Bhp Group Ltd · ASX:BHP
Bhp — BMO Farm to Market Conference 2022
17 slides from Bhp's conference presentation, May 19, 2022
Slide 1: BMO Farm to Market Conference
BMO Farm to Market Conference David Lamont Chief Financial Officer Jansen
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; production forecasts; plans, strategies and objectives of management; assumed long-term scenari
Slide 3: BHP: Sector leading assets across our commodities
BHP: Sector leading assets across our commodities We are actively managing our portfolio for long-term value creation through the cycle Maximising value Demonstrated bulk logistics expertise Western Australia Iron Ore Queensland Iron ore Lowest cost major producer1 with expansion potential if market
Slide 4: Potash and Jansen fit our strategy
Potash and Jansen fit our strategy Modern, long-life, expandable will support long-term value and returns Attractive future facing commodity • Reliable base demand leveraged by population growth and higher living standards • Low emission, biosphere friendly and positively leveraged to decarbonisatio
Slide 5: Potash delivers value growth and differentiation
Potash delivers value growth and differentiation A future facing commodity with attractive long term fundamentals and differentiated demand drivers Potash market has highly attractive characteristics Potash provides differentiated demand drivers Correlation since 20093 Inducement Large market pricin
Slide 6: Risks and opportunities on the road to entry
Risks and opportunities on the road to entry Overall market changes are positive for Jansen S1 economics Europe 15% 16% Brazil • Near term consumption impacted by shipping constraints 4% USA CY21 Demand response China • Firm demand from food exporters/potash importers 12% Demand 18% to scarcity pric
Slide 7: Stage 1 execution on track
Stage 1 execution on track Contingencies built in for Stage 1, moving early to secure major capex items Early progress Investment spend profile (US$ billion) • Jansen S1 US$5.7 bn (C$7.5 bn) project is 5% complete following 1.6 August 2021 sanction 1.2 • ~US$1.4 bn in contracts awarded, covering the
Slide 8: Stage 2 studies underway
Stage 2 studies underway Stage 2 studies being accelerated to provide maximum optionality on sanction timing Estimated production from potential incremental stages beyond Jansen S16 (MOP Production, Mt) 20 Lower capital Higher incremental intensity returns10 16 Jansen S4 20-23% IRR11 US$800-950/t7 1
Slide 9: Jansen has structural competitive advantages
Jansen has structural competitive advantages Modern, large scale conventional mine with modern design providing platform for future growth Geology & Resource Mining system Hoisting Processing Outbound logistics Upfront ~60% less Shaft design ~20-50% Leading equipment Continuous, geological equipment
Slide 10: Scale and latest technology deliver an advantage
Scale and latest technology deliver an advantage Approach drives sustainable cost, safety and emissions benefits Larger sized borers, continuous conveyance and automation Photo of Jansen borer at mining trial • Existing technology, adapted and scaled into a unique integrated mining system • Four min
Slide 11: Efficient plant design and path to market
Efficient plant design and path to market Optimised for increased recovery and plant utilisation, with outbound logistics to support Jansen S1 and beyond Processing plant Processing sub-areas render • ~92% recovery rate; expected to be higher than peers • Setting a new benchmark for equipment and de
Slide 12: Confident in optimised construction schedule
Confident in optimised construction schedule 6 year construction period to first production followed by a 2 year ramp-up for Stage 1 Critical Path Activity CY21 CY22 CY23 CY24 CY25 CY26 CY27 CY28 Current Scope14 Final Liner Production and Service shaft Shafts handover Jansen Stage 1 Shaft infrastruc
Slide 13: Jansen expected to become a world class asset
Jansen expected to become a world class asset Jansen S1 to be a large, low cost asset that will enter the market at the bottom of the global cost curve15 Jansen S1’s competitive position against peers Initial investment (Average asset age in 2025) Well defined Note: Bubble size US$5.7 bn / C$7.5 bn
Slide 14: Appendix
BHP Appendix
Slide 15: Footnotes
Footnotes 1. Slide 3: Based on published unit costs by major iron ore producers, as reported at 31 December 2021. 2. Slide 4: Aiming to achieve Indigenous workforce participation of 20% by the end of FY27. 3. Slide 5: Correlation based on changes in average quarterly prices from Q2 2009 to Q1 2022.
Slide 16: Jansen Reserves and Resources
Jansen Reserves and Resources Notes: • The information in this report relating to Mineral Resources and Ore Reserves is based on and fairly represents information and supporting documentation compiled by B Németh MAusIMM ), O Turkekul (APEGS) for Mineral Resources, and J Sondergaard ( MAusIMM ) for
Slide 17: Slide 17