–
Total interest bearing liabilities
2,084
18,634
7,173
15,172
Less: Lease liability associated with index-linked freight contracts
267
244
114
173
Less: Cash and cash equivalents
Cash
8,150
–
7,206
–
Short-term deposits
4,351
–
5,222
–
Less: Total cash and cash equivalents
12,501
–
12,428
–
Less: Derivatives included in net debt
Net debt management related instruments1
(171)
(1,224)
(113)
(1,459)
Net cash management related instruments2
(19)
–
36
–
Less: Total derivatives included in net debt
(190)
(1,224)
(77)
(1,459)
Net debt
9,120
11,166
Net assets
49,120
48,530
Gearing
15.7%
18.7%
1. Represents the net cross currency and interest rate swaps designated as effective hedging instruments included within current and non-current other financial assets and liabilities.
2. Represents the net forward exchange contracts included within current and non-current other financial assets and liabilities.
Cash and short-term deposits are disclosed in the cash flow statement net of bank overdrafts and interest bearing liabilities at call.
2024
US$M
2023
US$M
2022
US$M
Total cash and cash equivalents
12,501
12,428
17,236
Bank overdrafts and short-term borrowings
(3)
(5)
–
Total cash and cash equivalents, net of overdrafts
12,498
12,423
17,236
Cash and cash equivalents includes US$112 million (2023: US$95 million) restricted by legal or contractual arrangements.
Recognition and measurement
Cash and short-term deposits in the balance sheet comprise cash at bank and on hand and highly liquid cash deposits with short-term maturities that
are readily convertible to known amounts of cash with insignificant risk of change in value. The Group considers that the carrying value of cash and
cash equivalents approximate fair value due to their short-term to maturity. Refer to note 22 ‘Leases’ and note 24 ‘Financial risk management’ for the
recognition and measurement principles for lease liabilities and other financial liabilities.
Interest bearing liabilities and cash and cash equivalents include balances denominated in the following currencies:
Interest bearing liabilities
Cash and cash equivalents
2024
US$M
2023
US$M
2024
US$M
2023
US$M
USD
15,203
16,289
4,445
5,925
EUR
2,440
3,050
5
544
GBP
1,613
1,587
711
674
AUD
1,265
1,233
3,840
1,797
CAD
5
7
3,259
3,362
Other
192
179
241
126
Total
20,718
22,345
12,501
12,428
The Group enters into derivative transactions to convert the majority of its exposures above into US dollars. Further information on the Group’s risk
management activities relating to these balances is provided in note 24 ‘Financial risk management’.
169
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
21 Net debt continued
Liquidity risk
The Group’s liquidity risk arises from the possibility that it may not be able to settle or meet its obligations as they fall due and is managed as part of the
portfolio risk management strategy. Operational, capital and regulatory requirements are considered in the management of liquidity risk, in conjunction
with short-term and long-term forecast information.
Recognising the cyclical volatility of operating cash flows, the Group has defined minimum target cash and liquidity buffers to be maintained to mitigate
liquidity risk and support operations through the cycle.
The Group’s strong credit profile, diversified funding sources, its minimum cash buffer and its committed credit facilities ensure that sufficient liquid funds
are maintained to meet its daily cash requirements.
The Group’s Moody’s credit rating has remained at A1/P-1 outlook stable (long-term/short-term). The Group’s S&P Global’s rating has remained at A-/A-1
outlook stable (long-term/short-term).
There were no defaults on the Group’s liabilities during the period.
Counterparty risk
The Group is exposed to credit risk from its financing activities, including short-term cash investments such as deposits with banks and derivative
contracts. This risk is managed by Group Treasury in line with the counterparty risk framework, which aims to minimise the exposure to a counterparty
and mitigate the risk of financial loss through counterparty failure.
Exposure to counterparties is monitored at a Group level across all products and includes exposure with derivatives and cash investments.
Investments and derivatives are only transacted with approved counterparties who have been assigned specific limits based on a quantitative credit risk
model. These limits are updated at least bi-annually. Additionally, derivatives are subject to tenor limits and investments are subject to concentration limits
by rating.
Derivative fair values are inclusive of valuation adjustments that take into account both the counterparty and the Group’s risk of default.
Standby arrangements and unused credit facilities
The Group’s committed revolving credit facility operates as a back-stop to the Group’s uncommitted commercial paper program. The combined amount
drawn under the facility or as commercial paper will not exceed US$5.5 billion. As at 30 June 2024, US$ nil commercial paper was drawn (2023: US$ nil).
The facility is due to mature on 10 October 2026. A commitment fee is payable on the undrawn balance and interest is payable on any drawn balance
comprising a reference rate plus a margin. The agreed margins are typical for a credit facility extended to a company with the Group’s credit rating.
Maturity profile of financial liabilities
The maturity profile of the Group’s financial liabilities based on the undiscounted contractual amounts, taking into account the derivatives related to debt,
is as follows:
2024
US$M
Bank loans,
debentures
and other loans
Expected
future interest
payments
Derivatives
related to
debentures
Other
financial
liabilities
Obligations
under lease
liabilities
Trade
and other
payables1
Total
Due for payment:
In one year or less or on demand
1,402
884
485
333
836
6,618
10,558
In more than one year but not more than two years
1,362
827
171
67
591
15
3,033
In more than two years but not more than five years
4,960
1,923
377
233
1,012
27
8,532
In more than five years
10,999
4,784
1,131
163
1,761
3
18,841
Total
18,723
8,418
2,164
796
4,200
6,663
40,964
Carrying amount
17,602
–
1,513
758
3,116
6,663
29,652
2023
US$M
Bank loans,
debentures
and other loans
Expected
future interest
payments
Derivatives
related to
debentures
Other
financial
liabilities
Obligations
under lease
liabilities
Trade
and other
payables1
Total
Due for payment:
In one year or less or on demand
6,659
757
536
257
658
6,175
15,042
In more than one year but not more than two years
1,399
595
388
126
538
4
3,050
In more than two years but not more than five years
4,058
1,410
399
267
1,031
–
7,165
In more than five years
8,093
3,693
1,020
211
1,846
–
14,863
Total
20,209
6,455
2,343
861
4,073
6,179
40,120
Carrying amount
19,326
–
1,755
804
3,019
6,179
31,083
1. Excludes input taxes of US$101 million (2023: US$121 million) included in other payables.
1 Consolidated Financial Statements continued
170
BHP Annual Report 2024
22 Leases
Movements in the Group’s lease liabilities during the year are as follows:
2024
US$M
2023
US$M
At the beginning of the financial year
3,019
2,576
Additions
593
542
Acquisition of subsidiaries and operations1
–
423
Remeasurements of index-linked freight contracts
230
53
Lease payments
(837)
(706)
Foreign exchange movement
(16)
12
Amortisation of discounting
181
130
Divestment of subsidiaries and operations2
(60)
–
Transfers and other movements
6
(11)
At the end of the financial year
3,116
3,019
Comprising:
Current liabilities
686
521
Non-current liabilities
2,430
2,498
1. Relates to the acquisition of OZL on 2 May 2023. Refer to note 29 ‘Business combinations’ for more information.
2. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
A significant proportion by value of the Group’s lease contracts relate to plant facilities, office buildings and vessels. Lease terms for plant facilities and
office buildings typically run for over 10 years and vessels from four to 10 years. Other leases include port facilities, various equipment and vehicles.
The lease contracts contain a wide range of different terms and conditions including extension and termination options and variable lease payments.
The Group’s lease obligations are included in the Group’s Interest bearing liabilities and, with the exception of vessel lease contracts that are priced with
reference to a freight index, form part of the Group’s net debt.
The maturity profile of lease liabilities based on the undiscounted contractual amounts is as follows:
Lease liability
2024
US$M
2023
US$M
Due for payment:
In one year or less or on demand
836
658
In more than one year but not more than two years
591
538
In more than two years but not more than five years
1,012
1,031
In more than five years1
1,761
1,846
Total
4,200
4,073
Carrying amount
3,116
3,019
1. Includes US$738 million (2023: US$808 million) due for payment in more than ten years.
At 30 June 2024, commitments for leases not yet commenced based on undiscounted contractual amounts were US$1,170 million (2023: US$1,271 million).
Movements in the Group’s right-of-use assets during the year are as follows:
2024
2023
Land and
buildings
US$M
Plant and
equipment
US$M
Total
US$M
Land and
buildings
US$M
Plant and
equipment
US$M
Total
US$M
Net book value
At the beginning of the financial year
573
2,236
2,809
452
1,909
2,361
Additions
26
567
593
192
350
542
Acquisition of subsidiaries and operations
–
–
–
–
423
423
Remeasurements of index-linked freight contracts
–
230
230
–
53
53
Depreciation expensed during the period
(79)
(638)
(717)
(71)
(462)
(533)
Impairments for the year
–
(140)
(140)
–
–
–
Divestment of subsidiaries and operations1
(30)
(40)
(70)
–
–
–
Transfers and other movements
–
3
3
–
(37)
(37)
At the end of the financial year
490
2,218
2,708
573
2,236
2,809
– Cost
742
4,479
5,221
758
4,088
4,846
– Accumulated depreciation and impairments
(252)
(2,261)
(2,513)
(185)
(1,852)
(2,037)
1. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
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Financial Statements
22 Leases continued
Right-of-use assets are included within the underlying asset classes in Property, plant and equipment. Refer to note 11 ‘Property, plant and equipment’.
Amounts recorded in the income statement and the cash flow statement for the year were:
2024
US$M
2023
US$M
2022
US$M
Included within
Income statement
Depreciation of right-of-use assets
717
533
964
Profit from operations
Short-term, low-value and variable lease costs1
916
795
847
Profit from operations
Interest on lease liabilities
181
130
119
Financial expenses
Cash flow statement
Principal lease payments
656
576
1,130
Cash flows from financing activities
Lease interest payments
181
130
119
Cash flows from operating activities
1. Relates to US$792 million of variable lease costs (2023: US$714 million; 2022: US$585 million), US$96 million of short-term lease costs (2023: US$47 million; 2022: US$222 million) and
US$28 million of low-value lease costs (2023: US$34 million; 2022: US$40 million). Variable lease costs include contracts for hire of mining service equipment, drill rigs and transportation
services. These contracts contain variable lease payments based on usage and asset performance.
Recognition and measurement
All leases with the exception of short-term (under 12 months) and low-value leases are recognised on the balance sheet, as a right-of-use asset
and a corresponding interest bearing liability. Lease liabilities are initially measured at the present value of the future lease payments from the lease
commencement date and are subsequently adjusted to reflect the interest on lease liabilities, lease payments and any remeasurements due to, for
example, lease modifications or a change to future lease payments linked to an index or rate. Lease payments are discounted using the interest rate
implicit in the lease or, where the rate is not readily determinable, the interest payments are discounted at the Group’s weighted average incremental
borrowing rate, adjusted to reflect factors specific to the lease, including where relevant the currency, tenor and location of the lease.
In addition to containing a lease, the Group’s contractual arrangements may include non-lease components. For example, certain mining services
arrangements involve the provision of additional services, including maintenance, drilling activities and the supply of personnel. The Group has elected to
separate these non-lease components from the lease components in measuring lease liabilities. Non-lease components are accounted for in accordance
with the accounting policies applied to each underlying good or service received.
Low-value and short-term leases are expensed to the income statement. Variable lease payments not dependent on an index or rate are excluded from
lease liabilities, and expensed to the income statement.
Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost will initially correspond to the lease liability, adjusted for initial direct costs, lease payments made prior to lease commencement,
capitalised provisions for closure and rehabilitation and any lease incentives received.
The lease asset and liability associated with all index-linked freight contracts, including continuous voyage charters (CVCs), are measured at each
reporting date based on the prevailing freight index (generally the Baltic C5 index).
Where the Group is the operator of an unincorporated joint operation and all investors are parties to a lease, the Group recognises its proportionate share
of the lease liability and associated right-of-use asset. In the event the Group is the sole signatory to a lease, and therefore has the sole legal obligation
to make lease payments, the lease liability is recognised in full. Where the associated right-of-use asset is sub-leased (under a finance sub-lease) to a
joint operation, for instance where it is dedicated to a single operation and the joint operation has the right to direct the use of the asset, the Group (as
lessor) recognises its proportionate share of the right-of-use asset and a net investment in the lease, representing amounts to be recovered from the other
parties to the joint operation. If the Group is not party to the head lease contract but sub-leases the associated right-of-use asset (as lessee), it recognises
its proportionate share of the right-of-use asset and a lease liability which is payable to the operator.
Key judgements and estimates
Judgements: Certain contractual arrangements not in the form of a lease require the Group to apply significant judgement in evaluating whether
the Group controls the right to direct the use of assets and therefore whether the contract contains a lease. Management considers all facts and
circumstances in determining whether the Group or the supplier has the rights to direct how, and for what purpose, the underlying assets are used in
certain mining contracts and other arrangements, including outsourcing and shipping arrangements. Judgement is used to assess which decision-
making rights mostly affect the benefits of use of the assets for each arrangement.
Where a contract includes the provision of non-lease services, judgement is required to identify the lease and non-lease components.
Estimates: Where the Group cannot readily determine the interest rate implicit in the lease, estimation is involved in the determination of the
weighted average incremental borrowing rate to measure lease liabilities. The incremental borrowing rate reflects the rates of interest a lessee
would have to pay to borrow over a similar term, with similar security, the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment. Under the Group’s portfolio approach to debt management, the Group does not specifically borrow for
asset purchases. Therefore, the incremental borrowing rate is estimated referencing the Group’s corporate borrowing portfolio and other similar
rated entities, adjusted to reflect the terms and conditions of the lease (including the impact of currency, credit rating of subsidiary entering into
the lease and the term of the lease), at the inception of the lease arrangement or the time of lease modification.
The Group estimates stand-alone prices, where such prices are not readily observable, in order to allocate the contractual payments between
lease and non-lease components.
1 Consolidated Financial Statements continued
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BHP Annual Report 2024
23 Net finance costs
2024
US$M
2023
US$M
2022
US$M
Financial expenses
Interest expense using the effective interest rate method:
Interest on bank loans, overdrafts and all other borrowings
1,467
997
491
Interest capitalised at 6.82% (2023: 5.71%; 2022: 2.90%)1
(530)
(271)
(113)
Interest on lease liabilities
181
130
119
Discounting on provisions and other liabilities
1,064
1,293
645
Other gains and losses:
Fair value change on hedged loans
(214)
(803)
(1,286)
Fair value change on hedging derivatives
188
691
1,277
Exchange variations on net debt
27
9
(99)
Other
15
14
16
Total financial expenses
2,198
2,060
1,050
Financial income
Interest income
(709)
(529)
(81)
Net finance costs
1,489
1,531
969
1. Interest has been capitalised at the rate of interest applicable to the specific borrowings financing the assets under construction or, where financed through general borrowings, at a
capitalisation rate representing the average interest rate on such borrowings. Tax relief for capitalised interest is approximately US$159 million (2023: US$81 million; 2022: US$34 million).
Recognition and measurement
Interest income is accrued using the effective interest rate method. Finance costs are expensed as incurred, except where they relate to the financing of
construction or development of qualifying assets.
24 Financial risk management
24.1 Financial risks
Financial and capital risk management strategy
The financial risks arising from the Group’s operations comprise market, liquidity and credit risk. These risks arise in the normal course of business and
the Group manages its exposure to them in accordance with the Group’s portfolio risk management strategy. The objective of the strategy is to support
the delivery of the Group’s financial targets, while protecting its future financial security and flexibility by taking advantage of the natural diversification
provided by the scale, diversity and flexibility of the Group’s operations and activities.
As part of the risk management strategy, the Group monitors target gearing levels and credit rating metrics under a range of different stress test scenarios
incorporating operational and macroeconomic factors.
Market risk management
The Group’s activities expose it to market risks associated with movements in interest rates, foreign currencies and commodity prices. Under the strategy
outlined above, the Group seeks to achieve financing costs, currency impacts, input costs and commodity prices on a floating or index basis.
In executing the strategy, financial instruments are potentially employed in three distinct but related activities. The following table summarises these
activities and the key risk management processes:
Activity
Key risk management processes
1 Risk mitigation
On an exception basis, hedging for the purposes of mitigating risk related to specific and significant expenditure
on investments or capital projects will be executed if necessary to support the Group’s strategic objectives.
Execution of transactions within
approved mandates.
2 Economic hedging of commodity sales, operating costs, short-term cash deposits, other monetary items
and debt instruments
Where Group commodity production is sold to customers on pricing terms that deviate from the relevant index target and
where a relevant derivatives market exists, financial instruments may be executed as an economic hedge to align the
revenue price exposure with the index target and US dollars.
Measuring and reporting
the exposure in customer
commodity contracts and
issued debt instruments.
Where debt is issued in a currency other than the US dollar and/or at a fixed interest rate, fair value and cash flow hedges
may be executed to align the debt exposure with the Group’s functional currency of US dollars and/or to swap to a floating
interest rate.
Executing hedging derivatives to
align the total group exposure
to the index target.
Where short-term cash deposits and other monetary items are denominated in a currency other than US dollars,
derivative financial instruments may be executed to align the foreign exchange exposure to the Group’s functional
currency of US dollars.
Execution of transactions within
approved mandates.
3 Strategic financial transactions
Opportunistic transactions may be executed with financial instruments to capture value from perceived market
over/under valuations.
Execution of transactions within
approved mandates.
Primary responsibility for the identification and control of financial risks, including authorising and monitoring the use of financial instruments for the above
activities and stipulating policy thereon, rests with the Financial Risk Management Committee under authority delegated by the Chief Executive Officer.
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Financial Statements
24 Financial risk management continued
Interest rate risk
The Group is exposed to interest rate risk on its outstanding borrowings and short-term cash deposits from the possibility that changes in interest
rates will affect future cash flows or the fair value of fixed interest rate financial instruments. Interest rate risk is managed as part of the portfolio risk
management strategy.
The majority of the Group’s debt is issued at fixed interest rates. The Group has entered into interest rate swaps and cross currency interest rate swaps to
convert most of its fixed interest rate exposure to floating US dollar interest rate exposure. As at 30 June 2024, 97 per cent of the Group’s borrowings were
exposed to floating interest rates inclusive of the effect of swaps (2023: 98 per cent).
The fair value of interest rate swaps and cross currency interest rate swaps in hedge relationships used to hedge both interest rate and foreign currency
risks are shown in the valuation hierarchy in section 24.4 ‘Derivatives and hedge accounting’.
Based on the net debt position as at 30 June 2024, taking into account interest rate swaps and cross currency interest rate swaps, it is estimated that a
one percentage point increase in the Secured Overnight Financing Rate (SOFR) interest rate will decrease the Group’s equity and profit after taxation by
US$47 million (2023: decrease of US$58 million). This assumes the change in interest rates is effective from the beginning of the financial year and the
fixed/floating mix and balances are constant over the year.
Currency risk
The US dollar is the predominant functional currency within the Group and as a result, currency exposures arise from transactions and balances in
currencies other than the US dollar. The Group’s potential currency exposures comprise:
– translational exposure in respect of non-functional currency monetary items
– transactional exposure in respect of non-functional currency expenditure and revenues
The Group’s foreign currency risk is managed as part of the portfolio risk management strategy.
Translational exposure in respect of non-functional currency monetary items
Monetary items, including financial assets and liabilities, denominated in currencies other than the functional currency of an operation are restated at the
end of each reporting period to US dollar equivalents and the associated gain or loss is taken to the income statement. The exception is foreign exchange
gains or losses on foreign currency denominated provisions for closure and rehabilitation at operating sites, which are capitalised in property, plant
and equipment.
The Group has entered into cross currency interest rate swaps and foreign exchange forwards to convert its significant foreign currency exposures in
respect of monetary items into US dollars. Fluctuations in foreign exchange rates are therefore not expected to have a significant impact on equity and
profit after tax.
The following table shows the carrying values of financial assets and liabilities at the end of the reporting period denominated in currencies other than the
US dollar that are exposed to foreign currency risk:
Net financial (liabilities)/assets – by currency of denomination
2024
US$M
2023
US$M
AUD
(3,850)
(4,168)
CAD
(543)
(312)
CLP
(150)
(74)
GBP
323
353
EUR
239
217
Other
43
355
Total
(3,938)
(3,629)
The principal non-functional currencies to which the Group is exposed are the Australian dollar, the Canadian dollar, the Chilean peso, the Pound
sterling and the Euro. Based on the Group’s net financial assets and liabilities as at 30 June 2024, a weakening of the US dollar against these
currencies (one cent strengthening in Australian dollar, one cent strengthening in Canadian dollar, 10 pesos strengthening in Chilean peso, one
penny strengthening in Pound sterling and one cent strengthening in Euro), with all other variables held constant, would decrease the Group’s
equity and profit after taxation by US$17 million (2023: decrease of US$15 million).
Transactional exposure in respect of non-functional currency expenditure and revenues
Certain operating and capital expenditure is incurred in currencies other than an operation’s functional currency. To a lesser extent, certain sales revenue
is earned in currencies other than the functional currency of operations and certain exchange control restrictions may require that funds be maintained
in currencies other than the functional currency of the operation. These currency risks are managed as part of the portfolio risk management strategy.
The Group may enter into forward exchange contracts when required under this strategy.
Commodity price risk
The risk associated with commodity prices is managed as part of the portfolio risk management strategy. Substantially all of the Group’s commodity
production is sold on market-based index pricing terms, with derivatives used from time to time to achieve a specific outcome.
Financial instruments with commodity price risk comprise forward commodity and other derivative contracts with net liabilities at fair value of
US$42 million (2023: net liabilities of US$20 million).
1 Consolidated Financial Statements continued
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BHP Annual Report 2024
Provisionally priced commodity sales and purchases contracts
Provisionally priced sales or purchases volumes are those for which price finalisation, referenced to the relevant index, is outstanding at the reporting
date. Provisional pricing mechanisms within these sales and purchases arrangements have the character of a commodity derivative. Trade receivables
or payables under these contracts are carried at fair value through profit or loss using Level 2 valuation inputs based on forecast selling prices in
the quotation period. The Group’s exposure at 30 June 2024 to the impact of movements in commodity prices upon provisionally invoiced sales and
purchases volumes was predominately around copper.
The Group had 428 thousand tonnes of copper exposure as at 30 June 2024 (2023: 314 thousand tonnes) that was provisionally priced. The final price
of these sales and purchases volumes will be determined during the first half of FY2025. A 10 per cent change in the price of copper realised on the
provisionally priced sales, with all other factors held constant, would increase or decrease profit after taxation by US$299 million (2023: US$184 million).
The relationship between commodity prices and foreign currencies is complex and movements in foreign exchange rates can impact
commodity prices.
Liquidity risk
Refer to note 21 ‘Net debt’ for details on the Group’s liquidity risk.
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
The Group is exposed to credit risk from its operating activities (primarily from customer receivables) and from its financing activities, including deposits
with banks and financial institutions, other short-term investments, interest rate and currency derivative contracts and other financial instruments.
Refer to note 8 ‘Trade and other receivables’ and note 21 ‘Net debt’ for details on the Group credit risk.
24.2 Recognition and measurement
All financial assets and liabilities, other than derivatives and trade receivables, are initially recognised at the fair value of consideration paid or received,
net of transaction costs as appropriate. Financial assets are initially recognised on their trade date.
Financial assets are subsequently carried at fair value or amortised cost based on:
– the Group’s purpose, or business model, for holding the financial asset
– whether the financial asset’s contractual terms give rise to cash flows that are solely payments of principal and interest
The resulting Financial Statements classifications of financial assets can be summarised as follows:
Contractual cash flows
Business model
Category
Solely principal and interest
Hold in order to collect contractual cash flows
Amortised cost
Solely principal and interest
Hold in order to collect contractual cash flows and sell
Fair value through other comprehensive income
Solely principal and interest
Hold in order to sell
Fair value through profit or loss
Other
Any of those mentioned above
Fair value through profit or loss
Solely principal and interest refers to the Group receiving returns only for the time value of money and the credit risk of the counterparty for financial
assets held. The main exceptions for the Group are provisionally priced receivables and derivatives which are measured at fair value through profit or loss
under IFRS 9.
The Group has the intention of collecting payment directly from its customers in most cases, however the Group also participates in receivables
financing programs in respect of selected customers. Receivables in these portfolios which are classified as ‘hold in order to sell’, are provisionally priced
receivables and are therefore held at fair value through profit or loss prior to sale to the financial institution.
With the exception of derivative contracts and provisionally priced trade payables which are carried at fair value through profit or loss, the Group’s
financial liabilities are classified as subsequently measured at amortised cost.
The Group may in addition elect to designate certain financial assets or liabilities at fair value through profit or loss or to apply hedge accounting where
they are not mandatorily held at fair value through profit or loss.
Fair value measurement
The carrying amount of financial assets and liabilities measured at fair value is principally calculated based on inputs other than quoted prices that
are observable for these financial assets or liabilities, either directly (i.e. as unquoted prices) or indirectly (i.e. derived from prices). Where no price
information is available from a quoted market source, alternative market mechanisms or recent comparable transactions, fair value is estimated
based on the Group’s views on relevant future prices, net of valuation allowances to accommodate liquidity, modelling and other risks implicit in
such estimates.
The inputs used in fair value calculations are determined by the relevant segment or function. The functions support the assets and operate under
a defined set of accountabilities authorised by the Executive Leadership Team. Movements in the fair value of financial assets and liabilities may be
recognised through the income statement or in other comprehensive income according to the designation of the underlying instrument.
For financial assets and liabilities carried at fair value, the Group uses the following to categorise the inputs to the valuation method used based on the
lowest level input that is significant to the fair value measurement as a whole:
IFRS 13 Fair value hierarchy
Level 1
Level 2
Level 3
Valuation inputs
Based on quoted prices (unadjusted)
in active markets for identical financial
assets and liabilities.
Based on inputs other than quoted
prices included within Level 1 that
are observable for the financial
asset or liability, either directly (i.e.
as unquoted prices) or indirectly
(i.e. derived from prices).
Based on inputs not observable in
the market using appropriate valuation
models, including discounted cash
flow modelling.
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Contents
Financial Statements
24 Financial risk management continued
24.3 Financial assets and liabilities
The financial assets and liabilities are presented by class in the table below at their carrying amounts.
IFRS 13
Fair value hierarchy
Level1
IFRS 9 Classification
2024
US$M
2023
US$M
Current cross currency and interest rate swaps2
2
Fair value through profit or loss
5
34
Current other derivative contracts3
2,3
Fair value through profit or loss
118
407
Current other financial assets4
Amortised cost
234
–
Current other investments5
1,2
Fair value through profit or loss
24
29
Non-current cross currency and interest rate swaps2
2
Fair value through profit or loss
113
149
Non-current other derivative contracts3
2,3
Fair value through profit or loss
103
228
Non-current other financial assets6
3
Fair value through profit or loss
195
246
Non-current other financial assets4,7
Amortised cost
398
–
Non-current investment in shares
1,3
Fair value through other comprehensive income
201
224
Non-current other investments5
1,2
Fair value through profit or loss
219
268
Total other financial assets
1,610
1,585
Cash and cash equivalents
Amortised cost
12,501
12,428
Trade and other receivables8
Amortised cost
1,597
1,506
Provisionally priced trade receivables
2
Fair value through profit or loss
3,250
2,705
Total financial assets
18,958
18,224
Non-financial assets
83,404
83,072
Total assets
102,362
101,296
Current cross currency and interest rate swaps2
2
Fair value through profit or loss
176
147
Current other derivative contracts
2
Fair value through profit or loss
241
176
Current other financial liabilities9
Amortised cost
95
79
Non-current cross currency and interest rate swaps2
2
Fair value through profit or loss
1,337
1,608
Non-current other derivative contracts3
2,3
Fair value through profit or loss
54
82
Non-current other financial liabilities9
Amortised cost
368
467
Total other financial liabilities
2,271
2,559
Trade and other payables10
Amortised cost
6,049
5,338
Provisionally priced trade payables
2
Fair value through profit or loss
614
841
Bank overdrafts and short-term borrowings11
Amortised cost
3
5
Bank loans11
Amortised cost
2,610
7,502
Notes and debentures11
Amortised cost
14,932
11,819
Lease liabilities12
3,116
3,019
Other11
Amortised cost
57
–
Total financial liabilities
29,652
31,083
Non-financial liabilities
23,590
21,683
Total liabilities
53,242
52,766
1.
All of the Group’s financial assets and financial liabilities recognised at fair value were valued using market observable inputs categorised as Level 2 unless specified otherwise in the
following footnotes.
2. Cross currency and interest rate swaps are valued using market data including interest rate curves and foreign exchange rates. A discounted cash flow approach is used to derive the fair
value of cross currency and interest rate swaps at the reporting date.
3. Includes net other derivative assets of US$92 million related to power purchase contract agreements that are categorised as Level 3 (2023: US$46 million).
4. Includes deferred consideration of US$495 million in relation to the divestment of the Blackwater and Daunia mines.
5. Includes investments held by BHP Foundation which are restricted and not available for general use by the Group of US$243 million (2023: US$290 million) of which other investments
(mainly US Treasury Notes) of US$134 million categorised as Level 1 (2023: US$138 million).
6. Includes receivables contingent on future realised coal price of US$195 million (2023: US$246 million receivables contingent on outcome of future events relating to mining and
regulatory approvals).
7.
Includes Senior notes of US$137 million relating to Samarco with a maturity date of 30 June 2031 (refer to note 4 ‘Significant events – Samarco dam failure’ for further information).
8. Excludes input taxes of US$492 million (2023: US$531 million) included in other receivables.
9. Includes the discounted settlement liability in relation to the cancellation of power contracts at the Group’s Escondida operations.
10. Excludes input taxes of US$101 million (2023: US$121 million) included in other payables.
11. All interest bearing liabilities, excluding lease liabilities, are unsecured.
12. Lease liabilities are measured in accordance with IFRS 16/AASB 16 ‘Leases’.
The carrying amounts in the table above generally approximate to fair value. In the case of US$532 million (2023: US$534 million) of fixed rate debt not
swapped to floating rate, the fair value at 30 June 2024 was US$538 million (2023: US$538 million). The fair value is determined using a method that can
be categorised as Level 2 and uses inputs based on benchmark interest rates, alternative market mechanisms or recent comparable transactions.
For financial instruments that are carried at fair value on a recurring basis, the Group determines whether transfers have occurred between levels
in the fair value hierarchy by reassessing categorisation at the end of each reporting period. There were no transfers between categories during
the period.
Offsetting financial assets and liabilities
The Group enters into money market deposits and derivative transactions under International Swaps and Derivatives Association master netting
agreements that do not meet the offsetting criteria in IAS 32/AASB 132 ‘Financial Instruments: Presentation’, but allow for the related amounts to be set-
off in certain circumstances. The amounts set out as cross currency and interest rate swaps in the table above represent the derivative financial assets
and liabilities of the Group that may be subject to the above arrangements and are presented on a gross basis.
1 Consolidated Financial Statements continued
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BHP Annual Report 2024
24.4 Derivatives and hedge accounting
The Group uses derivatives to hedge its exposure to certain market risks and may elect to apply hedge accounting.
Hedge accounting
Derivatives are included within financial assets or liabilities at fair value through profit or loss unless they are designated as effective hedging instruments.
Where hedge accounting is applied, at the start of the transaction, the Group documents the type of hedge, the relationship between the hedging
instrument and hedged items and its risk management objective and strategy for undertaking various hedge transactions. The documentation also
demonstrates that the hedge is expected to be effective.
The Group applies the following types of hedge accounting to its derivatives hedging the interest rate and currency risks of its notes and debentures:
– Fair value hedges – the fair value gain or loss on interest rate and cross currency swaps relating to interest rate risk, together with the change in the fair
value of the hedged fixed rate borrowings attributable to interest rate risk are recognised immediately in the income statement. If the hedge no longer
meets the criteria for hedge accounting, the fair value adjustment on the note or debenture is amortised to the income statement over the period to
maturity using a recalculated effective interest rate.
– Cash flow hedges – changes in the fair value of cross currency interest rate swaps which hedge foreign currency cash flows on the notes and
debentures are recognised directly in other comprehensive income and accumulated in the cash flow hedging reserve. To the extent a hedge is
ineffective, changes in fair value are recognised immediately in the income statement.
When a hedging instrument expires, or is sold, terminated or exercised, or when a hedge no longer meets the criteria for hedge accounting, any
cumulative gain or loss existing in equity at that time remains in equity and is amortised to the income statement over the period to the hedged
item’s maturity.
When hedged, the Group hedges the full notional value of notes or debentures. However, certain components of the fair value of derivatives are not
permitted under IFRS 9 to be included in the hedge accounting above. Certain costs of hedging are permitted to be recognised in other comprehensive
income. Any change in the fair value of a derivative that does not qualify for hedge accounting, or is ineffective in hedging the designated risk due to
contractual differences between the hedged item and hedging instrument, is recognised immediately in the income statement.
The table below shows the carrying amounts of the Group’s notes and debentures by currency and the derivatives which hedge them:
– The carrying amount of the notes and debentures includes foreign exchange remeasurement to period-end rates and fair value adjustments when
included in a fair value hedge.
– The breakdown of the hedging derivatives includes remeasurement of foreign currency notional values at period-end rates, fair value movements
due to interest rate risk, foreign currency cash flows designated into cash flow hedges, costs of hedging recognised in other comprehensive income,
ineffectiveness recognised in the income statement and accruals or prepayments.
– The hedged value of notes and debentures includes their carrying amounts adjusted for the offsetting derivative fair value movements due to foreign
currency and interest rate risk remeasurement.
Fair value of derivatives
2024
US$M
Carrying
amount of
notes and
debentures
Foreign
exchange
notional at
spot rates
Interest
rate risk
Recognised
in cash flow
hedging
reserve
Recognised
in cost of
hedging
reserve
Recognised
in the
income
statement1
Accrued
and other
cash flows
Total
Hedged
value of
notes and
debentures2
A
B
C
D
E
F
G
B to G
A + B + C
USD
10,928
–
498
–
–
2
(48)
452
11,426
GBP
1,595
521
247
(13)
3
(69)
(16)
673
2,363
EUR
2,409
367
259
(27)
7
(50)
(286)
270
3,035
Total
14,932
888
1,004
(40)
10
(117)
(350)
1,395
16,824
Fair value of derivatives
2023
US$M
Carrying
amount of
notes and
debentures
Foreign
exchange
notional at
spot rates
Interest
rate risk
Recognised
in cash flow
hedging
reserve
Recognised
in cost of
hedging
reserve
Recognised
in the
income
statement1
Accrued
and other
cash flows
Total
Hedged
value of
notes and
debentures2
A
B
C
D
E
F
G
B to G
A + B + C
USD
7,245
–
214
–
–
32
23
269
7,459
GBP
1,566
522
274
24
(9)
(69)
35
777
2,362
EUR
3,008
434
302
(39)
10
(49)
(132)
526
3,744
Total
11,819
956
790
(15)
1
(86)
(74)
1,572
13,565
1. Predominantly related to ineffectiveness.
2. Includes US$532 million (2023: US$534 million) of fixed rate debt not swapped to floating rate that is not in a hedging relationship.
The weighted average interest rate payable is USD SOFR +1.40 per cent (2023: USD SOFR +1.54 per cent). Refer to note 23 ‘Net finance costs’ for
details of net finance costs for the year.
177
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
24 Financial risk management continued
Movements in reserves relating to hedge accounting
The following table shows a reconciliation of the components of equity and an analysis of the movements in reserves for all hedges. For a description of
these reserves, refer to note 18 ‘Other equity’.
2024
US$M
Cash flow hedging reserve
Cost of hedging reserve
Gross
Tax
Net
Gross
Tax
Net
Total
At the beginning of the financial year
15
(5)
10
(1)
–
(1)
9
Add: Change in fair value of hedging instrument recognised in OCI
(24)
7
(17)
(9)
3
(6)
(23)
Less: Reclassified from reserves to financial expenses –
recognised through OCI
49
(15)
34
–
–
–
34
At the end of the financial year
40
(13)
27
(10)
3
(7)
20
2023
US$M
Cash flow hedging reserve
Cost of hedging reserve
Gross
Tax
Net
Gross
Tax
Net
Total
At the beginning of the financial year
59
(18)
41
(27)
8
(19)
22
Add: Change in fair value of hedging instrument recognised in OCI
95
(29)
66
–
–
–
66
Less: Reclassified from reserves to financial expenses –
recognised through OCI
(174)
53
(121)
26
(8)
18
(103)
Less: Loss/(gain) transferred to balance sheet related items
35
(11)
24
–
–
–
24
At the end of the financial year
15
(5)
10
(1)
–
(1)
9
Changes in interest bearing liabilities and related derivatives resulting from financing activities
The movement in the year in the Group’s interest bearing liabilities and related derivatives are as follows:
Interest bearing liabilities
Derivatives
(assets)/
liabilities
Bank
loans
Notes and
debentures
Lease
liabilities
Bank
overdraft and
short-term
borrowings
Other
Cross
currency
and interest
rate swaps
Total
2024
US$M
At the beginning of the financial year
7,502
11,819
3,019
5
–
1,572
Proceeds from interest bearing liabilities
400
4,691
–
–
–
–
5,091
Settlements of debt related instruments
–
–
–
–
–
(321)
(321)
Repayment of interest bearing liabilities
(5,319)
(1,338)
(656)
–
(14)
–
(7,327)
Change from Net financing cash flows
(4,919)
3,353
(656)
–
(14)
(321)
(2,557)
Other movements:
Divestment of subsidiaries and operations
–
–
(60)
–
–
–
Interest rate impacts
–
(214)
–
–
–
188
Foreign exchange impacts
24
(35)
(16)
–
–
35
Lease additions
–
–
593
–
–
–
Remeasurement of index-linked freight contracts
–
–
230
–
–
–
Other interest bearing liabilities/derivative related changes
3
9
6
(2)
71
(79)
At the end of the financial year
2,610
14,932
3,116
3
57
1,395
2023
US$M
At the beginning of the financial year
2,472
11,363
2,576
–
17
1,688
Proceeds from interest bearing liabilities
5,450
2,732
–
–
–
–
8,182
Settlements of debt related instruments
–
–
–
–
–
(677)
(677)
Repayment of interest bearing liabilities
(1,087)
(1,610)
(576)
–
(16)
–
(3,289)
Change from Net financing cash flows
4,363
1,122
(576)
–
(16)
(677)
4,216
Other movements:
Acquisition of subsidiaries and operations
688
–
423
–
–
–
Interest rate impacts
–
(803)
–
–
–
691
Foreign exchange impacts
(23)
128
12
–
–
(127)
Lease additions
–
–
542
–
–
–
Remeasurement of index-linked freight contracts
–
–
53
–
–
–
Other interest bearing liabilities/derivative related changes
2
9
(11)
5
(1)
(3)
At the end of the financial year
7,502
11,819
3,019
5
–
1,572
1 Consolidated Financial Statements continued
178
BHP Annual Report 2024
Employee matters
25 Key management personnel
Key management personnel compensation comprises:
2024
US$
2023
US$
2022
US$
Short-term employee benefits
12,687,272
13,599,217
13,979,139
Post-employment benefits
634,005
659,020
634,363
Share-based payments
11,143,944
11,455,666
11,165,439
Total
24,465,221
25,713,903
25,778,941
Key Management Personnel (KMP) includes the roles which have the authority and responsibility for planning, directing and controlling the activities of BHP.
These are Non-executive Directors, the CEO, the Chief Financial Officer, the President Australia and the President Americas.
Transactions and outstanding loans/amounts with key management personnel
There were no purchases by key management personnel from the Group during FY2024 (2023: US$ nil; 2022: US$ nil).
There were no amounts payable by key management personnel at 30 June 2024 (2023: US$ nil; 2022: US$ nil).
There were no loans receivable from or payable to key management personnel at 30 June 2024 (2023: US$ nil; 2022: US$ nil).
Transactions with personally related entities
A number of Directors of the Group hold or have held positions in other companies (personally related entities) where it is considered they control or
significantly influence the financial or operating policies of those entities. There were no reportable transactions with those entities and no amounts were
owed by the Group to personally related entities at 30 June 2024 (2023: US$ nil; 2022: US$ nil).
For more information on remuneration and transactions with key management personnel, refer to the Remuneration Report under Governance.
26 Employee share ownership plans
Awards, in the form of the right to receive ordinary shares in BHP Group Limited have been granted under the following employee share ownership plans:
Cash and Deferred Plan (CDP), Long-Term Incentive Plan (LTIP), Management Award Plan (MAP) and the all-employee share plan, Shareplus.
Some awards are eligible to receive a cash payment, or the equivalent value in shares, equal to the dividend amount that would have been earned on the
underlying shares awarded to those participants (the Dividend Equivalent Payment, or DEP). The DEP is provided to the participants once the underlying
shares are allocated or transferred to them. Awards under the plans do not confer any rights to participate in a share issue; however, there is discretion
under each of the plans to adjust the awards in response to a variation in the share capital of BHP Group Limited.
The table below provides a description of each of the plans.
Plan
CDP
LTIP and MAP
Shareplus
Type
Short-term incentive
Long-term incentive
All-employee share
purchase plan
Overview
The CDP is a plan for Executive KMP and
members of the Executive Leadership Team who
are not Executive KMP.
Generally under the CDP, two thirds of the value of a
participant’s short-term incentive amount is awarded
as rights to receive BHP Group Limited shares at
the end of the vesting period (and the remaining one
third is delivered in cash). Two awards of deferred
shares are granted, each of the equivalent value to
the cash award, vesting between two and five years
respectively. Awards of deferred shares may also
be granted to members of the Executive Leadership
Team as additional retention awards with vesting
periods of up to five years.
The LTIP is a plan for Executive KMP and members of the Executive
Leadership Team who are not Executive KMP, and awards are
granted annually.
The MAP is a plan for BHP senior management who are not
Executive KMP. The number of share rights awarded is determined
by a participant’s role and grade.
Employees may
contribute up
to US$5,000 to
acquire shares
in any plan year.
On the third
anniversary of
the start of a plan
year, the Group will
match the number
of acquired shares.
Vesting
conditions
Service conditions only for the two-year award.
Vesting of the four-year awards are subject to
service and individual performance conditions.
Vesting of the five-year awards are subject to
service conditions and also to a holistic review of
performance at the end of the five-year vesting
period, including a five-year view on Safety and
Sustainability performance, profitability, cash flow,
balance sheet health, returns to shareholders,
corporate governance and conduct.
LTIP: Service and performance conditions.
From FY2023 BHP’s Total Shareholder Return1 (TSR) performance
relative to two Morgan Stanley Capital International (MSCI) market
indices, the MSCI World Metals and Mining Index (“Sector Group
TSR”) and the MSCI World Index (“World TSR”). The Sector Group
TSR over a five-year performance period determines the vesting of
67 per cent of the awards, while performance relative to the World
TSR determines the vesting of 33 per cent of the awards. For awards
granted prior to FY2023, TSR performance relative to a bespoke
sector peer group and the MSCI World Index determines the vesting
of 67 per cent and 33 per cent of the award, respectively.
25 per cent of the award will vest where BHP’s TSR is equal to the
median TSR of the relevant comparator group(s), as measured over
the performance period. Where TSR is below the median, awards will
not vest. Vesting occurs on a sliding scale when BHP’s TSR measured
over the performance period is between the median TSR of the relevant
comparator group(s) up to a nominated level of TSR outperformance
over the relevant comparator group(s), as determined by the Committee,
above which 100 per cent of the award will vest.
MAP: Service conditions only.
Service conditions
only.
Vesting period
Between 2 and 5 years
LTIP – 5 years
MAP – 1 to 5 years
3 years
Dividend
Equivalent
Payment
Yes
LTIP – Yes
MAP – Varies
No
Exercise period None
None
None
1. For LTIP awards granted prior to unification and where the five-year performance period ends after unification, the TSR at the start of the performance period is based on the weighted
average of the TSRs of BHP Group Limited and BHP Group Plc and the TSR at the end of the performance period is based on the TSR of BHP Group Limited.
179
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
26 Employee share ownership plans continued
Employee share awards
2024
Number of
awards at the
beginning of the
financial year
Number of
awards issued
during the year
Number
of awards
vested and
exercised
Number
of awards
lapsed
Number of
awards at the
end of the
financial year
Weighted
average
remaining
contractual
life (years)
Weighted
average
share price at
exercise date
CDP awards
968,581
532,680
219,701
70,071
1,211,489
2.1
A$43.02
LTIP awards
2,558,796
564,431
520,443
177,078
2,425,706
2.2
A$43.02
MAP awards1
6,653,726
2,515,913
2,626,587
555,855
5,987,197
1.2
A$43.33
Shareplus
5,123,851
2,457,307
2,460,834
607,438
4,512,886
1.2
A$44.35
1. There were 75,457 awards vested and exercisable at the end of the financial year.
Fair value and assumptions in the calculation of fair value for awards issued
2024
Weighted average
fair value of
awards granted
during the year
US$
Risk-free
interest rate
Estimated life
of awards
Share price
at grant date
Estimated
volatility of
share price
Dividend
yield
CDP awards1
29.71
n/a
2-5 years
A$44.70/A$42.75
n/a
n/a
LTIP awards
19.51
4.23%
5 years
A$44.70
33.61%
n/a
MAP awards2
23.95
n/a
1-5 years
A$43.49/
A$47.74/
A$45.52/
A$42.75
n/a
5.21%/
5.60%/
7.44%
Shareplus
24.40
n/a
3 years
A$47.23
n/a
7.41%
1. Includes CDP awards granted on 8 December 2023 and 20 June 2024.
2. Includes MAP awards granted on 27 September 2023, 8 December 2023, 12 April 2024 and 20 June 2024.
Recognition and measurement
The fair value at grant date of equity-settled share awards is charged to the income statement over the period for which the benefits of employee services
are expected to be derived. The fair values of awards granted were estimated using a Monte Carlo simulation methodology and Black-Scholes option
pricing technique and consider the following factors:
– exercise price
– expected life of the award
– current market price of the underlying shares
– expected volatility using an analysis of historic volatility over different rolling periods. For the LTIP, it is calculated for all sector comparators and the
published MSCI World Index
– expected dividends
– risk-free interest rate, which is an applicable government bond rate
– market-based performance hurdles
– non-vesting conditions
Where awards are forfeited because non-market-based vesting conditions are not satisfied, the expense previously recognised is
proportionately reversed.
The tax effect of awards granted is recognised in income tax expense, except to the extent that the total tax deductions are expected to exceed the
cumulative remuneration expense. In this situation, the excess of the associated current or deferred tax is recognised in equity and forms part of the
employee share awards reserve. The fair value of awards as presented in the tables above represents the fair value at grant date.
In respect of employee share awards, the Group utilises the BHP Group Limited Employee Equity Trust. The trustee of this trust is an independent
company, resident in Jersey. The trust uses funds provided by the Group to acquire ordinary shares to enable awards to be made or satisfied.
The ordinary shares may be acquired by purchase in the market or by subscription at not less than nominal value.
1 Consolidated Financial Statements continued
180
BHP Annual Report 2024
27 Employee benefits, restructuring and post-retirement employee benefits provisions
2024
US$M
2023
US$M
Employee benefits1
1,698
1,749
Restructuring2
45
28
Post-retirement employee benefits3
300
373
Total provisions
2,043
2,150
Comprising:
Current
1,677
1,734
Non-current
366
416
2024
Employee
benefits
US$M
Restructuring
US$M
Post-retirement
employee
benefits3
US$M
Total
US$M
At the beginning of the financial year
1,749
28
373
2,150
Charge/(credit) for the year:
Underlying
1,375
55
65
1,495
Discounting
–
–
21
21
Yield on defined benefit scheme assets
–
–
(4)
(4)
Exchange variations
(21)
–
(45)
(66)
Released during the year
(98)
(10)
(1)
(109)
Remeasurement gains taken to retained earnings
–
–
(41)
(41)
Utilisation
(1,268)
(27)
(68)
(1,363)
Divestment of subsidiaries and operations4
(39)
–
–
(39)
Transfers and other movements
–
(1)
–
(1)
At the end of the financial year
1,698
45
300
2,043
1. The expenditure associated with total employee benefits will occur in a pattern consistent with when employees choose to exercise their entitlement to benefits.
2. Total restructuring provisions include provisions for terminations and office closures.
3. The net liability recognised in the Consolidated Balance Sheet includes US$142 million present value of funded defined benefits pension obligation (2023: US$151 million) offset by
fair value of defined benefit scheme assets US$(147) million (2023: US$(159) million), US$63 million present value of unfunded defined pension and post-retirement medical benefits
obligation (2023: US$79 million) and US$242 million unfunded post-employment benefits obligation in Chile (2023: US$302 million).
4. Relates to the divestment of the Blackwater and Daunia mines completed on 2 April 2024. Refer to note 3 ‘Exceptional items’ for more information.
Recognition and measurement
Provisions are recognised by the Group when:
– there is a present legal or constructive obligation as a result of past events
– it is more likely than not that a permanent outflow of resources will be required to settle the obligation
– the amount can be reliably estimated and measured at the present value of management’s best estimate of the cash outflow required to settle the
obligation at the reporting date
181
Operating and Financial Review
Overview
Additional Information
Governance
Contents
Financial Statements
27 Employee benefits, restructuring and post-retirement employee benefits provisions continued
Provision
Description
Employee benefits
Liabilities for benefits accruing to employees up until the reporting date in respect of wages and salaries, annual leave and any
accumulating sick leave are recognised in the period the related service is rendered.
Liabilities recognised in respect of short-term employee benefits expected to be settled within 12 months are measured at the
amounts expected to be paid when the liabilities are settled.
Liabilities for other long-term employee benefits, including long service leave, are measured as the present value of estimated future
payments for the services provided by employees up to the reporting date.
Liabilities that are not expected to be settled within 12 months are discounted at the reporting date using market yields of high-quality
corporate bonds or government bonds for countries where there is no deep market for corporate bonds. The rates used reflect the
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
In relation to industry-based long service leave funds, the Group’s liability, including obligations for funding shortfalls, is determined
after deducting the fair value of dedicated assets of such funds.
Liabilities for short and long-term employee benefits (other than unpaid wages and salaries) are disclosed within employee benefits.
Other liabilities for unpaid wages and salaries related to the current period are recognised in other creditors.
Review of employee allowances and entitlements
On 1 June 2023, the Group disclosed the identification of two issues with certain allowances and entitlements affecting a number
of current and former employees in Australia. The identified issues relate to rostered employees having leave incorrectly deducted
on public holidays since 2010 (leave issue) and certain employees at Port Hedland being eligible for additional allowances due to an
error with the employing entity in their employment documentation (employing entity issue). The Group self-reported the issues to the
Fair Work Ombudsman in Australia.
Since the date of the announcement, the Group has recredited leave hours to current employees and begun making payments to
former employees who were impacted by the leave issue.
The Group has also commenced making payments to current and former employees for historical impacts of the employing entity
issue in the first quarter of FY2025.
The Group’s best estimate of the remaining cost of remediating the two issues, incorporating on-costs, including associated
superannuation and interest payments (BHP share) is reflected in employee benefit provisions at 30 June 2024.
There remains a risk that other instances of non-compliance requiring remediation may be identified through the Group’s review
processes and associated provisions may be recognised in future reporting periods.
Restructuring
Restructuring provisions are recognised when:
– the Group has developed a detailed formal plan identifying the business or part of the business concerned, the location and
approximate number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline
– the restructuring has either commenced or been publicly announced and can no longer be withdrawn
Payments that are not expected to be settled within 12 months of the reporting date are measured at the present value of the
estimated future cash payments expected to be made by the Group.
Post-retirement
employee benefits
Defined contribution pension schemes and multi-employer pension schemes
For defined contribution schemes or schemes operated on an industry-wide basis where it is not possible to identify assets
attributable to the participation by the Group’s employees, the pension charge is calculated on the basis of contributions payable.
The Group contributed US$368 million during the financial year (2023: US$358 million; 2022: US$324 million) to defined contribution
plans and multi-employer defined contribution plans. These contributions are expensed as incurred.
Defined benefit pension and post-retirement medical schemes
The Group operates or participates in a number of defined benefit pension schemes throughout the world, all of which are closed to
new entrants. The funding of the schemes complies with local regulations. The assets of the schemes are generally held separately
from those of the Group and are administered by trustees or management boards. The Group also operates a number of unfunded
post-retirement medical schemes in the United States, Canada and Europe.
For defined benefit schemes, an asset or liability is recognised in the balance sheet based at the present value of defined benefit
obligations less, where funded, the fair value of plan assets, except that any such asset cannot exceed the present value of expected
refunds from and reductions in future contributions to the plan. Full actuarial valuations are prepared by local actuaries for all
schemes, using discount rates based on market yields at the reporting date on high-quality corporate bonds or by reference to
national government bonds if high-quality corporate bonds are not available.
Where funded, scheme assets are invested in a diversified range of asset classes, predominantly comprising bonds and equities.
1 Consolidated Financial Statements continued
182
BHP Annual Report 2024
Group and related party information
28 Discontinued operations
On 1 June 2022 (Completion date) BHP completed the merger of the Group’s oil and gas portfolio with Woodside Energy Group Limited (‘Woodside’).
Woodside acquired the entire share capital of BHP Petroleum International Pty Ltd (‘BHP Petroleum’) in exchange for 914,768,948 newly issued
Woodside ordinary shares.
On the Completion Date, the Group paid a fully franked in specie dividend in the form of Woodside shares to eligible BHP shareholders. Eligible BHP
shareholders received one Woodside share for every 5.5340 BHP shares they held on the Group’s register at the record date of 26 May 2022.
As part of completion and in order to reflect the economic effective date of 1 July 2021, the Group made a net cash payment of US$0.7 billion (net of
completion adjustments) to Woodside in addition to US$0.4 billion in cash that was left in the BHP Petroleum bank accounts to fund ongoing operations.
The total cash transfer of US$1.1 billion reflected the net cash flows generated by BHP Petroleum between 1 July 2021 and Completion Date adjusted for
dividends Woodside would have paid on the newly issued Woodside ordinary shares, had the Merger completed on 1 July 2021.
There was no contribution of Discontinued operations to the Group’s profit and cash flows for years ended 30 June 2024 and 30 June 2023.
The Blackwater and Daunia mines, while being divested on 2 April 2024, are not considered to meet the criteria for classification as a Discontinued
operation given their relative size to the Group and the Coal segment. For further information, refer to note 3 ‘Exceptional items’.
The contribution of Discontinued operations for the year ended 30 June 2022 is detailed below:
Income statement – Discontinued operations
2022
US$M
Profit/(loss) after taxation from operating activities
2,496
Net gain on Petroleum merger with Woodside (after tax)
8,159
Profit/(loss) after taxation
10,655
Attributable to non-controlling interests
–
Attributable to BHP shareholders
10,655
Basic earnings/(loss) per ordinary share (cents)
210.5
Diluted earnings/(loss) per ordinary share (cents)
210.1
The total comprehensive income attributable to BHP shareholders from Discontinued operations was a gain of US$10,596 million for the year ended
30 June 2022.
Cash flows from Discontinued operations
2022
US$M
Net operating cash flows
2,889
Net investing cash flows1
(904)
Net financing cash flows2
(33)
Net increase/(decrease) in cash and cash equivalents from Discontinued operations
1,952
Net cash completion payment on merger of Petroleum with Woodside
(683)
Cash and cash equivalents disposed
(399)
Total cash impact
870
1. Includes purchases of property, plant and equipment and capitalised exploration related to drilling and development expenditure of US$1,144 million, proceeds from sale of subsidiaries,
operations and joint operations, net of cash of US$91 million, proceeds from sale of assets of US$151 million and other investing outflows of US$2 million.
2. Represents net repayment of interest bearing liabilities of US$33 million.
Exceptional items – Discontinued operations
Exceptional items are those gains or losses where their nature, including the expected frequency of the events giving rise to them, and impact is considered
material to the Financial Statements.
There were no exceptional items related to Discontinued operations for years ended 30 June 2024 and 30 June 2023.
The Exceptional item related to Discontinued operations included within the Group’s profits for the year ended 30 June 2022 is detailed below.
Year ended 30 June 2022
Gross
US$M
Tax
US$M
Net
US$M
Exceptional items by category
Net gain on Petroleum merger with Woodside1
8,167
(8)
8,159
Total
8,167
(8)
8,159
Attributable to non-controlling interests
–
–
–
Attributable to BHP shareholders
8,167
(8)
8,159
1. The tax expense associated with the exceptional item reflects the tax impact of transaction costs and other restructuring related activities undertaken pre-merger. There were no further
tax impacts arising on the net gain on merger of our Petroleum business with Woodside as generated tax losses were either offset with capital gains in other entities in the Group, or not
recognised on the basis that it is not probable that future capital gains will be available against which the Group can utilise the tax losses.
183
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Overview
Additional Information
Governance
Contents
Financial Statements
28 Discontinued operations continued
Net gain on disposal of Discontinued operations
Details of the net gain on Petroleum merger with Woodside is presented below:
2022
US$M
Net assets disposed
10,172
Fair value of Woodside shares1
19,566
Net cash completion payment on merger of Petroleum with Woodside2
(683)
Foreign currency translation reserve transferred to the income statement
54
Other provisions and related indemnities recognised at completion
(353)
Transaction and other directly attributable costs
(245)
Income tax expense
(8)
Net gain on Petroleum merger with Woodside
8,159
1. Represents the consideration received being the fair value of 914,768,948 Woodside ordinary shares received using the closing ASX share price of A$29.76 on 31 May 2022
(US$21.39 equivalent based on an exchange rate of AUD/USD 0.7187).
2. Reflects the net cash flows generated by BHP Petroleum between 1 July 2021 and Completion Date adjusted for dividends Woodside would have paid on the newly issued Woodside
ordinary shares, had the Merger completed on 1 July 2021.
29 Business combinations
There were no business combinations entered into by the Group during the year ended 30 June 2024.
Business combination during the year ended 30 June 2023
OZ Minerals Limited
On 2 May 2023 (Acquisition Date), the Group acquired 100 per cent of the issued share capital of OZ Minerals Limited (OZL) for a net cash consideration
of US$5.9 billion. The terms of the acquisition did not include any contingent consideration.
The Group had 12 months from the acquisition date to make adjustments in the current period to the fair value of net identifiable assets acquired and the
resultant value of goodwill with no restatement of comparative information. As at 2 May 2024, the Group finalised the purchase price allocation which has
resulted in a net increase of US$2 million in goodwill from the provisional amount reported at 30 June 2023.
Details of the business combination are as follows:
Final
Fair value
US$M
Assets
Cash and cash equivalents
104
Trade and other receivables1
77
Other financial assets
7
Inventories
329
Property, plant and equipment
7,661
Intangible assets – goodwill
194
Current tax receivable
36
Other assets
25
Total assets
8,433
Liabilities
Trade and other payables
242
Interest bearing liabilities
1,111
Deferred tax liabilities2
850
Provisions
258
Total liabilities
2,461
Identifiable net assets acquired
5,972
Total consideration paid3 4
5,972
Cash and cash equivalents acquired
(104)
Net cash consideration paid
5,868
1. This represents the gross contractual amount for trade and other receivables all of which is expected to be collected.
2. This primarily represents the difference between the fair value of the mineral rights acquired and the corresponding tax base.
3. The Group executed a forward exchange contract to hedge the foreign exchange exposure on the consideration made in AUD. On maturity of the hedging instrument, a hedge loss of
US$35 million was capitalised to the cost of the acquisition.
4. The consideration paid by the Group was A$26.50 (at the average hedged exchange rate of AUD/USD 0.6681) per OZL share over 337,314,920 shares and excluded a special dividend of
A$1.75 per OZL share which was paid by OZL to its shareholders immediately prior to acquisition.
Goodwill of US$194 million represented the excess of consideration paid above the fair value of the acquired assets and liabilities. The goodwill primarily
arises from the deferred tax liability recognised at acquisition due to a difference between the fair value of mineral rights acquired and the corresponding
tax base.
None of the goodwill recognised is expected to be deductible for tax purposes.
During 2024, US$1,094 million of goodwill and property, plant and equipment recognised as part of the OZL business combination has been impaired.
Refer to note 13 ‘Impairment of non-current assets’ for information on impairments.
1 Consolidated Financial Statements continued
184
BHP Annual Report 2024
Key judgements and estimates
Judgements: Judgement is required to determine the fair value of assets acquired and liabilities assumed at acquisition date in a business
combination, which could have a material impact on goodwill.
Estimates: The Group used the discounted cash-flow method to measure the fair value of mineral rights. Key assumptions used included
commodity prices, production volumes, life of mine, cash outflows (including operating costs, capital expenditure, closure and rehabilitation
costs and taxes), discount rates and risking factors.
30 Subsidiaries
Significant subsidiaries of the Group are those with the most significant contribution to the Group’s net profit or net assets. The Group’s interest in the
subsidiaries’ results are listed in the table below.
Group’s interest
Significant subsidiaries
Country of
incorporation
Principal activity
2024
%
2023
%
Coal
Hunter Valley Energy Coal Pty Ltd
Australia
Coal mining
100
100
Copper
BHP Olympic Dam Corporation Pty Ltd
Australia
Copper, uranium and gold mining
100
100
Compañia Minera Cerro Colorado Limitada
Chile
Copper mining
100
100
Minera Escondida Ltda1
Chile
Copper mining
57.5
57.5
Minera Spence SA
Chile
Copper mining
100
100
OZ Minerals Carrapateena Pty Ltd
Australia
Copper and gold mining
100
100
OZ Minerals Prominent Hill Operations Pty Ltd
Australia
Copper and gold mining
100
100
Iron Ore
BHP Iron Ore (Jimblebar) Pty Ltd2
Australia
Iron ore mining
85
85
BHP Iron Ore Pty Ltd
Australia
Service company
100
100
BHP (Towage Service) Pty Ltd
Australia
Towing services
100
100
Marketing
BHP Billiton Freight Singapore Pte Limited
Singapore
Freight services
100
100
BHP Billiton Marketing AG
Switzerland
Marketing and trading
100
100
BHP Billiton Marketing Asia Pte Ltd
Singapore
Marketing support and other services
100
100
Group and Unallocated
BHP Billiton Finance B.V.
The Netherlands
Finance
100
100
BHP Billiton Finance Limited
Australia
Finance
100
100
BHP Billiton Finance (USA) Limited
Australia
Finance
100
100
BHP Canada Inc.
Canada
Potash development
100
100
BHP Group Operations Pty Ltd
Australia
Administrative services
100
100
BHP Nickel West Pty Ltd
Australia
Nickel mining, smelting,
refining and administrative services
100
100
OZ Minerals Musgrave Operations Pty Ltd
Australia
Nickel and copper development
100
100
WMC Finance (USA) Limited
Australia
Finance
100
100
1. As the Group has the ability to direct the relevant activities at Minera Escondida Ltda, it has control over the entity. The assessment of the most relevant activity in this contractual
arrangement is subject to judgement. The Group establishes the mine plan and the operating budget and has the ability to appoint the key management personnel, demonstrating that the
Group has the existing rights to direct the relevant activities of Minera Escondida Ltda.
2. The Group has an effective interest of 92.5 per cent in BHP Iron Ore (Jimblebar) Pty Ltd; however, by virtue of the shareholder agreement with ITOCHU Iron Ore Australia Pty Ltd
and Mitsui & Co. Iron Ore Exploration & Mining Pty Ltd, the Group’s interest in the Jimblebar mining operation is 85 per cent, which is consistent with the other respective contractual
arrangements at Western Australia Iron Ore.
31 Investments accounted for using the equity method
Significant interests in equity accounted investments of the Group are those with the most significant contribution to the Group’s net profit or net assets.
The Group’s ownership interest in significant equity accounted investments results are listed in the table below.
Ownership interest
Significant associates
and joint ventures
Country of incorporation/
principal place of business
Associate or
joint venture
Principal activity Reporting date
2024
%
2023
%
Compañía Minera Antamina S.A.
(Antamina)
Peru
Associate
Copper and zinc
mining
31 December
33.75
33.75
Samarco Mineração S.A.
(Samarco)
Brazil
Joint venture
Iron ore mining
31 December
50.00
50.00
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Governance
Contents
Financial Statements
31 Investments accounted for using the equity method continued
Voting in relation to relevant activities in Antamina, determined to be the approval of the operating and capital budgets, does not require unanimous
consent of all participants to the arrangement, therefore joint control does not exist. Instead, because the Group has the power to participate in the
financial and operating policies of the investee, this investment is accounted for as an associate.
Samarco is jointly owned by BHP Billiton Brasil Ltda (BHP Brasil) and Vale S.A. (Vale). As the Samarco entity has the rights to the assets and obligations
to the liabilities relating to the joint arrangement and not its owners, this investment is accounted for as a joint venture.
The Group is restricted in its ability to make dividend payments from its investments in associates and joint ventures as any such payments require the
approval of all investors in the associates and joint ventures. The ownership interest at the Group’s and the associates’ or joint ventures’ reporting dates
are the same. When the annual financial reporting date is different to the Group’s, financial information is obtained as at 30 June in order to report on an
annual basis consistent with the Group’s reporting date.
The movement for the year in the Group’s investments accounted for using the equity method is as follows:
Year ended 30 June 2024
US$M
Investment in
associates
Investment in
joint ventures
Total equity
accounted
investments
At the beginning of the financial year
1,620
–
1,620
(Loss)/profit from equity accounted investments, related impairments and expenses1
376
(3,032)
(2,656)
Investment in equity accounted investments
63
–
63
Dividends received from equity accounted investments
(397)
–
(397)
Other¹
–
3,032
3,032
At the end of the financial year
1,662
–
1,662
1. Represents financial impacts of Samarco dam failure in the Group’s loss from equity accounted investments, related impairments and expenses. Refer to note 4 ‘Significant events –
Samarco dam failure’ for further information.
The following table summarises the financial information relating to each of the Group’s significant equity accounted investments.
Associates
Joint ventures
2024
US$M
Antamina
Individually
immaterial1
Samarco2
Individually
immaterial
Total
Current assets
1,699
5643
Non-current assets
6,325
7,214
Current liabilities
(987)
(3,266)4
Non-current liabilities
(2,389)
(23,211)
Net assets/(liabilities) – 100%
4,648
(18,699)
Net assets/(liabilities) – Group share
1,569
(9,349)
Adjustments to net assets related to accounting policy adjustments
(71)
–
Investment in Samarco
–
5166
Impairment of the carrying value of the investment in Samarco
–
(1,041)7
Additional share of Samarco losses
–
7,8918
Unrecognised losses
–
1,9839
Carrying amount of investments accounted for using the equity method
1,498
164
–
–
1,662
Revenue – 100%
4,381
1,553
Profit/(loss) from Continuing operations – 100%
1,353
(6,726)10
Share of profit/(loss) of equity accounted investments
457
(3,363)
Adjustments to share of profit/(loss) related to accounting policy adjustments
8
(6)¹¹
Impairment of the carrying value of the investment in Samarco
–
–
Additional share of Samarco losses
–
506
Fair value change on forward exchange derivatives
–
(199)
Movement in unrecognised losses
–
309
(Loss)/profit from equity accounted investments, related impairments and expenses
465
(89)
(3,032)
–
(2,656)
Comprehensive income – 100%
1,353
(6,726)
Share of comprehensive (loss)/income – Group share in equity accounted investments
465
(89)
(3,032)
–
(2,656)
Dividends received from equity accounted investments
397
–
–
–
397
1 Consolidated Financial Statements continued
186
BHP Annual Report 2024
Associates
Joint ventures
2023
US$M
Antamina
Individually
immaterial1
Samarco2
Individually
immaterial
Total
Current assets
1,519
5373
Non-current assets
5,670
5,739
Current liabilities
(774)
(11,167)4
Non-current liabilities
(1,944)
(10,614)
Net assets/(liabilities) – 100%
4,471
(15,505)
Net assets/(liabilities) – Group share
1,509
(7,753)
Adjustments to net assets related to accounting policy adjustments
(79)
2915
Investment in Samarco
–
5166
Impairment of the carrying value of the investment in Samarco
–
(1,041)7
Additional share of Samarco losses
–
6,0348
Unrecognised losses
–
1,9539
Carrying amount of investments accounted for using the equity method
1,430
190
–
–
1,620
Revenue – 100%
4,350
1,554
Profit/(loss) from Continuing operations – 100%
1,571
(3,018)10
Share of profit/(loss) of equity accounted investments
530
(1,509)
Adjustments to share of profit/(loss) related to accounting policy adjustments
(79)
2311
Impairment of the carrying value of the investment in Samarco
–
–
Additional share of Samarco losses
–
452
Fair value change on forward exchange derivatives
–
471
Movement in unrecognised losses
–
7789
Profit/(loss) from equity accounted investments, related impairments and expenses
451
(72)
215
–
594
Comprehensive income – 100%
1,571
(3,018)
Share of comprehensive income/(loss) – Group share in equity accounted investments
451
(72)
215
–
594
Dividends received from equity accounted investments
327
1
–
–
328
Associates
Joint ventures
2022
US$M
Antamina
Individually
immaterial
Samarco2
Individually
immaterial
Total
Revenue – 100%
5,264
1,670
Profit/(loss) from Continuing operations – 100%
2,133
(528)10
Share of profit/(loss) of equity accounted investments
720
(276)
Impairment of the carrying value of the investment in Samarco
–
–
Additional share of Samarco losses
–
290
Fair value change on forward exchange derivatives
–
(81)
Movement in unrecognised losses
–
(609)9
Profit/(loss) from equity accounted investments, related impairments and expenses
720
(63)
(676)
–
(19)
Comprehensive income – 100%
2,133
(528)
Share of comprehensive income/(loss) – Group share in equity accounted investments
720
(63)
(676)
–
(19)
Dividends received from equity accounted investments
776
11
–
–
787
1.
The unrecognised share of gain for the period was US$41 million (2023: unrecognised share of gain for the period was US$76 million), which decreased the cumulative losses to US$100
million (2023: decrease to US$141 million).
2. Refer to note 4 ‘Significant events – Samarco dam failure’ for further information regarding the financial impact of the Samarco dam failure which occurred in November 2015 on BHP
Brasil’s share of Samarco’s losses. The financial information disclosed represents the underlying financial information of Samarco updated to reflect the Group’s best estimate of the
costs to resolve all aspects of the Federal Public Prosecution Office claim and Framework Agreement.
3. Includes cash and cash equivalents of US$251 million (2023: US$138 million).
4. Includes current financial liabilities (excluding trade and other payables and provisions) of US$ nil (2023: US$7,154 million).
5. Relates mainly to dividends declared by Samarco that remain unpaid at balance date and which, in accordance with the Group’s accounting policy, are recognised when received not
receivable.
6. Any working capital funding provided to Samarco is capitalised as part of the Group’s investments in joint ventures and disclosed as an impairment included within the Samarco
impairment expense line item.
7.
In the year ended 30 June 2016 BHP Brasil adjusted its investment in Samarco to US$ nil (resulting from US$(655) million share of loss from Samarco and US$(525) million impairment).
Additional cumulative impairment losses relating to working capital funding of US$(516) million have also been recognised.
8. BHP Brasil has recognised accumulated additional share of Samarco losses of US$(7,891) million resulting from US$(6,147) million provisions relating to the Samarco dam failure and
US$(1,744) million recognised as net finance costs.
9. Share of Samarco’s losses for which BHP Brasil does not have an obligation to fund.
10. Includes depreciation and amortisation of US$165 million (2023: US$144 million; 2022: US$205 million), interest income of US$43 million (2023: US$42 million; 2022: US$19 million),
interest expense of US$807 million (2023: US$1,384 million; 2022: US$628 million), other finance income in relation to the Judicial Reorganisation of US$1,756 million (2023: US$ nil;
2022: US$ nil) and income tax benefit/(expense) of US$999 million (2023: US$(213) million; 2022: US$(7) million).
11. Includes accounting policy adjustments mainly related to the removal of foreign exchange gains on excluded dividends payable.
187
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Overview
Additional Information
Governance
Contents
Financial Statements
32 Interests in joint operations
Significant joint operations of the Group are those with the most significant contributions to the Group’s net profit or net assets. The Group’s interest in the
joint operations results are listed in the table below.
Group’s interest
Significant joint operations
Country of operation
Principal activity
2024
%
2023
%
Mt Goldsworthy1
Australia
Iron ore mining
85
85
Mt Newman1
Australia
Iron ore mining
85
85
Yandi1
Australia
Iron ore mining
85
85
Central Queensland Coal Associates
Australia
Coal mining
50
50
1. These contractual arrangements are controlled by the Group and do not meet the definition of joint operations. However, as they are formed by contractual arrangement and are not
entities, the Group recognises its share of assets, liabilities, revenue and expenses arising from these arrangements.
Assets held in joint operations subject to significant restrictions are as follows:
Group’s share
2024
US$M
2023
US$M
Current assets
1,928
1,561
Non-current assets
25,307
26,370
Total assets1
27,235
27,931
1. While the Group is unrestricted in its ability to sell a share of its interest in these joint operations, it does not have the right to sell individual assets that are used in these joint operations
without the unanimous consent of the other participants. The assets in these joint operations are also restricted to the extent that they are only available to be used by the joint operation
itself and not by other operations of the Group.
33 Related party transactions
The Group’s related parties are predominantly subsidiaries, associates and joint ventures, and key management personnel of the Group.
Disclosures relating to key management personnel are set out in note 25 ‘Key management personnel’. Transactions between each parent company and
its subsidiaries are eliminated on consolidation and are not disclosed in this note.
– All transactions to/from related parties are made at arm’s length, i.e. at normal market prices and rates and on normal commercial terms.
– Outstanding balances at year-end are unsecured and settlement occurs in cash. Loan amounts owing from related parties represent secured loans
made to associates and joint ventures under co-funding arrangements. Such loans are made on an arm’s length basis.
– No guarantees are provided or received for any related party receivables or payables.
– No provision for expected credit losses has been recognised in relation to any outstanding balances and no expense has been recognised in respect of
expected credit losses due from related parties.
– There were no other related party transactions in the year ended 30 June 2024 (2023: US$ nil), other than those with post-employment benefit plans for
the benefit of Group employees. These are shown in note 27 ‘Employee benefits, restructuring and post-retirement employee benefits provisions’.
– Related party transactions with Samarco are described in note 4 ‘Significant events – Samarco dam failure’.
Further disclosures related to related party transactions are as follows:
Transactions with related parties
Joint ventures
Associates
2024
US$M
2023
US$M
2024
US$M
2023
US$M
Sales of goods/services
–
–
–
–
Purchases of goods/services
–
–
1,606.639
1,589.094
Interest income
–
–
–
–
Interest expense
–
–
–
–
Dividends received
–
–
396.856
327.679
Net loans made to/(repayments from) related parties
–
–
–
–
Outstanding balances with related parties
Joint ventures
Associates
2024
US$M
2023
US$M
2024
US$M
2023
US$M
Trade amounts owing to related parties
–
–
246.764
246.239
Loan amounts owing to related parties
–
–
–
–
Trade amounts owing from related parties
–
–
0.249
6.730
Loan amounts owing from related parties
–
–
–
–
1 Consolidated Financial Statements continued
188
BHP Annual Report 2024
Unrecognised items and uncertain events
34 Contingent liabilities
2024
US$M
2023
US$M
Associates and joint ventures1
1,492
1,094
Subsidiaries and joint operations1
859
1,184
Total
2,351
2,278
1. There are a number of matters, for which it is not possible at this time to provide a range of possible outcomes or a reliable estimate of potential future exposures, and for which no
amounts have been included in the table above.
A contingent liability is a possible obligation arising from past events and whose existence will be confirmed only by occurrence or non-occurrence of one
or more uncertain future events not wholly within the control of the Group. A contingent liability may also be a present obligation arising from past events
but is not recognised on the basis that an outflow of economic resources to settle the obligation is not viewed as probable, or the amount of the obligation
cannot be reliably measured.
When the Group has a present obligation, an outflow of economic resources is assessed as probable and the Group can reliably measure the obligation,
a provision is recognised.
The Group has entered into various counter-indemnities of bank and performance guarantees related to its own future performance, which are in the
normal course of business. The likelihood of these guarantees being called upon is considered remote.
The Group presently has tax matters, litigation and other claims, for which the timing of resolution and potential economic outflow are uncertain.
Obligations assessed as having probable future economic outflows capable of reliable measurement are provided at reporting date and matters
assessed as having possible future economic outflows capable of reliable measurement are included in the total amount of contingent liabilities above.
Individually significant matters, including narrative on potential future exposures incapable of reliable measurement, are disclosed below, to the extent that
disclosure does not prejudice the Group.
Uncertain tax and
royalty matters
The Group is subject to a range of taxes and royalties across many jurisdictions, the application of which is uncertain in some
regards. Changes in tax law, changes in interpretation of tax law, periodic challenges and disagreements with tax authorities, and
legal proceedings result in uncertainty of the outcome of the application of taxes and royalties to the Group’s business.
To the extent uncertain tax and royalty matters give rise to a contingent liability, an estimate of the potential liability is included within
the table above, where it is capable of reliable measurement.
Samarco contingent
liabilities
The table above includes contingent liabilities related to the Group’s equity accounted investment in Samarco to the extent they are
capable of reliable measurement. Details of contingent liabilities related to Samarco are disclosed in note 4 ‘Significant events –
Samarco dam failure’.
Divestments and
demergers
Where the Group divests or demerges entities, it is generally agreed to provide certain indemnities to the acquiring or demerged
entity. Such indemnities include those provided as part of the demerger of South32 Ltd in May 2015, divestment of Group’s Onshore
US assets in September 2018 and October 2018, divestment of BMC in May 2022 and the merger of the Group’s Petroleum business
with Woodside in June 2022. No material claims have been made pursuant to these indemnities as at 30 June 2024.
35 Subsequent events
On 30 July 2024, the Group announced an agreement with Lundin Mining to jointly acquire 100% of Filo Corp., a Toronto Stock Exchange listed company
which owns the Filo del Sol (FDS) copper project. BHP and Lundin Mining also agreed to form a 50/50 joint venture to hold the FDS and Josemaria
projects located in the Vicuña district of Argentina and Chile (together with the Filo Acquisition, the Proposed Transaction). Lundin Mining owns 100%
of the Josemaria project. BHP’s total cash payment for the Proposed Transaction is expected to be approximately US$2.1 billion. In connection with the
Filo Acquisition, BHP and Lundin Mining have also agreed to subscribe for 3,484,848 common shares of Filo Corp. at a price of C$33.00 per share for
aggregate gross proceeds of C$115 million (the Filo Share Placement) to provide interim financing to Filo Corp.
Other than the matters outlined above or elsewhere in the Financial Statements, no matters or circumstances have arisen since the end of the financial
year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent
accounting periods.
189
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Overview
Additional Information
Governance
Contents
Financial Statements
Other items
36 Auditor’s remuneration
2024
US$M
2023
US$M
2022
US$M
Fees payable to the Group’s auditors for assurance services
Audit of the Group’s Annual Report
10.558
9.700
9.816
Audit of the accounts of subsidiaries, joint ventures and associates
0.534
0.551
0.605
Audit-related assurance services required by legislation to be provided by the auditor
1.871
1.808
1.933
Other assurance and agreed-upon procedures under legislation or contractual arrangements
2.261
1.991
7.938
Total assurance services
15.224
14.050
20.292
Fees payable to the Group’s auditors for non-assurance services
Other services
0.498
0.180
–
Total other services
0.498
0.180
–
Total fees
15.722
14.230
20.292
All amounts were paid to EY or EY affiliated firms with fees determined, and predominantly billed, in US dollars.
Fees payable to the Group’s auditors for assurance services
Audit of the Group’s Annual Report comprises fees for auditing the statutory financial report of the Group and includes audit work in relation to compliance
with section 404 of the US Sarbanes-Oxley Act.
Audit-related assurance services required by legislation to be provided by the auditors mainly comprises review of the half-year report.
Other assurance services comprise assurance in respect of the Group’s sustainability reporting, economic contribution reporting, and other non-
statutory reporting.
Fees payable to the Group’s auditors for other services
Other services provided in FY2024 and FY2023 primarily relate to an independent assessment of technology project governance. No amounts were
payable for other services in FY2022.
37 BHP Group Limited
BHP Group Limited does not present unconsolidated parent company Financial Statements. Selected financial information of the BHP Group Limited
parent company is as follows:
2024
US$M
2023
US$M
Income statement information for the financial year
Profit after taxation for the year
13,696
10,924
Total comprehensive income
13,695
10,925
Balance sheet information as at the end of the financial year
Current assets
9,026
3,579
Total assets
45,443
39,232
Current liabilities
1,531
1,476
Total liabilities
1,734
1,637
Share capital
4,611
4,449
Treasury shares
(36)
(41)
Reserves
161
165
Retained earnings
38,973
33,022
Total equity
43,709
37,595
Parent company guarantees
BHP Group Limited has guaranteed certain financing arrangements available to subsidiaries of US$4,856 million at 30 June 2024 (2023: US$5,499 million).
BHP Group Limited and its wholly owned subsidiary BHP Group (UK) Ltd (formerly BHP Group Plc) have severally, fully and unconditionally guaranteed the
payment of the principal and premium, if any, and interest, including certain additional amounts that may be payable in respect of the notes issued by 100
per cent owned finance subsidiary, BHP Billiton Finance (USA) Ltd. BHP Group Limited and BHP Group (UK) Ltd have guaranteed the payment of such
amounts when they become due and payable, whether on an interest payment date, at the stated maturity of the notes, by declaration or acceleration, call for
redemption or otherwise. The guaranteed liabilities at 30 June 2024 amounted to US$3,500 million (2023: US$4,234 million). In addition, BHP Group Limited
and BHP Group (UK) Ltd have severally guaranteed a Group Revolving Credit Facility of US$5,500 million (2023: US$5,500 million), which remains undrawn.
BHP Group Limited has severally, fully and unconditionally guaranteed the payment of principal and premium, if any, and interest related to
US$7,500 million (2023: US$2,750 million) of US Global bonds issued by BHP Billiton Finance (USA).
1 Consolidated Financial Statements continued
190
BHP Annual Report 2024
38 Deed of Cross Guarantee
BHP Group Limited together with certain wholly owned subsidiaries set out below have entered into a Deed of Cross Guarantee (Deed) dated 6 June 2016 or
have subsequently joined the Deed by way of an Assumption Deed. The effect of the Deed is that BHP Group Limited has guaranteed to pay any outstanding
liabilities upon the winding up of any wholly owned subsidiary that is party to the Deed. Wholly owned subsidiaries that are party to the Deed have also given
a similar guarantee in the event that BHP Group Limited or another party to the Deed is wound up.
On 2 May 2023, BHP Lonsdale Investments Pty Ltd (a wholly owned subsidiary of BHP Group Limited that is a party to the Deed) acquired OZ Minerals Pty
Ltd (formerly OZ Minerals Ltd). OZ Minerals Pty Ltd and certain of its wholly owned subsidiaries were added as parties to the Deed by way of an Assumption
Deed effective 27 June 2024. OZ Minerals Pty Ltd was a disclosing entity for part of FY2024 and is relying on relief granted by ASIC under ASIC Instrument
24-0213 (Specific ASIC Instrument). The Specific ASIC Instrument relieves OZ Minerals Pty Ltd and its directors from certain provisions of the Corporations
Act 2001 (Cth) including the requirements for preparation, audit and lodgement of financial reports and a directors’ report for FY2024. It also relieves BHP
Group Limited from financial reporting obligations to the extent that any non-compliance with those obligations arises merely from the inclusion of notes that
have been prepared pursuant to section 6 of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785 (ASIC Instrument).
The following companies are parties to the Deed and members of the Closed Group as at 30 June 2024:
BHP (Towage Services) Pty Ltd1
OS ACPM Pty Ltd1
BHP Direct Reduced Iron Pty Limited
OS MCAP Pty Ltd1
BHP Iron Ore Pty Ltd1
UMAL Consolidated Pty Ltd1
BHP Minerals Pty Ltd1
BHP Freight Pty Ltd
BHP WAIO Pty Ltd1
BHP Group Operations Pty Ltd1
Pilbara Gas Pty Limited
BHP Innovation Pty Ltd
BHP Coal Pty Ltd1
BHP Lonsdale Investments Pty Ltd
BHP MetCoal Holdings Pty Ltd1
BHP Minerals Holdings Proprietary Limited1
Broadmeadow Mine Services Pty Ltd
BHP Nickel West Pty Ltd1
Central Queensland Services Pty Ltd
BHP Olympic Dam Corporation Pty Ltd1
Hay Point Services Pty Limited
The Broken Hill Proprietary Company Pty Ltd1
BHP Yakabindie Nickel Pty Ltd1
OZ Minerals Brazil (Holdings) Pty Ltd1,2
OZ Minerals Pty Ltd1,2
OZ Minerals Musgrave Holdings Pty Ltd2
OZ Minerals Prominent Hill Pty Ltd1,2
OZ Minerals Prominent Hill Operations Pty Ltd1,2
Carrapateena Pty Ltd1,2
OZM Carrapateena Pty Ltd2
Minotaur Resources Holdings Pty Ltd1,2
Avanco Resources Pty Ltd1,2
OZ Minerals Carrapateena Pty Ltd1,2
OZ Minerals Musgrave Operations Pty Ltd2
1. For the year ended 30 June 2024, these companies have relied on relief from the Corporations Act 2001 (Cth) requirements for preparation, audit and lodgement of financial reports and
directors’ reports pursuant to the ASIC Instrument or the Specific ASIC Instrument (as applicable) and the Deed.
2. These companies were added to the Deed by way of an Assumption Deed effective 27 June 2024.
A Consolidated Statement of Comprehensive Income and Retained Earnings and Consolidated Balance Sheet, comprising BHP Group Limited and the
wholly owned subsidiaries that are party to the Deed for the years ended 30 June 2024 and 30 June 2023 are as follows:
Consolidated Statement of Comprehensive Income and Retained Earnings
2024
US$M
2023
US$M
Revenue
34,404
32,649
Other income
4,508
5,553
Expenses excluding net finance costs
(26,369)
(21,703)
Net finance costs
(1,466)
(1,002)
Total taxation expense
(2,640)
(3,562)
Profit after taxation
8,437
11,935
Total other comprehensive income
–
–
Total comprehensive income
8,437
11,935
Retained earnings at the beginning of the financial year
38,667
40,196
Net effect on retained earnings of entities added to/removed from the Deed
14
–
Profit after taxation for the year
8,437
11,935
Transfers to and from reserves
(32)
(44)
Dividends
(7,712)
(13,420)
Retained earnings at the end of the financial year
39,374
38,667
191
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Overview
Additional Information
Governance
Contents
Financial Statements
38 Deed of Cross Guarantee continued
Consolidated Balance Sheet
2024
US$M
2023
US$M
ASSETS
Current assets
Cash and cash equivalents
9
3
Trade and other receivables
2,380
1,678
Loans to related parties
12,494
6,123
Other financial assets
215
4
Inventories
2,869
2,344
Current tax assets
–
79
Other
101
113
Total current assets
18,068
10,344
Non-current assets
Trade and other receivables
37
34
Other financial assets
464
326
Inventories
545
546
Property, plant and equipment
41,430
37,069
Intangible assets
1,368
1,140
Investments in Group companies
27,552
33,176
Other
2
6
Total non-current assets
71,398
72,297
Total assets
89,466
82,641
LIABILITIES
Current liabilities
Trade and other payables
4,126
3,574
Loans from related parties
28,306
19,564
Interest bearing liabilities
216
5,168
Other financial liabilities
13
–
Current tax payable
39
–
Provisions
1,913
1,961
Deferred income
4
4
Total current liabilities
34,617
30,271
Non-current liabilities
Trade and other payables
47
5
Loans from related parties
4,041
2,800
Interest bearing liabilities
783
657
Other financial liabilities
1
38
Deferred tax liabilities
596
773
Provisions
4,788
4,408
Deferred income
2
3
Total non-current liabilities
10,258
8,684
Total liabilities
44,875
38,955
Net assets
44,591
43,686
EQUITY
Share capital – BHP Group Limited
4,899
4,737
Treasury shares
(36)
(41)
Reserves
354
323
Retained earnings
39,374
38,667
Total equity
44,591
43,686
1 Consolidated Financial Statements continued
192
BHP Annual Report 2024
39 New and amended accounting standards and interpretations and changes to accounting policies
New and amended accounting pronouncements adopted in the current year
Amendment to IAS 12/AASB112 ‘Income taxes’ (IAS 12)
At 30 June 2023, the Group adopted amendments to IAS 12 issued by the IASB and AASB on 23 May 2023 and 27 June 2023, respectively, in relation to
the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) Pillar Two
income tax. The amendments introduced a temporary exception to the requirements of IAS 12 under which a company does not recognise or disclose
information about deferred tax assets and liabilities related to the proposed Pillar Two model rules.
At 30 June 2024, having applied the temporary exception in the prior reporting period, the Group is required to disclose the potential impacts of Pillar Two
income taxes.
Refer to note 6 ‘Income tax expense’ for more information.
Amendment to IAS 1/AASB 101 ‘Presentation of Financial Statements’ (IAS 1)
On 1 July 2023, the Group adopted amendments to IAS 1 that require entities to disclose their material accounting policy information rather than their
significant accounting policies. The amendments did not significantly impact the Group’s Financial Statements.
New and amended accounting pronouncements on issue but not yet effective
IFRS 18/AASB 18 ‘Presentation and Disclosure in Financial Statements’ (IFRS 18)
On 9 April 2024 and 14 June 2024, the IASB and AASB, respectively, issued IFRS 18 which will replace IAS 1 ‘Presentation of Financial Statements’ for
reporting periods beginning on or after 1 January 2027, with early application permitted.
IFRS 18 introduces new requirements on presentation within the statement of profit or loss, including specified totals and subtotals. It also requires
disclosure of management-defined performance measures and includes new requirements for aggregation and disaggregation of financial information
based on the identified roles of the primary financial statements and the notes. Further, the classification of interest and dividends within the statement
of cash flows will change for some entities. Management is currently assessing the impact of IFRS 18 on presentation and disclosures in the Group’s
Financial Statements.
A number of other accounting standards and interpretations have been issued and will be applicable in future periods. While these remain subject to
ongoing assessment, no significant impacts have been identified to date.
These pronouncements have not been applied in the preparation of these Financial Statements.
193
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Additional Information
Governance
Contents
Financial Statements
In accordance with the requirements of Subsection 295(3A) of the Australian Corporations Act 2001 (Cth), set out below is the consolidated entity
disclosure statement disclosing information in respect of BHP Group Limited and entities it controlled at 30 June 2024.
Entity name
Body corporate,
partnership or trust
Body corporates
Tax residency
Place
incorporated
or formed
Percentage
of share
capital held
Australian
or foreign1
Foreign
jurisdiction(s)
BHP Group Limited
Body corporate
Australia
N/A
Australian
N/A
Agnew Pastoral Company Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Albion Downs Pty Limited2
Body corporate
Australia
100%
Australian
N/A
Avanco Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Avanco Resources Pty Ltd
Body corporate
Australia
100%
Australian
N/A
AVB Brazil Pty Ltd
Body corporate
Australia
100%
Australian
N/A
AVB Carajas Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
AVB Copper Pty Ltd
Body corporate
Australia
100%
Australian
N/A
AVB Minerals Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP (AUS) DDS Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP (Towage Services) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Aluminium Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Billiton Finance (USA) Limited
Body corporate
Australia
100%
Australian
N/A
BHP Billiton Finance Limited
Body corporate
Australia
100%
Australian
N/A
BHP Billiton SSM Development Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Capital No. 20 Pty Limited
Body corporate
Australia
100%
Australian
N/A
BHP Coal Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Direct Reduced Iron Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Energy Coal Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Freight Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Group Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Innovation Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP IO Mining Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP IO Workshop Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Iron Ore (Jimblebar) Pty Ltd
Body corporate
Australia
85%
Australian
N/A
BHP Iron Ore Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Iron Ore Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Lonsdale Investments Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Manganese Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Marine & General Insurances Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Metals Exploration Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP MetCoal Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Minerals Holdings Proprietary Limited
Body corporate
Australia
100%
Australian
N/A
BHP Minerals Pty Ltd3
Body corporate
Australia
100%
Australian
N/A
BHP Nickel Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Nickel West Pty Ltd2
Body corporate
Australia
100%
Australian
N/A
BHP Olympic Dam Corporation Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Queensland Coal Investments Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Shared Business Services Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP SSM Indonesia Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP SSM International Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Titanium Minerals Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Boodarie) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Brolga) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Corella) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Ibis) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Kestrel) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Osprey) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Whistler) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Mallina) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Quail) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Atlantis) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Clerke) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Darwin) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Discovery) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Endeavour) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Enterprise) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Imperieuse) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Inspiration) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (Iron Wren) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
2 Consolidated entity disclosure statement
194
BHP Annual Report 2024
Entity name
Body corporate,
partnership or trust
Body corporates
Tax residency
Place
incorporated
or formed
Percentage
of share
capital held
Australian
or foreign1
Foreign
jurisdiction(s)
BHP Towage Services (Iron Robin) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Towage Services (RT Tough) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP WAIO Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Western Mining Resources International Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BHP Yakabindie Nickel Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Billiton Australia Finance Pty Ltd
Body corporate
Australia
100%
Australian
N/A
BM Alliance Coal Marketing Pty Limited
Body corporate
Australia
50%
Australian
N/A
BM Alliance Coal Operations Pty Limited
Body corporate
Australia
50%
Australian
N/A
Broadmeadow Mine Services Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Carrapateena Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Cassini Resources Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Central Queensland Services Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Coal Mines Australia Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Crossbow Resources Pty Ltd
Body corporate
Australia
100%
Australian
N/A
CTP Assets Pty Ltd
Body corporate
Australia
100%
Australian
N/A
CTP Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Estrela Metals Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Hay Point Services Pty Limited
Body corporate
Australia
100%
Australian
N/A
Hunter Valley Energy Coal Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Minotaur Resources Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Mt Arthur Coal Pty Limited
Body corporate
Australia
100%
Australian
N/A
Mt Arthur Underground Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OS ACPM Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OS MCAP Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Exploration Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Brazil (Holdings) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Carrapateena Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Equity Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Group Treasury Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals International (Holdings) Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Investments Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Musgrave Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Musgrave Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Prominent Hill Operations Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Prominent Hill Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Services Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZ Minerals Zinifex Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
OZM Carrapateena Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Pilbara Gas Pty Limited
Body corporate
Australia
100%
Australian
N/A
Pilbara Pastoral Company Pty Limited4
Body corporate
Australia
25%
Australian
N/A
The Broken Hill Proprietary Company Pty Ltd
Body corporate
Australia
100%
Australian
N/A
UMAL Consolidated Pty Ltd
Body corporate
Australia
100%
Australian
N/A
United Iron Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Wirraway Metals & Mining Pty Ltd
Body corporate
Australia
100%
Australian
N/A
WMC Finance (USA) Limited
Body corporate
Australia
100%
Australian
N/A
ZRUS Holdings Pty Ltd
Body corporate
Australia
100%
Australian
N/A
Ethel Creek Company Partnership
Partnership
N/A
N/A
Australian5
N/A
Mt Keith Pastoral Partnership
Partnership
N/A
N/A
Australian5
N/A
ARL Holdings Ltd
Body corporate
Bermuda
100%
Foreign
Bermuda
ARL South America Exploration Ltd
Body corporate
Bermuda
100%
Foreign
Bermuda
SLM Santa Lucia Mineracao Ltda
Body corporate
Brazil
100%
Foreign
Brazil
ACG Mineracao Ltda
Body corporate
Brazil
100%
Foreign
Brazil
Araguaia Participações Ltda
Body corporate
Brazil
100%
Foreign
Brazil
Avanco Resources Mineracao Ltda
Body corporate
Brazil
100%
Foreign
Brazil
AVB Mineracao Ltda
Body corporate
Brazil
100%
Foreign
Brazil
BHP Billiton Brasil Ltda
Body corporate
Brazil
100%
Foreign
Brazil
BHP Internacional Participacoes Ltda
Body corporate
Brazil
100%
Foreign
Brazil
Consórcio Santos Luz de Imóveis Ltda
Body corporate
Brazil
90%
Foreign
Brazil
Jenipapo Recursos Naturais Ltda.
Body corporate
Brazil
100%
Foreign
Brazil
MCT Mineracao Ltda
Body corporate
Brazil
100%
Foreign
Brazil
Mineracao Aguas Boas Ltda
Body corporate
Brazil
100%
Foreign
Brazil
195
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Governance
Contents
Financial Statements
Entity name
Body corporate,
partnership or trust
Body corporates
Tax residency
Place
incorporated
or formed
Percentage
of share
capital held
Australian
or foreign1
Foreign
jurisdiction(s)
WMC Mineracao Ltda.
Body corporate
Brazil
100%
Foreign
Brazil
BHP Billiton UK Holdings Limited
Body corporate
British Virgin
Islands
100%
Foreign
United Kingdom
BHP Billiton UK Investments Limited
Body corporate
British Virgin
Islands
100%
Foreign
United Kingdom
BHP Canada Inc.
Body corporate
Canada
100%
Foreign
Canada
BHP Investments Canada Inc
Body corporate
Canada
100%
Foreign
Canada
BHP World Exploration Inc.
Body corporate
Canada
100%
Foreign
Canada
Rio Algom Exploration Inc.
Body corporate
Canada
100%
Foreign
Canada
Rio Algom Investments (Chile) Inc
Body corporate
Canada
100%
Foreign
Canada
Rio Algom Limited
Body corporate
Canada
100%
Foreign
Canada
Global BHP Copper Ltd.
Body corporate
Cayman Islands
100%
Foreign
Cayman Islands
RAL Cayman Inc.
Body corporate
Cayman Islands
100%
Foreign
Cayman Islands
Riocerro Inc
Body corporate
Cayman Islands
100%
Foreign
Cayman Islands
Riochile Inc
Body corporate
Cayman Islands
100%
Foreign
Cayman Islands
BHP Chile Inversiones Limitada
Body corporate
Chile
100%
Foreign
Chile
BHP Exploration Chile SpA
Body corporate
Chile
100%
Foreign
Chile
Compania Minera Cerro Colorado Limitada
Body corporate
Chile
100%
Foreign
Chile
Kelti S.A.
Body corporate
Chile
57.50%
Foreign
Chile
Minera Escondida Ltda
Body corporate
Chile
57.50%
Foreign
Chile
Minera Spence SA
Body corporate
Chile
100%
Foreign
Chile
Operation Services Chile SpA
Body corporate
Chile
100%
Foreign
Chile
Tamakaya Energía SpA
Body corporate
Chile
100%
Foreign
Chile
BHP Billiton International Trading (Shanghai) Co., Ltd.
Body corporate
China
100%
Foreign
China
BHP Minerals (Shanghai) Co., Ltd
Body corporate
China
100%
Foreign
China
Cerro Quebrado S.A.
Body corporate
Ecuador
100%
Foreign
Ecuador
Stein Insurance Company Limited
Body corporate
Guernsey
100%
Foreign
Guernsey
BHP Marketing Services India Pvt Ltd
Body corporate
India
100%
Foreign
India
BHP Minerals India Pvt Limited
Body corporate
India
100%
Foreign
India
PT Billiton Indonesia
Body corporate
Indonesia
100%
Foreign
Indonesia
Billiton Investments Ireland Limited
Body corporate
Ireland
100%
Foreign
Ireland
OZ Minerals Jamaica Limited
Body corporate
Jamaica
100%
Foreign
Jamaica
BHP Japan Limited
Body corporate
Japan
100%
Foreign
Japan
BMA Japan KK
Body corporate
Japan
50%
Foreign
Japan
BHP Billiton Services Jersey Limited
Body corporate
Jersey
100%
Foreign
Jersey
BHP Billiton Limited Employee Equity Trust
Trust
N/A
N/A
N/A
N/A
Billiton Employee Share Ownership Trust
Trust
N/A
N/A
N/A
N/A
Avanco Lux S.ar.l
Body corporate
Luxembourg
100%
Foreign
Luxembourg
Avanco Lux S.C.S.
Body corporate
Luxembourg
100%
Foreign
Luxembourg
BHP Shared Services Malaysia Sdn. Bhd.
Body corporate
Malaysia
100%
Foreign
Malaysia
BHP Billiton Company B.V.
Body corporate
Netherlands
100%
Foreign
Netherlands
BHP Billiton Finance B.V.
Body corporate
Netherlands
100%
Foreign
United Kingdom,
Netherlands6
BHP Billiton International Metals B.V.
Body corporate
Netherlands
100%
Foreign
Netherlands
Billiton Development B.V.
Body corporate
Netherlands
100%
Foreign
Netherlands
Billiton Guinea B.V.
Body corporate
Netherlands
100%
Foreign
United Kingdom,
Netherlands6
Billiton Investment 3 B.V.
Body corporate
Netherlands
100%
Foreign
United Kingdom,
Netherlands6
Billiton Investment 8 B.V.
Body corporate
Netherlands
100%
Foreign
United Kingdom,
Netherlands6
Billiton Marketing Holding B.V.
Body corporate
Netherlands
100%
Foreign
Netherlands
Billiton Suriname Holdings B.V.
Body corporate
Netherlands
100%
Foreign
United Kingdom,
Netherlands6
Marcona International, S.A.
Body corporate
Panama
100%
Foreign
Panama
OZ Minerals Peru S.A.C.
Body corporate
Peru
100%
Foreign
Peru
BHP Billiton (Philippines) Inc.
Body corporate
Philippines
99.99%
Foreign
Philippines
BHP Shared Services Philippines Inc.
Body corporate
Philippines
99.99%
Foreign
Philippines
QNI Philippines Inc
Body corporate
Philippines
99.99%
Foreign
Philippines
BHP Metals Exploration d.o.o. Beograd
Body corporate
Serbia
100%
Foreign
Serbia
BHP Billiton Freight Singapore Pte Limited
Body corporate
Singapore
100%
Foreign
Singapore
BHP Billiton Marketing Asia Pte Ltd.
Body corporate
Singapore
100%
Foreign
Singapore
BM Alliance Marketing Pte Ltd
Body corporate
Singapore
50%
Foreign
Singapore
OZ Minerals Insurance Pte Ltd
Body corporate
Singapore
100%
Foreign
Singapore
Westminer Insurance Pte Ltd
Body corporate
Singapore
100%
Foreign
Singapore
2 Consolidated entity disclosure statement continued
196
BHP Annual Report 2024
Entity name
Body corporate,
partnership or trust
Body corporates
Tax residency
Place
incorporated
or formed
Percentage
of share
capital held
Australian
or foreign1
Foreign
jurisdiction(s)
Consolidated Nominees (Proprietary) Limited
Body corporate
South Africa
100%
Foreign
South Africa
Phoenix Mining Finance Company Proprietary Limited
Body corporate
South Africa
100%
Foreign
South Africa
BHP Midgard A.B.
Body corporate
Sweden
100%
Foreign
Sweden
BHP Billiton Marketing AG
Body corporate
Switzerland
100%
Foreign
Switzerland
BHP Billiton (UK) DDS Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton (UK) Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Finance PLC
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Group Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Holdings Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton International Services Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Marketing UK Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Petroleum Great Britain Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Billiton Sustainable Communities
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP BK Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Finance Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Group (UK) Ltd
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Group Holdings Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Holdings Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP International Services Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Marketing UK Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
BHP Minerals Europe Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
Billiton Executive Pension Scheme Trustee Limited
Body corporate
United Kingdom
100%
Foreign
United Kingdom
141 Union Company
Body corporate
United States
100%
Foreign
United States
BHP Chile Inc.
Body corporate
United States
100%
Foreign
United States
BHP Copper Inc
Body corporate
United States
100%
Foreign
United States
BHP Escondida Inc.7
Body corporate
United States
100%
Foreign
United States
BHP Finance (International) Inc.
Body corporate
United States
100%
Foreign
United States
BHP Foreign Holdings Inc.
Body corporate
United States
100%
Foreign
United States
BHP Foundation
Body corporate
United States
0%
Foreign
United States
BHP Holdings (International) Inc.
Body corporate
United States
100%
Foreign
United States
BHP Holdings (USA) Inc.
Body corporate
United States
100%
Foreign
United States
BHP Holdings International (Investments) Inc.
Body corporate
United States
100%
Foreign
United States
BHP International Finance Corp.
Body corporate
United States
100%
Foreign
United States
BHP Marketing North America Inc.
Body corporate
United States
100%
Foreign
United States
BHP Mineral Resources Inc.
Body corporate
United States
100%
Foreign
United States
BHP Minerals Exploration Inc.
Body corporate
United States
100%
Foreign
United States
BHP Minerals International Exploration Inc.
Body corporate
United States
100%
Foreign
United States
BHP Minerals International LLC
Body corporate
United States
100%
Foreign
United States
BHP Minerals Service Company
Body corporate
United States
100%
Foreign
United States
BHP New Mexico Coal Inc.
Body corporate
United States
100%
Foreign
United States
BHP Peru Holdings Inc.
Body corporate
United States
100%
Foreign
United States
BHP Queensland Coal Limited
Body corporate
United States
100%
Australian
United States
BHP Resolution Holdings LLC
Body corporate
United States
100%
Foreign
United States
BHP Ventures US Inc
Body corporate
United States
100%
Foreign
United States
Carson Hill Gold Mining Corporation
Body corporate
United States
100%
Foreign
United States
Rio Algom Mining LLC
Body corporate
United States
100%
Foreign
United States
WMC Corporate Services Inc.
Body corporate
United States
100%
Foreign
United States
1.
Whether an entity was an Australian resident or foreign resident within the meaning of the Income Tax Assessment Act 1997 has been determined in accordance with the Commissioner
of Taxation’s public guidance, including TR 2018/5 and PCG 2018/9.
2. Entity is a partner in the Mt Keith Pastoral Partnership.
3. Entity is a participant in the BHP Iron Ore (Jimblebar) Pty Ltd joint venture and partner in the Ethel Creek Partnership.
4. Entity is a partner in the Ethel Creek Company Partnership.
5. The partners of this partnership are incorporated in Australia.
6. Entity is a tax resident of the United Kingdom for the purposes of the United Kingdom-Netherlands double tax agreement.
7.
Entity is a participant in the Minera Escondida Ltda joint venture.
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Overview
Additional Information
Governance
Contents
Financial Statements
3 Directors’ declaration
In accordance with a resolution of the Directors of BHP Group Limited, the Directors declare that:
(a) in the Directors’ opinion the Financial Statements and notes are in accordance with the Australian Corporations Act 2001 (Cth), including:
(i) complying with the applicable Accounting Standards and the Australian Corporations Regulations 2001 (Cth); and
(ii) giving a true and fair view of the assets, liabilities, financial position and profit or loss of BHP Group Limited and the Group as at 30 June 2024 and
of their performance for the year ended 30 June 2024
(b) in the Directors’ opinion the consolidated entity disclosure statement required by Subsection 295(3A) of the Australian Corporations Act 2001 (Cth), as
disclosed in section 2 ‘Consolidated entity disclosure statement’, is true and correct
(c) the Financial Statements comply with International Financial Reporting Standards, as disclosed in the Basis of preparation to the Financial Statements
(d) to the best of the Directors’ knowledge, the management report (comprising the Operating and Financial Review and Directors’ Report) includes a fair
review of the development and performance of the business and the position of BHP Group Limited and the undertakings included in the consolidation
taken as a whole, together with a description of the principal risks and uncertainties that the Group faces
(e) in the Directors’ opinion there are reasonable grounds to believe that BHP Group Limited will be able to pay its debts as and when they become due
and payable
(f) as at the date of this declaration, there are reasonable grounds to believe that BHP Group Limited and each of the members of the Closed Group
identified in note 38 to the Financial Statements will be able to meet any liabilities to which they are, or may become, subject because of the Deed
of Cross Guarantee between BHP Group Limited and those group entities pursuant to ASIC Corporations (Wholly-owned Companies) Instrument
2016/785 and, in respect of OZ Minerals Pty Ltd, ASIC Instrument 24-0213
(g) the Directors have been given the declarations required by Section 295A of the Australian Corporations Act 2001 (Cth) from the Chief Executive
Officer and Chief Financial Officer for the financial year ended 30 June 2024
Signed in accordance with a resolution of the Board of Directors.
Ken MacKenzie
Mike Henry
Chair
Chief Executive Officer
27 August 2024
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BHP Annual Report 2024
4 Lead Auditor’s Independence Declaration under Section 307C
of the Australian Corporations Act 2001
Auditor’s independence declaration to the directors of BHP Group Limited
As lead auditor for the audit of the financial report of BHP Group Limited for the financial year ended 30 June 2024, I declare to the best of my
knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
(b) no contraventions of any applicable code of professional conduct in relation to the audit; and
(c) no non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.
This declaration is in respect of BHP Group Limited and the entities it controlled during the financial year.
Ernst & Young
Rodney Piltz
Partner
Melbourne
27 August 2024
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Financial Statements
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5 Independent auditor’s report to the members
of BHP Group Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of BHP Group Limited (the Company) and its subsidiaries (collectively the Group), which comprises the
consolidated balance sheet as at 30 June 2024, the consolidated income statement, consolidated statement of comprehensive income, consolidated
statement of changes in equity and consolidated cash flow statement for the year then ended, notes to the financial statements, including material
accounting policy information, the consolidated entity disclosure statement and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated financial performance for
the year ended on that date; and
b. Complying with International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB), Australian
Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards (ASAs) and International Standards on Auditing issued by the International
Auditing and Assurance Standards Board (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our consideration of climate change
The Group has assessed climate-related risks as threats and opportunities that have the potential to impact the financial statements as outlined in
Note 16 of the financial report. These risks and opportunities include both transition risks and physical risks arising from climate change and the
transition to a low carbon economy (climate change).
Our audit, with the assistance of our climate change specialists, considered the climate-related risks and opportunities that have the potential
to materially impact the basis of preparation, including the key judgements and estimates exercised by the Group in the preparation of the
financial report.
The Group has incorporated its current climate change strategy, including Board approved commitments and actions in the basis of preparation of
the financial report, reflecting the Group’s best estimate of the potential impact to the financial statements as at 30 June 2024.
The impacts of climate change are most material to the judgements and estimates involved in the assessment of the carrying value of property, plant
and equipment and the determination of closure and rehabilitation provisions.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current
year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do
not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in
that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including
in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of
material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below,
provide the basis for our audit opinion on the accompanying financial report.
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BHP Annual Report 2024
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Assessment of the carrying value of property, plant and equipment
Why significant
How our audit addressed the key audit matter
Refer to Note 11 ‘Property, plant and equipment’ and
Note 13 ‘Impairment of non-current assets’.
Accounting standards require an assessment of
indicators of impairment and impairment reversal
annually, or more frequently if indicators of impairment
exist, for each cash generating unit (CGU).
The Group’s assessment of indicators of impairment
and impairment reversal included an evaluation of
geo-political risks, regulatory and legislative changes,
macro-economic disruptions, commodity price
forecasts, reserve estimates, forecast operating and
capital expenditure and asset performance. The Group
focused on the CGUs that were the most susceptible to
changes in key input assumptions.
The key input assumptions in the Group’s determination
of indicators of impairment or impairment reversal, which
influence whether or not an estimate of the recoverable
amount of a CGU is required were as follows:
– Commodity prices: assumptions in relation
to commodity price forecasts are inherently
uncertain. There is a risk that the assumptions are
not reasonable and may not appropriately reflect
changes in supply and demand, including the impact
of climate change.
– Reserves: assessing the estimation of reserves is
complex as there is significant estimation uncertainty
in assessing the quantities of reserves, and the
amount that will be economically recovered based
on future production estimates over the asset life,
including the impact of climate change.
– Discount rates: given the long life of the
Group’s assets, CGU recoverable amounts
are sensitive to the discount rate applied.
Determining the appropriate discount rate to apply to
a CGU is judgemental.
During the year, the Group determined that indicators
of impairment existed for the Western Australia Nickel
CGU, requiring an impairment test to determine
the recoverable amount of the CGU as disclosed in
Note 13 of the financial report.
The Group assessed the recoverable amount of the
Western Australia Nickel CGU using a Fair Value Less
Cost of Disposal methodology (FVLCD), as disclosed
in Note 13 of the financial report.
An impairment charge of US$3,800 million was
recorded for the Western Australia Nickel CGU.
The key input assumptions in the Group’s
determination of the recoverable amount are consistent
to those identified above.
The assessment of the indicators of impairment
or impairment reversal and recoverable amount
of the CGU was considered to be a key audit
matter as it involved significant judgement.
Auditing the recoverable amount of a CGU is complex
and subjective due to the use of forward-looking
estimates, which are inherently difficult to determine
with precision. There is also a level of judgement
applied by the Group in determining the key inputs into
these forward-looking estimates.
The Group’s current climate change strategy continues
to assess climate-related risks, including transition and
physical risks.
The Group’s current understanding of the potential
financial impacts of climate change have been
incorporated into the assessment of indicators of
impairment and impairment reversal, the results of which
are disclosed in Notes 13 and 16 of the financial report.
The primary audit procedures we performed, amongst others, included the following:
– We evaluated the design of, and tested the operating effectiveness of, the Group’s
controls over the assessment for indicators of impairment, impairment reversal and the
assessment of the recoverable amount of the Western Australia Nickel CGU.
– We performed an analysis for indicators of impairment and impairment reversal, which
included considering the performance of the assets and external market conditions.
Our procedures involved assessing the key inputs such as commodity price forecasts,
discount rates, reserve estimation, operating and capital expenditure, comparable
market data and asset performance.
– We evaluated the historical accuracy of prior year’s forecast cash flows by comparing
to current year’s actual cash flows.
– We considered the impact of geo-political risks, regulatory and legislative changes and
macro-economic disruptions as part of our evaluation of indicators of impairment and
impairment reversal.
– We involved our valuation specialists to assist in evaluating, amongst other matters,
the discount rates applied and commodity price forecasts.
– We assessed commodity price forecasts assumed by the Group against comparable
market data.
The Group uses internal and external experts to provide geological, metallurgical, mine
planning and commodity price forecast information to support key assumptions in the
assessment of indicators of impairment or impairment reversal and determination of the
recoverable amount.
With assistance from our mining reserves specialists, we examined the information
provided by the Group’s experts, including assessment of the reserve estimation
methodology against the relevant industry and regulatory guidance. We also assessed
the qualifications, competence and objectivity of the internal and external experts.
Our procedures to address the recoverable amount of the Western Australia Nickel
CGU included:
– Evaluation of whether the methodology applied complied with the requirements of the
relevant Accounting Standards;
– Assessment of the commodity price forecasts adopted with reference to broker and
analyst data;
– Assessment of the discount rate adopted, with reference to external market data;
– Determination of whether cash flow projections for operating and capital expenditure
agreed to approved budgets and forecasts and assessment of the reasonableness of
forecast cash flows against past performance of the CGU;
– Assessment of the impacts of climate change as set out in our climate change related
procedures below;
– Assessed how a market participant would attribute value under a FVLCD methodology;
– Performance of sensitivity analysis to evaluate the impact of reasonably possible
changes in key assumptions such as commodity price forecasts, discount rates,
production quantities, operating costs and capital expenditure; and
– Testing the mathematical accuracy of the impairment model and calculated
recoverable amount.
Climate change related procedures:
With the assistance of our climate change and valuation specialists we undertook the
following procedures:
– Evaluated how the impact of climate change, as outlined in Note 16 of the financial
report, was reflected in commodity price forecasts and carbon price assumptions.
– Assessed how strategies to mitigate transition and physical risks, such as the Group’s
committed expenditure on decarbonisation activities, were reflected into the forecast
cashflows considered as part of the Group’s assessment of indicators of impairment
and impairment reversal.
– Assessed the accuracy of the Group’s disclosure regarding climate-related risks that
have the potential to adversely impact long term steelmaking coal pricing and the
carrying value of the Group’s steelmaking coal CGU.
– Considered the consistency of Other Information reported by the Group in relation to
its climate change strategy, with the key estimates adopted in the Group’s assessment
of indicators of impairment and impairment reversal and recoverable amount of the
Western Australia Nickel CGU.
– Assessed the adequacy of the Group’s climate change disclosures in Note 16 of the
financial report.
We assessed the adequacy of the disclosures included in Notes 11 and 13 of the
financial report.
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5 Independent auditor’s report to the members of BHP Group Limited continued
Closure and rehabilitation provisions
Why significant
How our audit addressed the key audit matter
Refer to Note 15 ‘Closure and rehabilitation provisions’.
The Group has closure and rehabilitation obligations to restore and
rehabilitate environmental disturbances created by its operations and
related sites.
These obligations arise from regulatory and legislative requirements
across multiple jurisdictions.
The key inputs used to determine the required closure and rehabilitation
provisions are:
– Life of the operation or site;
– Estimated cost of future closure and rehabilitation activities;
– Timing of the closure and rehabilitation activities;
– Discount rates; and
– Current regulatory and legislative requirements.
As a result of these inputs and the evaluation of climate-related risks
and strategies, closure and rehabilitation provisions have a high degree
of estimation uncertainty with a wide potential range of reasonably
possible outcomes.
Closure and rehabilitation provisions were considered to be a key audit
matter as the estimation of these provisions is complex, involves a high
degree of judgement including the impacts of climate change and often
requires specialist expertise to estimate the costs required to satisfy
closure and rehabilitation obligations.
The Group’s current understanding of the potential financial impacts of
climate change have been incorporated into the related estimates, to the
extent they can be reliably measured, in the determination of the closure
and rehabilitation provisions, the results of which are disclosed in Notes
15 and 16 of the financial report.
The primary audit procedures we performed, amongst others, included
the following:
– We evaluated the design of, and tested the operating effectiveness
of, the Group’s controls related to the determination of closure and
rehabilitation provision estimates.
– We evaluated the Group’s legal and regulatory obligations for
closure and rehabilitation, life of operation, future rehabilitation costs,
discount rates and timing of future cashflows.
– We assessed whether the future rehabilitation costs were consistent
with the closure plans prepared by the Group’s internal experts.
– We tested the mathematical accuracy of the closure and rehabilitation
provision calculations.
– We assessed the discount rates adopted to calculate the closure
and rehabilitation provisions, including benchmarking to comparable
market data.
– With the assistance of our rehabilitation subject matter specialists,
we evaluated a sample of closure and rehabilitation provisions for
operating and closed sites within the Group, including:
– Evaluation of the closure and rehabilitation plans with regard to
applicable regulatory and legislative requirements;
– Evaluation of the methodology used by the Group’s internal mine
closure engineers against industry practice and our understanding
of the business; and
– Assessment of the reasonableness of the timing of cash flows
and cost estimates against the closure and rehabilitation plan and
industry practice.
– The Group has used internal and external experts to support
the estimation of the mine closure and rehabilitation provisions.
With the assistance of our rehabilitation subject matter specialists,
we assessed the qualifications, competence and objectivity of the
internal and external experts and that the information provided by
the Group’s internal and external experts has been appropriately
reflected in the calculation of the closure and rehabilitation provisions.
Climate change related procedures:
With the assistance of our climate change and rehabilitation subject
matter specialists, we undertook the following procedures:
– Evaluated how physical risk has been incorporated into the
closure and rehabilitation provision estimates, such as the Group’s
current understanding of changes to long-term weather outlooks
and the potential to impact site closure designs and post-closure
monitoring activities.
– Evaluated the consistency of Other Information reported by the
Group in relation to its climate change strategy with the key inputs
used to determine the closure and rehabilitation provisions.
– For the Group’s steelmaking coal assets, we evaluated the potential
for climate change to shorten mine operating lives and therefore
impact the timing of closure activities.
– Assessed the reasonableness of the Group’s disclosure of the
Profile of closure and rehabilitation cashflows included in Note 16
of the financial report and the impact of a one-year acceleration to
the Group’s steelmaking coal closure and rehabilitation provisions
included in Note 16.
We assessed the adequacy of the disclosures included in Notes 15 and
16 of the financial report.
202
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Samarco dam failure provisions recognised and contingent liabilities disclosures
Why significant
How our audit addressed the key audit matter
Refer to Note 3 ‘Exceptional items’, Note 4 ‘Significant events –
Samarco dam failure’ and Note 34 ‘Contingent liabilities’.
The provision at 30 June 2024 reflects the Group’s best estimate of
cash outflows required to resolve all aspects of the Federal Public
Prosecution Office claim, being reparation, compensation and moral
damages, and the Framework Agreement.
Significant uncertainty remains around the resolution of the Federal
Public Prosecution Office Claim and the Framework Agreement
obligations, and there is a risk that outcomes may be materially
higher or lower than amounts reflected in the provision for the
Samarco dam failure.
There were a number of significant judgements and disclosures
made by the Group in relation to the Samarco dam failure, including:
– Determining the terms of any potential future outcome of the
settlement negotiations;
– Quantifying the costs to resolve all aspects of the Federal Public
Prosecution Office claim, being reparation, compensation and
moral damages, and the Framework Agreement;
– Assessing the extent to which Samarco is able to directly fund
any future obligations relating to reparation, compensation and
moral damages;
– Considering possible outcomes of appeals relating to the judicial
decision regarding collective moral damages;
– Determining the status, accounting treatment and quantification
(if applicable) of the legal claims against BHP Group Limited, BHP
Group (UK) Ltd, BHP Billiton Brasil Ltda and Samarco; and
– Disclosures relating to the contingent liabilities from the various
legal claims and other circumstances that represent exposures to
the Group.
We identified the Samarco dam failure provisions recognised, and
contingent liabilities disclosures, as a key audit matter as auditing
these estimates is complex. There is a high degree of estimation
uncertainty, together with a wide range of reasonable outcomes.
Significant judgement was required in relation to assessing the
completeness and measurement of the estimated cash outflows
related to the provisions and contingent liabilities, including the
probability of the outflows.
The primary audit procedures we performed, amongst others, included
the following:
– We assessed the design of, and tested the operating effectiveness of, the
Group’s controls over the Samarco dam failure accounting and disclosure
process. This included testing controls over:
– The determination of the provision for the settlement of the Federal
Public Prosecution Office claim and the Framework Agreement,
including significant assumptions in the estimate of amounts payable,
obligations to perform ongoing programs in relation to reparation and
compensation, and the period over which any amounts payable may
be made;
– The determination of the amount of funding Samarco is able to directly
contribute to fund any future obligations; and
– The Group’s assessment of the legal claims and determination of the
associated provision and related contingent liability disclosures.
– We assessed the key assumptions used to determine the provision
recorded by the Group in relation to potential obligations by:
– Understanding the impact of any court decisions on the Federal Public
Prosecution Office claim and the Framework Agreement;
– Determining whether or not it is possible to provide a range of
outcomes or a reliable estimate of any potential settlement outcomes;
– Inquiring with the Group’s subject matter experts regarding the cost
estimate to resolve all aspects of the Federal Public Prosecution
Office claim and to complete the various programs of work under the
Framework Agreement;
– Evaluating the qualifications, competence and objectivity of the
Group’s subject matter experts, and the independent external
party that contribute to the determination of the cash flow
estimates by considering their qualifications, scope of work and
remuneration structure;
– Comparing the nature and extent of remediation activities described in
the Framework Agreement and any new obligations under any potential
future settlement agreement, to the activities included in the cash
flow forecasts;
– Selecting a sample of cost estimates included in the provision and
considering the underlying supporting documentation;
– Assessing the extent to which Samarco is able to directly fund any
future obligations relating to reparation, compensation and moral
damages by:
– Comparison to Samarco’s business plan and our understanding of
the operations; and
– Performance of sensitivity analysis to evaluate the impact
of reasonably possible changes in key assumptions such as
commodity price forecasts, debt refinancing scenarios and
tax contingencies;
– Testing the mathematical accuracy of the provision model;
– Assessing the period in which a provision change was recorded by
understanding when the event that caused the change occurred;
– Evaluating the historical accuracy of prior year’s forecasted cash flows
with respect to the Group’s current year actual cash flows; and
– Considering the claims and assessing their status and whether they
now represent liabilities through:
– Inquiries with the Group’s internal legal advisors, senior
management, Group finance, and members of the
Executive Leadership Team, with respect to the ongoing
settlement negotiations;
– Inspection of correspondence with external legal advisors; and
– Independent confirmation letters received from external
legal advisors.
We assessed the disclosures regarding the environmental and legal
contingent liabilities as included in Note 34, and the relevant disclosures
regarding the significant events relating to Samarco dam failure as included
in Note 4 against the disclosure requirements of the relevant Australian
Accounting Standards.
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5 Independent auditor’s report to the members of BHP Group Limited continued
Information other than the financial report and auditor’s
report thereon
The directors are responsible for the other information. The other
information comprises the information included in the Company’s 2024
annual report, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information
and accordingly we do not express any form of assurance conclusion
thereon, with the exception of the Remuneration Report and our related
assurance opinion.
In connection with our audit of the financial report, our responsibility
is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the financial report
or our knowledge obtained in the audit or otherwise appears to be
materially misstated.
If, based on the work we have performed on other information obtained
prior to the date of this auditor’s report, we conclude that there is a
material misstatement of this other information, we are required to report
that fact. We have nothing to report in this regard.
Responsibilities of the directors for the financial report
The directors of the Company are responsible for the preparation of:
a) the financial report (other than the consolidated entity disclosure
statement) that gives a true and fair view in accordance with
International Financial Reporting Standards as issued by the IASB,
Australian Accounting Standards and the Corporations Act 2001; and
b) the consolidated entity disclosure statement that is true and correct in
accordance with the Corporations Act 2001, and
for such internal control as the directors determine is necessary to
enable the preparation of:
i) the financial report (other than the consolidated entity disclosure
statement) that gives a true and fair view and is free from material
misstatement, whether due to fraud or error; and
ii) the consolidated entity disclosure statement that is true and correct
and is free of misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for
assessing the Group’s ability to continue as a going concern, disclosing,
as applicable, matters relating to going concern and using the going
concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the
financial report
Our objectives are to obtain reasonable assurance about whether the
financial report as a whole is free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with the ASAs
and ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the ASAs and ISAs, we exercise
professional judgement and maintain professional scepticism throughout
the audit. We also:
– Identify and assess the risks of material misstatement of the financial
report, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
– Obtain an understanding of internal control relevant to the audit
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the Group’s internal control.
– Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by the directors.
– Conclude on the appropriateness of the directors’ use of the going
concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability
to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions
are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the
financial report, including the disclosures, and whether the financial
report represents the underlying transactions and events in a manner
that achieves fair presentation.
– Obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business activities within the Group to
express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters,
the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify
during our audit.
We also provide the directors with a statement that we have complied
with relevant ethical requirements regarding independence, and to
communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where
applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those
matters that were of most significance in the audit of the financial report
of the current year and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated
in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of
such communication.
Report on the audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the Directors’
Report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of BHP Group Limited for
the year ended 30 June 2024, complies with section 300A of the
Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and
presentation of the Remuneration Report in accordance with section
300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in
accordance with ASAs and ISAs.
Ernst & Young
Rodney Piltz
Partner
Melbourne
27 August 2024
204
BHP Annual Report 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Additional information
1 Information on mining operations
1
Information on mining operations
205
2
Financial information summary
216
3
Financial information by commodity
217
4
Production
219
5
Major projects
221
6
Mineral Resources and Ore Reserves
222
7
People – performance data
234
8
Legal proceedings
235
9
Shareholder information
238
9.1 History and development
238
9.2 Markets
238
9.3 Organisational structure
238
9.4 Constitution
238
9.5 Share ownership
240
9.6 Dividends
241
9.7 American Depositary Receipts fees and charges
242
9.8 Supplemental cybersecurity disclosures for US reporting
242
9.9 Government regulations
243
10
Glossary
245
Minerals Australia
Iron ore mining operations
The following table contains additional details of our iron ore mining
operations. This table should be read in conjunction with OFR 5.1 and
the production table and reserves and resources tables in Additional
information 4 and 6.
Mine & location
WAIO
Pilbara region, Western Australia
Newman West (Mt Whaleback, Orebodies 29, 30, 31
and 35)
Newman East (Orebodies 24, 25 and 32)
Mt Newman joint venture
Means of access
Private road
Ore transported by Mt Newman JV-owned rail to Port
Hedland (427 km)
Type and amount
of ownership
BHP Minerals 85%
Mitsui-ITOCHU Iron 10%
ITOCHU Minerals and Energy of Australia 5%
Operator
BHP
Title, leases
or options and
acreage involved
Mineral lease granted and held under the Iron Ore
(Mount Newman) Agreement Act 1964 expires in 2030
with right to successive renewals of 21 years each
ML244SA – approximately 78,934 hectares
History and stage
of property
Production stage
Production began at Mt Whaleback in 1969
Production from Orebodies 24, 25, 29, 30, 31, 32 and
35 complements production from Mt Whaleback
Production from Orebodies 31 and 32 started in 2015
and 2017 respectively
Mining at Orebody 18 ceased in 2020 after depletion
Mine type &
mineralisation
style
Open-cut
Bedded ore types classified as per host Archaean or
Proterozoic iron formation, which are Brockman and
Marra Mamba; also present is iron-rich detrital material
Power source
Power for all mine operations in the Central and
Eastern Pilbara is supplied by BHP’s natural gas-fired
Yarnima power station
Power consumed in port operations is supplied via a
contract with APA Group (formerly Alinta)
Processing
plants and other
available facilities
Newman Hub: primary crusher, ore handling plant,
heavy media beneficiation plant, stockyard blending
facility, single cell rotary car dumper, train load out
(nominal capacity 75 Mtpa)
Orebody 25: Ore processing plant (nominal capacity
12 Mtpa) ceased operation mid-FY2022
Key permit
conditions
State Agreement contains conditions set by
the Western Australian Government, including
requirements for future development proposals;
environmental compliance and reporting obligations;
closure and rehabilitation considerations; local
procurement and community plans/initiatives/
investment requirements; payment of rent, taxes and
government royalties
Tenements granted by the Western Australian
Government under the Mining Act 1978 (WA)
(WA Mining Act)
Key permit conditions include resource reporting,
environmental compliance and reporting, rehabilitation
considerations and offset payments and payment of
lease rentals and royalties
Registered Indigenous Land Use Agreements
with conditions, including appropriate native title
compensation and opportunity sharing; enshrine
heritage protections and land access rights; and
guarantee certain heritage, environment and
consultation processes
205
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Mine & location
WAIO
Pilbara region, Western Australia
Jimblebar
Bill’s Hill, Eastern Syncline and Mt Helen (jointly called
Western Ridge deposits)
Jimblebar operation*
Means of access
Private road
Jimblebar ore is transported via overland conveyor
(12.4 km) and by Mt Newman JV-owned rail to Port
Hedland (428 km)
The Western Ridge deposits are located close to
Newman Operations and all production will be trucked
and/or transported via overland conveyor
Type and amount
of ownership
BHP Minerals 85%
ITOCHU Minerals and Energy of Australia 8%
Mitsui & Co. Iron Ore Exploration & Mining 7%
*Jimblebar is an ‘incorporated’ venture with the above
companies holding A Class Shares with rights to
certain parts of mining lease 266SA held by BHP Iron
Ore (Jimblebar) Pty Ltd (BHPIOJ)
BHP Minerals holds 100% of the B Class Shares,
which has rights to all other Jimblebar assets
Operator
BHP
Title, leases
or options and
acreage involved
Mining lease granted pursuant to the Iron Ore
(McCamey’s Monster) Agreement Authorisation Act
1972 expires in 2030 with rights to successive renewals
of 21 years each
M266SA – approximately 51,756 hectares
History and stage
of property
Production stage
Production began in March 1989
From 2004, production was transferred to Wheelarra
JV as part of the Wheelarra sublease agreement
This sublease agreement expired in March 2018
Ore was first produced from the newly commissioned
Jimblebar Hub in late 2013
Jimblebar sells ore to the Newman JV proximate to the
Jimblebar Hub
Production at Western Ridge commenced in FY2022
Mine type &
mineralisation
style
Open-cut
Bedded ore types classified as per host Archaean
or Proterozoic banded iron formation, which are
Brockman and Marra Mamba; also present is iron-rich
detrital material
Power source
Power for all mine operations in the Central and
Eastern Pilbara is supplied by BHP’s natural gas-fired
Yarnima power station
Power consumed in port operations is supplied via a
contract with APA Group (formerly Alinta)
Processing
plants and other
available facilities
3 primary crushers, ore handling plant, train loadout,
stockyard blending facility and supporting mining hub
infrastructure (nominal capacity 71 Mtpa)
Production from the Western Ridge deposits will be
processed through existing processing facility for
Newman operations
Key permit
conditions
State Agreement contains conditions set by
the Western Australian Government, including
requirements for future development proposals;
environmental compliance and reporting obligations;
closure and rehabilitation considerations; local
procurement and community plans/initiatives/
investment requirements; payment of rent, taxes and
government royalties
Tenements granted by the Western Australian
Government under the WA Mining Act
Key permit conditions include resource reporting,
environmental compliance and reporting, rehabilitation
considerations and offset payments and payment of
lease rentals and royalties
Registered Indigenous Land Use Agreement
with conditions, including appropriate native title
compensation and opportunity sharing; enshrine
heritage protections and land access rights; and
guarantee certain heritage, environment and
consultation processes
Mine & location
WAIO
Pilbara region, Western Australia
Yandi joint venture
Means of access
Private road
Ore transported by Mt Newman JV-owned rail to Port
Hedland (316 km)
Yandi JV’s railway spur links Yandi hub to Mt Newman
JV main line
Type and amount
of ownership
BHP Minerals 85%
ITOCHU Minerals and Energy of Australia 8%
Mitsui Iron Ore Corporation 7%
Operator
BHP
Title, leases
or options and
acreage involved
Mining lease granted pursuant to the Iron Ore
(Marillana Creek) Agreement Act 1991 expires in 2033
with 1 renewal right to a further 21 years to 2054
M270SA – approximately 30,344 hectares
History and stage
of property
Production stage
Production began at the Yandi mine in 1992
Capacity of Yandi hub expanded between 1994
and 2013
Yandi commenced production ramp down activity
in FY2022
Mine type &
mineralisation
style
Open-cut
Channel iron deposits are Cainozoic fluvial sediments
Power source
Power for all mine operations in the Central and
Eastern Pilbara is supplied by BHP’s natural gas-fired
Yarnima power station
Power consumed in port operations is supplied via a
contract with APA Group (formerly Alinta)
Processing
plants and other
available facilities
2 primary crushers, 1 ore handling plant, stockyard
blending facility and 1 train load out (nominal capacity
50 Mtpa)
Decommissioning of additional facilities, including 2
ore handling plants, 2 primary crushers and 1 train load
out, is ongoing as part of planned ramp down activities
Key permit
conditions
State Agreement contains conditions set by
the Western Australian Government, including
requirements for future development proposals;
environmental compliance and reporting obligations;
closure and rehabilitation considerations; local
procurement and community plans/initiatives/
investment requirements; payment of rent, taxes and
government royalties
Tenements granted by the Western Australian
Government under the WA Mining Act
Key permit conditions include resource reporting,
environmental compliance and reporting, rehabilitation
considerations and offset payments and payment of
lease rentals and royalties
Registered Indigenous Land Use Agreements
with conditions, including appropriate native title
compensation and opportunity sharing; enshrine
heritage protections and land access rights; and
guarantee certain heritage, environment and
consultation processes
1 Information on mining operations continued
206
BHP Annual Report 2024
Mine & location
WAIO
Pilbara region, Western Australia
Yarrie
Nimingarra
Mining Area C
South Flank
Mt Goldsworthy joint venture
Means of access
Private road
Yarrie and Nimingarra iron ore transported by Mt
Goldsworthy JV-owned rail to Port Hedland (218 km)
Mining Area C iron ore transported by Mt Newman JV-
owned rail to Port Hedland (360 km)
South Flank iron ore transported by overland conveyors
(8–16 km) to the Mining Area C processing hub
Mt Goldsworthy JV railway spur links Mining Area C
and South Flank to Yandi JV’s railway spur
Type and amount
of ownership
BHP Minerals 85%
Mitsui Iron Ore Corporation 7%
ITOCHU Minerals and Energy of Australia 8%
Operator
BHP
Title, leases
or options and
acreage involved
1 mineral lease and 1 mining lease both granted
pursuant to the Iron Ore (Goldsworthy – Nimingarra)
Agreement Act 1972, expire in 2035, with rights to
successive renewals of 21 years each. ML251SA and
M263SA – approximately 15,623 hectares
A number of smaller mining leases granted under the
WA Mining Act expire in 2026 with rights to successive
renewals of 21 years. 5 leases – approximately
2,999 hectares
3 mineral leases granted under the Iron Ore (Mount
Goldsworthy) Agreement Act 1964, which expire 2028,
with rights to successive renewals of 21 years each
ML235SA, ML249SA and ML281SA – approximately
91,124 hectares
History and stage
of property
Production stage
Operations commenced at Mt Goldsworthy in 1966 and
at Shay Gap in 1973
Original Goldsworthy mine closed in 1982
Associated Shay Gap mine closed in 1993
Mining at Nimingarra mine ceased in 2007, then
continued from adjacent Yarrie area
Production commenced at Mining Area C mine in 2003
Yarrie mine operations were suspended in
February 2014
First ore at South Flank commenced in May 2021
Mine type &
mineralisation
style
Mining Area C, South Flank, Yarrie and Nimingarra are
open-cut
Bedded ore types classified as per host Archaean
or Proterozoic iron formation, which are Brockman,
Marra Mamba and Nimingarra; also present is iron-rich
detrital material
Power source
Power for Yarrie and Shay Gap is supplied by their own
small diesel generating stations
Power for all remaining mine operations in the Central
and Eastern Pilbara is supplied by BHP’s natural gas-
fired Yarnima power station
Power consumed in port operations is supplied via a
contract with APA Group (formerly Alinta)
Processing
plants and other
available facilities
Mining Area C: 2 primary crushers, 2 ore handling
plants, stockyard blending facility and train load out
(nominal capacity 64 Mtpa)
South Flank: 2 primary crushers, 1 ore handling plant,
stockyard and blending facility and train load out
(nominal capacity 80 Mtpa)
Key permit
conditions
State Agreements contain conditions set by
the Western Australian Government, including
requirements for future development proposals;
environmental compliance and reporting obligations;
closure and rehabilitation considerations; local
procurement and community plans/initiatives/
investment requirements; payment of rent, taxes and
government royalties
Tenements granted by the Western Australian
Government under the WA Mining Act
Key permit conditions include resource reporting,
environmental compliance and reporting, rehabilitation
considerations and offset payments and payment of
lease rentals and royalties
Registered Indigenous Land Use Agreements
with conditions, including appropriate native title
compensation and opportunity sharing; enshrine
heritage protections and land access rights; and
guarantee certain heritage, environment and
consultation processes
Mine & location
WAIO
Pilbara region, Western Australia
POSMAC joint venture
Means of access
Private road
POSMAC JV sells ore to Mt Goldsworthy JV at Mining
Area C
Ore is transported via Mt Goldsworthy JV-owned rail
and Mt Newman JV-owned rail to Port Hedland
Mt Goldsworthy JV railway spur links Mining Area C to
Yandi JV’s railway spur
Type and amount
of ownership
BHP Minerals 65%
ITOCHU Minerals and Energy of Australia 8%
Mitsui Iron Ore Corporation 7%
POS-Ore 20%
Operator
BHP
Title, leases
or options and
acreage involved
Sublease over part of Mt Goldsworthy Mining Area C
mineral lease that expires on the earlier of termination
of the mineral lease or the end of the POSMAC JV
ML281SA – approximately 56,335 hectares
History and stage
of property
Production stage
Production commenced in October 2003
POSMAC JV sells all ore to Mt Goldsworthy JV at
Mining Area C
Mine type &
mineralisation
style
Open-cut
Bedded ore types classified as per host Archaean or
Proterozoic iron formation, which is Marra Mamba
Power source
Power for all mine operations in the Central and
Eastern Pilbara is supplied by BHP’s natural gas-fired
Yarnima power station
Power consumed in port operations is supplied via a
contract with APA Group (formerly Alinta)
Processing
plants and other
available facilities
POSMAC sells all ore to Mt Goldsworthy JV, which is
then processed at Mining Area C
Key permit
conditions
Key permit conditions of POSMAC joint venture are
captured within the Mount Goldsworthy joint venture
key permit conditions outlined above
207
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Coal mining operations
The following table includes details about our mining operations as
at 30 June 2024. It does not include information on the Daunia and
Blackwater coal mining operations, which were divested by BMA’s owners
during the year. While some of the land and tenements related to the
Daunia and Blackwater mines is pending transfer following completion
in April 2024, the assets are now under Whitehaven Coal’s control and
operated for their benefit and have been excluded on that basis.
This table should be read in conjunction with OFR 5.1 and the production
table and reserves and resources tables in Additional information 4 and 6.
Mine & location
BHP Mitsubishi
Alliance
Bowen Basin, Queensland, Australia
Goonyella Riverside
Broadmeadow
Caval Ridge
Peak Downs
Saraji and Saraji South mines
Central Queensland Coal Associates joint venture
Means of access
Public road
Coal transported by rail to Hay Point Coal Terminal
Distances between the mines and port are between 191
km and 212 km
Type and amount
of ownership
BHP 50%
Mitsubishi Development 50%
Operator
BMA
Title, leases
or options and
acreage involved
Mining leases, including undeveloped tenements, have
expiry dates ranging up to 2045, renewable for further
periods as Queensland Government legislation allows
Approximately 79,752 hectares excluding the tenements
pending transition to Whitehaven Coal
Mining is permitted to continue under the legislation
during the renewal application period
All required renewal applications were lodged and
pending a decision from the Minister
History and stage
of property
Production stage
Goonyella mine commenced in 1971, merged with
adjoining Riverside mine in 1989
Operates as Goonyella Riverside
Production commenced at:
Peak Downs in 1972
Saraji in 1974
Norwich Park in 1979
Broadmeadow (longwall operations) in 2005
Caval Ridge in 2014
Production at Saraji South (formerly Norwich Park)
ceased in May 2012. Since October 2022, limited
product has been sourced from Saraji South for
processing at Saraji
Mine type &
mineralisation style
All open-cut except Broadmeadow
(longwall underground)
Bituminous coal is mined from the Permian Moranbah
Coal measures
Products range from premium-quality, low-volatile, high-
vitrinite hard coking coal to medium-volatile hard coking
coal, to weak coking coal and medium ash thermal coal
as a secondary product
Power source
Queensland electricity grid connection is under
long-term contracts and energy purchased via
Retail Agreements
Processing
plants and other
available facilities
On-site beneficiation processing facilities
Combined nominal capacity of 50 Mtpa
Key permit
conditions
Key permit conditions are contained in the various
legislation set by the Queensland Government and
include conditions relating to carrying out works in
accordance with the environmental authority and
approved development plans, payment of rents,
reporting and payment of royalties. Mining leases
granted under the Central Queensland Coal Associates
Agreement Act 1968 place an extraction cap of 1,860 Mt
Mine & location
New South Wales
Energy Coal
Approximately 126 km northwest of Newcastle, New
South Wales, Australia
Mt Arthur Coal
Means of access
Public road
Coal transported by third-party rail
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
New South Wales Energy Coal holds 10 mining leases,
2 subleases and 1 exploration licence
Total mining leases approximately 8,750 hectares
History and stage
of property
Production stage
Production commenced in 2002 (previous operations
dating to the early 1960s)
Approval to expand mining granted in 2010 with an
additional area also granted by an approval modification
in 2014
Current Development Consent expires in 2026
On 16 June 2022, BHP announced the decision to
cease mining at the asset by the end of FY2030
The application to continue mining for an additional
4 years from FY2026 to FY2030 was lodged with the
New South Wales Government in September 2023 and
is currently under assessment
Mine type &
mineralisation style
Open-cut
Produces a medium rank bituminous thermal coal
Power source
New South Wales electricity grid connection under a
deemed long-term contract and energy purchased via a
Retail Agreement
Processing
plants and other
available facilities
Beneficiation facilities: coal handling, preparation,
washing plants
Nominal capacity in excess of 23 Mtpa
Key permit
conditions
The project approval contains key conditions: (i) it
requires MAC to be operated generally in accordance
with the environmental assessment; and (ii) permits
extraction of up to 36 Mtpa of run of mine coal from
underground and open-cut operations, with open-cut
extraction limited to 32 Mtpa
1 Information on mining operations continued
208
BHP Annual Report 2024
Nickel mining operations
The following table contains additional details of our mining operations.
This table should be read in conjunction with OFR 5.1 and the production
table and reserves and resources tables in Additional information 4 and 6.
Mine & location
Nickel West
450 km north of Kalgoorlie, Western Australia
Mt Keith Mine
Mt Keith Satellite Mine (Yakabindie)
Mt Keith mine and concentrator
Means of access
Private road
Nickel concentrate transported by road to Leinster for
drying and on-shipping
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining leases granted by Western
Australian Government
Key leases expire between 2029 and 2036
First renewal of 21 years is as a right. Further renewals
at government discretion
Mt Keith mining leases approximately 9,240 hectares
Mt Keith satellite mining leases approximately
3,835 hectares
History and stage
of property
Production stage
Commissioned in 1995 by WMC
Acquired in 2005 as part of WMC acquisition
Mt Keith Satellite Mine contains 2 open-pit mines:
Six Mile Well and Goliath, both in full production
Nickel West operations will be temporarily suspended
from October 2024
Mine type &
mineralisation style
Open-cut
Disseminated textured magmatic nickel-sulphide
mineralisation associated with a metamorphosed
ultramafic intrusion
Power source
On-site third-party gas-fired turbines and
renewable solar generation with backup from diesel
engine generation
Contracts expire in December 2038
Natural gas sourced and transported under separate
long-term contracts
Processing
plants and other
available facilities
Concentration plant with a nominal capacity of 11 Mtpa
of ore
Key permit
conditions
Use of the land for the purposes set out by the Western
Australian Government under granted mining tenements
and broadly comprise of submission of detailed mining
proposals; payment of royalties, annual rent to the
State Government; rates to relevant local governments;
compliance with environmental regulations and mine
closure requirements and other reporting obligations.
Existing mining operations are also subject to an
Indigenous Land Use Agreement (ILUA), which includes
commitments for payments made to trust accounts;
Indigenous employment and business opportunities;
heritage and cultural protections
Mine & location
Nickel West
375 km north of Kalgoorlie, Western Australia
Venus sub-level caving operation
B11 block caving operation
Camelot open-pit mine
Rocky’s Reward open-pit mine
Leinster mine complex and concentrator
Means of access
Public road
Nickel concentrate shipped by road and rail to
Kalgoorlie Nickel Smelter
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining leases granted by Western
Australian Government
Key leases expire between 2025 and 2040
Renewals of principal mineral lease in accordance
with State Agreement ratified by the Nickel (Agnew)
Agreement Act 1974
Leinster mining leases approximately 6,325 hectares
Camelot mining leases approximately 2,353 hectares
History and stage
of property
Production stage
Production commenced in 1979
Acquired in 2005 as part of WMC acquisition
Leinster underground ceased operations in 2013 and
recommenced operations in 2016 with Venus sub-level
cave now in operation and B11 block cave developing its
undercut and draw points
Rocky’s Reward open-pit mine ceased mining in 2021
Nickel West operations will be temporarily suspended
from October 2024
Mine type &
mineralisation style
Open-cut and underground
Steeply dipping disseminated and massive textured
nickel-sulphide mineralisation associated with
metamorphosed ultramafic lava flows and intrusions
Power source
On-site third-party gas-fired turbines and renewable
solar generation with back up from diesel
engine generation
Contracts expire in December 2038
Natural gas sourced and transported under separate
long-term contracts
Processing
plants and other
available facilities
Concentration plant with a nominal capacity of 3 Mtpa
of ore
Key permit
conditions
Use of the land for the purposes set out by the
Western Australian Government in the Nickel (Agnew)
Agreement Act 1974 broadly comprise of submission
of detailed mining proposals and additional proposals;
payment of royalties, annual rent to Western Australian
Government; rates to relevant local governments;
compliance with environmental regulations and mine
closure requirements and other reporting obligations.
Existing mining operations are also subject to an
Indigenous Land Use Agreement (ILUA), which includes
commitments for payments made to trust accounts;
Indigenous employment and business opportunities;
heritage and cultural protections
209
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Overview
Financial Statements
Governance
Contents
Additional Information
Mine & location
Nickel West
450 km north of Kalgoorlie, Western Australia
Cliffs mine
Means of access
Private road
Nickel ore transported by road to Leinster or Mt Keith for
further processing
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining leases granted by Western
Australian Government
Key leases expire between 2025 and 2028
First renewal of 21 years is as of right. Further renewals
at government discretion
Mining leases approximately 2,675 hectares
History and stage
of property
Production stage
Production commenced in 2008
Acquired in 2005 as part of WMC acquisition
Nickel West operations will be temporarily suspended
from October 2024
Mine type &
mineralisation style
Underground
Steeply dipping massive textured nickel-sulphide
mineralisation associated with metamorphosed
ultramafic lava flows
Power source
Supplied from Mt Keith
Processing
plants and other
available facilities
Mine site
Key permit
conditions
Use of the land for the purposes set out by the Western
Australian Government under granted mining tenements
and broadly comprise of submission of detailed mining
proposals; payment of royalties, annual rent to the
State Government; rates to relevant local government;
compliance with environmental regulations and mine
closure requirements and other reporting obligations.
Existing mining operations are also subject to an
Indigenous Land Use Agreement (ILUA), which includes
commitments for payments made to trust accounts;
Indigenous employment and business opportunities;
heritage and cultural protections
Mine & location
West Musgrave
Project
Musgrave Province, Western Australia
Means of access
Public road
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
The Project contemplates 2 copper and nickel deposits
(Babel pit and Nebo pit) within the West Musgrave
Ranges of Western Australia
M69/149, L69/56, L69/57 and L69/44
Development Envelope of 20,852 hectares
History and stage
of property
Scoping studies completed in 2017
Pre-feasibility study completed by OZ Minerals and
Cassini Resources Ltd in 2020
Acquired by OZ Minerals in October 2020
Final investment decision in September 2022
Acquired in 2023 as part of OZ Minerals acquisition
West Musgrave Project will be temporarily suspended
from October 2024
Mine type &
mineralisation style
Open-pit (still in project stage)
Magmatic nickel and copper sulphide
Power source
Long-term power expected to be delivered by an
off-grid hybrid power system (wind, solar, battery and
thermal generation)
Processing
plants and other
available facilities
Crushing, vertical roller mill, flotation producing
separate nickel and copper concentrates (still in
project stage)
Key permit
conditions
All key regulatory approvals in place and a Land
access agreement signed with the Ngaanyatjarra
people to develop 2 copper and nickel deposits (Babel
pit and Nebo pit) within the West Musgrave Ranges
(including mining, accommodation, an airstrip and
processing facilities)
There are a number of strict conditions on cultural
heritage, flora and fauna, inland waters and greenhouse
gas, including:
– no more than 3,830 hectares clearing of
native vegetation
– achieving net zero greenhouse gas emissions by
2040, including up to 60 megawatts (instantaneous
load requirement) of fossil fuel electricity generation
with the remainder of the power supply to be
generated through solar or wind electricity generation
– abstraction of up to 7.5 gigalitres of groundwater
per annum
– compliance with the Cultural Heritage Management
Plan, including no direct disturbance of the
ethnographic exclusion zones
1 Information on mining operations continued
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BHP Annual Report 2024
Nickel smelters, refineries and processing plants
Smelter, refinery or processing plant
Nickel West
56 km south of Kalgoorlie, Western Australia
Kambalda nickel concentrator
Ownership
BHP 100%
Operator
BHP
Title, leases
or options
Mineral leases granted by Western
Australian Government
Key leases expire in 2028
Mining leases approximately 242 hectares
Key permit
conditions
Use of the land for the purposes set out by the Western
Australian Government under granted mining tenements
and broadly comprise of submission of detailed mining
proposals; payment of royalties, annual rent to the
State Government; rates to relevant local government;
compliance with environmental regulations and mine
closure requirements and other reporting obligations
Product
Concentrate containing approximately 13% nickel
Power source
On-site third-party gas-fired turbines supplemented by
access to grid power
Contracts expire in December 2038
Natural gas sourced and transported under separate
long-term contracts
Nominal production
capacity
1.6 Mtpa ore
Nickel sourced through ore tolling and concentrate
purchase arrangements with third parties in Kambalda
and outer regions
Smelter, refinery or processing plant
Nickel West
Kalgoorlie, Western Australia
Kalgoorlie nickel smelter
Ownership
BHP 100%
Operator
BHP
Title, leases
or options
Freehold title over the property
Key permit
conditions
Product
Matte containing approximately 65% nickel
Power source
On-site third-party gas-fired turbines supplemented by
access to grid power
Contracts expire in December 2038
Natural gas sourced and transported under separate
long-term contracts
Nominal production
capacity
110 ktpa nickel metal in matte
Smelter, refinery or processing plant
Nickel West
30 km south of Perth, Western Australia
Kwinana nickel refinery
Ownership
BHP 100%
Operator
BHP
Title, leases
or options
Freehold title over the property
Key permit
conditions
Product
London Metal Exchange grade nickel briquettes,
nickel powder
Also intermediate products, including copper sulphide,
cobalt-nickel-sulphide, ammonium sulphate
Nickel sulphate containing approximately 22% nickel
Power source
Power is sourced from the local grid, which is supplied
under a retail contract, supplemented by a Power
Purchase Agreement with Merredin Solar Farm for 50%
of its output
Nominal production
capacity
82.5 ktpa nickel metal in powder, briquettes and nickel
sulphate (with approval to increase up to 90 ktpa)
99 kt–100 kt nickel sulphate (approximately 22 kt–24
kt nickel)
Copper South Australia
Copper mining operations
The following table contains additional details of our mining operations.
This table should be read in conjunction with OFR 5.1 and 5.2, and
the production table and reserves and resources tables in Additional
information 4 and 6.
Mine & location
Olympic Dam
560 km northwest of Adelaide, South Australia
Means of access
Public road
Copper cathode trucked to ports
Uranium oxide transported by road to ports
Gold bullion transported by road and plane
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options
and acreage
involved
Mining lease granted by South Australian Government
expires in 2036
Approximately 17,788 hectares
Right of extension for 50 years (subject to remaining
mine life)
History and stage
of property
Production stage
Acquired in 2005 as part of Western Mining Corporation
(WMC) acquisition
Copper production began in 1988
Nominal milling capacity raised to 9 Mtpa in 1999
Optimisation project completed in 2002
New copper solvent extraction plant commissioned
in 2004
Major smelter maintenance campaigns completed in
2017 and 2022
Mine type &
mineralisation style
Underground
Large poly-metallic deposit of iron oxide-copper-
uranium-gold mineralisation
Power source
Electricity transmitted via BHP’s 275 kV power line from
Port Augusta and ElectraNet’s system upstream of
Port Augusta
Power is sourced from the local grid, which is supplied
under a retail contract, currently supplemented by
Power Purchase Agreement with Iberdrola
Processing
plants and other
available facilities
Underground automated train and trucking network
feeding crushing, storage and ore hoisting facilities
2 grinding circuits
Nominal milling capacity of 11 Mtpa
Flash furnace produces copper anodes, which are then
refined to produce copper cathodes
Electrowon copper cathode and uranium oxide
concentrate produced by leaching and solvent
extracting flotation tailings
Gold cyanide leach circuit and gold room producing
gold bullion
Key permit
conditions
The Roxby Downs (Indenture Ratification) Act 1982
(Indenture Act) applies to Olympic Dam’s operations.
It contains conditions from the South Australian
Government, including relating to the protection and
management of the environment; water; closure and
rehabilitation considerations; local procurement and
community plans/initiatives/project commitments; and
payment of royalties. Olympic Dam also holds other
relevant approvals and tenements granted by the South
Australian Government, including under the Mining Act
1971 (SA)
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Financial Statements
Governance
Contents
Additional Information
Mine & location
Carrapateena
The Gawler Craton, South Australia, approximately 160
km north of Port Augusta
Means of access
60 km private access road
Copper concentrate trucked to ports
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
The Carrapateena Project holds a mining lease (ML
6471) and 5 miscellaneous purposes licences (MPL
149, 152, 153, 154 and 156), which were granted
by the South Australian Government and expire in
January 2039, with the exception of MPL 149 which
expires in July 2038
Approximately 44,144 hectares in size across all
6 tenements
An application for tenement extensions can be made
within 6 months of the tenement expiry date
History and stage
of property
2011 – OZ Minerals acquired Carrapateena
exploration project
2014 – Pre-feasibility study completed
2016 – Carrapateena scoping study completed
2017 – Feasibility study updated
2017 – Works on enabling infrastructure commenced
2018 – Project approvals completed
2018 – Construction commenced
2019 – Construction completed
2019 – First saleable concentrate produced
2019 – Block Cave expansion pre-feasibility
study commenced
2020 – 4.25 Mtpa ramp up achieved
2020 – Block Cave expansion pre-feasibility
study completed
2020 – Block Cave expansion approved
2020 – New 270 km transmission line to Prominent Hill
via Carrapateena commissioned
2020 – Early works on Western Access
Road commenced
2021 – Block Cave expansion early works underway
2022 – Cave propagated to surface
2023 – Acquired as part of OZ Minerals acquisition
2024 – Commissioning of Crusher Station 2
Mine type &
mineralisation style
Underground
Iron oxide copper gold deposit
Power source
Electricity transmitted via private power line operated
under a Build Own Operate Maintain (BOOM)
agreement with ElectraNet
Power purchased via Retail Agreement
Processing
plants and other
available facilities
Conventional crushing, grinding and flotation on
mine site
Nominal milling capacity of 5.5 Mt
Key permit
conditions
The SA Mining Act and associated Mining Regulations
2020 (SA) apply to the Carrapateena Project. Each
tenement document (either ML or MPL) in conjunction
with the operation’s Program for Environment Protection
and Rehabilitation (PEPR) outlines the conditions
from the South Australian Government that must be
complied with including those relating to the protection
and management of the environment, water, closure
and rehabilitation
The Carrapateena Project is also approved by the
Federal Government under the Environment Protection
and Biodiversity Conservation Act 1999 (EPBC Act)
and as such has further conditions regarding nationally
threatened flora and fauna species
Mine & location
Prominent Hill
650 km northwest of Adelaide, 130 km southeast of the
town of Coober Pedy
Means of access
Mine access road (45 km off Stuart Highway)
Copper concentrate (containing gold and silver) trucked
to Wirrida Railway siding via dedicated Concentrate
Export Road
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining lease ML 6228 granted by South Australian
Government expires in August 2041
Miscellaneous purpose licences (MPL 81, 82, 83, 84,
91, 93, 94 96, 97, 101, 112 to 117 and 119 to 122) and
extractive mineral leases (EML 6234, 6236 to 6242,
6278 to 6296, 6299 to 6301) which were granted by the
South Australian Government and expire in August 2041
Approximately 11,401 hectares across all 51 tenements
History and stage
of property
2009 – Malu open-pit mine commissioned
2012 – Ankata underground mine
expansion commissioned
2015 – Malu underground mine
expansion commissioned
2017 – Expansion of the underground operation with
new northern decline (Liru)
2018 – Malu open-pit mine safely closed after more than
100 Mt of ore was mined over 10 years
2019 – Underground ramp up to 4.0 Mt
2019 – Prominent Hill expansion study commenced
2021 – Wira Shaft Mine expansion investment approved
2022 – Decision to increase the electric hoisting shaft’s
capacity from 6 Mtpa to 6.5 Mtpa
2023 – Acquired as part of OZ Minerals acquisition
Mine type &
mineralisation style
Underground
Iron oxide copper gold deposit
Power source
SA power grid via a high voltage power transmission
line operated under a Build Own Operate
Maintain agreement
Power purchased via Retail Agreement
Processing
plants and other
available facilities
Conventional crushing, semi-autogenous grinding
(SAG) and ball mill grinding circuit and flotation
processing plant on site
Nameplate capacity of 10 Mtpa
Key permit
conditions
MPEPR2022/137 Program for Environment Protection
and Rehabilitation for Mineral Lease (ML) 6228
and Associated Extractive Minerals Leases and
Miscellaneous Purpose Licences
Department for Environment and Water: Water Licences
396811 and 396809
Environment Protection Authority Licence 22764
Environment Protection Authority Licence 51429:
Licence to Carry out Mining or Mineral Processing
pursuant to Radiation Protection and Control Act 2021
1 Information on mining operations continued
212
BHP Annual Report 2024
Minerals Americas
Copper mining operations
The following table contains additional details of our mining operations.
This table should be read in conjunction with OFR 5.3 and the production
table and reserves and resources tables in Additional information 4 and 6.
Mine & location
Escondida
Atacama Desert
170 km southeast of Antofagasta, Chile
Means of access
Private road available for public use
Copper cathode transported by rail to ports at
Antofagasta and Mejillones
Copper concentrate transported by Escondida-owned
pipelines to its Coloso port facilities
Type and amount
of ownership
BHP 57.5%
Rio Tinto 30%
JECO Corporation consortium comprising Mitsubishi,
JX Nippon Mining and Metals 10%
JECO 2 Ltd 2.5%
Operator
BHP
Title, leases
or options and
acreage involved
Mining concession from Chilean Government valid
indefinitely (subject to payment of annual fees)
Mining concessions (exploitation) approximately
380,000 hectares
History and stage
of property
Production stage
Original construction completed and production
commenced in 1990
Start of operations of the third concentrator plant
in 2015
Inauguration of Escondida Water Supply desalination
plant (CY2018) and its extension (CY2019)
Key permit
conditions
Mining companies in Chile must obtain environmental
approvals for their projects, issued by the Environmental
Assessment Service (SEA), in order to operate
Depending on the particular characteristics and/
or extension of the relevant project to be assessed,
approvals can be obtained following a full Environmental
Impact Study (EIA) or after a less complex
Environmental Impact Declaration (DIA)
Mining companies are required to pay an annual fee for
each mining concession
Mine type &
mineralisation style
2 open-cut pits: Escondida and Escondida Norte
Escondida and Escondida Norte mineral deposits are
adjacent but distinct supergene enriched porphyry
copper deposits
Power source
Electricity sourced from 100% renewable sources
and certified by the Chilean Electricity Authority
(Coordinador Eléctrico Nacional – CEN)
Renewable power purchase agreements (PPAs) with
third parties supply approximately 99% of Escondida
electricity needs with the balance supplied by Tamakaya
SpA (100% owned by BHP)
Escondida-owned transmission lines connect to Chile’s
northern power grid
Processing
plants and other
available facilities
Crushing facilities feed concentrator and
leaching processes
3 concentrator plants produce copper concentrate
from sulphide ore by flotation extraction process (by-
products: gold and silver)
2 solvent extraction and electrowinning plants produce
copper cathode
Nominal capacity: 422 ktpd (nominal milling capacity)
and 350 ktpa copper cathode (nominal capacity of
tank house)
2 x 168 km concentrate pipelines, 167 km water pipeline
Port facilities at Coloso, Antofagasta
Desalinated water plant (total water capacity of 3,800
litres per second)
Mine & location
Pampa Norte
Spence
Atacama Desert
162 km northeast of Antofagasta, Chile
Means of access
Public road
Copper cathode transported by rail to ports at Mejillones
and Antofagasta
Copper concentrate transported by rail or trucks to port
in Mejillones
Molybdenum concentrate is transported by trucks
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining concession from Chilean Government valid
indefinitely (subject to payment of annual fees)
Mining concessions (exploitation): approximately
44,000 hectares
History and stage
of property
Production stage
First copper produced in 2006
Spence Growth Option (i.e. new 95 ktpd copper
concentrator and molybdenum plants) produced first
copper in December 2020 and first molybdenum in
April 2022
Key permit
conditions
Mining companies in Chile must obtain environmental
approvals for their projects, issued by the Environmental
Assessment Service (SEA), in order to operate
Depending on the particular characteristics and/
or extension of the relevant project to be assessed,
approvals can be obtained following a full Environmental
Impact Study (EIA) or after a less complex
Environmental Impact Declaration (DIA)
Mining companies are required to pay an annual fee for
each mining concession
Mine type &
mineralisation style
Open-cut
Enriched and oxidised porphyry copper deposit
containing in situ copper oxide mineralisation that
overlies a near-horizontal sequence of supergene
sulphides, transitional sulphides and finally primary
(hypogene) sulphide mineralisation
Power source
Electricity sourced from 100% renewable sources
and certified by the Chilean Electricity Authority
(Coordinador Eléctrico Nacional – CEN)
Renewable power purchase agreements (PPAs) with
third parties supply most of Spence electricity needs.
The remainder is supplied by Tamakaya SpA (100%
owned by BHP)
Spence-owned transmission lines connect to Chile’s
northern power grid
Processing
plants and other
available facilities
Crushing facilities feed concentrator and
leaching processes
1 copper concentrator plant with 95 ktpd capacity
(by-products: gold and silver), molybdenum plant and a
1,000 litres per second desalinated water plant under a
Build Own Operate Transfer (BOOT) agreement
Dynamic leach pads, solvent extraction and
electrowinning plant
Nominal capacity of tank house: 200 ktpa
copper cathode
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Contents
Additional Information
Mine & location
Pampa Norte
Cerro Colorado
Atacama Desert
120 km east of Iquique, Chile
Means of access
Public road
Copper cathode trucked to port at Iquique
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
Mining concession from Chilean Government valid
indefinitely (subject to payment of annual fees)
Transitioned to care and maintenance in
December 2023
Mining concessions (exploitation): approximately
34,000 hectares
History and stage
of property
Production stage
Commercial production commenced in 1994
Expansions in 1996 and 1998
Cerro Colorado entered temporary care and
maintenance in December 2023
Key permit
conditions
Mining companies in Chile must obtain environmental
approvals for their projects, issued by the Environmental
Assessment Service (SEA), in order to operate
Depending on the particular characteristics and/
or extension of the relevant project to be assessed,
approvals can be obtained following a full Environmental
Impact Study (EIA) or after a less complex
Environmental Impact Declaration (DIA)
Mining companies are required to pay an annual fee for
each mining concession
Mining companies in Chile that enter a care and
maintenance period must obtain approval of a
Temporary Closure Plan, sectorial permit, from
Sernageomin (Mining Authority). This permit is initially
granted for a period of 2 years and is renewable for an
additional period of up to 3 years
Mine type &
mineralisation style
Open-cut
Enriched and oxidised porphyry copper deposit
containing in situ copper oxide mineralisation that
overlies a near-horizontal sequence of supergene
sulphides, transitional sulphides and finally primary
(hypogene) sulphide mineralisation
Power source
Electricity purchased from external vendors
Processing
plants and other
available facilities
Crushing facilities, dynamic leach pads, solvent
extraction plant, electrowinning plant
Nominal capacity of tank house: 130 ktpa
copper cathode
Mine & location
Antamina
Andes mountain range, Peru
Mine: San Marcos – Ancash, 270 km northeast of Lima
Port: Huarmey – Ancash, 300 km north of Lima
Means of access
Public road
Copper and zinc concentrates transported by Antamina-
owned pipeline to its Punta Lobitos port
Molybdenum and lead/bismuth concentrates
transported by truck
Type and amount
of ownership
BHP 33.75%
Glencore 33.75%
Teck 22.5%
Mitsubishi 10%
Operator
Compañía Minera Antamina S.A.
Title, leases
or options and
acreage involved
Mining rights from Peruvian Government held
indefinitely, subject to payment of annual fees and
supply of information on investment and production
Total acreage: approximately 6,600 hectares
History and stage
of property
Production stage
Commercial production commenced in 2001
Key permit
conditions
During FY2024, the National Environmental Certification
Service (SENACE) approved Antamina’s Modification of
the Environmental Impact Assessment (MEIA), enabling
Antamina to extend its life from CY2028 to CY2036,
maintaining annual production volumes within its current
operational footprint
Mine type &
mineralisation style
Open-cut
Zoned porphyry and skarn deposit with central copper
dominated ores and an outer band of copper-zinc
dominated ores
Power source
Contracts with individual power producers
Processing
plants and other
available facilities
Primary crusher, concentrator, copper and zinc flotation
circuits, bismuth/moly cleaning circuit
Nominal milling capacity 145 ktpd
304 km concentrate pipeline
Port facilities at Huarmey
Mine & location
Resolution
Superior/Project: Pinal – Arizona, 100 km east of
Phoenix, United States
Means of access
Public road
Type and amount
of ownership
BHP 45%
Rio Tinto 55% (operator)
Operator
Resolution Copper Mining LLC
Title, leases
or options and
acreage involved
Private land, patented and unpatented mining claims
Total acreage: approximately 46,000 acres
History and stage
of property
Exploration stage
The Resolution deposit is within the footprint of and
adjacent to the historical Magma Copper Mine
The Resolution non-operated joint venture (NOJV) was
formed in 2004 with Rio Tinto as operator
Key permit
conditions
The Resolution Copper Project is subject to a
federal permitting process pursuant to the National
Environmental Policy Act (NEPA) and other US
legislation, including requirements for consultation,
coordination and collaboration with Native
American Tribes
The NEPA process is led by the US Forest Service
The Resolution Copper Project is also required to obtain
several state and local permits, including air quality and
groundwater protection permits
Mine type &
mineralisation style
Underground
Porphyry copper and molybdenum deposit
Power source
115 kV power lines to East and West Plant sites with
supply contract with Salt River Project
Processing
plants and other
available facilities
Water treatment and reverse osmosis plant, 2 active
underground shafts with associated support
infrastructure, including hoisting, ventilation and
cooling, and a rail corridor connecting the site to the
national rail network
1 Information on mining operations continued
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BHP Annual Report 2024
Iron ore mining operations
The following table contains additional details of our mining operations.
This table should be read in conjunction with OFR 5.3 and the production
table and reserves and resources tables in Additional information 4 and 6.
Mine & location
Samarco
Southeast Brazil
Samarco Mine: Mariana – Minas Gerais, 130 km
southeast of Belo Horizonte
Port: Anchieta – Espírito Santo, 520 km east of
Belo Horizonte
Means of access
Public road
Iron ore pellets exported via Samarco port facilities –
Ubu Port
Type and amount
of ownership
BHP Brasil 50%
Vale S.A. 50%
Operator
Samarco Mineração S.A.
Title, leases
or options and
acreage involved
Mining concessions granted by Brazilian Government
subject to compliance with the mine plan
Samarco recommenced iron ore pellet production in
December 2020, having met licensing requirements
to restart operations at its Germano complex in Minas
Gerais and its Ubu complex in Espírito Santo
Mining rights for approximately 1,605 hectares
History and stage
of property
Production stage
Production began at Germano mine in 1977 and at
Alegria complex in 1992
Second pellet plant built in 1997
Third pellet plant, second concentrator and second
pipeline built in 2008
Fourth pellet plant, third concentrator and third pipeline
built in 2014
Key permit
conditions
Samarco has an operating licence (LOC – Corrective
Operating License) obtained for the return of operations
For the continuity of operations, it has a long-term
licensing plan that includes expansion of the mining
area and new structures for the disposal of waste
and tailings
Mine type &
mineralisation style
Open-cut
Itabirites (metamorphic quartz-hematite rock) and friable
hematite ores
Power source
Samarco holds interests in 2 hydroelectric power
plants, which supply part of its electricity needs.
The remainder is purchased from the free
(non-regulated) electricity market
Processing
plants and other
available facilities
Facilities currently operating include 1 concentrator,
a system of tailings disposal combining a confined pit
and filtration plant for dry stacking of sandy tailings,
beneficiation plants, pipelines, 1 pellet plant and
port facilities
Following Samarco’s plan to gradually restart
operations, the restart of a second concentrator and
pelletising plant, and expansion of the existing filtration
plant are expected to be in operation by early CY2025
Other mining operations
The following table contains additional details of our mining operations.
This table should be read in conjunction with OFR 5.3 and the production
table and reserves and resources tables in Additional information 4 and 6.
Mine & location
Jansen (under
construction)
Province of Saskatchewan, approximately 140 km east
of Saskatoon, Canada
Means of access
Public road
Muriate of Potash (MOP) to be transported by rail to the
port at Westshore Terminal in Delta, British Columbia,
Canada
Type and amount
of ownership
BHP 100%
Operator
BHP
Title, leases
or options and
acreage involved
The total area of the Jansen lease is approximately
1,120 square km
All surface lands have been acquired
History and stage
of property
Development stage
Stage 1 is currently under construction
Stage 2 was sanctioned and execution commenced
in FY2024
Key permit
conditions
The Jansen Project received Ministerial approval under
the Saskatchewan Environmental Assessment Act
Following approval, various federal, provincial and
municipal permits have been or will be obtained for
construction and operation of facilities
Mine type &
mineralisation style
Underground
The Lower Patience Lake (LPL) sub-member is
the potash horizon targeted for Jansen. The LPL
sub-member is a bedded evaporite composed of
sylvite (KCl), halite (NaCl) with variable amounts of
disseminated insoluble and clay seams
Power source
Electricity transmitted via BHP’s 230 kV substation and
upstream provincial power utility system
Processing
plants and other
available facilities
Mill, buildings and other facilities and infrastructure are
under construction
Mine & location
Pedra Branca
Água Azul do Norte, Pará
Approximately 160 km from Marabá and 900 km from
Belém in the state of Pará, Brazil
Means of access
Public road
From Água Azul to Parauapebas from highway (PA 150)
to be transported by train to the port of Itaqui in São
Luiz, state of Maranhão, Brazil
Type and amount
of ownership
BHP 100%
Operator
OZ Minerals Brasil
Title, leases
or options and
acreage involved
The property belongs to OZ Minerals Brasil
History and stage
of property
2018 – OZ Minerals acquired mine operator Avanco
Resources – including projects in the Carajás Copper
Region and the Gurupi Greenstone Belt
2019 – Construction commenced
2020 – First developmental ore sent to Antas
for processing
2021 – Commencement of underground mining in
Pedra Branca and inaugural resource identification
announcement in Santa Lúcia
2022 – Ramped up to full production
2023 – Acquisition of OZ Minerals by BHP
2024 – Santa Lucia project permitting process granted
by SEMAS- environment Agency of Pará State
Key permit
conditions
The closure plan to be updated in accordance with
requirement from ANM (n° 68/2021) when the life of
mine changes
Annual environmental report (RIAA) required to be
submitted in accordance with the activities developed
for the mine production
Mine type &
mineralisation style
Underground
Iron oxide copper gold deposit. High grade zones
of semi-massive and breccia style mineralisation.
Dominant chalcopyrite (copper mineralisation)
Power source
3MW required to operate mine coming from power
lines from north of state (Tucurui hydroelectric plant).
The expansion required is in progress with new lines to
achieve 7MW
Processing
plants and other
available facilities
The material is processed in Antas Norte Plant located
in the municipality of Curionópolis. Plant capacity is 800
ktpa and the tailings are deposited in the exhausted
mine existing on site
Mill, buildings and other facilities and infrastructure are
in the Curionópolis municipality
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Governance
Contents
Additional Information
We prepare our Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS), as issued by the International
Accounting Standards Board. We publish our Consolidated Financial Statements in US dollars. All Consolidated Income Statement, Consolidated
Balance Sheet and Consolidated Cash Flow Statement information below has been derived from audited Financial Statements. For more information
refer to the Financial Statements.
Some information in this section has been presented on a Continuing operations basis to exclude the contribution from Discontinued operations.
Year ended 30 June
US$M
2024
2023
2022
2021
2020
Consolidated Income Statement (Financial Statements 1.1)
Revenue
55,658
53,817
65,098
56,921
38,924
Profit from operations
17,537
22,932
34,106
25,515
13,683
Profit after taxation from Continuing operations
9,601
14,324
22,400
13,676
8,628
Profit/(loss) after taxation from Discontinued operations
−
−
10,655
(225)
108
Profit after taxation from Continuing and Discontinued operations
attributable to BHP shareholders (Attributable profit)
7,897
12,921
30,900
11,304
7,956
Profit after taxation from Continuing operations attributable to
BHP shareholders
7,897
12,921
20,245
11,529
7,848
Dividends per ordinary share – paid during the period (US cents)
152.0
265.0
350.0
156.0
143.0
Dividends per ordinary share
– determined in respect of the period (US cents)
146.0
170.0
325.0
301.0
120.0
In specie dividend on merger of Petroleum with Woodside
(US cents)
–
–
386.4
–
–
Basic earnings per ordinary share (US cents)1
155.8
255.2
610.6
223.5
157.3
Diluted earnings per ordinary share (US cents)1
155.5
254.7
609.3
223.0
157.0
Basic earnings from Continuing operations per ordinary share
(US cents)1
155.8
255.2
400.0
228.0
155.2
Diluted earnings from Continuing operations per ordinary share
(US cents)1
155.5
254.7
399.2
227.5
154.8
Number of ordinary shares (million)1
– At period end
5,072
5,066
5,062
5,058
5,058
– Weighted average
5,068
5,064
5,061
5,057
5,057
– Diluted
5,077
5,073
5,071
5,068
5,069
Consolidated Balance Sheet (Financial Statements 1.3)2
Total assets
102,362
101,296
95,166
108,927
105,733
Net assets
49,120
48,530
48,766
55,605
52,175
Share capital (including share premium)
4,899
4,737
4,638
2,686
2,686
Total equity attributable to BHP shareholders
44,811
44,496
44,957
51,264
47,865
Consolidated Cash Flow Statement (Financial Statements 1.4)
Net operating cash flows3
20,665
18,701
32,174
27,234
15,706
Capital and exploration expenditure4,5
9,273
7,083
7,545
7,120
7,640
Other financial information (OFR 10)
Net debt5
9,120
11,166
333
4,121
12,044
Underlying attributable profit5
13,660
13,420
23,815
17,077
9,060
Underlying attributable profit – Continuing operations5
13,660
13,420
21,319
16,985
8,948
Underlying EBITDA5
29,016
27,956
40,634
35,073
19,870
Underlying EBIT5
23,631
22,820
34,436
29,853
15,130
Underlying basic earnings per share (US cents)5
269.5
265.0
470.6
337.7
179.2
Underlying basic earnings per share
– Continuing operations (US cents)5
269.5
265.0
421.2
335.9
176.9
Underlying return on capital employed (per cent)5
27.2
28.8
48.7
32.5
16.9
1. For more information on earnings per share refer to Financial Statements note 7 ‘Earnings per share’.
2. The Consolidated Balance Sheet for comparative periods includes the associated assets and liabilities in relation to Blackwater and Daunia mines (disposed in FY2024), Petroleum
(merger with Woodside in FY2022), BMC and Cerrejón (both disposed in FY2022) as IFRS 5 ‘Non-current Assets Held for Sale and Discontinued Operations’ does not require the
Consolidated Balance Sheet to be restated for comparative periods.
3. Net operating cash flows are after dividends received, net interest paid, proceeds and settlements of cash management related instruments, net taxation paid and includes Net operating
cash flows from Discontinued operations.
4. Capital and exploration and evaluation expenditure is presented on a cash basis and represents purchases of property, plant and equipment plus exploration and evaluation expenditure
from the Consolidated Cash Flow Statement and includes purchases of property, plant and equipment plus exploration and evaluation expenditure from Discontinued operations. For more
information refer to Financial Statements note 28 ‘Discontinued operations’. Exploration and evaluation expenditure is capitalised in accordance with our accounting policies, as set out in
Financial Statements note 11 ‘Property, plant and equipment’.
5. We use non-IFRS financial information to reflect the underlying performance of the Group. Underlying attributable profit, Underlying basic earnings per share and Underlying return on
capital employed includes Continuing and Discontinued operations. Refer to OFR 10 for a reconciliation of non-IFRS financial information to their respective IFRS measure. Refer to
OFR 10.1 for the definition and method of calculation of non-IFRS financial information. Refer to Financial Statements note 21 ‘Net debt’ for the composition of Net debt.
2 Financial information summary
216
BHP Annual Report 2024
Management believes the following financial information presented by commodity provides a meaningful indication of the underlying financial
performance of the assets, including equity accounted investments, of each reportable segment. Information relating to assets that are accounted for as
equity accounted investments is shown to reflect BHP’s share, unless otherwise noted, to provide insight into the drivers of these assets.
For the purposes of this financial information, segments are reported on a statutory basis in accordance with IFRS 8/AASB 8 ‘Operating Segments’.
The tables for each commodity include an ‘adjustment for equity accounted investments’ to reconcile the equity accounted results to the statutory
segment results.
For a reconciliation of non-IFRS financial information to respective IFRS measures and an explanation as to the use of Underlying EBITDA in assessing
our performance refer to OFR 10
For the definition and method of calculation of non-IFRS financial information refer to OFR 10.1
For more information as to the statutory determination of our reportable segments refer to Financial Statements note 1 ‘Segment reporting’
Year ended
30 June 2024
US$M
Revenue2
Underlying
EBITDA3
Underlying
EBIT3
Exceptional
items4
Net
operating
assets3
Capital
expenditure
Exploration
gross
Exploration
to profit5
Copper
Escondida
10,013
5,759
4,821
13,113
1,806
Pampa Norte6
2,375
896
468
4,843
721
Antamina7
1,478
968
746
1,498
437
Copper South Australia8
4,085
1,568
928
16,498
1,048
Other7
72
(176)
(228)
416
136
Total Copper from Group production
18,023
9,015
6,735
−
36,368
4,148
Third-party products
2,021
74
74
−
−
−
Total Copper
20,044
9,089
6,809
−
36,368
4,148
216
215
Adjustment for equity
accounted investments7
(1,478)
(525)
(285)
−
−
(437)
(3)
(2)
Total Copper statutory result
18,566
8,564
6,524
−
36,368
3,711
213
213
Iron Ore
Western Australia Iron Ore
27,805
18,964
16,902
20,597
2,026
Samarco9
−
−
−
(6,606)
−
Other
122
(48)
(74)
(179)
7
Total Iron Ore from Group production
27,927
18,916
16,828
(3,066)
13,812
2,033
Third-party products
25
(3)
(3)
−
−
−
Total Iron Ore
27,952
18,913
16,825
(3,066)
13,812
2,033
86
41
Adjustment for equity
accounted investments
−
−
−
−
−
−
−
−
Total Iron Ore statutory result
27,952
18,913
16,825
(3,066)
13,812
2,033
86
41
Coal
BHP Mitsubishi Alliance10
5,873
1,914
1,394
6,725
533
New South Wales Energy Coal11
1,945
502
408
(211)
100
Other
−
(27)
(50)
(42)
14
Total Coal from Group production
7,818
2,389
1,752
880
6,472
647
Third-party products
−
−
−
−
−
−
Total Coal
7,818
2,389
1,752
880
6,472
647
14
3
Adjustment for equity
accounted investments11
(152)
(99)
(75)
−
−
(1)
−
−
Total Coal statutory result
7,666
2,290
1,677
880
6,472
646
14
3
Group and unallocated items
Potash
−
(255)
(257)
6,138
1,090
1
1
Western Australia Nickel12
1,473
(302)
(374)
(6)
1,254
50
58
Other13
1
(194)
(764)
(1,421)
82
93
93
Total Group and unallocated items
1,474
(751)
(1,395)
(3,908)
4,711
2,426
144
152
Inter-segment adjustment
−
−
−
−
−
−
−
−
Total Group
55,658
29,016
23,631
(6,094)
61,363
8,816
457
409
3 Financial information by commodity
217
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
3 Financial information by commodity continued
Year ended
30 June 2023
US$M
Revenue2
Underlying
EBITDA3
Underlying
EBIT3
Exceptional
items4
Net
operating
assets3
Capital
expenditure
Exploration
gross
Exploration
to profit
Copper
Escondida
8,847
4,934
4,070
12,207
1,351
Pampa Norte6
2,491
754
244
4,487
647
Antamina7
1,468
998
824
1,430
374
Copper South Australia8
2,806
703
251
15,782
641
Other7
20
(209)
(228)
323
59
Total Copper from Group production
15,632
7,180
5,161
−
34,229
3,072
Third-party products
1,863
18
18
−
−
−
Total Copper
17,495
7,198
5,179
−
34,229
3,072
151
148
Adjustment for equity
accounted investments7
(1,468)
(545)
(369)
−
−
(374)
(6)
(3)
Total Copper statutory result
16,027
6,653
4,810
−
34,229
2,698
145
145
Iron Ore
Western Australia Iron Ore
24,678
16,660
14,663
20,438
1,956
Samarco9
−
−
−
(3,382)
−
Other
113
33
9
(100)
10
Total Iron Ore from Group production
24,791
16,693
14,672
176
16,956
1,966
Third-party products
21
(1)
(1)
−
−
−
Total Iron Ore
24,812
16,692
14,671
176
16,956
1,966
96
52
Adjustment for equity
accounted investments
−
−
−
−
−
−
−
−
Total Iron Ore statutory result
24,812
16,692
14,671
176
16,956
1,966
96
52
Coal
BHP Mitsubishi Alliance10
7,652
3,197
2,572
7,545
488
New South Wales Energy Coal11
3,455
1,953
1,868
(243)
156
Other
−
(39)
(57)
(36)
13
Total Coal from Group production
11,107
5,111
4,383
−
7,266
657
Third-party products
−
−
−
−
−
−
Total Coal
11,107
5,111
4,383
−
7,266
657
13
6
Adjustment for equity
accounted investments11
(149)
(113)
(88)
−
−
−
−
−
Total Coal statutory result
10,958
4,998
4,295
−
7,266
657
13
6
Group and unallocated items
Potash
−
(205)
(207)
4,469
647
1
1
Western Australia Nickel12
2,009
162
55
2,255
683
52
48
Other13
11
(344)
(804)
(1,295)
82
43
42
Total Group and unallocated items
2,020
(387)
(956)
(64)
5,429
1,412
96
91
Inter-segment adjustment
−
−
−
−
−
−
−
−
Total Group
53,817
27,956
22,820
112
63,880
6,733
350
294
1.
Group profit before taxation comprised Underlying EBITDA of US$29,016 million (FY2023: US$27,956 million), exceptional items, depreciation, amortisation and impairments of
US$11,479 million (FY2023: US$5,024 million) and net finance costs of US$1,489 million (FY2023: US$1,531 million).
2. Total revenue from thermal coal sales, including BMA and NSWEC, was US$1,873 million (FY2023: US$3,528 million).
3. For more information on the reconciliation of non-IFRS financial information to our statutory measures, reasons for usefulness and calculation methodology, please refer
OFR 10 ‘Non-IFRS financial information’.
4. Excludes exceptional items relating to Net finance costs US$506 million and Income tax benefit US$837 million (FY2023: Net finance costs US$452 million and Income tax expense
US$266 million).
5. Includes US$10 million (FY2023: US$ nil) of exploration expenditure previously capitalised, written off as impaired (included in depreciation and amortisation).
6. Includes Spence and Cerro Colorado. Cerro Colorado entered temporary care and maintenance in December 2023.
7.
Antamina, SolGold and Resolution (the latter two included in Other) are equity accounted investments and their financial information presented above with the exception of net operating
assets reflects BHP Group’s share. Group and Copper level information is reported on a statutory basis which reflects the application of the equity accounting method in preparing the
Group financial statements – in accordance with IFRS. Underlying EBITDA of the Group and the Copper segment, includes D&A, net finance costs and taxation expense of US$525
million (FY2023: US$545 million) related to equity accounted investments.
8. Includes Olympic Dam as well as Prominent Hill and Carrapateena which were acquired on 2 May 2023 as part of the acquisition of OZL.
9. Samarco is an equity accounted investment. With the exception of net operating assets, the financial information presented reflects BHP Billiton Brasil Ltda’s share. All financial impacts
following the Samarco dam failure have been reported as exceptional items in both reporting periods.
10. On 2 April 2024 BHP and Mitsubishi Development Pty Ltd (MDP) completed the divestment of the Blackwater and Daunia mines (which were part of the BHP Mitsubishi Alliance (BMA)
to Whitehaven Coal. This resulted in a net after tax gain of US$674 million that has been recognised as an exceptional item. BHP continued to report its share of profit and loss within the
Coal Segment and asset tables until that date. Refer to Financial Statements Note 3 ‘Exceptional items’ for further information.
11. Includes Newcastle Coal Infrastructure Group (NCIG) which is an equity accounted investment and its financial information presented above, with the exception of net operating assets,
reflects BHP Group’s share. Total Coal statutory result excludes contribution related to NCIG until future profits exceed accumulated losses.
12. Western Australia Nickel comprises the Nickel West operations and, following the OZL acquisition on 2 May 2023, the West Musgrave project.
13. Other includes functions, other unallocated operations including legacy assets and consolidation adjustments. Revenue not attributable to reportable segments comprises the sale of
freight and fuel to third parties, as well as revenues from unallocated operations. Exploration and technology activities are recognised within relevant segments.
218
BHP Annual Report 2024
The table below details our mineral and derivative product production for all operations for the three years ended 30 June 2024, 2023 and 2022.
Unless otherwise stated, the production numbers represent our share of production and include BHP’s share of production from which profit is derived
from our equity accounted investments. Production information for equity accounted investments is included to provide insight into the operational
performance of these entities.
For information on minerals pricing during the past three years refer to OFR 9
BHP interest
%
BHP share of production1
Year ended 30 June
2024
2023
2022
Copper2
Payable metal in concentrate (kt)
Escondida, Chile3
57.5
926.7
832.7
802.6
Pampa Norte, Chile4
100
150.3
125.3
111.2
Copper South Australia, Australia5
100
106.3
19.9
Antamina, Peru6
33.75
143.9
138.4
149.9
Carajás, Brazil7
100
8.4
1.6
Total
1,335.6
1,117.9
1,063.7
Cathode (kt)
Escondida, Chile3
57.5
198.6
222.6
201.4
Pampa Norte, Chile4
100
115.3
163.5
170.0
Copper South Australia, Australia5
100
215.7
212.5
138.4
Total
529.6
598.6
509.8
Total copper (kt)
1,865.2
1,716.5
1,573.5
Lead
Payable metal in concentrate (t)
Antamina, Peru6
33.75
332
657
1,118
Total
332
657
1,118
Zinc
Payable metal in concentrate (t)
Antamina, Peru6
33.75
103,392
125,048
123,200
Total
103,392
125,048
123,200
Gold
Payable metal in concentrate (troy oz)
Escondida, Chile3
57.5
181,061
189,095
166,972
Pampa Norte, Chile4
100
13,280
26,811
28,870
Copper South Australia, Australia5
100
163,061
32,736
Carajás, Brazil7
100
5,813
1,153
Total
363,215
249,795
195,842
Refined gold (troy oz)
Copper South Australia, Australia5
100
207,123
186,029
119,517
Total
207,123
186,029
119,517
Total gold (troy oz)
570,338
435,824
315,359
Silver
Payable metal in concentrate (troy koz)
Escondida, Chile3
57.5
5,446
5,074
5,334
Pampa Norte, Chile4
100
1,654
1,318
1,011
Copper South Australia, Australia5
100
1,134
201
Antamina, Peru6
33.75
3,359
3,885
5,078
Total
11,593
10,478
11,423
Refined silver (troy koz)
Copper South Australia, Australia5
100
995
1,089
743
Total
995
1,089
743
Total silver (troy koz)
12,588
11,567
12,166
Uranium
Payable metal in concentrate (t)
Copper South Australia, Australia5
100
3,603
3,406
2,375
Total
3,603
3,406
2,375
Molybdenum
Payable metal in concentrate (t)
Pampa Norte, Chile4
100
794
990
71
Antamina, Peru6
33.75
1,822
1,172
798
Total
2,616
2,162
869
4 Production
219
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
BHP interest
%
BHP share of production1
Year ended 30 June
2024
2023
2022
Iron Ore
Production (kt)8
Newman Joint Venture, Australia
85
58,102
56,945
57,041
Area C Joint Venture, Australia
85
105,868
107,375
94,431
Yandi Joint Venture, Australia
85
17,855
21,410
38,922
Jimblebar, Australia9
85
73,111
66,801
58,782
Total Western Australia Iron Ore
254,936
252,531
249,176
Samarco, Brazil6
50
4,748
4,512
4,071
Total iron ore
259,684
257,043
253,247
Steelmaking coal
Production (kt)10
Blackwater, Australia11
50
3,572
5,055
5,834
Goonyella Riverside, Australia
50
6,434
8,310
8,360
Peak Downs, Australia
50
4,217
5,480
4,944
Saraji, Australia
50
3,287
4,596
4,614
Daunia, Australia11
50
1,513
1,989
1,491
Caval Ridge, Australia
50
3,252
3,590
3,899
Total BHP Mitsubishi Alliance (BMA)
22,275
29,020
29,142
South Walker Creek, Australia12
80
–
–
4,941
Poitrel, Australia12
80
–
–
2,981
Total BHP Mitsui Coal12
–
–
7,922
Total steelmaking coal
22,275
29,020
37,064
Energy coal
Production (kt)
New South Wales Energy Coal, Australia
100
15,368
14,172
13,701
Cerrejón, Colombia6,13
33.3
–
–
4,236
Total energy coal
15,368
14,172
17,937
Nickel
Saleable production (kt)
Western Australia Nickel, Australia14,15
100
81.6
80.0
76.8
Total
81.6
80.0
76.8
Cobalt
Saleable production (t)
Western Australia Nickel, Australia14,15
100
734
752
632
Total
734
752
632
1.
BHP share of production includes the Group’s share of production for which profit is derived from our equity accounted investments, unless otherwise stated.
2. Metal production is reported on the basis of payable metal.
3. Shown on 100 per cent basis. BHP interest in saleable production is 57.5 per cent.
4. Includes Spence for the full year and Cerro Colorado which entered temporary care and maintenance in December 2023.
5. The year ended 30 June 2024 includes Olympic Dam, Prominent Hill and Carrapateena. The year ended 30 June 2023 includes Olympic Dam and two months of production from
Prominent Hill and Carrapateena from 1 May 2023, following the acquisition of OZ Minerals on 2 May 2023.
6. For statutory financial reporting purposes, this is an equity accounted investment. We have included production numbers from our equity accounted investments as the level of production
and operating performance from these operations impacts Underlying EBITDA of the Group. Our use of Underlying EBITDA is explained in OFR 4.3.
7.
The year ended 30 June 2023 includes two months of production from 1 May 2023, following the acquisition of OZ Minerals on 2 May 2023.
8. Iron ore production is reported on a wet tonnes basis.
9. Shown on 100 per cent basis. BHP interest in saleable production is 85 per cent.
10. Steelmaking coal production is reported on the basis of saleable product. Production figures may include some thermal coal.
11. BHP completed the sale of the Blackwater and Daunia mines on 2 April 2024. Production reported until their divestment on 2 April 2024.
12. Shown on 100 per cent basis. BHP completed the sale of its 80 per cent interest in BHP Mitsui Coal (BMC) on 3 May 2022. Production reported until 30 April 2022.
13. BHP completed the sale of our 33.3 per cent interest in Cerrejón on 11 January 2022. Production for Cerrejón reported until 31 December 2021.
14. Nickel contained in matte and refined nickel metal, including briquette, powder, nickel sulphate and by-product streams.
15. On 11 July 2024, we announced the temporary suspension of operations at Western Australia Nickel from October 2024, with a transition period to commence from July 2024.
4 Production continued
220
BHP Annual Report 2024
Jansen Stage 1 (JS1) is 52 per cent complete and remains on track for first production in late CY2026 with a two-year ramp-up period. The engineering
work and execution of procurement agreements is largely complete. In FY2025, underground and surface construction works will continue, including
structural, mechanical and electrical activities for the mill areas. We also expect to complete the conversion of the service shaft headframe to a
permanent structure. In FY2025, we estimate capex of US$1.3 billion for JS1 (FY2024: US$0.9 billion).
In October 2023, we approved an investment of US$4.9 billion for Jansen Stage 2 (JS2), which when combined with JS1, will increase our total planned
potash production capacity to approximately 8.5 Mtpa representing around 10 per cent of the estimated market when fully ramped up. JS2 execution
activity has now commenced and is 2 per cent complete, with first production expected in FY2029, followed by a three-year ramp-up period. In FY2025,
the focus will be on detailed engineering, procurement for major equipment and construction packages, and structural steel fabrication. In FY2025, we
estimate capex of US$0.5 billion for JS2 (FY2024: US$0.2 billion).
Commodity
Project
and ownership
Project scope/capacity
Capital
expenditure
US$M
First production
target date
Progress
Potash
Jansen Stage 1
(Canada) 100%
Design, engineering and construction of
an underground potash mine and surface
infrastructure, with capacity to produce 4.15 Mtpa
5,723
End-CY2026
Project is 52% complete
Potash
Jansen Stage 2
(Canada) 100%
Development of additional mining districts,
completion of the second shaft hoist
infrastructure, expansion of processing facilities
and addition of rail cars to facilitate production of
an incremental 4.36 Mtpa
4,859
FY2029
Project is 2% complete
Capital and exploration expenditure was US$9.3 billion in FY2024. This was made up of investment in organic development of US$5.9 billion, which
includes approximately US$2.7 billion on copper projects and approximately US$1.1 billion at Jansen, plus an exploration spend of US$0.5 billion primarily
at Copper South Australia; and maintenance1 and decarbonisation expenditure of US$3.0 billion with US$1.2 billion sustaining capital at WAIO to support
our medium-term goal of producing >305 Mtpa. In July this year, we signed an agreement with Lundin Mining to jointly acquire Filo Corp. and to enter a
joint venture with the intent of developing the Filo del Sol and Josemaria copper projects.
Capital and exploration expenditure of approximately US$10 billion is expected for FY2025, including approximately US$0.5 billion of exploration.
In FY2026 and the medium term,2 capital and exploration expenditure of approximately US$11 billion per annum on average is expected. We have
flexibility to adjust capital spend and phasing of projects to accommodate market dynamics and cash flow generation. Guidance is subject to exchange
rate movements.
1. Maintenance capital includes non-discretionary spend for the following purposes: deferred development and production stripping; risk reduction, compliance and asset integrity.
2. Average for FY2027–FY2029.
5 Major projects
221
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Resources are the estimated quantities of material that can potentially be
commercially recovered from BHP’s properties. Reserves are a subset
of resources that can be demonstrated to be able to be economically and
legally extracted. In order to estimate reserves, assumptions are required
about a range of technical and economic factors, including quantities,
qualities, production techniques, recovery efficiency, production and
transport costs, commodity supply and demand, commodity prices and
exchange rates. The statement of Mineral Resources and Ore Reserves
presented in this Annual Report has been produced in accordance with
the Australian Securities Exchange (ASX) Listing Rules Chapter 5 and the
Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves, December 2012 (JORC Code).
Predicted sales prices, based on supply and demand forecast and current
and long-term historical average price trends, have been used. The Ore
Reserves tabulated are held within existing, permitted mining tenements.
Mineral leases are of sufficient duration (or convey a legal right to renew
for sufficient duration) to enable all reserves on the leased properties to
be mined in accordance with current production schedules. Ore Reserves
may include areas where some additional approvals remain outstanding,
however it is anticipated such approvals will be obtained within the
timeframe required by the current life-of-mine schedule.
Declaration tables
– All Mineral Resources and Ore Reserves presented are reported in
100 per cent terms (unless otherwise stated) and represent estimates
as at 30 June 2024.
– Tonnes are reported as dry metric tonnes (unless otherwise stated).
All tonnes and grade/quality information have been rounded, so small
differences may be present in the totals.
– The Measured and Indicated Mineral Resources are inclusive of those
Mineral Resources modified to produce the Ore Reserves.
Other reporting jurisdictions
The information contained in this document is expected to differ from that
reported to the United States Securities and Exchange Commission (SEC)
in our Annual Report on Form 20-F for the year ended 30 June 2024.
Mineral resources and mineral reserves reporting requirements for SEC
filings in the United States are set forth in S-K 1300. S-K 1300 requires
resources estimates to be reported exclusive of reserves estimates and both
reported only for the portion attributable to our interest in such resources
or reserves. In addition, specific disclosure requirements pertaining to
economic assumptions and interpretation of reasonable prospects of
economic extraction are expected to result in further differences between
the resources and reserves estimates presented in this document and those
to be reported in our Annual Report on Form 20-F.
Key differences in the estimation of our resources and reserves pursuant to
the ASX Listing Rules and S-K 1300 are the economic inputs, commodity
prices and cost assumptions. Estimates we report in accordance with the
ASX Listing Rules and JORC Code (2012) are generally based on cost
forecasts and internally-generated projected long-term commodity prices
and current operating costs or costs used in studies for development
projects. S-K 1300 requires mineral resources and mineral reserves
estimates to be based on a reasonable and justifiable commodity price
selected by a qualified person. The estimates reported in accordance with
S-K 1300 are generally based on the historical average costs and prices
over a timeframe of three years for production stage properties or, for
development stage properties, costs determined from first principles.
Our resources and reserves estimates to be reported in our Annual Report
on Form 20-F are therefore not directly comparable to those presented
in this document and should be considered in relation to the differing
reporting and disclosure requirements of the jurisdiction under which they
are presented.
Assurance and verification
BHP has internal controls over our Mineral Resources and Ore Reserves
estimation efforts that are designed to produce reasonable and reliable
estimates aligned with industry practice and our regulatory reporting
requirements. The governance for our estimation efforts is located at
both the asset and the BHP Group level within our Resource Centre of
Excellence, an internal assurance team independent of our Competent
Persons and BHP employees who are responsible for the estimations.
The assets provide first-line assurance on estimates through peer
review and validation processes. The Resource Centre of Excellence is
responsible for assurance over the processes implemented by the assets
as they relate to Mineral Resources and Ore Reserves estimations and
the compiling of the estimates to be reported in accordance with the ASX
Listing Rules and JORC Code (2012).
Our internal controls utilise management systems, including, but not limited
to, formal quality assurance and quality control processes, standardised
procedures, workflow processes, data security covering record keeping,
chain of custody and data storage, supervision and management approval,
reconciliations, internal and external reviews and audits.
Our internal requirements and standards provide the basis for the
governance over the estimation and reporting of Mineral Resources and
Ore Reserves and provide technical guidance to all reporting assets.
These internal requirements and standards are periodically reviewed and
updated for alignment with industry practice and reporting regulations.
Our internal controls for exploration data, as they relate to Mineral
Resources and Ore Reserves estimations, are managed by our operating
assets with assurance provided by the Resource Centre of Excellence.
These include procedures and standards defining minimum requirements
of critical aspects to support exploration and resource development
programs, spatial quality control checks on measurement points (e.g.
collar, down-hole survey), quality control checks on samples, including
laboratory data quality checks, geological database reviews and back-up
routines and technical peer review across the data gathering, integration
and estimation processes.
Our internal controls for Mineral Resources and Ore Reserves estimations
include, but are not limited to:
– source data review from database extracts, using exploratory data
statistical analysis prior to use in the estimation of Mineral Resources.
Identification of data to exclude outliers and visual checks against
estimation domains
– peer reviews of the estimation inputs based on statistical studies
and estimation parameters as applied in industry standard
estimation software
– visual and statistical validation of the estimates against source data and
where available reconciliation to previous models, operational models
and production data
– peer review of the classification applied, considering quantitative
measures and qualitative considerations
– peer review of assumptions applied that convert resources to reserves
– independent audits or reviews for new or materially changed Mineral
Resources and Ore Reserves
Operating assets manage internal risk registers relating to uncertainties in
the Mineral Resources and Ore Reserves estimates to direct future work
programs or estimation updates. These may include but are not limited to:
– areas of uncertainty in the estimates impacting local interpretations
– bulk density assumptions, based on sample testwork or
operational results
– metallurgical recovery assumptions, based on testwork or
plant performance
– changes in commodity prices, costs and exchange rate assumptions
– geotechnical and hydrogeological considerations impacting on
underground or open-cut mining assumptions
– ore loss and dilution, mining selectivity and production rate assumptions
– cut-off value changes to meet product specifications
– changes in environmental, permitting and social licence to
operate assumptions
Further to assurance activities by the assets specifically relating to the
estimation of resources and reserves, the Resource Centre of Excellence
with subject matter experts has developed standards and guidelines
across BHP for reviewing and documenting the information supporting our
Mineral Resources and Ore Reserves estimates, describing the methods
used and verifying the reliability of such estimates. These activities are
supported by the following controls:
– The reporting of Mineral Resources and Ore Reserves estimates are
required to follow BHP’s standard procedures for public reporting in
accordance with current regulatory requirements.
– Annual risk reviews are conducted with Competent Persons and BHP
employees on all Mineral Resources and Ore Reserves to be reported,
including a year-on-year change impact assessment, reconciliation
performance metrics for the operating mines and a control assessment
for the estimation inputs. The information and supporting documentation
are prepared by the Competent Persons relating to the estimates and
evaluated for compliance with BHP’s internal controls. Based on these
reviews, recommendations of endorsement are provided to our senior
management for the use and reporting of the Mineral Resources and
Ore Reserves.
6 Mineral Resources and Ore Reserves
222
BHP Annual Report 2024
– Periodic internal technical ‘deep dive’ assessments of Mineral
Resources and Ore Reserves are conducted on a frequency that is
informed by asset materiality and outcomes of the annual risk reviews.
– Management and closure reviews of actions assigned to Competent
Persons and BHP employees resulting from the annual risk reviews and
technical ‘deep dive’ assessments are conducted.
– Assurance is undertaken over the reporting documentation provided by
Competent Persons for public release and management and verification
of inputs into the BHP Resources and Reserves reporting database.
The Resource Centre of Excellence also provides an annual update on
assurance activities and changes relating to our resources and reserves
estimation efforts to the Risk and Audit Committee (RAC) in connection
with the RAC’s responsibility over the effectiveness of systems of internal
control and risk management of BHP.
Inherent risks in the estimation of Mineral Resources
and Ore Reserves
Estimated annual cash flows from our future operations, estimated
production schedules, estimated capital expenditure and operating costs,
estimated site closure costs, estimated royalty and tax costs, valuation
assumptions and interpretations of geological data obtained from drill
holes and other exploration techniques may not necessarily be indicative
of future results. The assumptions and interpretations used to estimate our
Mineral Resources and Ore Reserves may change from period to period,
and because additional geological data generated during the course of
our operations may not be consistent with the data on which we based our
Mineral Resources and Ore Reserves, such estimates may change from
period to period or may need to be revised. No assurance can be given
that our Mineral Resources and Ore Reserves presented in this Annual
Report will be recovered at the grade, quality or quantities presented or
at all.
There are numerous uncertainties inherent in the estimation of Mineral
Resources and Ore Reserves. Areas of uncertainty that may materially
impact our Mineral Resources and Ore Reserves estimates may include,
but are not limited to: (i) changes to long-term commodity prices, external
market factors, foreign exchange rates and other economic assumptions;
(ii) changes in geological interpretations of mineral deposits and geological
modelling, including estimation input parameters and techniques; (iii)
changes to metallurgical or process recovery assumptions which adversely
affect the volume, grade or qualities of our commodities produced (for
example, processing that results in higher deleterious elements that
result in penalties) or other changes to mining method assumptions; (iv)
changes to input assumptions used to derive the potentially mineable
shapes applicable to the assumed underground or open-pit mining
methods used to constrain the estimates; (v) changes to life of mine or
production rate assumptions; (vi) changes to dilution and mining recovery
assumptions; (vii) changes to cut-off grades applied to the estimates;
(viii) changes to geotechnical data, structures, rock mass strength, stress
regime, hydrogeological, hydrothermal or geothermal factors; (ix) changes
to infrastructure supporting the operations of or access to the applicable
mine site; (x) changes to mineral, surface, water or other natural resources
rights; (xi) changes to royalty, taxes, environmental, permitting and social
licence assumptions in the jurisdictions where we operate; and (xii)
changes in capital or operating costs.
Estimates of Mineral Resources are subject to further exploration and
evaluation of development and operating costs, grades, recoveries
and other material factors, and therefore, are subject to uncertainty.
Mineral Resources do not meet the threshold for Ore Reserves modifying
factors, such as engineering, legal or economic feasibility, that would
allow for the conversion to Ore Reserves. Accordingly, no assurance can
be given that our Mineral Resources not included in Ore Reserves will
become recoverable Proved and Probable Ore Reserves.
This statement is based on and fairly represents information and
supporting documentation compiled by Competent Persons (as defined
in the JORC Code). All Competent Persons have, at the time of reporting,
sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity they are undertaking to
qualify as a Competent Person.
Each Competent Person listed is an employee of BHP or a company
in which BHP has a controlling interest (unless otherwise stated) and
declares they have no issues that could be perceived by investors as
a material conflict of interest in preparing the reported information.
All Competent Persons are a Member or Fellow of the Australasian
Institute of Mining and Metallurgy (AusIMM) or the Australian Institute
of Geoscientists (AIG) or a Recognised Professional Organisation.
Each Competent Person consents to the inclusion in this Annual Report
of the matters based on their information in the form and context in which
it appears.
Competent Persons
Copper
Mineral
Resources
Escondida: R Maureira (MAusIMM) employed by Minera
Escondida Limitada
Cerro Colorado and Spence: R Guerrero Roman (MAusIMM)
Pampa Escondida, Pinta Verde and Chimborazo: E Mulet Cortes
(MAusIMM) employed by Minera Escondida Limitada
Pantera and Pedra Branca: C Lollo (FAusIMM)
Succoth: P Ormond (MAusIMM)
Carrapateena and Fremantle Doctor: S Light (MAusIMM)
Prominent Hill: B Whittaker (MAusIMM)
Olympic Dam: J L Macdonald (MAusIMM)
Antamina: L Canchis Perez (FAusIMM) employed by Compañía
Minera Antamina S.A.
Ore
Reserves
Escondida: P Castillo (MAusIMM) employed by Minera Escondida
Limitada
Spence: P Elissetche (MAusIMM)
Pedra Branca: J Moura (MAusIMM)
Carrapateena: M Fargher (MAusIMM)
Prominent Hill: AM Ebbels (FAusIMM-CP)
Olympic Dam: F Mello (MAusIMM)
Antamina: F Angeles Beron (PEGBC) employed by Compañía
Minera Antamina S.A.
Iron ore
Mineral
Resources
WAIO: C Allison (MAusIMM), M Furness (MAusIMM), E Maidens
(MAIG)
Samarco: L Bonfioli (MAusIMM) employed by Samarco
Mineração S.A.
Ore
Reserves
WAIO: A Balueva (MAusIMM), P K Chhajer (MAusIMM-CP), J
Frewen (MAusIMM), R Fuentes Acosta (MAusIMM), H Mavhondo
(MAusIMM), N Nicholls (MAusIMM)
Samarco: E Baeta (MAusIMM) employed by Samarco Mineração
S.A.
Coal
Coal
Resources
Goonyella Complex: D James (MAusIMM)
Saraji, Blackwater, Daunia and Togara South: R Saha (MAusIMM)
Peak Downs: J L Young (MAusIMM)
Caval Ridge: C Williams (MAusIMM-CP)
Saraji South: J Robin (MAusIMM)
Mt Arthur Coal: J James (MAusIMM)
Coal
Reserves
Goonyella Complex: V Grajdan (MAusIMM) and D Walker
(MAusIMM)
Peak Downs: P Gupta (MAusIMM)
Saraji: N Mohtaj (MAusIMM)
Caval Ridge, Saraji South and Daunia: G Bustos (MAusIMM-CP)
Blackwater: R Campbell (MAusIMM)
Mt Arthur Coal: D Perkins (MAusIMM)
Potash
Mineral
Resources
Jansen: B Németh (MAusIMM) and O Turkekul (APEGS)
Ore
Reserves
Jansen: J Sondergaard (MAusIMM)
Nickel
Mineral
Resources
Leinster: R Finch (MAusIMM), M Hope (MAusIMM), G Merello
(MAusIMM)
Mt Keith, Yakabindie and Honeymoon Well: R Finch (MAusIMM)
and M Hope (MAusIMM)
Cliffs and Jericho: G Merello (MAusIMM) and M Hope
(MAusIMM)
Nebo and Babel: P Ormond (MAusIMM)
Ore
Reserves
Leinster, Mt Keith, Cliffs and Yakabindie: B Hollins (MAusIMM)
Nebo and Babel: Y Sitorus (MAusIMM)
Annual Report compilation
F Bodycoat (MAusIMM-CP), Resource Centre of Excellence
223
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Copper
Mineral Resources
As at 30 June 2024
Measured Resources
Indicated Resources
Commodity
deposit1
Ore type
Mt
%Cu
ppmMo
g/tAu
Mt
%Cu
ppmMo
g/tAu
Copper operations
Escondida2
Oxide
90
0.57
–
–
14
0.54
–
–
Mixed
50
0.48
–
–
37
0.48
–
–
Sulphide
5,080
0.58
–
–
4,000
0.53
–
–
Cerro Colorado3
Oxide
68
0.61
–
–
113
0.62
–
–
Supergene Sulphide
48
0.58
–
–
97
0.58
–
–
Transitional Sulphide
72
0.45
–
–
104
0.41
–
–
Hypogene Sulphide
–
–
–
–
–
–
–
–
Spence4
Oxide
14
0.63
–
–
1.6
0.59
–
–
Supergene Sulphide
82
0.55
–
–
29
0.45
–
–
Transitional Sulphide
16
0.58
100
–
0.2
0.47
50
–
Hypogene Sulphide
736
0.46
160
–
696
0.43
130
–
Copper projects
Pampa Escondida
Sulphide
294
0.53
–
0.07
1,150
0.55
–
0.10
Pinta Verde
Oxide
109
0.59
–
–
64
0.52
–
–
Sulphide
–
–
–
–
23
0.50
–
–
Chimborazo
Sulphide
–
–
–
–
135
0.50
–
–
Pantera
OC Sulphide
–
–
–
–
13
1.28
–
0.17
Succoth
OC Sulphide
–
–
–
–
61
0.57
–
–
Copper gold operations
Mt
%Cu
g/tAu
g/tAg
Mt
%Cu
g/tAu
g/tAg
Pedra Branca5
UG Sulphide
0.58
1.57
0.48
–
7.9
1.67
0.43
–
Carrapateena
UG Sulphide
130
0.98
0.40
4
470
0.62
0.26
3
Prominent Hill6
UG Sulphide
42
1.15
0.59
3
50
0.86
0.88
2
SP Sulphide
0.3
1.04
0.61
3
1.6
0.11
0.56
0.3
SP Low-grade
–
–
–
–
2.2
0.16
0.34
0.6
Copper gold project
Fremantle Doctor
UG Sulphide
–
–
–
–
–
–
–
–
Copper uranium gold operation
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
Olympic Dam7
OC Sulphide
3,570
0.61
0.20
0.32
1
3,310
0.57
0.19
0.23
1
UG Sulphide
820
1.55
0.45
0.61
3
640
1.48
0.45
0.51
3
Copper zinc operation
Mt
%Cu
%Zn
g/tAg
ppmMo
Mt
%Cu
%Zn
g/tAg
ppmMo
Antamina8
Sulphide Cu only
275
0.80
0.12
8
250
339
0.83
0.14
9
260
Sulphide Cu-Zn
70
0.86
1.60
20
90
188
1.00
1.82
18
80
UG Sulphide Cu only
–
–
–
–
–
–
–
–
–
–
UG Sulphide Cu-Zn
–
–
–
–
–
–
–
–
–
–
1. Cut-off criteria:
Deposit
Ore type
Mineral Resources
Ore Reserves
Escondida
Oxide
≥ 0.20%SCu
−
Full SaL
−
Variable cut-off grade (V_COG): oxide ≥ 0.20%SCu and sulphide
≥0.30%Cu.
Mixed
≥ 0.30%Cu
−
Sulphide
≥0.25%Cu or ≥0.30%Cu depending on processing.
≥ 0.30%Cu and greater than V_COG of the concentrator. Sulphide
ore is processed in the concentrator plants as a result of an optimised
mine plan with consideration of technical and economical parameters
in order to maximise net present value.
Sulphide Leach
−
≥ 0.25%Cu and lower than V_COG and with >30% of copper carried
by more leachable copper minerals. Sulphide Leach ore is processed
by dump leaching as an alternative to the concentrator process.
Cerro Colorado
Oxide & Supergene
Sulphide
≥ 0.25%Cu
−
Transitional
Sulphide &
Hypogene Sulphide
≥ 0.20%Cu
−
Spence
All ore types
≥ 0.20%Cu
≥ 0.20%Cu
Pampa Escondida
Sulphide
≥ 0.30%Cu
−
Pinta Verde
Oxide
≥ 0.20%SCu
−
Sulphide
≥ 0.30%Cu
−
Chimborazo
Sulphide
≥ 0.30%Cu
−
Pantera
OC Sulphide
≥ 0.25%Cu
−
Succoth
OC Sulphide
Net smelter return (NSR) cut-off of A$19/t which represents the mill
limited break-even cut-off inclusive of processing, ore re-handling
and material handling costs per total tonne mined.
−
Pedra Branca
UG Sulphide
Cut-off based on NSR value of US$52/t.
Cut-off based on NSR for two regions of the mine: US$62/t above the
upper mining level (925) and US$68/t below the 925 mining level.
Carrapateena
UG Sulphide
Cut-off based on NSR value of A$25/t to generate a continuous
shape in which all material has the potential to be mined by block
cave mining method.
Cut-off based on NSR value of A$30/t for Block Cave 1 and NSR
A$34 for Block Cave 2. Cut-off in the SLC varies by block between
NSR A$65-90/t.
Prominent Hill
UG Sulphide
Cut-off based on NSR value of A$48/t, being life of mine break-
even cut-off of A$57/t multiplied by a factor of 0.83. An NSR of
A$48/t is equivalent to 0.52%Cu, 0.36g/t Au and 1.7g/t Ag.
Cut-off varies with material handling requirements and is between
NSR value of A$65-75/t.
SP Sulphide & SP
Low-grade
Cut-off based on NSR value of A$17/t which is inclusive of re-
handling and processing costs.
Cut-off based on NSR value of A$17/t which is inclusive of re-handling
and processing costs.
6 Mineral Resources and Ore Reserves continued
224
BHP Annual Report 2024
As at 30 June 2023
Inferred Resources
Total Resources
BHP
interest
%
Total Resources
Mt
%Cu
ppmMo
g/tAu
Mt
%Cu
ppmMo
g/tAu
Mt
%Cu
ppmMo
g/tAu
2.0
0.51
–
–
106
0.56
–
–
57.5
111
0.58
–
–
20
0.45
–
–
107
0.47
–
–
125
0.47
–
–
9,060
0.53
–
–
18,100
0.55
–
–
18,800
0.54
–
–
5.7
0.58
–
–
187
0.62
–
–
100
187
0.62
–
–
22
0.64
–
–
167
0.59
–
–
167
0.59
–
–
29
0.42
–
–
205
0.43
–
–
205
0.43
–
–
1,700
0.36
–
–
1,700
0.36
–
–
1,700
0.36
–
–
–
–
–
–
16
0.63
–
–
100
21
0.61
–
–
0.3
0.42
–
–
111
0.52
–
–
119
0.48
–
–
–
–
–
–
16
0.58
100
–
12
0.58
90
–
786
0.39
90
–
2,220
0.43
130
–
2,300
0.43
120
–
5,400
0.44
–
0.04
6,840
0.46
–
0.06
57.5
6,860
0.46
–
0.06
15
0.54
–
–
188
0.56
–
–
57.5
188
0.57
–
–
37
0.45
–
–
60
0.47
–
–
60
0.47
–
–
80
0.60
–
–
215
0.54
–
–
57.5
218
0.53
–
–
7.1
1.09
–
0.15
20
1.21
–
0.17
100
20
1.21
–
0.17
57
0.52
–
–
120
0.54
–
–
100
120
0.54
–
–
Mt
%Cu
g/tAu
g/tAg
Mt
%Cu
g/tAu
g/tAg
Mt
%Cu
g/tAu
g/tAg
7.3
1.38
0.36
–
16
1.53
0.40
–
100
17
1.54
0.41
–
300
0.26
0.13
2
900
0.55
0.24
3
100
900
0.56
0.24
3
66
0.85
0.90
2
158
0.93
0.81
3
100
162
0.94
0.81
3
–
–
–
–
1.9
0.24
0.57
0.7
4.4
0.19
0.58
0.5
–
–
–
–
2.2
0.16
0.34
0.6
2.2
0.16
0.34
0.6
100
0.51
0.33
1
100
0.51
0.33
1
100
100
0.51
0.33
1
Mt
%Cu kg/tU3O8
g/tAu
g/tAg
Mt
%Cu kg/tU3O8
g/tAu
g/tAg
Mt
%Cu kg/tU3O8
g/tAu
g/tAg
2,840
0.58
0.20
0.22
1
9,720
0.59
0.20
0.26
1
100
9,640
0.58
0.19
0.26
1
190
1.44
0.41
0.63
3
1,650
1.51
0.45
0.57
3
1,740
1.49
0.44
0.58
3
Mt
%Cu
%Zn
g/tAg
ppmMo
Mt
%Cu
%Zn
g/tAg
ppmMo
Mt
%Cu
%Zn
g/tAg
ppmMo
536
0.87
0.14
8
240
1,150
0.84
0.13
8
250
33.75
1,190
0.84
0.14
8
250
215
1.06
1.52
16
80
473
1.01
1.65
17
80
502
1.01
1.63
17
80
268
1.28
0.21
11
170
268
1.28
0.21
11
170
251
1.28
0.22
12
180
166
1.12
1.33
15
60
166
1.12
1.33
15
60
166
1.14
1.41
16
60
Deposit
Ore type
Mineral Resources
Ore Reserves
Fremantle Doctor
UG Sulphide
Cut-off based on NSR value of A$25/t used to generate a
continuous shape in which all material has the potential to be mined
by block cave mining method.
−
Olympic Dam
OC Sulphide
Variable between 0.1%Cu and 0.3%Cu
−
UG Sulphide
Variable between 0.6%Cu and 1.0%Cu
Variable between 1.0%Cu and 1.7%Cu
Low-grade
−
≥ 0.6%Cu
Antamina
Sulphide Cu only
Net value per concentrator hour (US$/h) incorporating all material
revenue and cost factors and includes metallurgical recovery (see
footnote 11 for averages). Mineralisation at the US$0/hr limit is
approximately equivalent to 0.16%Cu, 2.3g/tAg, 130ppmMo with
7,055t/hr mill throughput.
Net value per concentrator hour (US$/h) incorporating all material
revenue and cost factors and includes metallurgical recovery (see
footnote 11 for averages). Mineralisation at the US$6,000/hr limit
is approximately equivalent to 0.16%Cu, 2.1g/tAg, 141ppmMo with
7,032t/hr mill throughput.
Sulphide Cu-Zn
Net value per concentrator hour (US$/h) incorporating all material
revenue and cost factors and includes metallurgical recovery (see
footnote 11 for averages). Mineralisation at the US$0/hr limit is
approximately equivalent to 0.09%Cu, 0.70%Zn, 4.5g/tAg with
6,286t/hr mill throughput.
Net value per concentrator hour (US$/h) incorporating all material
revenue and cost factors and includes metallurgical recovery (see
footnote 11 for averages). Mineralisation at the US$6,000/hr limit is
approximately equivalent to 0.09%Cu, 0.85%Zn, 3.2g/tAg with 6,284t/
hr mill throughput.
UG Sulphide Cu
only
NSR value incorporating all material revenue and includes
metallurgical recovery. Only sub-level stoping mining method at
US$53.8/t break-even cut-off was applied, equivalent to 0.80%Cu,
7.2g/tAg and 140ppmMo. Predicted metallurgical recoveries of 93%
for Cu, 81% for Ag and 51% for Mo.
−
UG Sulphide Cu-Zn
NSR value incorporating all material revenue and includes
metallurgical recovery. Only sub-level stoping mining method at
US$53.8/t break-even cut-off was applied, equivalent to 0.58%Cu,
1.02%Zn and 10.4g/tAg. Predicted metallurgical recoveries of 83%
for Cu, 83% for Zn and 74% for Ag.
−
2. Escondida – The decrease in Mixed ore type was mainly due to changes in geotechnical parameters.
3. Cerro Colorado – Remained on care and maintenance.
4. Spence – The decrease in Oxide and Supergene Sulphide ore types was due to depletion and updated economic parameters. The increase in Transitional Sulphide ore type was due to
updated economic parameters.
5. Pedra Branca – The decrease in Mineral Resources was due to depletion.
6. Prominent Hill – The decrease in SP Sulphide ore type was due to depletion.
7. Olympic Dam – The decrease in UG Sulphide ore type was due to a resource estimate update supported by additional drilling.
8. Antamina – The decrease in Sulphide Cu-Zn ore type was mainly due to depletion. An increase in UG Sulphide Cu only ore type was due to updated economic parameters.
225
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Copper
Ore Reserves
As at 30 June 2024
Proved Reserves
Probable Reserves
Commodity deposit1,9,10
Ore type
Mt
%Cu
ppmMo
Mt
%Cu
ppmMo
Copper operations
Escondida11,13
Full SaL
180
0.80
–
36
0.61
–
Oxide
–
–
–
–
–
–
Sulphide
3,370
0.63
–
1,400
0.54
–
Sulphide Leach
1,260
0.38
–
239
0.37
–
Spence11,12,14
Oxide
12
0.63
–
0.6
0.53
–
Supergene Sulphide
44
0.60
–
37
0.51
–
Transitional Sulphide
11
0.55
120
0.2
0.41
96
Hypogene Sulphide
390
0.57
190
385
0.50
130
Copper gold operations
Mt
%Cu
g/tAu
g/tAg
Mt
%Cu
g/tAu
g/tAg
Pedra Branca12,15
UG Sulphide
0.31
1.65
0.49
–
2.6
2.07
0.53
–
Carrapateena11
UG Sulphide
–
–
–
–
185
1.03
0.41
4
Prominent Hill11,16
UG Sulphide
21
1.18
0.54
3
28
0.82
0.70
2
SP Sulphide
0.3
1.04
0.61
3
1.6
0.11
0.56
0.3
SP Low-grade
–
–
–
–
2.2
0.16
0.34
0.6
Copper uranium gold operation
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
Olympic Dam11,17
UG Sulphide
285
1.96
0.61
0.74
5
273
1.73
0.57
0.59
3
Low-grade
–
–
–
–
–
42
0.84
0.28
0.33
2
Copper zinc operation
Mt
%Cu
%Zn
g/tAg
ppmMo
Mt
%Cu
%Zn
g/tAg
ppmMo
Antamina11,18
Sulphide Cu only
91
0.90
0.13
8
350
46
1.04
0.18
10
340
Sulphide Cu-Zn
25
1.00
1.81
19
100
36
0.96
1.94
17
90
9. Approximate drill-hole spacings used to classify the reserves were:
Deposit
Proved Reserves
Probable Reserves
Escondida
Full SaL: 30m × 30m
Full SaL: 45m × 45m
Sulphide: 50m × 50m
Sulphide: 90m × 90m
Sulphide Leach: 60m × 60m
Sulphide Leach: 115m × 115m
Spence
Oxide 50m x 50m
100m × 100m for all ore types
Supergene Sulphide, Transitional Sulphide &
Hypogene Sulphide: 70m × 70m
Pedra Branca
25m x 50m
50m x 50m
Carrapateena
–
25m to 100m
Prominent Hill
<35m
35m to 75m
Olympic Dam
20m to 35m
35m to 70m
Antamina
25m to 55m
40m to 80m
10. Ore delivered to process plant.
11. Metallurgical recoveries for the operations were:
Deposit
Metallurgical recovery
Escondida
Full SaL: 76%
Sulphide: 85%
Sulphide Leach: 42%
Spence
Oxide: 84%
Supergene Sulphide: 81%
Carrapateena
Cu 92%, Au 84%, Ag 73%
Prominent Hill
UG Sulphide and SP Sulphide: Cu 86%, Au 83%, Ag 75%
SP Low-grade: Cu 65%, Au 55%
Olympic Dam
Cu 94%, U3O8 68%, Au 70%, Ag 63%
Antamina
Sulphide Cu only: Cu 93%, Zn 0%, Ag 81%, Mo 51%
Sulphide Cu-Zn: Cu 83%, Zn 83%, Ag 74%, Mo 0%
12. Metallurgical recoveries based on testwork:
Deposit
Metallurgical recovery
Spence
Transitional Sulphide and Hypogene Sulphide: Cu 85%, Mo 55%
Pedra Branca
Cu 83-95%, Au 53-72%
13. Escondida – Full SaL ore type has replaced Oxide ore type. The increase in Full SaL ore type was due to a change in processing methodology for ore types at Escondida. The decrease in
Sulphide Leach ore type was due to updates in the mine design and economic assumptions.
14. Spence – The decrease in Ore Reserves was due to changes in economic parameters and an updated mine plan.
15. Pedra Branca – The decrease in Ore Reserves was due to depletion.
16. Prominent Hill – The decrease in UG Sulphide and SP Sulphide ore types was due to depletion.
17. Olympic Dam – The decrease in UG Sulphide ore type was due to a change in cut-off grade and updated macroeconomics.
18. Antamina – The decrease in Ore Reserves was mainly due to depletion.
6 Mineral Resources and Ore Reserves continued
226
BHP Annual Report 2024
As at 30 June 2023
Total Reserves
BHP
interest
%
Total Reserves
Mt
%Cu
ppmMo
Mt
%Cu
ppmMo
216
0.77
–
57.5
–
–
–
–
–
–
158
0.52
–
4,770
0.60
–
4,780
0.64
–
1,500
0.38
–
1,650
0.41
–
13
0.63
–
100
18
0.63
–
81
0.56
–
115
0.49
–
11
0.55
120
12
0.58
90
775
0.54
160
1,210
0.46
140
Mt
%Cu
g/tAu
g/tAg
Mt
%Cu
g/tAu
g/tAg
2.9
2.03
0.52
–
100
3.4
1.99
0.52
–
185
1.03
0.41
4
100
189
1.04
0.41
4
49
0.97
0.63
3
100
54
0.99
0.64
3
1.9
0.24
0.57
0.7
4.4
0.19
0.58
0.5
2.2
0.16
0.34
0.6
2.2
0.16
0.34
0.6
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
Mt
%Cu
kg/tU3O8
g/tAu
g/tAg
558
1.85
0.59
0.67
4
100
590
1.82
0.58
0.67
4
42
0.84
0.28
0.33
2
44
0.79
0.27
0.34
2
Mt
%Cu
%Zn
g/tAg
ppmMo
Mt
%Cu
%Zn
g/tAg
ppmMo
137
0.95
0.15
9
340
33.75
173
0.94
0.15
8
350
61
0.98
1.89
18
90
80
0.98
1.89
15
80
227
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Iron ore
Mineral Resources
As at 30 June 2024
Measured Resources
Indicated Resources
Commodity
deposit1,2
Ore type
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
Iron ore operations
WAIO3,4,5,6
BKM
3,180
60.6
0.14
4.7
2.6
5.4
4,950
59.5
0.14
5.4
2.6
6.1
CID
330
55.7
0.05
6.4
2.3
11.0
340
56.2
0.06
6.5
2.3
10.3
DID
–
–
–
–
–
–
190
61.8
0.05
3.8
3.5
3.5
MM
1,610
61.2
0.07
3.6
1.8
6.4
1,680
59.6
0.06
4.8
2.2
7.0
NIM
–
–
–
–
–
–
–
–
–
–
–
–
Brazil
Mt
%Fe
%Pc
Mt
%Fe
%Pc
Samarco
ROM
3,050
39.3
0.05
1,720
37.7
0.05
Ore Reserves
As at 30 June 2024
Proved Reserves
Probable Reserves
Commodity
deposit1,7
Ore type
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
Iron ore operations
WAIO3,4,8,9,10,11,12
BKM
1,250
62.2
0.13
3.4
2.3
4.6
1,310
61.8
0.13
3.6
2.2
5.0
CID
22
57.0
0.05
5.5
1.7
10.8
3.0
56.5
0.06
6.0
2.3
10.7
MM
740
62.3
0.06
2.9
1.6
5.9
1,000
61.2
0.06
3.5
1.8
6.6
Brazil
Mt
%Fe
%Pc
Mt
%Fe
%Pc
Samarco13
ROM
97
40.7
0.07
752
43.0
0.05
1. The Mineral Resources and Ore Reserves qualities listed refer to in situ mass percentage on a dry weight basis. Wet tonnes are reported for WAIO deposits and Samarco, including
moisture contents for WAIO: BKM – Brockman 3%, CID – Channel Iron Deposits 8%, DID – Detrital Iron Deposits 4%, MM – Marra Mamba 4% and Samarco: ROM 6.5%.
2. A single cut-off grade was applied in WAIO per deposit ranging from 50-58%Fe with an additional threshold of <6%Al203 applied to the DID ore type. For Samarco the cut-off grade
was 22%Fe.
3. WAIO – Mineral Resources and Ore Reserves are reported on a Pilbara basis by ore type to align with our production of blended lump products which comprises BKM and MM ore types
and blended fines products including CID. This also reflects our single logistics chain and associated management system.
4. WAIO – BHP interest is reported as Pilbara Ore Reserves tonnes weighted average across all joint ventures which can vary from year to year. BHP ownership varies between 85%
and 100%.
5. WAIO – Mineral Resources are restricted to areas which have been identified for inclusion based on a risk assessment, including heritage sites.
6. WAIO – The increase in the DID ore type was due to a resource estimate update informed by additional drilling. The decrease in NIM ore type was due to an updated economic
assessment.
1. Tonnages are reported on an in situ moisture basis. Coal qualities are for a potential product on an air-dried basis.
2. Cut-off criteria:
Deposit
Mining method
Coal Resources
Coal Reserves
Goonyella Complex
OC
≥ 0.5m seam thickness, core yield ≥50% and ≤35% raw ash
≥ 0.5m seam thickness
UG
≥ 2.0m seam thickness, core yield ≥50% and ≤35% raw ash
≥ 2.5m seam thickness
Peak Downs
OC
≥ 0.5m seam thickness and ≤35% raw ash
≥ 0.5m seam thickness
Caval Ridge
OC
≥ 0.3m seam thickness and core yield ≥30%
≥ 0.4m seam thickness
Saraji
OC
≥ 0.5m seam thickness, core yield ≥35% and ≤35% raw ash
≥ 0.5m seam thickness
UG
≥ 2.0m seam thickness, core yield ≥35% and ≤35% raw ash
–
Saraji South
OC
≥ 0.5m seam thickness, core yield ≥50%
≥ 0.5m seam thickness
3. Divestment of Blackwater and Daunia was completed on 2 April 2024.
Steelmaking Coal
Coal Resources
As at 30 June 2024
Measured Resources
Indicated Resources
Commodity
deposit1,2
Mining method
Coal type
Mt
%Ash
%VM
%S
Mt
%Ash
%VM
%S
Steelmaking coal operations
CQCA JV
Goonyella Complex
OC
Met
593
8.7
21.9
0.51
122
9.3
22.0
0.53
UG
Met
1,410
9.8
20.8
0.53
423
10.3
19.4
0.54
Peak Downs
OC
Met
1,024
10.4
19.2
0.61
568
11.3
19.1
0.68
Caval Ridge
OC
Met
282
12.3
22.0
0.56
211
11.9
20.1
0.56
Saraji
OC
Met/Th
1,106
10.4
16.9
0.62
506
11.0
16.0
0.68
UG
Met/Th
81
9.5
15.7
0.56
164
11.0
16.3
0.59
Saraji South
OC
Met
280
9.4
17.2
0.66
126
9.7
17.2
0.72
Blackwater3
OC
Met/Th
–
–
–
–
–
–
–
–
UG
Met/Th
–
–
–
–
–
–
–
–
Daunia3
OC
Met/Th
–
–
–
–
–
–
–
–
6 Mineral Resources and Ore Reserves continued
228
BHP Annual Report 2024
As at 30 June 2023
Inferred Resources
Total Resources
BHP
interest
%
Total Resources
Mt
%Fe
%P %SiO2 %Al2O3
%LOI
Mt
%Fe
%P %SiO2 %Al2O3
%LOI
Mt
%Fe
%P %SiO2 %Al2O3
%LOI
11,700
58.9
0.14
5.7
2.6
6.7
19,830
59.3
0.14
5.4
2.6
6.4
85
19,880
59.3
0.14
5.5
2.6
6.4
870
54.7
0.06
6.8
3.0
11.1
1,540
55.2
0.06
6.6
2.7
10.9
1,560
55.3
0.06
6.6
2.7
10.9
80
60.0
0.06
4.9
4.2
4.3
280
61.2
0.06
4.1
3.7
3.8
260
61.3
0.06
4.1
3.7
3.7
4,580
59.1
0.07
5.2
2.4
7.2
7,870
59.6
0.07
4.8
2.2
7.0
8,020
59.7
0.07
4.7
2.2
7.0
–
–
–
–
–
–
–
–
–
–
–
–
200
61.1
0.06
8.8
1.1
1.8
Mt
%Fe
%Pc
Mt
%Fe
%Pc
Mt
%Fe
%Pc
420
37.4
0.06
5,190
38.6
0.05
50
5,210
38.6
0.05
As at 30 June 2023
Total Reserves
BHP
interest
%
Total Reserves
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
Mt
%Fe
%P
%SiO2
%Al2O3
%LOI
2,560
62.0
0.13
3.5
2.3
4.8
85
2,450
61.9
0.13
3.7
2.3
4.8
25
56.9
0.05
5.6
1.8
10.8
60
56.6
0.05
5.5
1.8
11.2
1,740
61.7
0.06
3.2
1.7
6.3
1,810
61.7
0.06
3.2
1.7
6.3
Mt
%Fe
%Pc
Mt
%Fe
%Pc
849
42.7
0.06
50
–
–
–
As at 30 June 2023
Inferred Resources
Total Resources
BHP
interest
%
Total Resources
Mt
%Ash
%VM
%S
Mt
%Ash
%VM
%S
Mt
%Ash
%VM
%S
50
12.4
24.8
0.59
765
9.0
22.1
0.52
50
780
9.0
22.1
0.52
662
9.3
18.9
0.51
2,495
9.7
20.0
0.52
2,501
9.7
20.0
0.52
366
11.9
20.3
0.74
1,958
10.9
19.4
0.65
50
1,975
10.9
19.4
0.65
146
11.9
18.8
0.49
640
12.1
20.7
0.54
50
653
12.1
20.7
0.54
463
12.2
15.7
0.67
2,075
11.0
16.4
0.65
50
2,087
11.0
16.4
0.65
200
13.1
16.3
0.60
445
11.7
16.2
0.59
445
11.7
16.2
0.59
84
10.5
16.8
0.74
490
9.7
17.1
0.69
50
491
9.7
17.1
0.69
–
–
–
–
–
–
–
–
50
1,615
6.0
29.7
0.43
–
–
–
–
–
–
–
–
222
7.2
29.1
0.36
–
–
–
–
–
–
–
–
50
115
15.1
19.8
0.42
7. Approximate drill-hole spacings used to classify the reserves were:
Deposit
Proved Reserves
Probable Reserves
WAIO
50m × 50m
150m × 50m
Samarco
100m x 100m
200m x 200m
8. WAIO – Recovery was 100% for all ore types (tonnage basis).
9. WAIO – Iron ore is marketed for WAIO as Lump (direct blast furnace feed) and Fines (sinter plant feed).
10. WAIO – Cut-off grades used to estimate Ore Reserves range from 50–62%Fe for all material types. Ore delivered to process facility.
11. WAIO – Ore Reserves are all located on State Agreement mining leases that guarantee the right to mine. Across WAIO, State Government approvals (including environmental and
heritage clearances) are required before commencing mining operations in a particular area. Included in the Ore Reserves are select areas where one or more approvals remain
outstanding, but where, based on the technical investigations carried out as part of the mine planning process and company knowledge and experience of the approvals process, it is
expected that such approvals will be obtained as part of the normal course of business and within the time frame required by the current mine schedule.
12. WAIO – The decrease in CID ore type was due to changes in modifying factors and depletion.
13. Samarco – The increase in Ore Reserves was due to the re-instatement of mining permits.
229
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Energy Coal
Coal Resources
As at 30 June 2024
Measured Resources
Indicated Resources
Commodity deposit1,2
Mining
method
Coal
type
Mt
%Ash
%VM
%S
Kcal/
kg CV
Mt
%Ash
%VM
%S
Kcal/
kg CV
Energy coal operations
Mt Arthur Coal3
OC
Th
80
19.0
29.5
0.66
6,170
37
19.8
29.3
0.54
6,060
Energy coal project
Togara South
UG
Th
–
–
–
–
–
1,420
13.7
29.0
0.31
6,546
Coal Reserves
As at 30 June 2024
Proved
Reserves
Probable
Reserves
Total
Reserves
Proved Marketable Reserves
Probable Marketable Reserves
Commodity deposit
Mining
method
Coal
type
Mt
Mt
Mt
Mt
%Ash
%VM
%S
Kcal/
kg CV
Mt
%Ash
%VM
%S
Kcal/
kg CV
Energy coal operation
Mt Arthur Coal1,2,4,5,6,7,8 OC
Th
69
35
104
51
15.5
30.5
0.51
5,910
26
15.5
30.3
0.51
5,910
Steelmaking Coal
Coal Reserves
As at 30 June 2024
Proved
Reserves
Probable
Reserves
Total
Reserves
Proved
Marketable
Reserves
Probable
Marketable
Reserves
Commodity
deposit1,2,4,5,6,7
Mining
method
Coal
type
Mt
Mt
Mt
Mt
Mt
Steelmaking coal operations
CQCA JV
Goonyella Complex8
OC
Met
407
41
448
301
31
UG
Met
25
–
25
19
–
Peak Downs9
OC
Met/Th
695
243
938
422
124
Caval Ridge
OC
Met
186
104
290
110
64
Saraji9,10
OC
Met/Th
344
38
382
226
19
Saraji South11
OC
Met
71
3.1
74
45
2
Blackwater3
OC
Met/Th
–
–
–
–
–
Daunia3
OC
Met/Th
–
–
–
–
–
4. Geophysically logged, laboratory analysed, cored drillholes with a coal sample linear recovery greater than 90% are used to classify Coal Reserves. Drill-hole spacings vary between
seams and geological domains, as determined by geostatistical analysis where possible. The range of maximum drill-hole spacings used to classify the Coal Reserves were:
Deposit
Proved Reserves
Probable Reserves
Goonyella Complex
900m to 1,300m
1,750m to 2,400m
Peak Downs
200m to 2,250m
400m to 4,300m
Caval Ridge
350m to 1,300m
650m to 2,400m
Saraji
450m to 1,800m
800m to 3,600m
Saraji South
500m to 2,650m
1,000m to 4,200m
1. Cut-off criteria:
Deposit
Coal Resources
Coal Reserves
Mt Arthur Coal
≥ 0.3m seam thickness and ≤35% raw ash
≥ 0.3m seam thickness, ≤32%ash, ≥40% coal plant yield
Togara South
≥ 2.0m seam thickness and ≤25% raw ash
−
2. Qualities are reported on an air-dried in situ basis. Tonnages are reported as in situ.
3. Mt Arthur Coal – The decrease in Coal Resources was due to depletion.
6 Mineral Resources and Ore Reserves continued
230
BHP Annual Report 2024
As at 30 June 2023
Inferred Resources
Total Resources
BHP
interest
%
Total Resources
Mt
%Ash
%VM
%S
Kcal/
kg CV
Mt
%Ash
%VM
%S
Kcal/
kg CV
Mt
%Ash
%VM
%S
Kcal/
kg CV
6.5
23.3
28.8
0.49
5,700
124
19.5
29.4
0.61
6,110
100
143
19.4
29.5
0.62
6,110
201
16.1
28.5
0.32
6,271
1,620
14.0
29.0
0.31
6,510
100
1,620
14.0
29.0
0.31
6,510
30 June 2023
Total Marketable Reserves
BHP
interest
%
Total Marketable Reserves
Mt
%Ash
%VM
%S
Kcal/
kg CV
Mt
%Ash
%VM
%S
Kcal/
kg CV
77
15.5
30.4
0.51
5,910
100
92
15.7
30.4
0.53
5,890
As at 30 June 2023
Total Marketable Reserves
BHP
interest
%
Total Marketable Reserves
Mt
%Ash
%VM
%S
Mt
%Ash
%VM
%S
332
8.9
22.5
0.52
50
343
8.9
22.5
0.52
19
9.0
22.9
0.54
24
9.0
22.9
0.54
546
10.5
21.9
0.64
50
556
10.5
21.9
0.64
174
10.5
22.4
0.57
50
181
10.5
22.4
0.57
245
10.5
18.0
0.64
50
265
10.5
18.1
0.64
47
9.6
17.6
0.65
50
55
9.6
17.6
0.65
–
–
–
–
50
183
8.9
26.0
0.41
–
–
–
–
50
67
8.2
20.4
0.34
5. Product recoveries for the operations were:
Deposit
Product recovery
Goonyella Complex
74%
Peak Downs
53%
Caval Ridge
51%
Saraji
60%
Saraji South
54%
6. Total Coal Reserves were at 4% moisture content when mined. Total Marketable Reserves were at a product specification moisture content (9.5-10% Goonyella Complex; 10.5% Peak
Downs and Caval Ridge; 10.1% Saraji, 10-11% Saraji South) and at an air-dried quality basis for sale after the beneficiation of the Total Coal Reserves.
7. Coal delivered to handling plant.
8. Goonyella Complex – The decrease in Coal Reserves was mainly due to depletion.
9. Percentage of secondary thermal products for Reserves with coal type Met/Th are: Peak Downs 6% and Saraji 1%. Contributions may vary year on year based on market demand.
10. Saraji – The decrease in Coal Reserves was mainly due to changes in economic parameters.
11. Saraji South – The decrease in Coal Reserves was mainly due to changes in economic parameters.
4. Mt Arthur Coal – Approximate drill-hole spacings used to classify the reserves were:
Deposit
Proved Reserves
Probable Reserves
Mt Arthur Coal
200m to 800m (geophysical logged, ≥95% core recovery)
400m to 1,550m (geophysical logged, ≥95% core recovery)
5. Mt Arthur Coal – Overall product recovery for the operation was 67%.
6. Mt Arthur Coal – Moisture content when mined is 8.5%. Moisture content for Marketable Reserves is 9.5%.
7. Mt Arthur Coal – Coal delivered to handling plant where it may be washed through a coal handling and preparation plant or sold as raw product.
8. Mt Arthur Coal – The decrease in Marketable Coal Reserves was due to depletion.
231
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Potash
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured Resources
Indicated Resources
Inferred Resources
Total Resources
BHP
interest
%
Total Resources
Commodity
deposit
Ore
type
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Potash project
Jansen1,2,3,4,5
LPL
5,230
25.6
7.7
0.08
–
–
–
–
1,280
25.6
7.7
0.08
6,510
25.6
7.7
0.08
100
6,510
25.6
7.7 0.08
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Reserves
Probable Reserves
Total Reserves
BHP
interest
%
Total Reserves
Commodity
deposit
Ore
type
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Mt
%K2O
%Insol.
%MgO
Potash project
Jansen1,4,5,6
LPL
–
–
–
–
1,070
24.9
7.5
0.10
1,070
24.9
7.5
0.10
100
1,070
24.9
7.5
0.10
1. Mineral Resources and Ore Reserves are stated for the Lower Patience Lake (LPL) potash unit.
2. Mineral Resources are reported using a seam thickness of 3.96m from the top of 406 clay seam.
3. Measured Resources grade has been assigned to Inferred Resources.
4. %K2O grade is equivalent to %KCl content using a mineralogical conversion factor of 1.583.
5. Tonnages are reported on an in situ moisture content basis, estimated to be 0.3%.
6. Ore Reserves are based on an expected metallurgical recovery of 88%.
Nickel
Mineral Resources
As at 30 June 2024
As at 30 June 2023
Measured
Resources
Indicated
Resources
Inferred
Resources
Total
Resources
BHP
interest
%
Total
Resources
Commodity
deposit1
Ore type
Mt
%Ni
Mt
%Ni
Mt
%Ni
Mt
%Ni
Mt
%Ni
Nickel West operations
Leinster
OC Disseminated Sulphide
4.1
0.72
77
0.58
52
0.64
133
0.60
100
133
0.60
OC Massive Sulphide
0.25
4.4
1.0
4.9
0.37
4.7
1.6
4.8
1.6
4.8
UG Disseminated Sulphide
16
1.8
15
1.4
4.3
1.2
36
1.6
36
1.5
UG Massive Sulphide
0.70
5.4
2.2
5.6
1.2
4.4
4.1
5.2
4.2
5.2
Oxide
–
–
–
–
5.1
1.8
5.1
1.8
5.1
1.8
SP Oxidised
–
–
–
–
1.9
1.7
1.9
1.7
1.9
1.7
Mt Keith
OC Disseminated Sulphide
132
0.54
67
0.52
24
0.52
223
0.53
100
224
0.53
Cliffs2
UG Disseminated Sulphide
–
–
4.5
0.86
0.84
1.1
5.3
0.89
100
8.0
0.92
UG Massive Sulphide
0.72
3.5
0.82
3.8
0.52
3.9
2.1
3.7
2.0
3.7
Yakabindie
OC Disseminated Sulphide
148
0.61
88
0.61
148
0.61
384
0.61
100
388
0.61
Nickel West projects
Honeymoon Well OC Disseminated Sulphide
–
–
138
0.62
6.5
0.66
144
0.62
100
144
0.62
UG Disseminated Sulphide
9.6
0.69
18
0.75
3.9
0.72
31
0.73
31
0.74
UG Massive Sulphide
0.47
5.6
0.82
6.2
0.15
6.7
1.4
6.1
1.4
6.3
Jericho3
OC Disseminated Sulphide
–
–
19
0.57
80
0.55
98
0.56
100
86
0.55
Nickel copper projects
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Nebo
OC Sulphide
–
–
–
49
0.34
0.32
1.1
0.35
0.38
50
0.34
0.32
100
50
0.34
0.32
Babel
OC Sulphide
91
0.31
0.36
190
0.28
0.31
58
0.32
0.35
340
0.30
0.33
100
340
0.30
0.33
6 Mineral Resources and Ore Reserves continued
232
BHP Annual Report 2024
Nickel
Ore Reserves
As at 30 June 2024
As at 30 June 2023
Proved Reserves
Probable Reserves
Total Reserves
BHP
interest
%
Total Reserves
Commodity
deposit4
Ore type
Mt
%Ni
Mt
%Ni
Mt
%Ni
Mt
%Ni
Nickel West operations
Leinster
OC
–
–
–
–
–
–
100
1.3
0.58
UG
–
–
–
–
–
–
8.5
1.5
Mt Keith
OC
–
–
–
–
–
–
100
75
0.58
Cliffs
UG
–
–
–
–
–
–
100
0.51
2.0
Yakabindie
OC
–
–
–
–
–
–
100
164
0.65
Nickel copper projects
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Mt
%Ni
%Cu
Nebo
OC
–
–
–
–
–
–
–
–
–
100
36
0.37
0.35
Babel
OC
–
–
–
–
–
–
–
–
–
100
236
0.30
0.34
1. Cut-off criteria:
Deposit
Ore type
Mineral Resources
Leinster
OC Disseminated Sulphide
≥ 0.40%Ni
OC Massive Sulphide
Stratigraphic
UG Disseminated Sulphide
Variable between stratigraphic for block cave and ≥1.0%Ni
UG Massive Sulphide
Stratigraphic
Oxide
≥ 1.2%Ni
Mt Keith
OC Disseminated Sulphide
Variable between 0.35%Ni and 0.40%Ni based on mineralogy
Cliffs
UG Disseminated Sulphide
≥ 0.40%Ni
UG Massive Sulphide
Stratigraphic
Yakabindie
OC Disseminated Sulphide
≥ 0.35%Ni
Honeymoon Well
OC Disseminated Sulphide
≥ 0.35%Ni
UG Disseminated Sulphide
≥ 0.40%Ni
UG Massive Sulphide
Stratigraphic
Jericho
OC Disseminated Sulphide
≥ 0.40%Ni
Nebo & Babel
OC Sulphide
Cut-off based on NSR value of A$13/t which represents mill-limited break-even cut-off inclusive of
processing and re-handling costs per total tonne mined
2. Cliffs – The decrease in UG Disseminated Sulphide ore type was mainly due to depletion. The increase in UG Massive Sulphide ore type was due to a resource estimate update informed
by additional drilling.
3. Jericho – The increase in UG Disseminated Sulphide ore type was mainly due to a resource estimate update informed by additional drilling.
4. Nickel Ore Reserves – The decrease in Ore Reserves was mainly due to changes in macro-economics and are subject to further studies.
233
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
7 People – performance data1,2,3
Table 1 – Workforce data and diversity by region FY2024
Region
Number and
% of employees
Average number
and % of contractors2
Employees by gender number and %
Male
Male %
Female
Female %
Asia
1,651
4.0
4,335
8.5
625
37.9
1,026
62.1
Australia
31,155
76.2
18,737
36.9
20,501
65.8
10,654
34.2
Europe
84
0.2
9
0.0
38
45.2
46
54.8
North America
693
1.7
1,537
3.0
362
52.2
331
47.8
South America
7,289
17.8
26,097
51.5
4,186
57.4
3,103
42.6
Total
40,872
100.0
50,715
100.0
25,712
62.9
15,160
37.1
Table 2 – Employees by category and diversity for FY2024
Employment
category
Gender
Region
Total
% of Total
Male
Female
Asia
Australia
Europe
North America South America
Full time
38,962
95.3
25,054
13,908
1,613
29,601
77
676
6,995
Part time
1,132
2.8
444
688
3
1,121
3
5
0
Fixed term full time
672
1.6
182
490
35
327
4
12
294
Fixed term part time
11
0.0
3
8
0
11
0
0
0
Casual
95
0.2
29
66
0
95
0
0
0
Total
40,872
100.0
25,712
15,160
1,651
31,155
84
693
7,289
Table 3 – Employees by category and diversity for FY2024
Category
Gender
Gender %
Age group %
Total
Male
Female
Male %
Female %
Under 30
30–39
40–49
50+
Senior leaders
262
158
104
60.3
39.7
0.0
6.9
51.9
41.2
Managers
1,369
828
541
60.5
39.5
0.4
23.4
51.2
25.1
Supervisory and
professional
18,070
10,723
7,347
59.3
40.7
9.2
39.3
32.9
18.6
Operators and
general support
21,171
14,003
7,168
66.1
33.9
20.1
28.7
25.2
26.0
Total
40,872
25,712
15,160
62.9
37.1
14.5
33.0
29.7
22.8
Board and executive management diversity
In accordance with UK Listing Rule 14.3.30(2), these tables set out the Board and executive management diversity data as at 30 June 2024.
Gender identity
Region
Number of Board
members
Percentage
of the Board
Number of senior positions
on the Board (CEO,
CFO, SID and Chair)4
Number in executive
management5
Percentage of executive
management5
Men
6
60%
3
5
45%
Women
4
40%
–
6
55%
Not specified/
prefer not to say
0
0%
–
0
0%
Ethnic background
Region
Number of Board
members
Percentage
of the Board
Number of senior
positions on the Board4
Number in executive
management5
Percentage of executive
management5
White British or other
White (including minority-
white groups)
8
80%
2
7
64%
Mixed/Multiple
ethnic groups
1
10%
1
3
27%
Asian/Asian British
1
10%
–
1
9%
Black/
African/Caribbean/
Black British
0
0%
–
0
0%
Other ethnic group
0
0%
–
0
0%
Not specified/prefer
not to say
0
0%
–
0
0%
1. Based on a ‘point-in-time’ snapshot of employees as at 30 June 2024, including employees on extended absence, which was 1,146 in FY2024. There is no significant seasonal variation in
employment numbers.
2. Contractor data is collected from internal organisation systems. Contractor data is averaged for a 10-month period, July 2023 to April 2024.
3. Figures reported do not include employees and contractors of BHP Billiton Mitsubishi Alliance Blackwater and Daunia operations, sold to Whitehaven Coal during FY2024. Figures
reported do not include employees and contractors of the operations located in Brazil, that were acquired as part of the OZ Minerals acquisition completed during FY2023.
4. These tables are set out in the format prescribed by the UK Listing Rules. For BHP, the senior Board positions are the CEO, Senior Independent Director and Chair as the CFO is not a
member of the Board, in line with market practice for Australian listed companies.
5. In accordance with the UK Listing Rules, executive management includes the Executive Leadership Team (the most senior executive body below the Board) and the Group Company
Secretary, excluding administrative and support staff.
234
BHP Annual Report 2024
The Group is involved from time to time in legal proceedings and
government investigations, including claims and pending actions against
it seeking damages or clarification or prosecution of legal rights and
regulatory inquiries regarding business practices. Insurance or other
indemnification protection may offset the financial impact on the Group
of a successful claim.
This section summarises the significant legal proceedings, investigations,
and associated matters in which the Group is currently involved or has
finalised since our last Annual Report.
Legal proceedings relating to the failure of the
Fundão tailings dam at the Samarco iron ore
operations in Minas Gerais and Espírito Santo
(Samarco dam failure)
The Group is engaged in numerous legal proceedings relating to the
Samarco dam failure. While there has been progress in priority areas,
such as individual compensation and indemnification for the damage
caused by the dam failure, it is not possible at this time to provide a range
of possible outcomes for all proceedings or a reliable estimate of potential
future exposures. BHP Billiton Brasil Ltda. (BHP Brasil) is a party to
approximately 42 ongoing public civil claims, of which 20 are suspended.
The most significant of these proceedings are summarised in this section
Additional information 8. There are numerous additional lawsuits against
Samarco relating to the dam failure to which the Group is not a party.
Public civil actions brought by federal prosecutors
and agreements
Several legal proceedings have been brought by government authorities
and civil associations claiming environmental and socioeconomic damages
and a number of specific remediation measures as a result of the Samarco
dam failure, including proceedings in which BHP Brasil is a defendant.
Among the claims brought against BHP Brasil are:
– the public civil action brought by the Federal Government of Brazil,
states of Espírito Santo and Minas Gerais and other public authorities
against Samarco and its shareholders, BHP Brasil and Vale S.A. (Vale)
in November 2015, seeking their joint liability for the full reparation of
environmental and socioeconomic damages arising from the Samarco
dam failure, in the amount of R$20 billion (approximately US$3.6 billion1)
(the R$20 billion Public Civil claim)
– the public civil action brought by the Brazilian Federal Public
Prosecutors’ Office against Samarco, BHP Brasil and Vale, as well as
other public entities in May 2016, seeking R$155 billion (approximately
US$27.9 billion1) for reparation, compensation and social, individual and
collective moral damages in relation to the Samarco dam failure (the
R$155 billion Federal Public Prosecutors’ Office claim)
A number of other proceedings to which BHP Brasil is a party are currently
suspended due to their connection with the R$20 billion Public Civil claim
and R$155 billion Federal Public Prosecutors’ Office claim.
Samarco, Vale, BHP Brasil, and other public authorities have entered into
agreements for the remediation of damages resulting from the Samarco
dam failure.
– In March 2016, Samarco, BHP Brasil and Vale (Companies), entered
into a Framework Agreement with the Federal Government of Brazil,
the states of Espírito Santo and Minas Gerais and certain other public
authorities to establish a foundation (Renova Foundation) to develop
and execute environmental and socioeconomic programs (Programs)
to remediate and provide compensation for damages caused by
the Samarco dam failure. The term of the Framework Agreement
is 15 years, renewable for periods of one year successively until all
obligations under the Framework Agreement have been performed.
Under the Framework Agreement, Samarco is responsible, as a primary
obligor, for funding Renova Foundation’s annual calendar year budget
for the duration of the Framework Agreement. The amount of funding for
each calendar year will depend on the remediation and compensation
projects to be undertaken in a particular year and judicial decisions.
To the extent that Samarco does not meet its funding obligations
under the Framework Agreement, BHP Brasil and Vale have funding
obligations under the Framework Agreement, as secondary obligors,
each in proportion to its 50 per cent shareholding in Samarco in this
section Additional information 8.
– In June 2018, Samarco, BHP Brasil, Vale, the other parties to the
Framework Agreement, the Public Prosecutors’ Office2 and the Public
Defense Office3 entered into a Governance Agreement (ratified by the
Court on 8 August 2018), which settled the merits of the R$20 billion
Public Civil claim and established a process to renegotiate the Programs
over two years to progress settlement of the R$155 billion Federal
Public Prosecutors’ Office claim. Under the Governance Agreement,
renegotiation of the Programs is based on certain agreed principles,
including full reparation consistent with Brazilian law, the requirement for
a technical basis for any proposed changes, consideration of findings
from experts appointed by Samarco, BHP Brasil and Vale, consideration
of findings from experts appointed by prosecutors and consideration of
feedback from impacted communities.
In February 2021, the Minas Gerais State Prosecutor filed a public civil
action against Samarco, BHP Brasil, Vale and Renova Foundation
seeking the dissolution of Renova Foundation. The plaintiffs are
seeking R$10 billion (approximately US$1.8 billion1) for moral damages.
An injunction for the immediate intervention in Renova Foundation was
also sought, alleging the need to preserve information and documents
produced by Renova Foundation to evaluate criminal and civil
responsibilities. A ruling on the merits is pending.
Since 7 January 2020, the Federal Court has issued several decisions
creating 14 enforcement proceedings and ruled on several proceedings
linked to the R$20 billion Public Civil claim and R$155 billion Federal Public
Prosecutors’ Office claim, including dismissal without prejudice of some
of the requests and proceedings. Issues covered by these proceedings
include, for example, environmental recovery, tailings management, human
health risk and ecological risk, resettlement of affected communities,
infrastructure and development, registration of certain impacted individuals
under the Programs, monthly emergency financial aid, loss of profit and
indemnities for people impacted by the Samarco dam failure, resumption
of economic activities, water supply for human consumption and hiring of
technical advisers to impacted people, Renova Foundation’s governance
and management system, and new areas allegedly affected by the dam
failure, including freezing orders requests.
In October 2023, the Federal Court judge rendered a decision determining
that the Interfederative Committee (IFC), which is an external and
independent body responsible for supervising Renova Foundation and
its programs, holds the final authority to determine technical issues
concerning the reparation. This decision was confirmed by the Federal
Court of Appeals in April 2024, which upheld that Renova Foundation
and the Companies must comply with all IFC’s directions, which are
presumed to be valid and must prevail, unless the Companies and Renova
Foundation can present clear proof that they are illegal. In January
2024, the Federal Court rendered a decision (25 January decision) that
found Samarco, Vale and BHP Brasil jointly and severally liable to pay
collective moral damages in the amount of R$47.6 billion (approximately
US$8.6 billion1) (to be adjusted for interest and inflation). The decision
ordered that no payment should occur until the decision is final and
unappealable. In March 2024, the Federal Court found that the correct
historical amount due of collective moral damages is R$46.7 billion
(instead of R$47.6 billion). Samarco, Vale, and BHP Brasil appealed
the decision challenging the merits and amount of damages. In May
2024, the various government parties filed interlocutory appeals to the
25 January decision seeking increased damages and the ability to enforce
the judgment prior to it becoming final. The Federal Court judge and the
Federal Court of Appeals issued rulings denying the requests for early
enforcement. On 27 June 2024, the Federal Court judge dismissed without
prejudice certain claims directed at the Companies in the R$155 billion
Federal Public Prosecutors’ Office claim, on the grounds that they are
already covered by previous agreements and decisions (such as the
Framework Agreement). This decision did not dismiss the collective moral
damages decision outlined above and is subject to appeal.
In June 2024, the Public Prosecutors’ Office and the Public Defense Office
filed a public civil claim against the Companies and Renova Foundation for
alleged gender discrimination against women in the reparation process.
They requested certain changes in Renova Foundation’s registration
program, damages and an injunctive relief to implement emergency
measures. On 14 August 2024, the Federal Court partially granted the
injunctive relief request and ordered Renova Foundation to allow the
review of the registration of all women who are either registered or have
pending registration applications in Renova Foundation. The decision is
subject to appeal.
8 Legal proceedings
1. Based on the exchange rate as at 30 June 2024.
2. The Public Prosecutors’ Office includes the Federal, State of Minas Gerais and State of Espírito Santo public prosecutors’ offices.
3. The Public Defense Office includes the Federal, State of Minas Gerais and State of Espírito Santo public defense offices.
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Additional Information
The parties have been engaging in negotiations to seek a definitive and
substantive settlement of claims relating to the Samarco dam failure.
The negotiations are ongoing and the outcome is uncertain. The potential
liabilities resulting from current and future claims, lawsuits, proceedings,
enforcement actions and Framework Agreement obligations relating to
the Samarco dam failure, together with the potential cost of implementing
remedies sought in the various proceedings, cannot be estimated with
certainty at this time and there is a risk that outcomes may be materially
higher or lower than amounts reflected in BHP Brasil’s provision and
contingencies for the Samarco dam failure.
For more information on BHP Brasil’s provision and contingencies
for the Samarco dam failure refer to Financial Statements note 4
‘Significant events – Samarco dam failure’
Civil public actions commenced by the State
Prosecutors’ Office in the state of Minas Gerais
(Mariana CPA cases)
The State Prosecutors of Mariana have commenced several civil public
actions (CPAs) against Samarco, BHP Brasil and Vale.
On 10 December 2015, the State Prosecutors’ Office in the state of Minas
Gerais filed a CPA against Samarco, BHP Brasil and Vale before the State
Court in Mariana claiming indemnification (amount not specified) for moral
and material damages to an unspecified group of individuals affected by
the Samarco dam failure, including the payment of costs for housing and
social and economic assistance (CPA Mariana I).
On 2 October 2018, the parties reached a settlement dismissing the claim,
which was ratified by the Court. Under this settlement, Renova Foundation
has reached more than 100 individual agreements with impacted families
in Mariana for the payment of damages.
In connection with CPA Mariana I, the State Prosecutors (Minas Gerais)
started enforcement proceedings against Samarco, BHP Brasil and Vale.
There are six enforcement proceedings under way, which among other
things seek (i) to set a deadline for completion of resettlement of the
residents of Mariana’s districts and for fines to be imposed for delays to
resettlement; (ii) to set the final term that will allow new households to join
the resettlement; (iii) payment of compensation to affected individuals
for delivery of houses below standard; (iv) to guarantee access to water
sources for the families of the collective resettlements; (v) payment of
fines for alleged delays in presenting proposals and making payments
to affected individuals; and (vi) payment of compensation to impacted
individuals who allege they have not yet received compensation and a
penalty for the alleged delays in making such payments.
In addition to CPA Mariana I, the State Prosecutors (Minas Gerais)
commenced other CPAs in Mariana against Samarco, BHP Brasil, Vale
and, in some cases, Renova Foundation. The claims presented in those
CPAs are related to damages that, according to the State Prosecutors,
are not covered by CPA Mariana I.
As to those CPAs, there are proceedings that (i) have been settled
by the parties, including BHP Brasil, (ii) have been dismissed or (iii)
are still pending (9 in total). Renova Foundation is responsible for any
pending obligations set forth in the settlement agreements relating to the
CPAs and for complying with future awards eventually rendered in the
remaining CPAs.
Civil public action commenced by Associations
concerning the use of Tanfloc for water treatment
(R$120 billion Associations claim)
On 28 October 2021, the Vila Lenira Residents Association, State of
Espírito Santo Rural Producers and Artisans Association, Colatina Velha
Neighbourhood Residents Association, and United for the Progress of
Palmeiras Neighbourhood Association filed a lawsuit against Samarco,
BHP Brasil and Vale and others, including the State of Minas Gerais, the
State of Espírito Santo and the Federal Government. The plaintiffs allege
the defendants carried out a clandestine study on the citizens of the
locations affected by the Samarco dam failure, using Tanfloc, a tannin-
based flocculant/coagulant that is currently used for wastewater treatment
applications. The plaintiffs claim this product allegedly put the population at
risk due to its alleged experimental qualities.
On 17 November 2023, the Federal Court dismissed the lawsuit without
prejudice due to the Associations’ lack of standing to sue and the
defectiveness of the complaint. The Associations filed a motion for
clarification and the decision is still subject to appeal.
Indigenous Communities – Civil public action for
partial nullity of agreements
In February 2024, the Federal Prosecutor’s Office filed a collective lawsuit
against the Companies, alleging that the settlement agreements entered
into between Renova Foundation and the Indigenous communities of
Tupiniquim Guarani, Mboapy Pindó, and Comboios contain nullities
regarding the release of monthly Emergency Subsistence Aid (ASE), and
requested an injunction ordering the Companies to continue to pay ASE
to the Indigenous Peoples of the Tupiniquim, Comboios, and Caieiras
Velha II, in the Indigenous Lands of Aracruz, State of Espírito Santo in
Brazil, following certain new rules, including an increase in the monthly
payment amount. On 4 March 2024, the Federal Court granted the
Federal Prosecutor’s request for a preliminary injunction, which was later
overturned in April 2024. As of 30 June 2024, a final decision on the merits
is pending.
Other civil proceedings in Brazil
As noted above, BHP Brasil has been named as a defendant in numerous
lawsuits relating to the Samarco dam failure. In addition, government
inquiries and investigations relating to the Samarco dam failure have
been commenced by the Brazilian Government’s representatives and are
ongoing, including studies regarding impact of the dam failure.
BHP Brasil’s potential liabilities, if any, resulting from other pending and
future claims, lawsuits and enforcement actions relating to the Samarco
dam failure, together with the potential cost of implementing remedies
sought in the various proceedings, cannot be reliably estimated at this
time. Ultimately, these could have a material adverse impact on BHP’s
business, competitive position, cash flows, prospects, liquidity and
shareholder returns.
For more information on the Samarco dam failure refer to OFR 7
As of 30 June 2024, Samarco had been named as a defendant in more
than 87,200 small claims for moral damages in which people argue their
public water service was interrupted for between five and 10 days, of which
approximately 38,000 claims are still active. BHP Brasil is a co-defendant
in more than 24,300 of these cases.
The Brazilian Code of Civil Procedure provides that repetitive claims can
be settled through a proceeding known as the Resolution of Repetitive
Demands Procedure (IRDR). Under the IRDR, a court will hear a ‘pilot
case’ representative of such recurring legal matters and the judgment in
that decision will set a precedent for the resolution of similar cases in that
jurisdiction. An IRDR has been established in Minas Gerais and the court
in the pilot case has ruled that the mandatory parameter for resolution
of claims will be the payment of R$2,000 (approximately US$4001) per
individual claim for moral damages due to the suspension of public water
supply. Appeals before higher courts were filed. Meanwhile, as of 30 June
2024, Samarco has reached settlement in more than 18,200 individual
cases. On 21 May 2024, the Superior Court of Justice granted the State
Prosecutor of Minas Gerais request to declare null the IRDR due to the
alleged failure to satisfy the procedural requirements necessary for its
formal admissibility.
Samarco’s judicial reorganisation
On 9 April 2021, Samarco filed for judicial reorganisation (JR) with the
Second Business State Court for the Belo Horizonte District of Minas
Gerais (JR Court). On 28 July 2023, Samarco and one of its supporting
creditors filed a consensual plan (Consensual Plan), which provided,
among other things, that the agreements entered into between Samarco
and Brazilian public authorities in connection with the Samarco dam failure
will not be impaired by the Consensual Plan and Samarco will continue
to have the primary obligation to fund Renova Foundation. In addition,
pursuant to the Consensual Plan, between 2024 and full payment of the
debt owed by Samarco to the holders of the senior notes, Samarco is
permitted to fund remediation activities to Renova Foundation up to a
US$1 billion cap. This means that BHP Brasil and Vale will pay directly
or fund Samarco in the form of common equity in respect of remediation
obligations, including payments to Renova Foundation, in excess of
the US$1 billion cap. The JR Court confirmed the Consensual Plan on
1 September 2023. Following the confirmation of the Consensual Plan and
satisfaction of other conditions precedent set forth therein, the definitive
documentation formalising the consummation of Samarco’s financial debt
restructuring was executed on 1 December 2023. Samarco has paid the
majority of labour claims, suppliers and other non-financial creditors as
provided in the Consensual Plan. BHP Brasil participated in Samarco’s JR
proceeding in its capacities as a shareholder and creditor of Samarco.
8 Legal proceedings continued
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BHP Annual Report 2024
Class or group action claims
BHP Group Limited and certain of its subsidiaries have been named
as defendants in class or group action claims related to the Samarco
dam failure. The most significant of those claims are summarised in the
bullets below.
– BHP Group Limited is named as a defendant in a shareholder class
action in the Federal Court of Australia on behalf of persons who
acquired shares in BHP Group Limited or BHP Group Plc (now BHP
Group (UK) Ltd) in periods prior to the Samarco dam failure. The amount
of damages sought in the class action is unspecified. A trial is scheduled
to commence in September 2025.
– BHP Group (UK) Ltd (formerly BHP Group Plc) and BHP Group
Limited are named as defendants in group action claims for damages
filed in the courts of England. These claims were filed on behalf of
certain individuals, municipalities, businesses and communities in
Brazil allegedly impacted by the Samarco dam failure. The amount of
damages sought in these claims is unspecified. In December 2022, the
BHP parties filed their defence and a contribution claim against Vale.
The contribution claim contended that if the BHP parties’ defence is not
successful and they are ordered to pay damages to the claimants, Vale
should contribute to any amount payable. A trial in relation to the BHP
parties’ liability for the dam failure is set to commence in October 2024.
– In January 2024, the BHP parties were served with a new group action
filed in the courts of England on behalf of additional individuals and
businesses in Brazil allegedly impacted by the Samarco dam failure.
The new action makes broadly the same claims as the original action
and the amount of damages sought in these claims is unspecified.
In March 2024, a claim was filed in the Netherlands against Vale S.A.
and a Dutch subsidiary of Samarco for compensation relating to the
Fundão dam failure. The claim filed in the Netherlands indicates that
these claims were filed on behalf of certain individuals, municipalities,
businesses, associations, and faith-based institutions allegedly impacted
by the Samarco dam failure who are not also claimants in the UK
group action claims referred to above. BHP is not a defendant in the
Netherlands proceedings.
In July 2024, BHP Group Limited, BHP Group (UK) Ltd, BHP Brasil Ltda
and Vale S.A. entered into an agreement – without any admission of
liability in any proceedings – whereby: (i) Vale will pay 50 per cent of any
amounts that may be payable by the BHP Defendants to the claimants in
the UK group action claims (or by the BHP Defendants, BHP Brasil or their
related parties to claimants in any other proceedings in Brazil, England or
the Netherlands covered by the agreement); and (ii) BHP Brasil will pay
50 per cent of any amounts that may be payable by Vale to the claimants in
the Netherlands proceedings (or by Vale or its related parties to claimants
in any other proceedings in Brazil, England or the Netherlands covered
by the agreement). The agreement reinforces the terms of the Framework
Agreement entered into in 2016 which require BHP Brasil and Vale to
each contribute 50 per cent to the funding of the Renova Foundation for
compensation of persons impacted by the Fundão dam failure where
Samarco is unable to contribute that funding. The BHP Defendants
withdrew the contribution claim against Vale in England as it is no longer
necessary given this agreement.
Criminal charges
On 20 October 2016, the Federal Prosecutors’ Office in Brazil filed
criminal charges against Samarco, BHP Brasil, Vale and certain of their
employees and former employees in the Federal Court of Ponte Nova,
Minas Gerais. On 3 March 2017, BHP Brasil and the charged employees
and former employees of BHP Brasil (Affected Individuals) filed their
preliminary defences. The Federal Court granted Habeas Corpus petitions
in favour of all eight Affected Individuals, terminating the charges against
those individuals. The Federal Prosecutors’ Office appealed seven of the
decisions with hearings of the appeals still pending. BHP Brasil remains
a defendant in the criminal proceeding. The evidentiary phase has been
concluded and Federal Prosecutors and defendants are expected to
present written closing arguments by August 2024. BHP Brasil rejects
the charges against BHP Brasil and the Affected Individuals and expects
to defend against the charges and fully support each of the Affected
Individuals in their defences of the charges.
In several civil proceedings the Federal Court has stated that Renova
Foundation has allegedly obstructed the adoption of reparation measures.
The judge ordered an official notice to be sent to the Prosecutor’s Office
to communicate his view on the need for an investigation into Renova
Foundation’s conduct. On 10 May 2024 the Public Prosecutor’s Office
publicly announced that they will conduct an investigation into Renova
Foundation, without specifying if civil or criminal liability for Renova
Foundation, BHP Brasil, Vale, Samarco or any individual will be sought.
Legal proceedings unrelated to the
Samarco dam failure
South African class action claim
On 14 August 2023, an application to commence a class action was filed in
the High Court of South Africa on behalf of current and former mineworkers
(and the dependants of certain mineworkers). The mineworkers are alleged
to have contracted coal mine dust lung disease and to have worked on
specified coal mines in South Africa between 1965 and the filing date.
‘BHP Billiton Plc Incorporated’ is named as a respondent, alongside
South32 SA Holdings Limited and Seriti Power (Proprietary) Limited.
The claims against the BHP entity relate to the period from 1999 to 2015.
The relevant businesses were divested in 2015 as part of the demerger of
South32 Limited.
The matter is currently at the certification stage whereby the South African
Court must first grant permission for a class action to proceed. BHP,
South32 and Seriti have filed notices opposing certification. The amount
of damages sought by the Applicants on behalf of the putative class is
unspecified. BHP has notified South32 that it considers any liability to the
Applicants arising from the class action to be indemnified under the terms
of the Separation Deed agreed as part of the demerger of South32 in 2015.
1. Based on the exchange rate as at 30 June 2024.
2. The Public Prosecutors’ Office includes the Federal, State of Minas Gerais and State of Espírito Santo public prosecutors’ offices.
3. The Public Defense Office includes the Federal, State of Minas Gerais and State of Espírito Santo public defense offices.
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Additional Information
9.1 History and development
BHP Group Limited (formerly BHP Billiton Limited, before then
BHP Limited and, before that, The Broken Hill Proprietary Company
Limited) was incorporated in 1885 and is registered in Australia with
ABN 49 004 028 077.
9.2 Markets
As at the date of this Annual Report, BHP Group Limited has a primary
listing on the Australian Securities Exchange (ASX) (ticker BHP) in
Australia, an international secondary listing on the London Stock Exchange
(LSE) (ticker BHP), a secondary listing on the Johannesburg Stock
Exchange (ticker BHG) and is listed on the New York Stock Exchange
(NYSE) in the United States.
Trading on the NYSE is in the form of American Depositary Receipts
(ADRs) evidencing American Depositary Shares (ADSs), with each ADS
representing two ordinary shares of BHP Group Limited. Citibank N.A.
(Citibank) is the Depositary for the ADS program. BHP Group Limited’s
ADSs have been listed for trading on the NYSE (ticker BHP) since
28 May 1987.
9.3 Organisational structure
BHP Group Limited is the ultimate parent company of all subsidiaries within
the BHP Group.
From June 2001 to January 2022, BHP operated under a Dual Listed
Company (DLC) structure, with two separate parent companies (BHP
Group Limited and BHP Group Plc (now BHP Group (UK) Limited) and
their respective subsidiaries operating as a single unified economic entity
run by a unified Board and senior executive management team.
On 31 January 2022, BHP unified its DLC structure, following which
BHP Group Plc (now BHP Group (UK) Limited) became a subsidiary of
BHP Group Limited.
9.4 Constitution
This section sets out a summary of BHP Group Limited’s Constitution, as
well as other related arrangements under applicable laws and regulations.
Provisions of the Constitution of BHP Group Limited can be amended
only where such amendment is approved by special resolution. A special
resolution is a resolution that is passed by at least 75 per cent (i.e. at least
three quarters) of the votes cast by BHP shareholders entitled to vote being
in favour of the resolution.
Board
The Board may exercise all powers of BHP, other than those that are
reserved for BHP shareholders to exercise in a general meeting.
Power to issue securities
Under the Constitution, the Board has the power to issue any BHP shares
or other securities (including redeemable shares) with preferred, deferred
or other special rights, obligations or restrictions. The Board may issue
shares on any terms it considers appropriate, provided that:
– the issue does not affect any special rights of shareholders
– if required, the issue is approved by shareholders
– if the issue is of a class other than ordinary shares, the rights attaching
to the class are expressed at the date of issue
Restrictions on voting by Directors
A Director may not vote in respect of any contract or arrangement or any
other proposal in which they have a material personal interest except in
certain prescribed circumstances, including (subject to applicable laws)
where the material personal interest:
– arises because the Director is a shareholder of BHP and is held in
common with the other shareholders of BHP
– arises in relation to the Director’s remuneration as a Director of BHP
– relates to a contract BHP is proposing to enter into that is subject to
approval by the shareholders and will not impose any obligation on BHP
if it is not approved by the shareholders
– arises merely because the Director is a guarantor or has given an
indemnity or security for all or part of a loan, or proposed loan, to BHP
– arises merely because the Director has a right of subrogation in relation
to a guarantee or indemnity referred to above
– relates to a contract that insures or would insure the Director against
liabilities the Director incurs as an officer of BHP, but only if the contract
does not make BHP or a related body corporate the insurer
– relates to any payment by BHP or a related body corporate in respect of
an indemnity permitted by law, or any contract relating to or containing
such an indemnity, or
– is in a contract or proposed contract with or for the benefit of or on behalf
of a related body corporate and arises merely because the Director is a
director of a related body corporate
If a Director has a material personal interest and is not entitled to vote
on a proposal, they will not be counted in the quorum for any vote on a
resolution concerning the material personal interest.
Loans by Directors
Any Director may lend money to BHP at interest with or without security
or may, for a commission or profit, guarantee the repayment of any money
borrowed by BHP and underwrite or guarantee the subscription of shares
or securities of BHP or of any corporation in which BHP may be interested
without being disqualified as a Director and without being liable to account
to BHP for any commission or profit.
Appointment and retirement of Directors
Appointment of Directors
The Constitution provides that a person may be appointed as a Director of
BHP Group Limited by the existing Directors of BHP or may be elected by
the shareholders in a general meeting.
Any person appointed as a Director of BHP Group Limited by the existing
Directors will hold office only until the next general meeting that includes
an election of Directors.
A person may be nominated by shareholders as a Director of BHP Group
Limited if:
– a shareholder provides a valid written and signed notice of
the nomination
– the person nominated by the shareholder satisfies candidature for the
office and provides written and signed notice of their willingness to be
elected as a Director
and the nomination is provided at least 40 business days before the date of
the general meeting. The person nominated as a Director may be elected
to the Board by ordinary resolution passed in a general meeting.
Retirement of Directors
The Board has adopted a policy under which all Non-executive Directors
must, if they wish to remain on the Board, seek re-election by shareholders
annually. This policy took effect in 2011 and replaced the previous
system that required Non-executive Directors to submit themselves to
shareholders for re-election at least every three years.
A Director may be removed from the Board in accordance with applicable
law and must vacate their office as a Director in certain circumstances set
out in the Constitution. There is no requirement for a Director to retire on
reaching a certain age.
Rights attaching to shares
Dividend rights
Under Australian law, dividends on shares may be paid only if the
company’s assets exceed its liabilities immediately before the dividend
is determined and the excess is sufficient for payment of the dividend,
the payment of the dividend is fair and reasonable to the company’s
shareholders as a whole and the payment of the dividend does not
materially prejudice the company’s ability to pay its creditors.
The Constitution provides that payment of any dividend may be made in
any manner, by any means and in any currency determined by the Board.
All unclaimed dividends may be invested or otherwise used by the Board
for the benefit of BHP until claimed or otherwise disposed of according to
law. BHP Group Limited is governed by the Victorian unclaimed monies
legislation, which requires BHP to pay to the State Revenue Office any
unclaimed dividend payments of A$20 or more that have remained
unclaimed for over 12 months.
9 Shareholder information
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BHP Annual Report 2024
Voting rights
For the purposes of determining which shareholders are entitled to attend
or vote at a meeting of BHP Group Limited and how many votes such
shareholder may cast, the Notice of Meeting specifies when a shareholder
must be entered on the Register of Shareholders in order to have the right
to attend or vote at the meeting. The specified time must be not more than
48 hours before the time of the meeting.
Shareholders who wish to appoint a proxy to attend, vote or speak at
a meeting of BHP Group Limited on their behalf must deposit the form
appointing a proxy so that it is received not less than 48 hours before the
time of the meeting.
Rights to share in profits
The rights attached to shares of BHP Group Limited, as regards the
participation in the profits available for distribution that the Board
determines to distribute, are as follows:
– The holders of any preference shares will be entitled, in priority to any
payment of dividend to the holders of any other class of shares, to a
preferred right to participate as regards dividends up to but not beyond
a specified amount in distribution.
– Any surplus remaining after payment of the distributions above will be
payable to the holders of ordinary shares in equal amounts per share.
Rights on return of assets on liquidation
On a return of assets on liquidation of BHP Group Limited, the assets
of BHP Group Limited remaining available for distribution among
shareholders after the payment of all prior ranking amounts owed to
all creditors and holders of preference shares, and to all prior ranking
statutory entitlements, are to be applied on an equal priority with any
amount paid to the holders of BHP Group Limited ordinary shares.
Any surplus remaining is to be applied in making payments solely to
the holders of BHP Group Limited ordinary shares in accordance with
their entitlements.
Redemption of preference shares
If BHP Group Limited at any time proposes to create and issue any
preference shares, the terms of the preference shares may give either
or both of BHP Group Limited and the holder the right to redeem the
preference shares.
The preference shares’ terms may also give the holder the right to convert
the preference shares into ordinary shares.
Under the Constitution, the preference shares must give the holders:
– the right (on redemption and on a winding-up) to payment in cash in
priority to any other class of shares of (i) the amount paid or agreed to
be considered as paid on each of the preference shares; and (ii) the
amount, if any, equal to the aggregate of any dividends accrued but
unpaid and of any arrears of dividends
– the right, in priority to any payment of dividend on any other class of
shares, to the preferential dividend
Capital calls
Subject to the terms on which any shares may have been issued, the
Board may make calls on the shareholders in respect of all monies unpaid
on their shares. BHP Group Limited has a lien on every partly paid share
for all amounts payable in respect of that share. Each shareholder is
liable to pay the amount of each call in the manner, at the time and at the
place specified by the Board (subject to receiving at least 14 days’ notice
specifying the time and place for payment). A call is considered to have
been made at the time when the resolution of the Board authorising the call
was passed.
Borrowing powers
Subject to relevant law, the Directors may exercise all powers of BHP to
borrow money and to mortgage or charge its undertaking, property, assets
(both present and future) and all uncalled capital or any part or parts
thereof, and to issue debentures and other securities, whether outright or
as collateral security for any debt, liability or obligation of BHP or of any
third party.
Variation of class rights
Rights attached to any class of shares issued by BHP Group Limited can
only be varied where such variation is approved by:
– the company as a special resolution, and
– the holders of the issued shares of the affected class, either by a special
resolution passed at a separate meeting of the holders of the issued
shares of the class affected, or with the written consent of members with
at least 75 per cent of the votes of that class
Annual General Meetings
The Annual General Meeting (AGM) provides a forum to facilitate the
sharing of shareholder views and is an important event in the BHP
calendar. The meeting provides an update for shareholders on our
performance and offers an opportunity for shareholders to ask questions
and vote. To vote at an AGM, a shareholder must be a registered holder of
BHP Group Limited shares at a designated time before the relevant AGM.
Key members of management, including the Chief Executive Officer (CEO)
and Chief Financial Officer, are present and available to answer questions.
The External Auditor will also be available to answer questions.
Proceedings at AGMs are webcast live from our website. Copies of the
speeches delivered by the Chair and CEO to the AGM are released to
the relevant stock exchanges and posted on our website. The outcome
of voting on the items of business are released to the relevant stock
exchanges and posted on our website as soon as they are available
following completion of the AGM and finalisation of the polls.
More information on our AGMs is available at bhp.com/meetings
Conditions governing general meetings
The Board may, and must on requisition in accordance with applicable
laws, call a general meeting of the shareholders at the time and place
or places and in the manner determined by the Board. No shareholder
may convene a general meeting of BHP Group Limited except where
entitled under law to do so. Any Director may convene a general meeting
whenever the Director thinks fit. General meetings can also be adjourned,
cancelled or postponed where permitted by law or the Constitution.
Notice of a general meeting must be given to each shareholder entitled to
vote at the meeting and such notice of meeting may be given in the form
and manner in which the Board thinks fit subject to any applicable law.
Five shareholders of the company present in person or by proxy constitute
a quorum for a general meeting. A shareholder who is entitled to attend
and cast a vote at a general meeting of BHP Group Limited may appoint
a person as a proxy to attend and vote for the shareholder in accordance
with applicable law. All provisions of the Constitution relating to general
meetings apply with any necessary modifications to any special meeting of
any class of shareholders that may be held.
Limitations of rights to own securities
There are no limitations under the Constitution restricting the right to own
BHP shares or other securities. The Australian Foreign Acquisitions and
Takeovers Act 1975 imposes a number of conditions that restrict foreign
ownership of Australian-based companies.
For information on share control limits imposed by relevant laws refer to
Additional information 9.8
Documents on display
Documents filed by BHP Group Limited on the Australian Securities
Exchange (ASX) are available at asx.com.au and documents filed on the
London Stock Exchange (LSE) are available at data.fca.org.uk/#/nsm/
nationalstoragemechanism. Documents filed on the ASX or on the LSE
are not incorporated by reference into this Annual Report. The documents
referred to in this Annual Report as being available on our website,
bhp.com, are not incorporated by reference and do not form part of this
Annual Report.
BHP Group Limited files Annual Reports and other reports and
information with the US Securities and Exchange Commission (SEC).
These filings are available on the SEC website at sec.gov
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Financial Statements
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Contents
Additional Information
9.5 Share ownership
Share capital
The details of the share capital for BHP Group Limited are presented in Financial Statements note 17 ‘Share capital’ and remain current as at
16 July 2024.
Substantial shareholders in BHP Group Limited
BHP Group Limited is not directly or indirectly controlled by another corporation or by any government. No shareholder possesses voting rights that
differ from those attaching to all of BHP Group Limited’s voting securities.
The following table shows holdings of 5 per cent or more of voting rights in BHP Group Limited’s shares as notified to BHP Group Limited under the
Australian Corporations Act 2001 (Cth), Section 671B as at 16 July 2024.
Date of last notice
Title of class
Identity of person
or group
Date received
Date of change
Number owned
% of total
voting rights1
Ordinary shares
BlackRock Group2
03 February 2022
31 January 2022
347,008,470
6.85%
Ordinary shares
Citigroup Global Markets
Australia Pty Limited
26 April 2022
21 April 2022
318,921,856.17
6.2999%
Ordinary shares
State Street Corporation
15 May 2024
13 May 2024
310,604,627
6.12%
Ordinary shares
The Vanguard Group Inc.
13 September 2022
07 September 2022
253,318,530
5.001%
1. The percentages quoted are based on the voting rights provided in the last substantial shareholders’ notice.
2. In addition, on 3 February 2022, BlackRock Group notified that, as of 31 January 2022, it owned 4,152,969 American Depositary Receipts, with a voting power of 0.08 per cent.
Each American Depositary Receipt represents two fully paid ordinary shares in BHP Group Limited.
9 Shareholder information continued
Twenty largest shareholders as at 16 July 2024 (as named on the Register of Shareholders)1
BHP Group Limited
Number of fully
paid shares
% of issued
capital
1.
HSBC Custody Nominees (Australia) Limited 2
1,385,528,644
27.32
2.
J P Morgan Nominees Australia Pty Limited
909,805,343
17.94
3.
Citicorp Nominees Pty Ltd
379,203,501
7.48
4.
Citicorp Nominees Pty Limited
289,613,351
5.71
5.
Computershare Clearing Pty Ltd 3
230,277,141
4.54
6.
South Africa Control A/C\C4
186,947,112
3.69
7.
BNP Paribas Nominees Pty Ltd
104,509,093
2.06
8.
National Nominees Limited
75,964,078
1.50
9.
BNP Paribas Noms Pty Ltd
68,456,596
1.35
10.
Citicorp Nominees Pty Limited
45,222,045
0.89
11.
HSBC Custody Nominees (Australia) Limited
36,674,802
0.72
12.
BNP Paribas Nominees Pty Ltd
24,925,705
0.49
13.
Computershare Nominees CI Ltd
22,796,591
0.45
14.
BNP Paribas Nominees Pty Ltd
18,864,475
0.37
15.
Netwealth Investments Limited
15,707,723
0.31
16.
Australian Foundation Investment Company Limited
13,413,159
0.26
17.
HSBC Custody Nominees (Australia) Limited
12,593,578
0.25
18.
Argo Investments Limited
9,990,464
0.20
19.
BNP Paribas Noms (NZ) Ltd
5,759,220
0.11
20.
HSBC Custody Nominees (Australia) Limited
5,574,343
0.11
3,841,826,964
75.75
1. Many of the 20 largest shareholders shown for BHP Group Limited hold shares as a nominee or custodian. In accordance with the reporting requirements, the tables reflect the legal
ownership of shares and not the details of the underlying beneficial holders.
2. HSBC Custody Nominees (Australia) Limited is listed twice in the above table as they are registered separately under the same name on the share register.
3. Computershare Clearing Pty Ltd represents the Depositary Interest Register (UK).
4. South Africa Control A/C\C represents the South African branch register.
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US share ownership as at 16 July 2024
Classification of holder
BHP Group Limited
Number of
shareholders
%
Number of fully
paid shares
% of issued
capital
Registered holders of voting securities
1,737
0.28
4,354,308
0.09
ADR holders
1,851
0.30
289,590,7361
5.71
1. The number of shares corresponds to 144,795,368 ADRs.
Distribution of shareholdings by size as at 16 July 2024
Size of holding
BHP Group Limited
Number of
shareholders
%
Number of
shares1
%
1–5002
299,724
48.57
58,313,947
1.15
501–1,000
107,646
17.44
82,278,812
1.62
1,001–5,000
165,585
26.83
372,175,995
7.34
5,001–10,000
26,637
4.32
187,925,361
3.71
10,001–25,000
13,366
2.17
200,493,124
3.95
25,001–50,000
2,787
0.45
95,487,981
1.88
50,001–100,000
912
0.15
62,785,184
1.24
100,001–250,000
312
0.05
44,593,549
0.88
250,001–500,000
73
0.01
23,970,370
0.47
500,001– and over
73
0.01
3,943,506,494
77.76
Total
617,115
100
5,071,530,817
100
1. One ordinary share entitles the holder to one vote.
2. The number of BHP Group Limited shareholders holding less than a marketable parcel (A$500) based on the market price of A$43.08 as at 16 July 2024 was 7,576.
9.6 Dividends
Policy
The Group adopted a dividend policy in February 2016 that provides for a minimum 50 per cent payout of Underlying attributable profit (Continuing
operations) at every reporting period.
For information on Underlying attributable profit (Continuing operations) for FY2024 refer to OFR 4.2 and OFR 10
The Board will assess, at each reporting period, the ability to pay amounts additional to the minimum payment, in accordance with the Capital Allocation
Framework, as described in OFR 2.
In FY2024, we determined our dividends and other distributions in US dollars as it is our main functional currency.
Payments
BHP Group Limited shareholders may have their cash dividends paid directly into their bank account in Australian dollars, UK pounds sterling, New
Zealand dollars, South African rand or US dollars, provided they have submitted direct credit details and if required, a valid currency election nominating
a financial institution to the BHP Share Registrar no later than close of business on the dividend reinvestment plan election date. BHP Group Limited
shareholders who do not provide their direct credit details will receive dividend payments by way of a cheque in Australian dollars. BHP Group Limited
shareholders who reside in New Zealand must provide valid direct credit details to receive their dividend payment.
Dividend reinvestment plan
BHP offers a dividend reinvestment plan to registered shareholders, which provides shareholders the opportunity to reinvest dividends to purchase
additional BHP shares in the market, rather than receiving dividends in cash. Participation in the plan is entirely optional and is subject to the terms and
conditions of the plan, which can be found at bhp.com/DRP.
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Financial Statements
Governance
Contents
Additional Information
9.7 American Depositary Receipts fees
and charges
We have an American Depositary Receipts (ADR) program for BHP Group
Limited which has a 2:1 ordinary shares to American Depositary Share
(ADS) ratio.
Depositary fees
Citibank serves as the depositary bank for our ADR program. ADR
holders agree to the terms in the deposit agreement filed with the SEC
for depositing ordinary shares or surrendering ADSs for cancellation and
for certain services as provided by Citibank. Holders are required to pay
certain fees for general depositary services provided by Citibank, as set
out in the tables below.
Standard depositary fees
Depositary service
Fee payable by the ADR holders
Issuance of ADSs upon deposit
of shares
Up to US$5.00 per 100 ADSs
(or fraction thereof) issued
Delivery of Deposited Securities
against surrender of ADSs
Up to US$5.00 per 100 ADSs
(or fraction thereof) surrendered
Distribution of Cash Dividends
Up to US$1.50 per 100 ADSs
(or fraction thereof) held
Corporate actions depositary fees
Depositary service
Fee payable by the ADR holders
Cash Distributions other than Cash
Dividends (i.e. sale of rights, other
entitlements, return of capital)
Up to US$2.00 per 100 ADSs
(or fraction thereof) held
Distribution of ADSs pursuant
to exercise of rights to purchase
additional ADSs. Excludes stock
dividends and stock splits
Up to US$5.00 per 100 ADSs
(or fraction thereof) held
Distribution of securities other than
ADSs or rights to purchase additional
ADSs (i.e., spin-off shares)
Up to US$5.00 per 100 ADSs
(or fraction thereof) held
Distribution of ADSs pursuant to an
ADR ratio change in which shares
are distributed
No fee
Fees payable by the Depositary to the Issuer
Citibank has provided a BHP net reimbursement of US$2,512,358.75 in
FY2024 for ADR program-related expenses for BHP’s ADR program.
ADR program-related expenses include legal and accounting fees,
listing fees, expenses related to investor relations in the United States,
fees payable to service providers for the distribution of material to ADR
holders, expenses of Citibank as administrator of the ADS Direct Plan
and expenses to remain in compliance with applicable laws.
Citibank has further agreed to waive other ADR program-related
expenses for FY2024, amounting to US$5,812.12, which are associated
with the administration of the ADR program.
The ADSs issued under our ADR program trade on the NYSE under the
stock ticker BHP. As of 16 July 2024, there were 144,795,368 ADSs on
issue and outstanding in the BHP Group Limited ADR program.
Charges
Holders are also required to pay the following charges in connection
with depositing of ordinary shares and surrendering ADSs for
cancellation and for the purpose of withdrawing deposited securities:
taxes and other governmental charges, registration fees, transmission
and delivery expenses, expenses and charges incurred by the depositary
in the conversion of foreign currency, fees and expenses of the depositary
in connection with compliance with exchange control regulations and
other regulatory requirements and fees and expenses incurred by the
depositary or other nominee in connection with servicing or delivery of
deposit securities.
9.8 Supplemental cybersecurity disclosures for
US reporting
Our approach to managing material risks from cyber threats is integrated
into our overall risk management processes. Cybersecurity risks are
addressed by BHP’s Risk Framework, a system of control for identifying
and managing risks, implemented by the CEO.
For information on our Risk Framework refer to OFR 8
We employ a number of measures designed to protect against, detect and
respond to cyber threats, events or attacks, including BHP’s mandatory
minimum performance requirements for technology and cybersecurity,
cybersecurity performance requirements for suppliers and cybersecurity
resilience programs. In addition, cybersecurity standards, cybersecurity
risk and control guidance, security awareness programs and training
to build capability, security assessments and continuous monitoring,
restricted physical access to hardware and crisis management plans are
also in place to manage cybersecurity.
We utilise dedicated internal and external cybersecurity personnel to focus
on assessing, detecting, identifying, managing, preventing and responding
to cyber threats, events and attacks. We have a dedicated cybersecurity
team, which has been in place since 2016 and has 24/7 monitoring and
response capability that leverages core in-house capability and external
service providers. Our assets, functions and projects are responsible for
managing localised or project-specific exposure to technology and cyber
risks, including risks associated with business-critical technology systems,
with guidance provided by our cybersecurity team. Enterprise-level risks
that are specific to technology, such as those that pose a greater threat to
our wider business and strategic opportunities, are managed by our global
Technology team and other relevant stakeholders.
We regularly evaluate and assess the threat landscape and our security
controls, including through audits and assessments, regular network and
endpoint monitoring, vulnerability testing, penetration testing and tabletop
exercises that include members of BHP’s management team. To assess
the design and effectiveness of our cybersecurity controls, we engage
with assessors, consultants, auditors or other third parties, including
through independent third-party reviews of our information technology
security program conducted on a periodic basis. We have processes in
place to consider and remediate any findings from these reviews and
assessments as required. We also have processes to oversee and identify
material cybersecurity risks associated with our use of third-party service
providers, including performing diligence on certain third parties that have
access to our systems, data or facilities that store such systems or data
and we continually monitor cybersecurity risks identified through such
diligence. We also utilise contractual clauses to manage cybersecurity
risks, including by requiring certain agreements to be subject to periodic
cybersecurity audits.
We have experienced targeted and non-targeted cybersecurity threats in
the past; however, no prior cybersecurity incident has materially affected
our business strategy, results of operations or financial condition.
For information on our risk factors refer to OFR 8.1
Governance
The Board, supported by the Risk and Audit Committee (RAC), is
responsible for oversight of emerging and principal risks facing the Group.
The Board and the RAC receive updates on the Group’s cybersecurity
position, and the Group has policies in place through the Group’s
disclosure process that are designed to escalate material incidents.
For information on other Board Committee activities that support risk
governance at BHP refer to the above ‘Risk governance’ disclosures
and Corporate Governance Statement 5
The CEO is responsible for the effectiveness of BHP’s Risk Framework
with oversight from the Board. Primary responsibility for Technology and
Systems Group Risk (which includes the cybersecurity risks), rests with the
Chief Technical Officer under authority delegated by the CEO.
9 Shareholder information continued
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BHP Annual Report 2024
The Chief Technical Officer is accountable for and establishes the risk
appetite for Technology and Systems, while the Vice President (VP)
Technology Secure & Architecture is responsible for overseeing the
performance of cybersecurity risks in the Technology and Systems Group
Risk category within that risk appetite, and provides reports concerning
these matters to the Chief Technical Officer.
Our VP Technology Secure & Architecture oversees the prevention,
detection, mitigation and remediation of cybersecurity incidents through
their management of, and participation in, our cybersecurity risk
management and cybersecurity strategy processes described above.
Our VP Technology Secure & Architecture leads the BHP cybersecurity
team involved in monitoring and managing our cyber security threat risk
and assurance process. That team includes personnel with significant
information technology experience. During FY2024, two individuals
held the role of VP Technology Secure & Architecture, each of whom
has more than 25 years of experience in the information technology and
information security field, including serving as chief information security
officer (CISO) and deputy CISO at other large companies. Our current
VP Technology Secure & Architecture holds a number of qualified
technical expert certifications, including Certified Information Systems
Security Professional (CISSP) since 2001 and various cybersecurity-
related technical certifications, in addition to Master in Information
Technology (specialising in Information Security) and Master in Business
Administration degrees, and is active in various cybersecurity industry
collaboration groups internationally.
9.9 Government regulations
Our business is subject to a broad range of laws and regulations imposed
by governments and regulatory bodies. These laws and regulations
touch all aspects of our business, including how we extract, process and
explore for minerals and how we conduct our operations, including laws
and regulations governing matters such as environmental protection,
land rehabilitation, occupational health and safety, human rights, cultural
heritage, the rights and interests of Indigenous peoples, competition,
foreign investment, export, marketing of minerals, and taxes.
The ability to extract and process minerals is fundamental to BHP.
In most jurisdictions, the rights to extract mineral deposits are owned
by the government. We obtain the right to access the land and extract the
product by entering into licences or leases with the government that owns
the mineral deposit. We also rely on governments to grant the rights
necessary to transport and treat the extracted material to prepare it for
sale. The terms of the lease or licence, including the time period of the
lease or licence, vary depending on the laws and regulations of the
relevant jurisdiction or terms negotiated with the relevant government.
Generally, we own the product we extract and we are required to pay
royalties or other taxes to the government. In Australia and Chile, recent
reforms to mining royalties laws have been adopted. For example,
from 1 July 2022, a progressive system of coal royalties in the State of
Queensland was adopted, resulting in higher royalty rates as the price of
coal passes certain monetary thresholds. In May 2024, the Queensland
Government introduced new legislation to Parliament which, if passed,
would prevent future governments from reversing these higher royalty rates
without parliamentary approval. Similarly, in September 2023, the State
of New South Wales introduced a new coal royalty scheme, replacing the
emergency domestic coal cap and reservation measures. This increase
took effect on 1 July 2024, increasing the royalty rate payable for different
methods of extraction by 2.6 percentage points. In May 2023, the Chilean
Congress approved a mining royalty bill to establish a new regulatory
tax framework for copper mining activities, which, in general terms,
established that mining operators are subject to an ad-valorem component
plus a margin component, with a maximum tax rate of 46.5 per cent.
The new Chilean mining royalties took effect from 1 January 2024, subject
to existing tax stability agreements. In most instances, the rights to explore
for minerals are granted to us by the government that owns the natural
resources we wish to explore. Usually, the right to explore carries with it
the obligation to spend a defined amount of money on the exploration, or to
undertake particular exploration activities.
Environmental protection, mine closure, land rehabilitation, cultural
heritage and occupational health and safety are principally regulated by
governments and to a lesser degree, if applicable, by conditions under
leases or licences. These obligations often require us to make substantial
expenditures to minimise or remediate the environmental impact of our
assets and to ensure the safety of our employees, contractors and the
communities where we operate.
In many of the jurisdictions where we or our suppliers or customers
operate, legislation and regulations are increasingly being enacted in
response to the potential impacts of climate change and to implement
international environmental commitments. For example, as a result of the
Paris Agreement a number of governments, including Australia, Chile,
Canada and the United States, have submitted Nationally Determined
Contributions to reduce national greenhouse gas emissions (GHG).
Further, the governments in a number of regions where we or our suppliers
or customers operate have advanced targets and goals to reduce GHGs.
In Australia, the National Greenhouse and Energy Reporting Act 2007
(Cth) imposes requirements for corporations meeting a certain threshold
to register and report company information about GHGs and energy
production and consumption as part of a single, national reporting
scheme and establishes the Safeguard Mechanism to keep certain GHG
emissions at or below legislated limits, known as baselines, for Australia’s
largest industrial facilities. On 1 July 2023, amendments to the Safeguard
Mechanism commenced operation, which require facility baselines for
Scope 1 GHG emissions at Australia’s largest industrial facilities to be
decreased in accordance with a set decline rate, with a view to achieving
consistent and gradual emission reductions on a trajectory consistent with
achieving Australia’s GHG emission reduction targets of 43 per cent below
2005 levels by 2030 and net zero by 2050. Facilities that exceed their
progressively declining legislated baselines may apply credits to meet the
compliance obligations.
Regulations setting emissions standards for fuels used to power vehicles
and equipment at our assets and the modes of transport used in our supply
chains can also have a substantial impact, both directly and indirectly, on
the markets for these products, with flow-on impacts on our costs.
A number of governments and regulators in relevant jurisdictions for
BHP have proposed or foreshadowed disclosure rules that would require
enhanced climate-related and broader sustainability-related disclosures.
For example, in Australia, the Federal Government has proposed
legislation that would implement a new mandatory climate-related financial
disclosure regime and associated auditing and assurance requirements,
intended to be phased in from 1 January 2025. There is also growing
focus on mandatory corporate due diligence and reporting for climate-
and broader sustainability-related issues in the value chain. For example,
the new European Union (EU) Corporate Sustainability Due Diligence
Directive requires in-scope companies to conduct human rights and
environmental due diligence on the company’s own operations and their
business partners’ chain of activities (largely upstream). While it is not yet
possible to reasonably estimate the exact nature, extent, timing and cost or
other impacts of any future climate-related or broader sustainability-related
regulatory programs or future legislative action that may be enacted,
we anticipate we will be required to dedicate more resources to address
legislative or regulatory changes.
In Australia, national environmental law is currently undergoing review with
the potential for significant reform, including an emphasis on addressing
environmental decline and achieving nature-positive outcomes, although
timing, scope and outcome remain uncertain. Aspects of heritage
protection laws in Australia have also been reviewed. For example,
in November 2023, the Western Australian parliament repealed the
Aboriginal Cultural Heritage Act 2021 (WA) and reverted to the previous
Aboriginal Cultural Heritage Act 1972 (WA) (with limited amendments).
Our business is also subject to a number of regulations and legal
developments relating to employee relations.
From time to time, certain trade sanctions are adopted by the United
Nations (UN) Security Council and/or various governments, including in the
United Kingdom, the United States, the European Union (EU), China and
Australia against certain countries, entities or individuals, that may restrict
our ability to sell extracted minerals or other products to and/or our ability
to purchase goods or services from, these countries, entities or individuals.
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Additional Information
9 Shareholder information continued
Shareholding limits
Under current Australian legislation, the payment of any dividends, interest
or other payments by BHP Group Limited to non-resident holders of BHP
Group Limited’s shares is not restricted by exchange controls or other
limitations, except that in certain circumstances, BHP Group Limited may
be required to withhold Australian taxes.
From time to time, certain sanctions are adopted by the UN Security
Council and/or various governments, including in the United Kingdom, the
United States, the EU and Australia. Those sanctions prohibit, or in some
cases impose, certain approval and reporting requirements on transactions
involving sanctioned countries, entities and individuals and/or assets
controlled or owned by them. Certain transfers into or out of Australia of
amounts greater than A$10,000 in any currency may also be subject to
reporting requirements.
The Australian Foreign Acquisitions and Takeovers Act 1975 (the FATA)
restricts certain acquisitions of interests in securities in Australian
companies, including BHP Group Limited. Generally, under the FATA,
the prior approval of the Australian Treasurer must be obtained for
proposals by a foreign person (either alone or together with its associates)
to acquire 20 per cent or more of the voting power or issued securities
in an Australian company. Lower approval thresholds apply in certain
circumstances, including for acquisitions of interests in entities that
operate a ‘national security business’, and acquisitions of interests by
foreign government investors of voting power or issued securities in an
Australian company.
The FATA also empowers the Treasurer to make certain orders prohibiting
acquisitions by foreign persons in Australian companies, including BHP
Group Limited (and requiring divestiture if the acquisition has occurred)
where the Treasurer considers the acquisition to be contrary to national
security or the national interest.
Except for the restrictions under the FATA, there are no limitations,
either under Australian law or under the Constitution of BHP Group
Limited, on the right of non-residents to hold or vote BHP Group Limited
ordinary shares.
Post-unification requirements under FATA
The Treasurer gave approval under the FATA for the actions taken as
part of implementation of the unification of BHP’s DLC structure on the
conditions set out below:
– BHP Group Limited remains an Australian resident company,
incorporated under the Corporations Act, that is listed on the ASX
under the name ‘BHP Group Limited’ and trades under that name.
– BHP Group Limited remains the ultimate holding company of and
continues to ultimately manage and control the companies conducting
the businesses that are presently conducted by the subsidiaries of BHP
Group Limited, including the Minerals and Services businesses, for so
long as those businesses form part of the BHP Group.
– The headquarters of BHP Group Limited (including the BHP Group’s
corporate head offices) are in Australia.
– The Chief Executive Officer of BHP Group Limited has their principal
office in Australia.
– The centre of administrative and practical management of BHP Group
Limited is in Australia and BHP Group Limited’s corporate head office
activities, of the kind presently carried on in Australia, continue to be
managed in Australia.
– The headquarters of BHP Group Limited is publicly acknowledged
as being in Australia in significant public announcements and in all
public documents.
– The Chief Executive Officer of BHP Group Limited has their principal
place of residence in Australia.
– The majority of all regularly scheduled Board meetings of BHP Group
Limited in any calendar year occurs in Australia.
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10 Glossary
10.1 Mining-related terms
3D Three dimensional.
AIG The Australian Institute of Geoscientists.
APEGS Association of Professional Engineers
and Geoscientists of Saskatchewan.
AusIMM The Australasian Institute of Mining
and Metallurgy.
Beneficiation The process of physically
separating ore from waste material prior to
subsequent processing of the improved ore.
Bituminous Coal of intermediate rank with
relatively high carbon content.
Block cave An area resulting from an
underground mining method where the orebody
is undermined to make it collapse under its
own weight.
Brownfield The development or exploration
located inside the area of influence of existing
mine operations which can share infrastructure/
management.
Coal Reserves Equivalent to Ore Reserves,
but specifically concerning coal.
Coal Resources Equivalent to Mineral
Resources, but specifically concerning coal.
Coking coal Used in the manufacture of coke,
which is used in the steelmaking process by
virtue of its carbonisation properties. Coking coal
may also be referred to as steelmaking coal or
metallurgical coal.
Competent Person A minerals industry
professional who is a Member or Fellow of The
Australasian Institute of Mining and Metallurgy,
or of the Australian Institute of Geoscientists,
or of a ‘Recognised Professional Organisation’
(RPO), as included in a list available on the
JORC and ASX websites. These organisations
have enforceable disciplinary processes,
including the powers to suspend or expel a
member. A Competent Person must have a
minimum of five years’ relevant experience in the
style of mineralisation or type of deposit under
consideration and in the activity that the person
is undertaking (JORC Code, 2012 Edition).
Copper cathode Electrolytically refined copper
that has been deposited on the cathode of an
electrolytic bath of acidified copper sulphate
solution. The refined copper may also be
produced through leaching and electrowinning.
Cut-off grade A nominated grade above which
an Ore Reserve or Mineral Resource is defined.
For example, the lowest grade of mineralised
material that qualifies as economic for estimating
an Ore Reserve.
Electrowinning/electrowon An electrochemical
process in which metal is recovered by
dissolving a metal within an electrolyte and
plating it onto an electrode.
Energy coal Used as a fuel source in electrical
power generation, cement manufacture and
various industrial applications. Energy coal may
also be referred to as steaming or thermal coal.
FAusIMM Fellow of the Australasian Institute of
Mining and Metallurgy.
FAusIMM-CP Fellow of the Australasian
Institute of Mining and Metallurgy –
Chartered Professional.
Flotation A method of selectively recovering
minerals from finely ground ore using a froth
created in water by specific reagents. In the
flotation process, certain mineral particles
are induced to float by becoming attached to
bubbles of froth and the unwanted mineral
particles sink.
Full SaL A processing technology that allows
the extraction of copper using chlorine-assisted
leaching predominantly for sulphidic material.
Grade or Quality Any physical or chemical
measurement of the characteristics of the
material of interest in samples or product.
Greenfield The development or exploration
located outside the area of influence of existing
mine operations/infrastructure.
Hypogene Sulphide Hypogene mineralisation
is formed by fluids at high temperature
and pressure derived from magmatic
activity. Copper in Hypogene Sulphide is
mainly provident from the copper bearing
mineral chalcopyrite and higher metal
recoveries are achieved via grinding/flotation
concentration processes.
Indicated (Mineral) Resources That part of a
Mineral Resource for which quantity, grade
(or quality), densities, shape and physical
characteristics are estimated with sufficient
confidence to allow the application of Modifying
Factors in sufficient detail to support mine
planning and evaluation of the economic viability
of the deposit (JORC Code, 2012 Edition).
Inferred (Mineral) Resources That part of
a Mineral Resource for which quantity and
grade (or quality) are estimated on the basis
of limited geological evidence and sampling.
Geological evidence is sufficient to imply but not
verify geological and grade (or quality) continuity
(JORC Code, 2012 Edition).
In situ Situated in the original place.
JORC The Australasian Joint Ore
Reserves Committee.
JORC Code A set of minimum standards,
recommendations and guidelines for public
reporting in Australasia of Exploration Results,
Mineral Resources and Ore Reserves.
The guidelines are defined by JORC, which is
sponsored by the Australian mining industry and
its professional organisations.
Leaching The process by which a soluble metal
can be economically recovered from minerals in
ore by dissolution.
LOI (loss on ignition) A measure of the
percentage of volatile matter (liquid or gas)
contained within a mineral or rock. LOI is
determined to calculate loss in mass when
subjected to high temperatures.
MAIG Member of the Australian Institute
of Geoscientists.
Marketable (Coal) Reserves Represents
beneficiated or otherwise enhanced coal product
where modifications due to mining, dilution and
processing have been considered, must be
publicly reported in conjunction with, but not
instead of, reports of Coal Reserves. The basis
of the predicted yield to achieve Marketable Coal
Reserves must be stated (JORC Code, 2012).
MAusIMM Member of the Australasian Institute
of Mining and Metallurgy.
MAusIMM-CP Member of the Australasian
Institute of Mining and Metallurgy –
Chartered Professional.
Measured (Mineral) Resources That part of
a Mineral Resource for which quantity, grade
(or quality), densities, shape and physical
characteristics are estimated with confidence
sufficient to allow the application of Modifying
Factors to support detailed mine planning and
final evaluation of the economic viability of the
deposit (JORC Code, 2012 Edition).
Metallurgical coal A broader term than
coking coal, which includes all coals used
in steelmaking, such as coal used for the
pulverised coal injection process. May also be
referred to as steelmaking coal.
Mineral Resources A concentration or
occurrence of solid material of economic
interest in or on the Earth’s crust in such form,
grade (or quality) and quantity that there are
reasonable prospects for eventual economic
extraction. The location, quantity, grade
(or quality), continuity and other geological
characteristics of a Mineral Resource are known,
estimated or interpreted from specific geological
evidence and knowledge, including sampling
(JORC Code, 2012 Edition).
Mineralisation Any single mineral or
combination of minerals occurring in a mass,
or deposit, of economic interest.
Mixed (ore type) Refer to Transitional Sulphide.
Modifying Factors Considerations used to
convert Mineral Resources to Ore Reserves.
These include, but are not restricted to, mining,
processing, metallurgical, infrastructure,
economic, marketing, legal, environmental,
social and governmental factors.
Nickel intermediates Concentrate, matte,
residue and mixed sulphides.
Nominated production rate The approved
average production rate for the remainder of the
life-of-asset plan or five-year plan production
rate if significantly different to life-of-asset
production rate.
Open-cut (OC) Surface working in which the
working area is kept open to the sky.
Ore Reserves The economically mineable
part of a Measured and/or Indicated Mineral
Resource. It includes diluting materials and
allowances for losses, which may occur when
the material is mined or extracted and is defined
by studies at Pre-Feasibility or Feasibility
level as appropriate that include application of
Modifying Factors. Such studies demonstrate
that, at the time of reporting, extraction
could reasonably be justified (JORC Code,
2012 Edition).
PEGBC Association of Professional
Engineers and Geoscientists of the
Province of British Columbia.
Probable (Ore) Reserves The economically
mineable part of an Indicated and, in some
circumstances, a Measured Mineral Resource.
The confidence in the Modifying Factors
applying to a Probable Ore Reserve is lower
than that applying to a Proved Ore Reserve.
Consideration of the confidence level of the
Modifying Factors is important in conversion of
Mineral Resources to Ore Reserves. A Probable
Ore Reserve has a lower level of confidence
than a Proved Ore Reserve but is of sufficient
quality to serve as the basis for a decision on
the development of the deposit (JORC Code,
2012 Edition).
Proved (Ore) Reserves The economically
mineable part of a Measured Mineral Resource.
A Proved Ore Reserve implies a high degree of
confidence in the Modifying Factors. A Proved
Ore Reserve represents the highest confidence
category of reserve estimate and implies a
high degree of confidence in geological and
grade continuity, and the consideration of the
Modifying Factors. The style of mineralisation
or other factors could mean that Proved Ore
Reserves are not achievable in some deposits
(JORC Code, 2012 Edition).
ROM (run of mine) Run of mine product mined
in the course of regular mining activities.
Tonnes include allowances for diluting materials
and for losses that occur when the material
is mined.
Slag A by-product of smelting after the desired
metal has been extracted from its ore.
Smelting The process of extracting metal from
its ore by heating and melting.
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Solvent extraction A method of separating one
or more metals from a leach solution by treating
with a solvent that will extract the required metal,
leaving the others. The metal is recovered from
the solvent by further treatment.
SP (stockpile) An accumulation of ore or mineral
built up when demand slackens or when the
treatment plant or beneficiation equipment is
incomplete or temporarily unable to process
the mine output; any heap of material formed to
create a buffer for loading or other purposes or
material dug and piled for future use.
Sub-level cave An area within an underground
mine which uses the sub-level cave method.
This is where an orebody is extracted from the
upper horizons first and mining progresses
downwards level by level.
Supergene Sulphide Supergene is a term
used to describe near-surface processes and
their products, formed at low temperature and
pressure by the activity of meteoric or surface
water. Copper in Supergene Sulphide is mainly
provident from the copper bearing minerals
chalcocite and covellite and is amenable to
both grinding/flotation concentration and
leaching processes.
Tailings Those portions of washed or milled ore
that are too poor to be treated further or remain
after the required metals and minerals have
been extracted.
Total (Mineral) Resources The sum of Inferred,
Indicated and Measured Mineral Resources.
Total (Ore) Reserves The sum of Proved and
Probable Ore Reserves.
Transitional Sulphide This is a term used to
describe the zone of mineralisation that is
a gradation between Supergene Sulphide
and Hypogene Sulphide resulting from
the incomplete development of the former
as it overprints the latter. This results in a
more irregular distribution of the three main
copper bearing minerals and is amenable
to both grinding/flotation concentration and
leaching processes.
Troy oz Troy ounce is a unit of measure of
precious metals.
TSF Tailings storage facility/facilities.
Underground (UG) Below the surface
mining activities.
Wet tonnes Production is usually quoted in
terms of wet metric tonnes (wmt). To adjust from
wmt to dry metric tonnes (dmt) a factor is applied
based on moisture content.
Yield The percentage of material of interest that
is extracted during mining and /or processing.
10.2 Terms used in reserves
and resources
Ag
silver
AI2O3
alumina
Ash
inorganic material remaining
after combustion
Au
gold
Cu
copper
CV
calorific value
Fe
iron
Insol.
insolubles
K2O
potassium oxide
KCl
potassium chloride
LOI
loss on ignition
LPL
Lower Patience Lake
(stratigraphic unit)
Met
metallurgical coal
MgO
magnesium oxide
Mo
molybdenum
Ni
nickel
NiSO4
nickel sulphate
NSR
Net smelter return
P
phosphorous
Pc
phosphorous in concentrate
PCI
pulverised coal injection
S
sulphur
SCu
soluble copper
SiO2
silica
Th
thermal coal
U3O8
uranium oxide
VM
volatile matter
Zn
zinc
10.3 Units of measure
%
percentage or per cent
Bt
billion tonnes
CO2-e
carbon dioxide equivalent
dmt
dry metric tonne
GJ
gigajoule
g/t
grams per tonne
ha
hectare
kcal/kg
kilocalories per kilogram
kg/tonne
or kg/t
kilograms per tonne
km
kilometre
ktoz
thousand troy ounces
kt
kilotonnes
ktpa
kilotonnes per annum
ktpd
kilotonnes per day
kV
kilovolt
kW
kilowatt
kWh
kilowatt hour
lb
pound
m
metre
m³
cubic metre
ML
megalitre
Mt
million tonnes
MtCO2-e
million tonnes of carbon
dioxide equivalent
Mtpa
million tonnes per annum
MW
megawatt
oz
troy ounce
PJ
petajoule
ppm
parts per million
scf
standard cubic feet
t
Tonne
tCO2-e
tonnes of carbon dioxide equivalent
t/h
tonnes per hour
tpa
tonnes per annum
tpd
tonnes per day
TW
terawatt
TWh
terawatt hour
wmt
wet metric tonnes
10.4 Other terms
2030 goals Our aspirational goals for
FY2030 under the pillars of our 2030 social
value scorecard: Decarbonisation; Healthy
environment; Indigenous partnerships; Safe,
inclusive and future-ready workforce, Thriving,
empowered communities and Responsible
supply chains.
AASB (Australian Accounting Standards Board)
Accounting standards as issued by
the Australian Accounting Standards Board.
Activity data (in relation to greenhouse gas
(GHG) emissions data) A quantitative measure
of a level of activity that results in GHG
emissions. Activity data is multiplied by an energy
and/or emissions factor to derive the energy
consumption and GHG emissions associated with
a process or an operation. Examples of activity
data include kilowatt-hours of electricity used,
quantity of fuel used, output of a process, hours
equipment is operated, distance travelled and
floor area of a building.
Adjusted/unadjusted (in respect to GHG
emissions data) Adjusted means calculated
to present the GHG emissions data for a time
period (such as a baseline year or reporting
year) as though relevant changes took effect
from the start of that period even though
they occurred during or not until after the
end of the period. Unless expressly stated
otherwise, relevant changes are all acquisitions,
divestments and/or GHG emission calculation
methodology changes. For example, when
we adjust the FY2020 baseline year for our
operational GHG emission target and goal to
compare our adjusted FY2024 performance data
against it:
– the FY2020 data is presented with Scopes
1 and 2 emissions for operated assets that
have been acquired or divested by BHP
added or removed (respectively), and applying
methodology changes that took effect,
between 1 July 2019 and 30 June 2024; and
– the FY2024 data is presented as though any
acquisitions, divestments and/or methodology
changes that occurred during the year took
effect from the start of the year
This enables a ‘like for like’ comparison that
provides the information most relevant to
assessing progress against our GHG emissions
targets and goals. Unadjusted means calculated
to present the GHG emissions data for a
reporting year so that any relevant changes that
occurred during the year (including acquisitions,
divestments and/or methodology changes)
are applied only from the date they took effect.
Adjustments (in respect of our GHG emissions
targets and goals) Calculations to present GHG
emissions data on an adjusted basis.
ADR (American Depositary Receipt) An
instrument evidencing American Depositary
Shares or ADSs, which trades on a stock
exchange in the United States.
ADS (American Depositary Share) A share
issued under a deposit agreement that has
been created to permit US-resident investors
to hold shares in non-US companies and, if
listed, trade them on the stock exchanges in the
United States. ADSs are evidenced by American
Depositary Receipts, or ADRs, which are the
instruments that, if listed, trade on a stock
exchange in the United States.
ASIC (Australian Securities and Investments
Commission) The Australian Government
agency that enforces laws relating to companies,
securities, financial services and credit in order
to protect consumers, investors and creditors.
Assets Assets are a set of one or more
geographically proximate operations
(including open-cut mines and underground
mines). Assets include our operated and
non-operated assets.
ASX (Australian Securities Exchange) ASX is a
multi-asset class vertically integrated exchange
group that functions as a market operator,
clearing house and payments system facilitator.
It oversees compliance with its listing and
operating rules, promotes standards of corporate
governance among Australia’s listed companies
and helps educate retail investors.
Australian Carbon Credit Units Australian
Carbon Credit Units issued by the Australian
Government through a regulatory framework
established under the Carbon Credit (Carbon
Farming Initiative) Act 2011.
10 Glossary continued
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Baseline/baseline year (in relation to GHG
emissions targets and goals) A year used as a
basis to compare and measure performance of
future years.
BHP BHP Group Limited and its subsidiaries.
BHP Group Limited BHP Group Limited.
BHP Group Limited share A fully paid ordinary
share in the capital of BHP Group Limited.
BHP Group Limited shareholders The holders of
BHP Group Limited shares.
BHP Group Plc BHP Group Plc (now known as
BHP Group (UK) Ltd) and its subsidiaries.
BHP Group Plc share A fully paid ordinary share
in the capital of BHP Group Plc (now known as
BHP Group (UK) Ltd).
BHP Group Plc shareholders The holders of
BHP Group Plc shares (prior to unification of the
DLC structure).
BHP Group (UK) Ltd BHP Group (UK) Ltd
(formerly known as BHP Group Plc) and
its subsidiaries.
BHP Healthy environment goal roadmap Our
Group-level framework for nature-positive
plans to achieve the 2030 Healthy environment
goal under our social value scorecard, which
is intended to apply to our operated assets in
Australia, Chile and Canada.
BHP shareholders In the context of BHP’s
financial results, BHP shareholders refers to the
holders of shares in BHP Group Limited.
Biofuel A fuel, usually a liquid fuel, produced
from renewable biological feedstock sources,
such as plant material, vegetation or
agricultural waste.
Biodiversity The variability among living
organisms from all sources, including, inter alia,
terrestrial, marine and other aquatic ecosystems
and the ecological complexes of which they
are part; this includes diversity within species,
between species and of ecosystems. (Convention
on Biological Diversity (1992) Article 2).
BMA The BHP Mitsubishi Alliance.
Board The Board of Directors of BHP.
BOS BHP Operating System.
CAF BHP’s Capital Allocation Framework.
Carbon credit The reduction or removal of
carbon dioxide, or the equivalent amount of a
different GHG, using a process that measures,
tracks and captures GHGs to compensate for
an entity’s GHG emissions emitted elsewhere.
Credits may be generated through projects in
which GHG emissions are avoided, reduced,
removed from the atmosphere or permanently
stored (sequestration). Carbon credits are
generally created and independently verified
in accordance with either a voluntary program
or under a regulatory program. The purchaser
of a carbon credit can ‘retire’ or ‘surrender’
it to claim the underlying reduction towards
their own GHG emissions reduction targets or
goals or to meet legal obligations, which is also
referred to as carbon offsetting or offsetting.
We define regulatory carbon credits to mean
carbon credits used to offset GHG emissions
for regulatory compliance in our operational
locations (such as the Safeguard Mechanism in
Australia). We define voluntary carbon credits to
mean carbon credits generated through projects
that reduce or remove GHG emissions outside
the scope of regulatory compliance (including
Australian Carbon Credit Units not used for
regulatory compliance).
Carbon dioxide equivalent The universal unit
of measurement to indicate the global warming
potential (GWP) of each GHG, expressed
in terms of the GWP of one unit of carbon
dioxide. It is used to evaluate releasing (or
avoiding releasing) different GHGs against a
common basis.
Carbon neutral Making or resulting in no net
release of GHG emissions into the atmosphere,
including as a result of offsetting. Carbon neutral
includes all those GHG emissions as defined for
BHP reporting purposes.
CBWT (context-based water targets)
Context-based water targets aim to address
the water challenges shared by BHP and
other stakeholders in the regions where we
operate. These targets are based on what we
heard from others and our own assessment of
water-related risks and opportunities.
CMD Coal mine dust.
CEO Water Mandate The CEO Water Mandate
is a UN Global Compact initiative that mobilises
business leaders on water, sanitation and the
Sustainable Development Goals. Companies that
endorse the CEO Water Mandate commit to
continuous progress against six core elements of
their water stewardship practice and in so doing,
better understand and manage their own water
risks. The six core areas are: Direct Operations,
Supply Chain & Watershed Management,
Collective Action, Public Policy, Community
Engagement and Transparency. BHP is an active
signatory of the Mandate.
Commercial Our Commercial function seeks
to maximise commercial and social value across
our end-to-end supply chain. It provides effective
and efficient service levels to our assets and
customers through world-class insights and market
intelligence, deep subject-matter expertise, simple
processes and centralised standard activities.
The function is organised around the core activities
in our inbound and outbound value chains,
supported by credit and market risk management,
and strategy and planning activities.
Community concern Broadly classified as
any communication to a BHP representative
by a member of the community where an
issue has not yet necessarily occurred but
has the potential/likelihood to escalate into a
formal complaint.
Community complaint A verbal or written
notification made directly to a BHP
representative by a member of the community
relating to an alleged adverse impact on the
community arising from BHP’s activities and/
or employee or contractor behaviour in part or
in whole.
Company BHP Group Limited and
its subsidiaries.
Continuing operations Assets/operations/
entities that are owned and/or operated by BHP,
excluding assets/operations/entities classified as
Discontinued operations.
Convention of Biological Diversity The
Convention on Biological Diversity (CBD)
is the international legal instrument for ‘the
conservation of biological diversity, the
sustainable use of its components and the fair
and equitable sharing of the benefits arising out
of the utilisation of genetic resources’ that has
been ratified by 196 nations.
CTAP 2024 BHP’s second Climate Transition
Action Plan, published on 27 August 2024.
Directions (Directions for Coal Mines) The New
South Wales Government Coal Market Price
Emergency Directions.
Discontinued operations Assets/operations/
entities that have either been disposed of or are
classified as held for sale in accordance with
IFRS 5/AASB 5 Non-current Assets Held for
Sale and Discontinued operations.
Dividend record date The date, determined by
a company’s board of directors, by when an
investor must be recorded as an owner of shares
in order to qualify for a forthcoming dividend.
DLC (Dual Listed Company) BHP’s Dual Listed
Company structure had two parent companies
(BHP Group Limited and BHP Group Plc (now
known as BHP Group (UK) Ltd)) operating
as a single economic entity as a result of the
DLC merger. The DLC structure was unified on
31 January 2022.
DLC merger The Dual Listed Company merger
between BHP Group Limited and BHP Group
Plc (now known as BHP Group (UK) Ltd) on
29 June 2001.
ECR (Economic Contribution Report) BHP’s
Economic Contribution Report for the year
ended 30 June 2024.
Ecosystem A dynamic complex of plant,
animal and microorganism communities
and the non-living environment, interacting as
a functional unit. (Convention on Biological
Diversity (1992) Article 2; Intergovernmental
Science-Policy Platform on Biodiversity and
Ecosystem Services (2019) Global Assessment
Report on Biodiversity and Ecosystem Services).
Ecosystem function The flow of energy
and materials through the biotic and abiotic
components of an ecosystem. This includes
many processes such as biomass production,
trophic transfer through plants and animals,
nutrient cycling, water dynamics and heat
transfer. (Intergovernmental Science-Policy
Platform on Biodiversity and Ecosystem
Services (2019) Global Assessment Report on
Biodiversity and Ecosystem Services).
Ecosystem services The contributions of
ecosystems to the benefits that are used in
economic and other human activity. (United
Nations et al. (2021) System of Environmental-
Economic Accounting - Ecosystem Accounting).
ELT (Executive Leadership Team) The
Executive Leadership Team directly reports to
the Chief Executive Officer and is responsible for
the day-to-day management of BHP and leading
the delivery of our strategic objectives.
Emission factor A factor that converts activity
data into GHG emissions data (e.g. kg CO2-e
emitted per GJ of fuel consumed, kg CO2-e
emitted per KWh of electricity used).
Energy (in relation to BHP) Energy means
all forms of energy products where ‘energy
products’ means combustible fuels, heat,
renewable energy, electricity or any other form
of energy from operations that are owned or
controlled by BHP. The primary sources of
energy consumption come from fuel consumed
by haul trucks at our operated assets, as well as
purchased electricity used at our operated assets.
Energy content factor The energy content of a
fuel is an inherent chemical property that is a
function of the number and types of chemical
bonds in the fuel.
Entrained water Entrained water includes water
incorporated into product and/or waste streams,
such as tailings, that cannot be easily recovered.
Equity share approach (in relation to GHG
emissions data) A consolidation approach
whereby a company accounts for GHG
emissions from operations according to its share
of equity in the operation. The equity share
reflects economic interest, which is the extent of
rights a company has to the risks and rewards
flowing from an operation. Also see the definition
for Operational control approach.
ESG Environmental, Social and Governance.
Executive KMP (Key Management
Personnel) Executive Key Management
Personnel includes the Executive Director (our
CEO), the Chief Financial Officer, President
Australia, President Americas, and the Chief
Operating Officer. It does not include the
Non-executive Directors (on our Board).
Fatality Elimination Program (FEL) The
Fatality Elimination Program involves all
Assets developing control implementation
plans. These plans identify the relevant
controls required to address their respective
operations fatality risks, including timeframes
for when control implementation is possible.
Progress against these plans is monitored
monthly via the BHP FEL dashboard. The aim
is to implement and sustain as many ‘hard’
controls as possible, whilst also recognising that
to build a robust control framework it will rely
on all elements of the hierarchy of control being
available, including soft/administrative controls
(i.e. human-dependent controls).
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10 Glossary continued
Financial control approach (in relation
to GHG emissions data) A consolidation
approach whereby a company reports GHG
emissions based on the accounting treatment
in the company’s consolidated financial
statements, as follows:
– 100 per cent for operations accounted for
as subsidiaries, regardless of the equity
interest owned
– for operations accounted for as a joint
operation, the company’s interest in
the operations
It does not report GHG emissions from
operations that are accounted for using
the equity method in the company’s
financial statements.
Fugitive methane emissions Methane emissions
that are not physically controlled but result
from the intentional or unintentional releases of
methane from coal mining.
Functions Functions operate along global
reporting lines to provide support to all areas
of the organisation. Functions have specific
accountabilities and deep expertise in areas
such as finance, legal, governance, technology,
human resources, corporate affairs, health,
safety and community.
Future-facing commodity A commodity that
BHP determines to be positively leveraged
in the energy transition and broader global
response to climate change, with potential
for decades-long demand growth to support
emerging megatrends like electrification
and decarbonisation. Currently, the major
commodities in the BHP portfolio that fall within
this criterion include copper, nickel and potash.
GBF (Kunming-Montreal Global Biodiversity
Framework) The Kunming-Montreal Global
Biodiversity Framework is a set of targets and
goals adopted by the 15th Conference of Parties
(COP15) to the United Nations Convention on
Biological Diversity (CBD) in December 2022
that aims to address the loss of biodiversity
and restore natural ecosystems by 2030.
Gearing ratio The ratio of net debt to net debt
plus net assets.
GHG (greenhouse gas) For BHP reporting
purposes, these are the aggregate
anthropogenic carbon dioxide equivalent
emissions of carbon dioxide (CO2), methane
(CH4), nitrous oxide (N2O), hydrofluorocarbons
(HFCs), perfluorocarbons (PFCs) and sulphur
hexafluoride (SF6). Nitrogen trifluoride (NF3)
GHG emissions are currently not relevant for
BHP reporting purposes. GHG emissions in
this report are presented in tonnes CO2-e or its
multiples, unless otherwise stated.
GISTM Global Industry Standards on
Tailings Management.
Global goal for nature The global goal for
nature defines what is needed to halt and
reverse today’s current state of loss of nature.
It is supported by a number of organisations
that ask governments to adopt the goal at the
international level, which each country, the
private sector, communities and others can
contribute to achieving.
Goal (for BHP with respect to GHG
emissions) An ambition to seek an outcome
for which there is no current pathway(s), but
for which efforts are being or will be pursued
towards addressing that challenge, subject to
certain assumptions or conditions. Such efforts
may include the resolution of existing potential
or emerging pathways.
Goals of the Paris Agreement The central
objective of the Paris Agreement is its long-term
temperature goal to hold the global average
temperature increase to well below 2°C above
pre-industrial levels and pursue efforts to limit
the temperature increase to 1.5°C above
pre-industrial levels.
Green hydrogen Hydrogen produced using
electrolysis powered by renewable energy, with
no associated Scope 1 emissions or Scope
2 emissions.
Grievance An event or community complaint
relating to an adverse impact/event that has
escalated to the point where a third-party
intervention or adjudication is required
to resolve.
GRI (Global Reporting Initiative) The Global
Reporting Initiative works with businesses and
governments to understand and communicate
their impact on critical sustainability issues.
Groundwater Water beneath the earth’s
surface, including beneath the seabed, which
fills pores or cracks between porous media,
such as soil, rock, coal and sand, often forming
aquifers. Groundwater may be abstracted for
use from bore fields or accessed via dewatering
to access ore. For accounting purposes, water
that is entrained in the ore can be considered
as groundwater.
Group BHP Group Limited and its subsidiaries.
GWP (global warming potential) A factor
describing the radiative forcing impact (degree
of harm to the atmosphere) of one unit of a given
GHG relative to one unit of CO2. BHP currently
uses GWP from the Intergovernmental Panel on
Climate Change (IPCC) Assessment Report 5
(AR5) based on a 100-year timeframe.
HPI (high-potential injuries) High-potential
injuries are recordable injuries and first aid
cases where there was the potential for a fatality.
ICMM (International Council on Mining and
Metals) The International Council on Mining and
Metals is an international organisation dedicated
to a safe, fair and sustainable mining and
metals industry.
IFRS (International Financial Reporting
Standards) Accounting standards as issued by
the International Accounting Standards Board.
Indigenous Peoples Policy Statement
Articulates BHP’s approach to engaging
with and supporting Indigenous peoples.
IPCC (Intergovernmental Panel on Climate
Change) The Intergovernmental Panel on
Climate Change is the United Nations body for
assessing the science related to climate change.
IUCN (International Union for Conservation
of Nature) The International Union for
Conservation of Nature is an international
organisation working in the field of nature
conservation and sustainable use of
natural resources.
KMP (Key Management Personnel) Key
Management Personnel includes the roles
which have the authority and responsibility for
planning, directing and controlling the activities
of BHP. These are Non-executive Directors,
the CEO, the Chief Financial Officer, the
President Australia, the President Americas.
KPI (key performance indicator) Used to
measure the performance of the Group,
individual businesses and executives in any
one year.
Legacy assets Legacy assets refer to those
BHP operated assets, or part thereof, located
in the Americas that are in the closure phase.
LME (London Metal Exchange) A major futures
exchange for the trading of industrial metals.
Location-based reporting (in relation to GHG
emissions data) Scope 2 emissions based on
average energy generation emission factors
for defined geographic locations, including
local, subnational, or national boundaries (i.e.
grid factors). In the case of a direct line transfer,
the location-based emissions are equivalent to
the market-based emissions.
Lower GHG emission(s) (for shipping)
Capable of between 5 per cent to 80 per cent
lower GHG emissions intensity (gCO2 -e/joule)
on a well-to-wake basis compared to
conventional fossil fuels used in shipping.
Lower GHG emission(s) (other than shipping
fuels) Capable of lower absolute GHG
emissions or GHG emissions intensity than the
current state or the conventional or incumbent
technology, as applicable.
Low to zero GHG emission(s) (for shipping)
Capable of between 81 per cent to
100 per cent lower GHG emissions intensity
(gCO2 -e/joule) on a well-to-wake basis
compared to conventional fossil fuels used
in shipping.
Low to zero GHG emission(s) (for energy
products other than shipping fuels) Capable
of between 90 per cent to 100 per cent lower
GHG emissions intensity during generation
and/or combustion (as applicable) compared
to conventional fossil fuel generation and/
or combustion.
Market-based method/reporting (in relation to
GHG emissions data) Scope 2 emissions based
on the generators (and therefore the generation
fuel mix from which the reporter contractually
purchases electricity and/or is directly provided
electricity via a direct line transfer).
MFL (Maximum Foreseeable Loss) The MFL
is the estimated impact to BHP if a risk were
to materialise in a worst-case scenario without
regard to probability and assuming all controls
are ineffective.
Nature The natural world, with an emphasis
on the diversity of living organisms (including
people) and their interactions among themselves
and with their environment. (Adapted from
Díaz, S et al. (2015) The IPBES Conceptual
Framework – Connecting Nature and People).
Nature-positive A high-level goal and
concept describing a future state of nature
(e.g. biodiversity, ecosystem services and
natural capital) which is greater than the current
state. This definition comes from the Taskforce
on Nature-related Financial Disclosures (TNFD)
Framework – Beta release v0.1.
Near zero emissions (for steelmaking or
ironmaking) 0.40 tonnes of CO2 -e per tonne
of crude steel for 100 per cent ore-based
production (no scrap), as defined by the
International Energy Agency (IEA) and
implemented in ResponsibleSteel International
Standard V2.0 (‘near zero’ performance level
4 threshold). IEA (2022), Achieving Net Zero
Heavy Industry Sectors in G7 Members,
IEA, Paris, License: CC BY 4.0, which also
describes the boundary for the emission
intensity calculation (including in relation to
upstream emissions).
Net zero (for a BHP GHG emissions target,
goal or pathway, or similar) Net zero includes
the use of carbon credits as governed by BHP’s
approach to carbon offsetting, available at bhp.
com/climate.
Net zero (for industry sectors, the global
economy, transition or future, or similar)
Net zero refers to a state in which the GHGs
(as defined in this Glossary) going into the
atmosphere are balanced by removal out of
the atmosphere.
NGER (National Greenhouse and Energy
Reporting Scheme) The Australian National
Greenhouse and Energy Reporting scheme
is a single national framework for reporting
and disseminating company information about
GHG emissions, energy production, energy
consumption and other information specified
under the National Greenhouse and Energy
Reporting Act 2007.
Nickel intermediates Concentrate, matte,
residue and mixed sulphides.
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BHP Annual Report 2024
NOJV (non-operated asset/non-operated joint
venture) Non-operated assets/non-operated
joint ventures are our interests in assets that are
owned as a joint venture but not operated by
BHP. References in this Annual Report to a ‘joint
venture’ are used for convenience to collectively
describe assets that are not wholly owned
by BHP. Such references are not intended to
characterise the legal relationship between the
owners of the asset.
NSWEC New South Wales Energy Coal.
Occupational illness An illness that occurs as
a consequence of work-related activities or
exposure. It includes acute or chronic illnesses
or diseases, which may be caused by inhalation,
absorption, ingestion or direct contact.
OELs (occupational exposure limits) An OEL is
an upper limit on the acceptable concentration
of a hazardous substance in workplace air
for a particular material or class of materials.
OELs may also be set for exposure to physical
agents such as noise, vibration or radiation.
Offsetting (in relation to GHG emissions) The
use of carbon credits. Refer to the definition of
carbon credit.
OFR BHP’s Operating and Financial Review for
the year ended 30 June 2024.
Onshore US BHP’s Petroleum asset (divested
in the year ended 30 June 2019) in four US
shale areas (Eagle Ford, Permian, Haynesville
and Fayetteville), where we produced oil,
condensate, gas and natural gas liquids.
Operated assets Operated assets are our
assets (including those under exploration,
projects in development or execution phases,
sites and operations that are closed or in
the closure phase) that are wholly owned
and operated by BHP or that are owned as a
BHP-operated joint venture. References in this
Annual Report to a ‘joint venture’ are used for
convenience to collectively describe assets that
are not wholly owned by BHP. Such references
are not intended to characterise the legal
relationship between the owners of the asset.
Operational control approach (in relation
to GHG emissions data) A consolidation
approach whereby a company accounts for
100 per cent of the GHG emissions over
which it has operational control (a company
is considered to have operational control over
an operation if it or one of its subsidiaries has
the full authority to introduce and implement its
operating policies at the operation). It does not
account for GHG emissions from operations
in which it owns an interest but does not have
operational control. Also see the definition for
Equity share approach.
Operational GHG emissions Our operational
GHG emissions are the Scope 1 emissions and
Scope 2 emissions from our operated assets.
Operations Open-cut mines, underground
mines and processing facilities, which in the
case of BHP are within our operated assets.
Other (with respect to water consumption
volumes) This includes water volumes used for
purposes such as potable water consumption
and amenity facilities at our operated assets.
Paris Agreement The Paris Agreement is an
agreement between countries party to the United
Nations Framework Convention on Climate
Change to strengthen efforts to combat climate
change and adapt to its effects, with enhanced
support to assist developing countries to do so.
Petroleum (asset group) A group of oil and
gas assets formerly operated by BHP before
its merger with Woodside in June 2022.
Petroleum’s core production operations were
located in the US Gulf of Mexico, Australia and
Trinidad and Tobago. Petroleum produced crude
oil and condensate, gas and natural gas liquids.
PPA (power purchasing agreement) An
agreement between a vendor and purchaser
for the sale of electricity, which may be wholly
or partially renewable or other low to zero GHG
emissions energy and either physically supplied
directly to the purchaser or for supply from an
electricity grid.
PPE (personal protective equipment) PPE
means anything used or worn to minimise risk
to a worker’s health and safety, including air
supplied respiratory equipment.
Physical climate-related risk Acute risks that
are event-driven, including increased severity
and frequency of extreme weather events and
chronic risks resulting from longer-term changes
in climate patterns.
Reference year (for a BHP GHG emissions
target or goal) A year used to track progress
towards GHG emissions targets and goals.
It is not a baseline for GHG emissions targets
and goals.
Residual mix The mix of energy generation
resources and associated attributes such
as GHG emissions in a defined geographic
boundary left after contractual instruments have
been claimed/retired/cancelled. The residual mix
can provide an emission factor for companies
without contractual instruments to use in a
market-based method calculation. A residual mix
is currently unavailable to account for voluntary
purchases and this may result in double counting
between electricity consumers.
Safeguard Mechanism A mechanism
established in Australia under the National
Greenhouse and Energy Reporting Act 2007
to keep certain GHG emissions at or below
legislated limits, known as baselines, for
Australia’s largest industrial facilities. Reforms
to the Safeguard Mechanism that applied from
1 July 2023 are intended to reduce Scope
1 emissions at Australia’s largest industrial
facilities on a trajectory consistent with achieving
Australia’s GHG emission reduction targets
of 43 per cent below 2005 levels by 2030 and
net zero by 2050. Facilities that exceed their
progressively declining legislated baselines may
apply Australian Carbon Credit Units to meet the
compliance obligations.
SASB (Sustainability Accounting Standards
Board) The Sustainability Accounting Standards
Board is a non-profit organisation that develops
standards focused on the financial impacts
of sustainability.
Scope 1 emissions (GHG emissions) Scope 1
emissions are direct GHG emissions from
operations that are owned or controlled by the
reporting company. For BHP, these are primarily
GHG emissions from fuel consumed by haul
trucks at our operated assets, as well as fugitive
methane emissions from coal production at our
operated assets.
Scope 2 emissions (GHG emissions) Scope 2
emissions are indirect GHG emissions from the
generation of purchased or acquired electricity,
steam, heat or cooling that is consumed by
operations that are owned or controlled by the
reporting company. BHP’s Scope 2 emissions
have been calculated using the market-based
method unless otherwise specified.
Scope 3 emissions (GHG emissions) Scope
3 are all other indirect GHG emissions (not
included in Scope 2 emissions) that occur in
the reporting company’s value chain. For BHP,
these are primarily emissions resulting from
our customers using and processing the
commodities we sell, as well as upstream
emissions associated with the extraction,
production and transportation of the goods,
services, fuels and energy we purchase for use
at our operations; emissions resulting from the
transportation and distribution of our products;
and operational emissions (on an equity basis)
from our non-operated joint ventures.
SEC (United States Securities and Exchange
Commission) The US regulatory commission
that aims to protect investors, maintain fair,
orderly and efficient markets and facilitate
capital formation.
Senior manager An employee who has
responsibility for planning, directing or controlling
the activities of the entity or a strategically
significant part of it. In the OFR, senior manager
includes senior leaders and any persons who
are directors of any subsidiary company even if
they are not senior leaders.
Shareplus BHP’s all-employee share
purchase plan.
Social investment Social investment is our
voluntary contribution towards projects
or donations with the primary purpose of
contributing to the resilience of the communities
where we operate and the environment, aligned
with our broader business priorities.
Social value Our positive contribution to society
through the creation of mutual benefit for BHP,
our shareholders, Indigenous partners and the
broader community.
South32 During FY2015, BHP demerged
a selection of our alumina, aluminium, coal,
manganese, nickel, silver, lead and zinc assets
into a new company – South32 Limited.
Steelmaking coal Metallurgical coal of a
sufficient high quality (grade) that it is suitable
for use in steelmaking. Refer to Additional
information 10.1 for the definition of metallurgical
coal and coking coal.
Surface water All water naturally open to
the atmosphere, including rivers, lakes and
creeks and external water dams but excluding
water from oceans, seas and estuaries (e.g.
precipitation and runoff, including snow and hail).
Sustainability (including sustainable and
sustainably) We describe our approach to
sustainability and its governance in this Report,
including OFR 6. Our references to sustainability
(including sustainable and sustainably) in
this Report and our other disclosures do not
mean we will not have any adverse impact on
the economy, the environment or society, and
do not imply we will necessarily give primacy
to consideration of or achieve any absolute
outcome in relation to any one economic,
environmental or social issue (such as zero
GHG emissions or other environmental effects).
Structural GHG emissions abatement
Actions taken at a source of GHG emissions
to avoid generating GHG emissions.
For BHP, this includes contractual power
purchase agreements.
Target (for BHP with respect to GHG
emissions) An intended outcome in relation to
which we have identified one or more pathways
for delivery of that outcome, subject to certain
assumptions or conditions.
TCFD (Task Force on Climate-Related Financial
Disclosures) The task force created by the
Financial Stability Board to improve and increase
reporting of climate-related financial information,
which has released recommendations designed
to help companies provide better information
to investors and others about how they
think about and assess climate-related risks
and opportunities.
Third-party water Water supplied by an entity
external to the operational facility. Third-party
water may contain water from three sources,
surface water, groundwater and seawater.
Tier 1 asset An asset that we believe is large,
long life and low cost.
TNFD (Taskforce on Nature-related Financial
Disclosures) The Taskforce on Nature-related
Financial Disclosures is a global, market-led
initiative that aims to develop a risk management
and disclosure framework for organisations
to report and act on evolving nature-related
dependencies, impacts, risks and opportunities.
249
Operating and Financial Review
Overview
Financial Statements
Governance
Contents
Additional Information
Transition risk (climate-related) Risks that arise
from existing and emerging policy, regulatory,
legal, technological, market and other societal
responses to the challenges posed by climate
change and the transition to a net zero
global economy.
TRIF (total recordable injury frequency)
The sum of (fatalities + lost-time cases +
restricted work cases + medical treatment
cases) x 1,000,000 ÷ actual hours worked.
Stated in units of per million hours worked.
BHP adopts the US Government Occupational
Safety and Health Administration guidelines
for the recording and reporting of occupational
injury and illnesses. TRIF statistics exclude
non-operated assets.
TSR (total shareholder return) Measures the
return delivered to shareholders over a certain
period through the movements in share price
and dividends paid (which are assumed to be
reinvested). It is the measure used to compare
BHP’s performance to that of other relevant
companies under the Long-Term Incentive Plan.
Underlying attributable profit Profit/(loss) after
taxation attributable to BHP shareholders
excluding any exceptional items attributable to
BHP shareholders as described in Financial
Statements note 3 ‘Exceptional items’. For more
information refer to OFR 10.
Underlying EBIT Earnings before net finance
costs, taxation expense, Discontinued
operations and any exceptional items.
Underlying EBIT includes BHP’s share of profit/
(loss) from investments accounted for using the
equity method including net finance costs and
taxation expense/(benefit). For more information
refer to OFR 10.
Underlying EBITDA Earnings before net
finance costs, depreciation, amortisation and
impairments, taxation expense, Discontinued
operations and any exceptional items.
Underlying EBITDA includes BHP’s share
of profit/(loss) from investments accounted
for using the equity method including net
finance costs, depreciation, amortisation and
impairments and taxation expense/(benefit).
For more information refer to OFR 10.
Unification The unification of BHP’s corporate
structure under BHP Group Limited as effected
on 31 January 2022.
Unit costs One of the financial measures BHP
uses to monitor the performance of individual
assets. Unit costs are calculated as ratio of
net costs of the assets to the equity share of
sales tonnage. Net costs is defined as revenue
less Underlying EBITDA and excluding freight,
and other costs, depending on the nature of
each asset. For information on the method of
calculation of the unit costs refer to OFR 10.1.
United Nations SDGs (Sustainable
Development Goals) The Sustainable
Development Goals, also known as the Global
Goals, were adopted by the United Nations in
2015 as a universal call to action to end poverty,
protect the planet, and ensure that by 2030 all
people enjoy peace and prosperity.
Value chain GHG emissions Scope 3 emissions
in our reported GHG emissions inventory.
WAF (Water Accounting Framework) A common
mining and metals industry approach to water
accounting in Australia.
Water quality – Type 1 Water of high quality
that would require minimal (if any) treatment to
meet drinking water standards. This water is
considered high quality/high grade in the ICMM
‘Good Practice’ Guide (2nd Edition) (2021).
Water quality – Type 2 Water of medium
quality that would require moderate treatment
to meet drinking water standards (it may have
a high salinity threshold of no higher than
5,000 milligrams per litre total dissolved solids
and other individual constituents). This water is
considered high quality/high grade in the ICMM
‘Good Practice’ Guide (2nd Edition) (2021).
Water quality – Type 3 Water of low quality
that would require significant treatment to meet
drinking water standards. It may have individual
constituents with high values of total dissolved
solids, elevated levels of metals or extreme
levels of pH. This type of water also includes
seawater. This water is considered low quality/
low grade in the ICMM ‘Good Practice’ Guide
(2nd Edition) (2021).
Well-to-wake basis Inclusive of the GHG
emissions across the entire process of fuel
production, delivery and use onboard vessels.
WRSA (Water Resource Situational
Analysis) A Water Resource Situational
Analysis is a holistic assessment of the water
situation where an operated asset operates.
The process is designed to describe the water
challenges that partners and stakeholders
share and the opportunities for collective action
to address those challenges. The WRSA is
prepared by a credible third party and draws on
publicly available information and direct partner
and stakeholder input. Within a defined area that
includes the water resources that BHP interacts
with, each WRSA includes assessment of:
– the ongoing stability of the volume and quality
of the water resources, taking into account
interactions of all other parties and any related
environmental, social or cultural values and
climate change forecasts
– the state of water infrastructure, water access,
sanitation and hygiene of local communities
– the environmental health of the water
catchments that feed the water resources
taking into account the extent of vegetation,
runoff and any conservation of the area
– external water governance arrangements
and their effectiveness
10 Glossary continued
250
BHP Annual Report 2024
BHP Registered Offices
BHP Group Limited
Australia
Level 18
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Melbourne VIC 3000
Telephone Australia: 1300 55 47 57
Telephone International: +61 3 9609 3333
Facsimile: +61 3 9609 3015
Group Company Secretary
Stefanie Wilkinson
BHP Corporate Centres
United Kingdom
Nova South, 160 Victoria Street
London, SW1E 5LB, UK
Telephone: +44 20 7802 4000
Facsimile: +44 20 7802 4111
Chile
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Piso 15
Las Condes 7560623
Santiago
Telephone: +56 2 2579 5000
Facsimile: +56 2 2202 6328
Commercial Office
Singapore
10 Marina Boulevard, #18-01
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Singapore 018983
Telephone: +65 6421 6000
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Share Registrars and
Transfer Offices
Australia
BHP Group Limited Registrar
Computershare Investor Services Pty Limited
Yarra Falls, 452 Johnston Street
Abbotsford VIC 3067
Postal address – GPO Box 2975
Melbourne VIC 3001
Telephone: 1300 656 780 (within Australia)
+61 3 9415 4020 (outside Australia)
Facsimile: +61 3 9473 2460
Email enquiries: investorcentre.com/bhp
United Kingdom
BHP Group Limited Depositary
Computershare Investor Services PLC
The Pavilions, Bridgwater Road
Bristol BS13 8AE
Postal address (for general enquiries)
The Pavilions, Bridgwater Road
Bristol BS99 6ZZ
Telephone: +44 344 472 7001
Facsimile: +44 370 703 6101
Email enquiries:
webcorres@computershare.co.uk
South Africa
BHP Group Limited Branch Register and
Transfer Secretary
Computershare Investor Services (Pty) Limited
Rosebank Towers
15 Biermann Avenue
Rosebank 2196
South Africa
Postal address – Private Bag X9000
Saxonwold
2132 South Africa
Telephone: +27 11 373 0033
Facsimile: +27 11 688 5217
Email enquiries:
web.queries@computershare.co.za
Holders of shares dematerialised into Strate
should contact their CSDP or stockbroker.
New Zealand
Computershare Investor Services Limited
Level 2/159 Hurstmere Road
Takapuna Auckland 0622
Postal address – Private Bag 92119
Auckland 1142
Telephone: +64 9 488 8777
United States
Computershare Trust Company, N.A.
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Postal address – PO Box 43078
Providence RI 02940-3078
Telephone: +1 888 404 6340
(toll free within US)
Facsimile: +1 312 601 4331
ADR Depositary, Transfer Agent
and Registrar
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Telephone +1 781 575 4555 (outside of US)
+1 877 248 4237 (+1-877-CITIADR)
(toll free within US)
Email enquiries:
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Website: citi.com/dr
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