Bhp Group Ltd · ASX:BHP
Bhp — Investor Presentation (October 2022)
35 slides from Bhp's investor presentation, Oct 3, 2022
Slide 1: Western Australia Iron Ore
Western Australia Iron Ore Brandon Craig Asset President WAIO 3 October 2022 Newman
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including: statements regarding our strategy, our values and how we define success; our expectations of a competitive advantage for our business or certain products; our commitment to generating social value
Slide 3: Acknowledgement of Country
Acknowledgement of Country Banjima Country Yandi
Slide 4: Western Australia Iron Ore site tour: 3 days at a glance
Western Australia Iron Ore site tour: 3 days at a glance Meet the team DAY 1 DAY Port Hedland 3 DAY 2 South Flank Brandon Craig Anna Wiley Huw McKay Rod Dukino Kristy Heal Asset President Vice President Vice President Vice President Head of Finance WAIO Planning and Technical Market Analysis Sales a
Slide 5: Western Australia Iron Ore snapshot
Western Australia Iron Ore snapshot An interconnected system bringing resources and people together to build a better world • Workforce of ~8,000 employees – 29% female and 11% Indigenous • Four processing hubs supported by five mines, all located in the Pilbara – Processing hubs are Newman, Jimbleb
Slide 6: WAIO is a significant contributor to BHP
WAIO is a significant contributor to BHP An example of a large, long-life, low-cost asset • Value unlocked through embedded growth optionality over the Asset returns since investment in 1985 long asset-life and first quartile cost performance (annualised, %) Return on Capital Employed (ROCE) • FY2
Slide 7: Consistent delivery of superior returns
Consistent delivery of superior returns Safer, lower cost, more reliable, more productive Operational excellence Strong margins Value and returns a Safe Stable and Continuous Strong price Lowest cost Large, high Social value Clear growth Disciplined operations reliable improvement realisations iron
Slide 8: Our strategy is underpinned by the way we work
Our strategy is underpinned by the way we work Enabling our people to contribute to their full potential to achieve operational excellence Data People & Digital enablement supporting value creation Inclusive, performance orientated culture strategy culture WAIO Safer BHP Deep technical capability en
Slide 9: WAIO values safe operations above all else
WAIO values safe operations above all else Empowering our workforce though culture, systems and controls Events with fatal potential3 Over 11 years fatality free; fatal potential events down 65% since FY18 (#, index FY18 = 100) -65% Disciplined approach to material risk management (e.g. COVID-19) FY
Slide 10: Social value embedded in our approach
Social value embedded in our approach Helps enable sustainable operations long term and positions us to access future opportunities Decarbonisation Healthy Indigenous Safe, inclusive Thriving, Responsible environment partnerships and future ready empowered supply chains workforce communities Contrib
Slide 11: Indigenous partnerships
Indigenous partnerships Building relationships based on trust, respect and mutual benefit Emphasis on co-creating plans and high-quality relationships Ongoing commitment to Heritage protection through 8 Traditional Owner Groups consultation on strengthened systems and across our portfolio heritage a
Slide 12: Large resource base in proximity to existing infrastructure
Large resource base in proximity to existing infrastructure Enables capital efficient volumes over the next few decades • 30 Bt Mineral Resources6 Mines replacement to achieve 330 Mtpa run rate7 (Mtpa, peak capacity) 340 • Currently operate four processing hubs supported by five mines 320 • ~95% of
Slide 13: Competitive advantage
Competitive advantage High-grade ore and percentage of lump drives superior price realisation Index quality ore Increasing lump proportion Premium price realisation Iron content in ore Lump proportion Realised price (%) (%, FY22) ($US/wmt FOB, FY22) WAIO Yandi Competitors Platts 62% Index 66 Range w
Slide 14: Unlocking capacity across the value chain
Unlocking capacity across the value chain Disciplined investment to shift the bottleneck to the port over the medium term Mines Rail Port Direct to ship ore Mining Ore handling Product Train load-outs Rail Car Shipped via Shiploaders plants stockpiles dumpers stockyards and berths Current (284 Mtpa
Slide 15: Delivering productivity at Mines
Delivering productivity at Mines Productivity mitigating expanding deposits and increased haul cycle times Greater truck payload increasing production Productivity driving improved truck hours (t, index FY19 = 100) (hours, index FY19 = 100) 120 120 110 ~115 110 109 111 100 100 100 100 100 90 90 80 8
Slide 16: Delivering productivity at Rail and Port interface
Delivering productivity at Rail and Port interface Debottlenecking Port and Rail increases productivity Track speed restrictions impact on cycle time Five car dumper (CD) availability (mins, index FY20 = 100) (%, index FY19 = 100) 100 110 100 80 105 105 100 74 100 60 90 40 45 20 80 FY20 FY22 Medium
Slide 17: Sector leading free cash flow performance
Sector leading free cash flow performance Lowest cost iron ore producer, with low sustaining capital intensity • FY23 unit cost guidance of US$18-19/t FOB, decreasing to Lowest cost producer for four consecutive years12 <US$17/t FOB in the medium term (both @ $0.72 FX) ($US/t) – Supply chain reliab
Slide 18: Technology is a key enabler
Technology is a key enabler Improving safety, equipment reliability and increasing productivity across the value chain Autonomous haulage Rail Technology Project (RTP) Shiploader automation • Jimblebar and Newman East embedded • Replaces end of life rail signalling systems with • Currently testing t
Slide 19: Growing to >300 Mtpa in the medium term
Growing to >300 Mtpa in the medium term Focus on debottlenecking the Inflow system (Port and Rail) • The supply chain is highly interconnected with limited sprint capacity • Capital intensity of between US$45 – US$60/t Phase 1 – Maximising capacity through port five car dumpers system Port • Port De
Slide 20: Studying options for growth to 330 Mtpa
Studying options for growth to 330 Mtpa Shifting the system constraint to design bottleneck at Outflow (shiploaders) • Studies expected to be completed in FY25 Phase 2: Enable a stable future proof supply chain Port • Further debottlenecking the Port, likely through an additional car- CD 6 dumper, r
Slide 21: Consistent delivery of superior returns
Consistent delivery of superior returns Safer, lower cost, more reliable, more productive Operational excellence Strong margins Value and returns a Safe Stable and Continuous Strong price Lowest cost Large, high Social value Clear growth Disciplined operations reliable improvement realisations iron
Slide 22: Decarbonisation: operational emissions
Decarbonisation: operational emissions Anna Wiley Vice President Planning and Technical 3 October 2022 Newman
Slide 23: Decarbonisation: operational emissions
Decarbonisation: operational emissions WAIO is on track to deliver our plans to lower operational emissions, with further upside potential as new technologies emerge WAIO is one of the lowest carbon intensity iron ore producers globally4 Renewable PPA to lower electricity greenhouse gas emissions at
Slide 24: WAIO's decarbonisation pathway
WAIO’s decarbonisation pathway Delivering structural abatement of emissions through technological advancement Emissions source FY2020 2050 Electricity (10%) Natural Gas (15%) Diesel (75%) Flexibility in the implementation horizon is Studies and pilots are critical near-term Our pathway to net-zero i
Slide 25: WAIO is one of the lowest carbon intensity producers
WAIO is one of the lowest carbon intensity producers WAIO represents around 22% of BHP’s overall operational emissions (Scope 1 and Scope 2) 2021 Carbon Intensity – Seaborne Iron Ore15 (Kilograms CO2-equivalent per tonne of iron ore (wet)) 250 Axis blue, redo formatting. 200 Add dot points into subh
Slide 26: New PPA to reduce emissions at Port Hedland
New PPA to reduce emissions at Port Hedland Alinta agreement expected to deliver a 50% reduction in emissions at Port ~75 MW demand (Port) ~610 kt CO2-e GHG emissions16 ~150 MW demand (Pilbara) (~25% of WAIO total) Port • Integrating a 45 MW solar farm, 35 MW battery energy storage system and low em
Slide 27: Our renewable transition will be supported by Yarnima
Our renewable transition will be supported by Yarnima Our highly efficient Combined Cycle Gas Power Station will provide firm power in the Pilbara Gas power generation in WA Emission Intensity17 (t CO2-e/MWh) 0.70 0.61 0.56 0.46 • Yarnima enables the production of reliable gas power while emitting f
Slide 28: We are trialling battery electric locomotives
We are trialling battery electric locomotives Preparing for the replacement of our diesel powered locomotive fleet ~190 million litres ~490 kt of CO2-e GHG emissions ~180 locomotives of diesel annually (~20% of WAIO total) EMPTY EMPTY • Partnership agreements signed with Significant battery use Over
Slide 29: Mines will focus on battery electric technology
Mines will focus on battery electric technology Collaborating for large-scale haul truck electrification solutions ~300 haul trucks18 ~500 million litres ~1,340 kt CO2-e GHG emissions ~45 excavators of diesel annually (~55% of WAIO total) ~500 ancillary equipment • Partnership agreements signed in 2
Slide 30: Decarbonisation: operational emissions
Decarbonisation: operational emissions WAIO is on track to deliver our plans to lower operational emissions, with further upside potential as new technologies emerge WAIO is one of the lowest carbon intensity iron ore producers globally4 Renewable PPA to lower electricity greenhouse gas emissions at
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Slide 32: Footnotes
Footnotes 1. Slide 6: EBITDA Margin presented on a ‘continuing operations’ basis. 2. Slide 7,22: Based on published unit costs by major iron ore producers, as reported at 30 June 2022. 3. Slide 9: Fatal potential events include High Potential Injuries (HPI) and near miss events. 4. Slide 10,23,30: 2
Slide 33: Appendix
BHP Appendix
Slide 34: Summary of mining and processing hubs
Summary of mining and processing hubs Joint venture Processing hub Mining hub Main mineral deposits Mount Whaleback, Eastern Ridge, Mount Newman Shovelanna Newman operations Newman Western Ridge Jimblebar South Jimblebar, Wheelarra, Jimblebar Jimblebar Hashimoto Yandi Yandi Yandi Yandi (end-of-life
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