Bhp Group Ltd · ASX:BHP
Bhp — Technical Presentation (November 2024)
141 slides from Bhp's technical presentation, Nov 18, 2024
Slide 1: 2024 Chilean copper site tour
2024 Chilean copper site tour Brandon Craig President Minerals Americas 18 November 2024 Escondida
Slide 2: Disclaimer
Disclaimer Forward-looking statements This presentation 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
Slide 3: A winning strategy
A winning strategy We have an enduring competitive advantage when it comes to copper Copper is an attractive commodity positively leveraged to global megatrends Resilient long-term portfolio of copper assets Set to create Excellence in operations and delivering on our growth potential value for our
Slide 4: Minerals Americas: a winning portfolio
Minerals Americas: a winning portfolio A focus on safely and more sustainably delivering exceptional operational performance and growing production Copper, potash and iron ore operations and projects in 7 countries Canada Copper Jansen Potash • A world class copper business in Chile and Peru with gr
Slide 5: BHP Chilean copper snapshot
BHP Chilean copper snapshot Operating for over 30 years in Chile. A pre-eminent copper producer, with significant contribution to the country 27% US$9.4 bn of total Chilean copper production total economic contribution2 to Chile in FY24 ~16,000 workforce 100% of which ~6,000 are employees (42% femal
Slide 6: Safety is our most important priority
Safety is our most important priority Empowering our workforces through culture, systems and controls Safety is integrated into how we operate Improving trends in high-potential injury (HPI) data in Chile (HPI events) (HPI per million exposure hours) 45 0.40 Field Leadership Enabling a culture of ca
Slide 7: Our Chilean business is globally significant
Our Chilean business is globally significant Since 1990 we have produced 38 Mt of copper in Chile, representing over 7% of global copper mine production3 Chilean copper business is significant and larger than competitors' mines4 N (CY23 copper production, kt) 1,400 1,200 1,000 800 600 400 200 0 Cerr
Slide 8: A consistently high-performing business
A consistently high-performing business Quality of asset base and focus on cost control has enabled strong cashflow and returns over time Consistently high EBITDA margin averaging 58% over 20 years5 BHP’s strategy to increase copper exposure is delivering5 (EBITDA, US$ bn) (EBITDA margin, %) (EBITDA
Slide 9: Our strategy reflects our competitive advantages
Our strategy reflects our competitive advantages We are leveraging our strengths to deliver growth in Chile Geology Operational Social value and Growth options & resource excellence sustainability Consistent and Four pathways across Integrated into our World’s largest reliable new and existing appro
Slide 10: Geology & resource: an advantaged position for growth
Geology & resource: an advantaged position for growth Largest copper mineral resource globally with significant installed infrastructure Chile a significant portion of BHP’s copper resources7 (Copper contained, Mt) (Cu grade, %) Scale provides multiple benefits 200 1.0 Excludes Josemaria, Filo del S
Slide 11: Operational excellence: a relentless pursuit
Operational excellence: a relentless pursuit We have a differentiated approach that has delivered stable and improving performance and a strong base for growth Technology People & Digital enablement supporting value creation strategy culture Inclusive, high-performance culture Safer BHP Centres of D
Slide 12: Growth options: delivering Chilean copper growth
Growth options: delivering Chilean copper growth We have narrowed our studies to four main pathways for growth The number of options we are assessing has been reduced… …to an attractive set of options across four main pathways Existing facilities Concentrator strategy 10 projects 24 projects 18 proj
Slide 13: Maintaining our position in Chile
Maintaining our position in Chile A program of high-quality projects leveraging existing infrastructure and delivering production growth Chilean copper indicative production shows potential pathway to offset decline (Copper production, Mtpa) Recent Market Production Existing New Further Escondida gr
Slide 14: Sequencing to manage capital profile
Sequencing to manage capital profile Healthy competition for capital both in Chile and across BHP globally via our Capital Allocation Framework Our compelling pipeline of copper projects will compete for capital Capital Allocation Framework remains core to BHP Portfolio Chilean copper Copper SA Oper
Slide 15: BHP at the forefront of the sector's sustainability efforts
BHP at the forefront of the sector's sustainability efforts Facilitated region's move to renewable power, positioning operations for further electrification 100% thermal coal power Break status-quo First wave of optimisations Next wave of optimisations • Highly concentrated market • Increase in powe
Slide 16: A clear strategy for decarbonisation in Chile
A clear strategy for decarbonisation in Chile Plans to eliminate Scopes 1 and 2 emissions are well underway. Progress from here will be uneven Scope 2: Electricity Scope 1: Diesel consumption First challenge was to secure renewable electricity, reducing Next challenge is to displace diesel consumpti
Slide 17: BHP Chile Copper site tour: 3 days at a glance
BHP Chile Copper site tour: 3 days at a glance Meet the team DAY 1 N Brandon Craig Laura Whitton René Muga President Head of Copper VP Corporate Affairs Minerals Americas Commodity Strategy Latin America Frances Summerhayes Adam Favero Pedro Correa VP Finance VP Development and VP Projects Minerals
Slide 18: Copper market view
Copper market view Laura Whitton Head of Commodity Strategy | Copper and Potash BHP Insights: how copper will shape our future
Slide 19: Portfolio positively leveraged to megatrends
Portfolio positively leveraged to megatrends BHP is positioned to compete in a complex, but opportunity-rich environment Traditional demand Decarbonisation Portfolio Attractive fundamentals Demand amplification, rising material intensity Population growth Climate-positive land use Urbanisation Decar
Slide 20: Copper has multiple sources of increasing demand
Copper has multiple sources of increasing demand Near term global energy transition trends and data centres are adding to ‘traditional’ fundamentals playing out ‘Traditional’ economic growth Energy transition Digital Developed EVs Data centres Mature stock, mainly replacement demand Electrification
Slide 21: Long-term trends remain compelling
Long-term trends remain compelling Demand is broad based and shows strong growth even with expected substitution and thrifting Copper demand projected to grow ~70% through to 2050… …an average of ~2% per year10 (Copper semis end-use demand by key theme, Mt) (Copper demand by end-use sector, indexed
Slide 22: No denying impressive growth in copper mine supply
No denying impressive growth in copper mine supply In the past 30 years primary supply has grown rapidly, particularly in Latin America …primarily from Latin America, Africa and Asia Pacific11 (Primary copper supply by region, Mt) Africa • Underinvestment and civil unrest led to 25 collapse in produ
Slide 23: Latin America a key region for mine supply growth
Latin America a key region for mine supply growth Other regions growing include Africa and Asia-Pacific, but Latin America expected to deliver the largest new supply Primary copper supply12 Russia + 20 (Mtpa) 20 Caspian Europe Total current supply 10 Total current supply 2.0 Mtpa 1.1 Mtpa 10 0 20 Ac
Slide 24: Industry likely to disappoint on forecast primary supply
Industry likely to disappoint on forecast primary supply Many “possible” projects have yet to satisfy all requirements for investment so are unlikely to come to market as forecast Primary copper supply and demand13 (Mt) Longer term primary copper demand growth slowing 40 due to increasing secondary
Slide 25: Today's mines are getting older and lower grade
Today’s mines are getting older and lower grade Currently operating mines are working harder for longer More than half of mines operating in 2023 are >20 years old14 Grade decline has been a consistent long-term trend15 (Start dates of mines operating in 2023 versus 2023 copper grade, %) 1.40 Foreca
Slide 26: Steady increase in project capital intensity
Steady increase in project capital intensity Brownfield projects face fewer risks in execution, but likely to see similar cost profile to greenfield projects Latin American sanctioned project capital intensity has moved up over time16 (US$/tpa copper equivalent, real 2024) 60,000 25 projects 4 proje
Slide 27: Greenfield projects facing multiple challenge
Greenfield projects facing multiple challenge A continual pattern of delays highlights risks to delivery of forecast greenfield volumes Large segment of greenfield volumes continue to be delayed, and even those that get approved take 17 years from discovery to first production17 (Copper production c
Slide 28: Technology options continue to advance
Technology options continue to advance Developments gaining pace but unlikely to solve significant forecast deficits Operating productivity Deconstraining Method substitution Sulphide leaching improvements existing operations of high-cost supply Potential • Automation • Multiple in development acros
Slide 29: Capturing the copper opportunity
Capturing the copper opportunity To win, companies must adapt to and manage complexity and maintain a strong balance sheet and social value credentials The opportunity… ~70% demand growth through to 2050 ‘Traditional’ economic growth Energy transition Digital …how to capture it Technical Environment
Slide 30: Chilean context and social value
Chilean context and social value René Muga Vice President Corporate Affairs Latin America Santiago
Slide 31: A stable country for investment
A stable country for investment Chile has robust institutions underpinning a longstanding market economy 1st South American country to join the OECD Favourable investment framework 1st 2nd 2nd place in Latin America - best in region on political lowest levels of corruption 2024 IMD World rights, civ
Slide 32: Macro fundamentals remain robust
Macro fundamentals remain robust Post economic instability due to the pandemic and social unrest, inflation continues to moderate as economic growth recovers Chile has stable and reliable monetary and fiscal policies GDP growth recovering as inflation normalises20 (Chilean GDP and inflation YoY chan
Slide 33: Chile is an attractive destination for copper investment
Chile is an attractive destination for copper investment Mining is expected to remain a significant driver of private investments Investments are beginning to recover and stabilise21 Private investors are showing confidence in Chile’s economic path22 (Gross fixed capital formation by component, US$
Slide 34: New royalty structure brings certainty
New royalty structure brings certainty Royalty bill passed in 2023 now in place, Government expects it to raise as much as 0.45% of Chilean GDP Royalty structure Ad valorem component Margin Cap on mining tax over gross revenue component burden 1% 8-26% 46.5% • Mining industry average effective tax r
Slide 35: Permitting reform discussion underway
Permitting reform discussion underway Congress is discussing two different bills to streamline permitting processes In January 2024 the Executive submitted two bills to Congress to reform the permit system • Reform to the Environmental Assessment System (SEIA Reform) • Reform to the Sectoral Permits
Slide 36: Social value
Social value Delivering on our framework with tangible results across Chile Our social value framework Decarbonisation Healthy Indigenous Safe, inclusive Thriving, Responsible environment partnerships and future ready empowered supply chains workforce communities Building relationships Supporting et
Slide 37: Investing in Indigenous peoples in Chile
Investing in Indigenous peoples in Chile Building long-term relationships based on deep respect for distinct cultures, rights, perspectives and aspirations Indigenous peoples around our operations Taking a multi-faceted approach • Escondida has an Indigenous partnership strategy • Social and economi
Slide 38: Financial performance
Financial performance Frances Summerhayes Vice President Finance Minerals Americas Escondida
Slide 39: Chile copper: A significant business performing strongly
Chile copper: A significant business performing strongly A large, high quality business with consistent returns and contribution to BHP Consistent EBITDA margins averaging ~58% over last 20 years Chile generates significant EBITDA…and healthy returns25 (EBITDA margin, %) 90 80 70 $5.6 bn 22% 60 EBIT
Slide 40: Proven cost discipline in an inflationary environment
Proven cost discipline in an inflationary environment Through our operational excellence and relentless focus on cost control we have managed the challenges Market drivers have been highly …and yet cost control has been Labour remains a key source of inflationary… strong vs. competitors inflationary
Slide 41: Productivity is our biggest value lever
Productivity is our biggest value lever Delivered ~US$4 bn of productivity benefits across Chilean copper since FY20 Driving a stable cost base at Escondida over the long run… Improved labour (Escondida unit cost US$/lb vs. Chilean inflation) productivity across 🠅10% 2.00 Unit costs 17% lower than…
Slide 42: A sustainable competitive advantage
A sustainable competitive advantage Our proven approach to operational excellence and relentless focus on cost control drives sector-leading performance Escondida and Spence have managed costs well…33 …and delivered better at Escondida vs. guidance33 (two year unit cost increase to FY24, %) (unit co
Slide 43: Capital discipline supports our strategy
Capital discipline supports our strategy Our investments across Chilean copper are assessed through a robust framework Capital to maintain and improve our assets set to increase34 (Average Chilean annual capital spend) The Capital Allocation Framework sits at the core of BHP Increasing near term spe
Slide 44: Clear in our approach to investment
Clear in our approach to investment Delivering the right information at the right time to make decisions that consider value and the pillars of our social value framework We assess projects on a range of financial and other metrics… …which incorporates social value metrics Planning cycle Investment
Slide 45: Strong performance in FY24 with momentum to continue
Strong performance in FY24 with momentum to continue Following a solid year at Escondida and record production at Spence we are set to deliver production growth of +8% into FY25 FY2435 FY25 guidance35 Medium term guidance 35,36 Production (kt) Cost (US$/lb) Production (kt) Cost (US$/lb) Production (
Slide 46: Chilean growth program
Chilean growth program Adam Favero Vice President Development and Strategic Services Chile Escondida
Slide 47: Growth strategy reflects competitive advantages
Growth strategy reflects competitive advantages We will leverage our strengths to deliver growth Globally significant resource base Latent capacity and Infrastructure • 30 Bt resource in Chile37; ~7.5% of global • ~300 ktpa Cu of SXEW latent capacity copper resources across Chile39 • More than 65 ye
Slide 48: Growing production from our Chilean resource base
Growing production from our Chilean resource base Targeting organic growth from across BHP Chile operated assets Chilean copper organic growth shows potential pathways to offset decline 1 • Escondida (Average annual copper production, Mtpa) ‒ Extension of Los Colorados Concentrator with timing optio
Slide 49: Clear pathways forward for Chilean growth
Clear pathways forward for Chilean growth We have narrowed our studies to four main pathways Relevant progress on concentrator and leaching projects Strategic approach to growth options in Chile Existing New facilities facilities Concentrator Expansion of Laguna Seca 1 and 2 strategy New concentrato
Slide 50: Escondida represents a world-class opportunity
Escondida represents a world-class opportunity Leading global resource and increase in mining intensity to support growth of concentrator capacity ~26 Bt of resource @ 0.53% copper presents significant optionality42 Increase in mining rate key to growth Escondida Norte (Open Pit) Pinta Verde Resourc
Slide 51: Escondida growth program
Escondida growth program A combination of concentrator programs and leaching options underpin Escondida growth Growth program Escondida growth program approach Key enabler to improve Mine head grades to feed our concentrator capacity • Optimal resource & mine planning decisions, considering resource
Slide 52: Escondida concentrator pathways
Escondida concentrator pathways Large existing concentrator capacity plus supporting infrastructure presents optionality Context Flowsheet The opportunity • Concentrate feed grade decline • Extend Los Colorados beyond FY27 to FY29 with optionality to FY31 • Resources rich in sulphides • Expand Lagun
Slide 53: Trade-offs: Los Colorados Concentrator
Trade-offs: Los Colorados Concentrator We have the optionality to access to high-grade ore sooner or later by managing the Los Colorados Concentrator closure date Accessing higher grade ore PL8 FY78 • Los Colorados located at the edge of pit above PL2 PL3 • Higher grades and volumes accessible from
Slide 54: Leaching in the copper industry
Leaching in the copper industry Different technologies work across different ore types Types of material processed Types of leaching across the industry Benefits of leaching • Oxide ore • Acid leaching No tailings, lower water and energy ‒ Typically shallower ore (Supergene) ‒ Applicable to oxide or
Slide 55: A differentiated strategy on leaching
A differentiated strategy on leaching Long and successful track record in developing and implementing new leaching technologies History Our approach to assessing opportunities • 20+ years of development and delivery of new leaching technologies • Assessing multiple opportunities, including oxide lea
Slide 56: Escondida leaching pathways
Escondida leaching pathways Leaching technologies and the scale of Escondida provide opportunities for a variety of targeted applications across the business Context Flowsheet The opportunity… • Current Escondida cathode production • Chloride leaching (Full SaL) improves ~200 ktpa recovery and enabl
Slide 57: BHP Leach is a patented technology for nitrate leaching
BHP Leach is a patented technology for nitrate leaching Potential to recover additional copper from spent ripios and low-grade sulphide run-of-mine material Technology development and piloting BHP demonstration plant Engineering and studies • Nitrate leaching of primary sulphide ore, for • Industria
Slide 58: Pampa Norte growth pathways
Pampa Norte growth pathways Possibilities including an expansion, life extension and re-starting an operation Context Flowsheet The opportunity… Spence Cerro Colorado • Spence concentrator bottlenecks and • Upgrade recovery by 3-7ppt adding a complex mineralogy new flotation circuit • Upside potenti
Slide 59: Understanding permitting and our approach
Understanding permitting and our approach Chilean regulation requires permit approval before final investment decision; with the ultimate approach determined by authorities DIA EIA Simplified environmental impact statement Full environmental impact study Timing Legal timing: 90 days Legal timing: 18
Slide 60: Our growth aims to more than offset production decline
Our growth aims to more than offset production decline Growth pathway to ~1.4 Mtpa from organic growth in Chile in FY31-FY40 with further upside potential Chilean copper indicative production shows attractive potential to offset decline Growth Projects (Average annual copper production, Mtpa) • Esco
Slide 61: Escondida production expected to recover in early 2030s
Escondida production expected to recover in early 2030s Options to maximise value through timing of access to higher grade ore Escondida potential long-term production profile48 (Indicative payable copper production capacity, Mt) Understanding production profile in the 2030s 1.4 3 • Production decli
Slide 62: Executing on our growth
Executing on our growth Pedro Correa Vice President Projects Escondida
Slide 63: An experienced and disciplined projects team
An experienced and disciplined projects team We consistently control and deliver projects closer to target than our competitors BHP Chile49,50 Industry average49,50 Our differentiators... TRIF TRIF Global experience Safety 0.9 > 2.8 Connected global Projects Centre of Excellence (PCoE) brings experi
Slide 64: Strategies to deliver our growth
Strategies to deliver our growth Proactively adapting to address project delivery challenges of the future Investment discipline Securing the right talent Managing to market conditions • Bundling strategies with suppliers • Secured long-term engineering • Establishing contracts with Tier 1 partners,
Slide 65: Executing our copper growth strategy
Executing our copper growth strategy Our experience and global lessons learned from past projects will be incorporated into our upcoming program Our track record on delivery Building on our foundation since 2021 OGP1, Laguna Seca Expansion • Organisational structure focused on specialised types of p
Slide 66: Site overview | Escondida growth program
Site overview | Escondida growth program Expanding the Laguna Seca concentrator, replacing Los Colorados with a new concentrator and new technologies at the leach pad Escondida growth program Escondida Norte pit Gravel Dump Extension New truckshop OLAP pad Los Colorados New demolition warehouse Full
Slide 67: Laguna Seca expansion
Laguna Seca expansion An attractive opportunity for growth by expanding existing facilities, lifting throughput and recovery at Laguna Seca Project overview • Option for additional production by preparing Laguna Seca for hardness increase and utilising new technologies to increase recovery ‒ New thi
Slide 68: Escondida new concentrator
Escondida new concentrator A new concentrator utilising the latest technology to serve as a long-term replacement of Los Colorados Project overview • Option to construct a new concentrator plant at Escondida to replace Los Colorados ‒ Traditional comminution circuit with Semi-Autogenous Grinding mil
Slide 69: Los Colorados concentrator life extension
Los Colorados concentrator life extension Allowing continued operation of the concentrator while we execute the growth program Project overview • Option for extending Los Colorados until FY29 (beyond FY27 current plan) sustains production in FY28-29, providing an incremental 130 - 145 ktpa58 • Optio
Slide 70: Los Colorados concentrator demolition
Los Colorados concentrator demolition Demolition of the concentrator enables access to key mine pushbacks Project overview • Demolition of concentrator to expand the Escondida pit and unlock high grade ore located under the site • Large demolition scope drives capital cost: ‒ Area of 200 Ha and 100+
Slide 71: Escondida BHP Leach ripios application
Escondida BHP Leach ripios application Utilising innovative leaching technology for processing spent primary sulphide ores Project overview • Implementation of BHP’s new patented leaching technology in the existing sulphide leach pad to leach spent material (ripios) • Attractive option to leach spen
Slide 72: Site overview | Pampa Norte
Site overview | Pampa Norte Pursuing incremental upgrades at Spence and potentially restarting operations at Cerro Colorado Pampa Norte portfolio Spence Cerro Colorado Spence Conc. throughput & recovery upgrade US$ 0.4 – 0.6 bn Spence chalcopyrite leaching US$ 0.10 – 0.14 bn Cerro Colorado Asset Lif
Slide 73: Spence chalcopyrite leaching
Spence chalcopyrite leaching Employing proven technology to extend cathode production life Project overview • Option for the implementation of Simple Approach to Leaching 2 (SaL2), BHP's patented technology, at the sulphide leach pad, enabling processing of transitional and hypogene ores 2,650m • Ad
Slide 74: Spence concentrator growth
Spence concentrator growth Pursuing incremental upgrades at the concentrator Project overview • Two avenues for growth options at the Spence concentrator to increase copper production: ‒ Expand and debottleneck the Spence concentrator ‒ Lift throughput from ~95 ktpd to ~105 ktpd ‒ Lift recovery by a
Slide 75: Cerro Colorado potential restart option
Cerro Colorado potential restart option Phase 1 to process existing supergene ore, phase 2 to unlock vast hypogene resource utilising leaching technology Project overview Crushing • Restart of operations65 using Simple Approach to Leaching 1 (SaL1) leaching technology to process existing supergene o
Slide 76: Staging our options to maximise value
Staging our options to maximise value Taking a disciplined approach to sequencing ensures healthy competition for capital, permitting remains a key variable Illustrative timeline Maturity FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 FY34 FY35+ Escondida projects ◕ No environmental permit required Lo
Slide 77: A competitive and capital efficient pipeline of options
A competitive and capital efficient pipeline of options Our projects benchmark well relative to current expansion projects by competitors in the Americas Capital intensity71 (US$k/tpa CuEq) 26 – 43 34 25 – 33 33 23 – 32 32 19 – 28 27 Average ~US$27k/t Mid-point 15 – 21 20 average ~US$23k/t 18 2–3 IR
Slide 78: Well positioned to deliver on our growth potential in Chile
Well positioned to deliver on our growth potential in Chile We have the right mix of team experience, track record of delivery and strong relationships with key stakeholders to succeed Experienced team • Leadership team with extensive track record delivering large scale projects • Leverages the glob
Slide 79: Setting up Chilean copper for decades to come
Setting up Chilean copper for decades to come Pathways for growth leverage our existing position to generate strong returns, maintain production and deliver value Track record of operational excellence and project delivery A compelling program of projects delivering 15 – 19% IRRs Chile set for ~1.4
Slide 80: Slide 80
Slide 81: Footnotes
Footnotes 1. Slide 4, 14: BHP has agreed to jointly acquire Filo Corp with Lundin Mining, through a Canadian plan of arrangement, and form a 50/50 joint venture to progress the Filo del Sol and Josemaria projects. The transaction is expected to complete in Q3 FY25, subject to regulatory approvals. 2
Slide 82: Footnotes
Footnotes 37. Slide 47: For further information on Mineral Resources refer to slide 87. 38. Slide 47: Based on the Escondida Ore Reserves and Mineral Resources at 30 June 2024 in 100% terms reported in compliance with the JORC Code. For further information on Ore Reserves and Mineral Resources, refe
Slide 83: Chilean growth program set to deliver
Chilean growth program set to deliver An attractive set of options based on latest project assumptions and consensus copper prices IRR at Estimated FID Potential consensus capital Completion / Maturity (Final Investment production copper price at expenditure First production Decision) (ktpa Cu)1 san
Slide 84: Chilean growth program set to deliver
Chilean growth program set to deliver An attractive set of options based on latest project assumptions and consensus copper prices IRR at Estimated Potential consensus capital Completion / Maturity FID production copper price at expenditure First production (ktpa Cu)1 sanction (US$ bn) (nominal,%)2
Slide 85: Understanding leaching in copper
Understanding leaching in copper No single approach fits all ores, different technologies work across different ore types and applications are site specific Leach Crushed or Mixed Secondary Primary Cycle Capital Production Technology Oxide residue uncrushed Recovery (30% Oxide, sulphide Sulphide tim
Slide 86: Competent Person Statement: Copper Ore Reserves
Competent Person Statement: Copper Ore Reserves Chile Copper Ore Reserves Competent Person Statement The information in this slide relates to Copper Ore Reserves as at 30 June 2024. Ore Reserves are based on information compiled by Marcelo Cortes as Competent Person (compiler) for all declared Ore R
Slide 87: Competent Person Statement: Copper Mineral Resources
Competent Person Statement: Copper Mineral Resources Copper Mineral Resources Competent Person Statement The information in this slide relates to Copper Mineral Resources as at 30 June 2024. Mineral Resources are inclusive of Ore Reserves and is based on information compiled by Marcelo Cortes as Com
Slide 88: Escondida
Escondida Alejandro Tapia Asset President Escondida Autonomous trucks at Escondida
Slide 89: Disclaimer
Disclaimer Forward-looking statements This presentation 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
Slide 90: Meet the team
Meet the team Alejandro Tapia Jose Quiñones Olga Alfaro President GM Mine GM Concentrator Escondida Operations Operations Lisset Hormazabal Yerko Fuentes Romina Maggiolo GM Cathode GM Non-Process Head of BHP Operations Infrastructure Operating System Carolina Cuadros Claudio Reygadas Head of Health,
Slide 91: Welcome to Escondida
Welcome to Escondida Los Colorados concentrator A globally significant copper asset Escondida Norte pit Large and high-margin • World’s largest copper mine • Costs in 2nd quartile Sulphide Leach pad • ROCE 27%, EBITDA margin 58% in FY24 OLAP pad Escondida pit Long life today… • In production since 1
Slide 92: Safety is our highest priority
Safety is our highest priority Ensuring our workforce return home safe everyday through culture, systems and controls • 39 out of 60 Fatality Elimination Program initiatives implemented since FY21; expect to conclude in FY25 • Standardised routines with contractors, performance monitoring and execut
Slide 93: Delivering social value
Delivering social value Escondida has multiple globally leading sustainability practices in copper operations setting us up well for future permitting approvals Our social value framework Decarbonisation Healthy Indigenous Safe, inclusive Thriving, Responsible environment partnerships and future rea
Slide 94: An inclusive and diverse operation
An inclusive and diverse operation Enhancing the diversity, capability and wellbeing for our employee workforce Achieved gender balance3 in FY24 Female Chilean copper participation vs. industry average 40% ~21% People with disabilities Since 2017, Escondida has implemented a training program called
Slide 95: Social investment projects in Antofagasta
Social investment projects in Antofagasta Supports Escondida’s license to operate by creating sustainable partnerships with key regional organisations and stakeholders Regional Entrepreneurship Ecosystem Skills of the Future • 60 start-ups have graduated from Aster since 2022, • We are starting with
Slide 96: Environmental credentials ahead of our competitors
Environmental credentials ahead of our competitors BHP was an early mover on desalinated water and our operations run on fully renewable power • >US$4 bn invested in desalinated water supply for BHP’s mines in Chile over last 15 years, including for Escondida • Escondida’s concentrators have operate
Slide 97: A large scale, fully integrated operation
A large scale, fully integrated operation ~26 Bt Mineral Two open pits Autonomous Copper oxide Three Two Rail line Port facility Resources 2 zone with 15 and sulphide concentrator desalination Escondida and 216 km to Coloso trucks operating leaching plants plants 0.53% Cu grade Escondida Norte Antof
Slide 98: A globally significant copper resource
A globally significant copper resource Drives long life and underpins our growth potential Multi decade asset with strong resource base Escondida is the world’s largest copper resource…4 (Copper contained, Mt) (Copper grade, %) 200 1.0 Excludes Josemaria, Filo del Sol and NOJVs Pinta Verde 160 0.8 1
Slide 99: Exploiting high grade areas is key to growth
Exploiting high grade areas is key to growth Areas such as PL1 important in near term with PL2 key in the longer term after Los Colorados closure Cross section A-A’ shows potential progression of Escondida pit over the decades to come (Resource model 2024) Los Colorados Concentrator location PL3 PL2
Slide 100: Managing geotechnical challenges
Managing geotechnical challenges Measures taken are working to ensure stable operational performance • PL1 is a high-grade portion of the Escondida pit that has PL1 Los Colorados challenging geotechnical characteristics • 8 geotechnical issues identified in FY22 generating minor production impacts •
Slide 101: A fully integrated mine to port value chain
A fully integrated mine to port value chain Mine Crushing Concentrators Infrastructure & Ports Services Dumps Waste Laguna Seca 1 Desalination Plants Oxides Low- grade Crusher 1 Sulphide sulphides Laguna Seca 2 Laguna Seca Tailing Dam Crusher 2 Copper Concentrate Coloso Crusher 3 Filter Plant Concen
Slide 102: Mining operations overview
Mining operations overview Escondida operates a large fleet in two pits to consistently move >1.2 million tonnes per day of material Two open pit operations Additional trucks have helped increase material movement over time (Material moved, Mtpd) (Number of trucks) • Escondida Pit 1.6 200 • Escondid
Slide 103: Escondida has begun its move into autonomy
Escondida has begun its move into autonomy Delivery of autonomous trucks and drills ongoing • Autonomous trucks currently in Escondida Norte pit ‒ 15 out of 36 trucks • Total conversion of 141 trucks by FY30 • Main achievements during 8 months of operation ‒ Zero safety events ‒ Over 17 Mt of waste
Slide 104: Increasing mine movement key to unlocking growth
Increasing mine movement key to unlocking growth Changes to fleet and mine design to help deliver increased volumes • Current5 ex-pit mine movement ~400 Mtpa ‒ 134 Mtpa to concentrators, average grade 0.82% Cu ‒ 36 Mtpa to Sulphide Leach, average grade 0.42% Cu • Productivity initiatives and mine de
Slide 105: Concentrator operations are a strong base for growth
Concentrator operations are a strong base for growth Operating three concentrators that account for ~80% of total copper produced at Escondida Today Future Los Colorados (1990) Los Colorados extension and closure ‒ 96 ktpd capacity; 3 SAG mills and 7 ball mills ‒ High grade ore sitting below plant,
Slide 106: Cathode operations provides range of options
Cathode operations provides range of options Leveraging emerging leaching technology to offset production decline and utilise installed latent capacity Today Future • Two solvent extraction processes • Full SaL expected to deliver incremental ~55 ktpa of copper ‒ Oxide ores crushed and processed at
Slide 107: Port of Coloso supports current and future operation
Port of Coloso supports current and future operation 100% of the water used at Escondida site and port is produced via our desalination facilities Fully integrated port facility supporting Escondida Copper concentrate filter • 6 press filters with capacity of ~12 ktpd • Copper concentrate stockpile
Slide 108: Relentless pursuit of operational excellence
Relentless pursuit of operational excellence Safer, lower cost, more reliable, more productive Trends in equipment utilisation are improving… Leveraging BOS to deliver operational excellence (All Escondida equipment utilisation, %) 85 Laguna Seca clay management standardisation 80 • Developed a clay
Slide 109: Application of technology and Artificial Intelligence
Application of technology and Artificial Intelligence Our size and scale generates significant amounts of data, enabling us to use machine learning and AI to deliver tangible value Machine learning and AI has allowed us to capture significant value since FY22 118 GWh 3.5 Gl +0.3% +$19 mn Optimal bla
Slide 110: Delivering growth near term
Delivering growth near term Our guidance shows an ~10% increase in production before a decline from FY27 for a period FY25 guidance shows growth FY24 strong performance Production (kt) Cost (US$/lb)6 Production (kt) Cost (US$/lb)6 1,180 – 1,300 1.30 – 1.60 1,125 1.45 • Production weighted to second
Slide 111: Strong and consistent returns
Strong and consistent returns A large and high-quality business, Escondida is the cornerstone of BHP Copper Consistent EBITDA margins averaging ~60% over last 20 years Generating significant EBITDA…and healthy returns7 90 80 70 60 50 40 30 $4.9 bn 30% 20 EBITDA p.a. 5-year average 5-year average ROC
Slide 112: Escondida has a long history of managing grade decline
Escondida has a long history of managing grade decline Discovered in 1981 with operations beginning in 1990, investment over time has helped to offset natural grade decline Copper Production Copper Head Grade (copper, ktpa) (%) 1,600 3.00 Sulphide leach 1,400 Laguna Seca 2.50 Line 2 (OGP1 ) 1,200 La
Slide 113: What you will be seeing today…
What you will be seeing today… The world’s largest copper mine Open pit Concentrators Cathodes BHP Leach demonstration pad 2024 Chilean copper site tour 19 November 2024 26
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Slide 115: Footnotes
Footnotes 1. Slide 4: Based on the Escondida Ore Reserves and Mineral Resources at 30 June 2024 in 100% terms reported in compliance with the JORC Code. 2. Slide 4, 10: For further information on Ore Reserves and Mineral Resources, refer to slides 29 and 30. 3. Slide 7: We define gender balance as a
Slide 116: Competent Person Statement: Copper Ore Reserves
Competent Person Statement: Copper Ore Reserves Chile Copper Ore Reserves Competent Person Statement The information in this slide relates to Copper Ore Reserves as at 30 June 2024. Ore Reserves are based on information compiled by Marcelo Cortes as Competent Person (compiler) for all declared Ore R
Slide 117: Competent Person Statement: Copper Mineral Resources
Competent Person Statement: Copper Mineral Resources Copper Mineral Resources Competent Person Statement The information in this slide relates to Copper Mineral Resources as at 30 June 2024. Mineral Resources are inclusive of Ore Reserves and is based on information compiled by Marcelo Cortes as Com
Slide 118: Spence
Spence Cristian Sandoval Asset President Pampa Norte Spence concentrator
Slide 119: Disclaimer
Disclaimer Forward-looking statements This presentation 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
Slide 120: Meet the team
Meet the team Cristian Sandoval Rodrigo Caballero President GM Pampa Norte Operations Eliana Calderon Pedro Gonzalez-Carbonell Juliet Taylor Head of Health, GM Planning, Technical & GM Integrated Safety and Security Environment Operations Rodrigo Barrera Alejandro Heibron Lilia Bustamante GM Enginee
Slide 121: Welcome to Spence
Welcome to Spence N Tailings Dam A long-life copper asset Improved performance and increased production • Part of Pampa Norte (along with Cerro Colorado) • Record production in FY24 +6% YoY, medium term Concentrator guidance ~250 ktpa Long-life asset Electrowinning Mine • In production since 2006 •
Slide 122: Safety is our highest priority
Owner – Spence Safety is our highest priority Ensuring our workforce return home safe everyday through culture, systems and controls • Build a safety culture centered on frontline engagement through our Field Leadership Program and the BHP Operating System (BOS) • Steady and continuous progress in o
Slide 123: Delivering social value
Delivering social value Spence has made tangible progress across our framework setting us up well for future permitting approvals Decarbonisation Healthy Indigenous Safe, inclusive Thriving, Responsible environment partnerships and future ready empowered supply chains workforce communities Safety, d
Slide 124: Delivering social investment projects in Sierra Gorda
Delivering social investment projects in Sierra Gorda Maintaining a strong social value proposition and stakeholder engagement are fundamental to achieving Spence's growth objectives Spence Education Entrepreneurship program Employability program Strategy in Sierra Gorda “Transforma Sierra Gorda” “S
Slide 125: An inclusive and diverse operation
An inclusive and diverse operation Enhancing diversity, capability and wellbeing for our employee workforce has enabled better safety and performance Achieved gender balance4 in FY24… Female Female leadership participation representation >41% >43% People with disabilities …with progress across all a
Slide 126: A long-life operation
A long-life operation A more sustainable, fully integrated copper operation producing both cathode and concentrate ~2.4 Bt Mineral Open pit mine 100% Cathodes process Concentrator Desalination plant 100% of electricity Resources5 autonomous truck for oxide ore, process for supply comes ~90% of water
Slide 127: An integrated supply chain
An integrated supply chain Mine Dumps Waste Tailings Dam Desalination Plant (Caitan) - External Oxides Supergene Hypogene Sulphides Sulphide Ports Concentrate Crusher 2 Stock Pile Grinding & Flotation Filter Plant Concentrate Copper transport Concentrate Mejillones Bay Crusher 1 Agglomeration Leachi
Slide 128: Spence performance has improved
Spence performance has improved We work with passion, discipline and respect to produce the sustainable copper that the planet needs Production and costs initiatives examples Concentrator rate has increased (kt per hour) 4,100 • Spence Cathodes improves recovery through leaching pad irrigation and 4
Slide 129: Mine operations overview
Mine operations overview Spence operates a fleet of autonomous trucks to feed two crushers Mining equipment and fixed infrastructure • 33 autonomous Komatsu 980E (400t) trucks • 5 electric and 1 hydraulic shovels • 5 autonomous production drills • 1 primary crusher and conveyance system to feed conc
Slide 130: Unlocking improved performance with automation
Unlocking improved performance with automation Autonomous haulage trucks conversion ahead of plan, delivering safety and operational improvements Safety layers of the FrontRunner Autonomous System Ramp up has gone well and is delivering solid performance (Annualised autonomous truck production time,
Slide 131: Cathode operations overview
Cathode operations overview Potential for emerging leaching technology to extend life, offset production decline and utilise installed latent capacity • Cathodes process for oxide ore through stacking leaching and Cathode production has declined with lower stacked grade solvent extraction (Cathode p
Slide 132: Concentrator operations overview
Concentrator operations overview Concentrate operations account for ~60% of total copper produced at Spence Spence Growth Option (SGO) • Started commissioning in FY21 • 1 SAG mill and 2 ball mills FY24 (YoY improvement vs FY23) • ~95 ktpd capacity • Includes a molybdenum production plant Cu payable
Slide 133: Spence Tailings Storage Facility
Spence Tailings Storage Facility Northwest Dam Northeast Dam Constructed as part of the SGO project, anomalies identified before FY22 results Main • Novel design of TSF with aim to reduce water losses Dam Background • Storage capacity is 680 Mt for 20 years (~92 Mt utilised at June 2024) • Operation
Slide 134: Cerro Colorado offers growth optionality
Cerro Colorado offers growth optionality After 30 years of operation there is an opportunity to create value from the ~2.3 Bt @ 0.40% Cu Mineral Resource5 Current state Future plans • Regulator approved temporary closure plan in 2023 • Restart operations at Cerro Colorado, maximising the use of the
Slide 135: A consistently profitable business
A consistently profitable business Margins have been consistent with plans to improve potential returns over time EBITDA margins at Spence averaged ~49% over last 15 years6 Solid financial performance at Spence over last 15 years7 80% 60% 40% 20% $0.7 bn 11% 0% EBITDA average Average ROCE FY10 FY11
Slide 136: Strong momentum set to continue
Strong momentum set to continue After record production in FY24 we expect continued reliable production near and medium term FY24 FY25 guidance Production (kt) Cost (US$/lb)8 Production (kt) Cost (US$/lb)8 255 2.13 240 – 270 2.00 – 2.30 • Record production (+6% YoY) • Strong production momentum to d
Slide 137: What you will be seeing today…
What you will be seeing today… A long-life operation with growth potential Autonomous Haulage Truck Workshop Tailings Storage Facility Concentrator 2024 Chilean copper site tour 20 November 2024 20
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Slide 139: Footnotes
Footnotes 1. Slide 4: Growth options include Spence Growth Option (SGO) and extending the life of cathode production through SaL2 technology. 2. Slide 5: Pampa Norte results. 3. Slide 7: STEAM stands for: Science, Technology, Engineering, Arts and Math 4. Slide 8: We define gender balance as a minim
Slide 140: Competent Person Statement: Copper Ore Reserves
Competent Person Statement: Copper Ore Reserves Chile Copper Ore Reserves Competent Person Statement The information in this slide relates to Copper Ore Reserves as at 30 June 2024. Ore Reserves are based on information compiled by Marcelo Cortes as Competent Person (compiler) for all declared Ore R
Slide 141: Competent Person Statement: Copper Mineral Resources
Competent Person Statement: Copper Mineral Resources Copper Mineral Resources Competent Person Statement The information in this slide relates to Copper Mineral Resources as at 30 June 2024. Mineral Resources are inclusive of Ore Reserves and is based on information compiled by Marcelo Cortes as Com