Bhp Group Ltd · ASX:BHP
Bhp — Global Metals, Mining and Steel Conference 2019
25 slides from Bhp's conference presentation, May 14, 2019
Slide 1: Our strategy delivers value and returns
Our strategy delivers value and returns Andrew Mackenzie Chief Executive Officer 14 May 2019 Western Australia Iron Ore
Slide 2: Disclaimer: Forward-looking statements
Disclaimer Forward - looking statements This presentation contains forward - looking statements, including statements which may include: trends in commodity prices and cu rrency exchange rates; demand for commodities; plans; strategies and objectives of management; closure or divestment of certain o
Slide 3: BHP's investment proposition
BHP’s investment proposition 14 May 2019 Global Metals, Mining and Steel Conference We have the assets, options, capabilities and discipline to sustainably grow long - term shareholder value and returns Low - cost producer efficiency, technology, culture Volume growth productivity, project delivery
Slide 4: Our strategy to maximise value and returns
Our strategy to maximise value and returns 14 May 2019 Global Metals, Mining and Steel Conference Assets that are resilient through the cycle, have embedded growth options and match our capabilities Best culture and capabilities Best commodities Best assets Commodities with high economic rent potent
Slide 5: Social value secures our strategy
• Build long - term societal value through deep and authentic relationships with local, regional and global stakeholders • Collaborate and advocate to effectively address challenges, and pursue opportunities, of importance to our communities • Place a high value on the long - term needs of society a
Slide 6: Balance sheet strength and capital allocation are critical
Balance sheet strength and capital allocation are critical Maximise value and returns > US$25 billion cash returns to shareholders announced since 1 January 2016 Buy - backs Acquisitions/ divestments Debt reduction Organic development Operating productivity Capital productivity Net operating cash fl
Slide 7: We navigate future uncertainty through scenario analysis
We navigate future uncertainty through scenario analysis Maximise the value of our existing assets and optimise our portfolio to meet the evolving needs of markets 14 May 2019 Global Metals, Mining and Steel Conference Value - conversion, de - risking and exercising options Competitive portfolio of
Slide 8: Transformation: our plans have delivered
Transformation 0 5 10 15 20 FY16 FY17 FY18 FY19e FY17 average realised prices Actual/forecast Our plans have delivered 14 May 2019 Global Metals, Mining and Steel Conference Returns (ROCE 1 excluding Onshore US , nominal %) ~5% unit cost reduction 3 across our portfolio Cost efficiencies Technology
Slide 9: Maximise the value of our present portfolio (Petroleum, Escondida)
Maximise the value of our present portfolio • Brownfield and major projects support average annual production of ~110 MMboe in medium term (decline of ~1.5% p.a.) • Advanced seismic imaging and ocean bottom node surveys to expand existing fields and unlock potential future opportunities – West Barra
Slide 10: Maximise the value of our present portfolio (WAIO, Queensland Coal)
Maximise the value of our present portfolio • Phased roll - out of autonomous haul trucks to replicate improvement in haulage costs seen at Jimblebar • Utilising moving block technology reduces distance between trains, increasing rail capacity • South Flank mine increases average product quality fro
Slide 11: Transforming BHP
Transformation Transforming BHP 14 May 2019 Global Metals, Mining and Steel Conference The world is undergoing significant change… we will be bolder and adapt faster to take advantage of this Innovative solutions for operations • Address sustainability challenges (e.g. carbon capture, water, tailing
Slide 12: Diversified across commodities, geographies and time periods
14 May 2019 Global Metals, Mining and Steel Conference Mad Dog northwest water injection c Wildling a Samurai a Western GOM a Atlantis Phase 4 b Spence materials reprocessing c Spence in - pit crusher & conveyor b Orphan Basin exploration a WAIO to 290 Mtpa f OD BFX d OD ODEP b Oak Dam a Blackwater
Slide 13: Broad suite of attractive opportunities
Comprehensive approach to evaluate and rank opportunities based on returns, risk and optionality Lower risk Higher risk Higher return Lower return South Flank (Iron ore) Atlantis Phase 3 (Petroleum) Mad Dog Phase 2 (Petroleum) Jansen Stage 1 (Potash) Scarborough (Petroleum) Resolution (Copper) Wards
Slide 14: Value and returns are at the centre of everything we do
Value and returns are at the centre of everything we do 14 May 2019 Global Metals, Mining and Steel Conference • >10% unit cost reductions 11 at bulk operations • Escondida unit costs flat in medium term, despite higher power and water costs • Petroleum unit costs reflect field decline • ~2% p.a. vo
Slide 15: BHP's investment proposition
BHP’s investment proposition 14 May 2019 Global Metals, Mining and Steel Conference We have the assets, options, capabilities and discipline to sustainably grow long - term shareholder value and returns Low - cost producer efficiency, technology, culture Volume growth productivity, project delivery
Slide 16: BHP
Bhp
Slide 17: Appendix
Appendix
Slide 18: Transformation initiatives: value, timing and capex
Initiatives Value 13 Timing 16 Capex over 5 - years ( US$m ) Description WAIO ~5 years <800 - BHP Operating System: piloted at Port Hedland and Perth Repair Centre - Value Chain Automation: focused on haulage , shiploaders, rail, integrated mine platforms and decision systems - Latent capacity: supp
Slide 19: Future options – worked for value, timed for returns
Future options – worked for value, timed for returns Options Description Potential execution t iming Capex ( US$m ) Tollgate IRR 13 Risk 17 (1 - 5) Investment considerations Ruby Petroleum Tie back into existing p rocessing f acilities in Trinidad & Tobago <1 year >250 Feasibility >15 •• - Similar s
Slide 20: Exploration – extending our conventional reserve life
Exploration – extending our conventional reserve life Investment decisions made in accordance with our Capital Allocation Framework and fully consider the broader market impact 14 May 2019 Global Metals, Mining and Steel Conference 20 Options Location Ownership Maturity Earliest first production Des
Slide 21: BHP guidance
BHP guidance 21 Group FY19e Capital and exploration expenditure (US$ bn) <8.0 Cash basis. FY20e: <US$8 billion. Including: M aintenance 2.1 Includes non - discretionary capital expenditure to maintain asset integrity, reduce risks and meet compliance requirements. Also includes capitalised deferred
Slide 22: BHP guidance (continued): Copper
BHP guidance (continued) 22 Copper FY19e Medium term Copper production (kt) 1,645 – 1,740 Escondida: 1.12 – 1.18 Mt; Olympic Dam: 170 – 180 kt; Spence: 160 – 175 kt; Cerro Colorado: 60 – 70 kt; Antamina: 135 kt (zinc 35kt). Capital and exploration expenditure (US$bn) 2.9 Includes US$70 million explo
Slide 23: BHP guidance (continued): Coal
BHP guidance (continued) 23 Coal FY19e Medium term Metallurgical coal production (Mt) 43 – 46 49 – 54 Energy coal p roduction (Mt) 28 – 29 NSWEC: 18 – 19 Mt ; Cerrejón : 10 Mt. Capital and exploration expenditure (US$bn) 0.6 Queensland Coal Production (Mt, 100% basis) 75 – 81 FY19 volumes expected t
Slide 24: Footnotes
Footnotes 1. Slides 3,8,14,15: ROCE: R epresents annualised attributable profit after tax excluding exceptional items and net finance costs (after tax) divided by average cap it al employed. Capital employed is net assets before net debt. Presentation of future Return on Capital Employed (ROCE) does
Slide 25: BHP
Bhp SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. BHP Group Limited and BHP Group Plc Date: May 14, 2019 By: /s/ Rachel Agnew Name: Rachel Agnew Titl
BHP Group — Global Metals, Mining and Steel Conference 2019 on 6ix