Bhp Group Ltd · ASX:BHP
Bhp — BHP Billiton — Investor Presentation (June 2016)
24 slides from Bhp's investor presentation, Jun 21, 2016
Slide 1: Disclaimer: Forward-looking statements
Disclaimer Forward-looking statements This presentation contains forward-looking statements, including statements regarding: trends in commodity prices and currency exchange rates; demand for commodities; plans, strategies and objectives of management; closure or divestment of certain operations or
Slide 2: Statement of Coal Reserves
Statement of Coal Reserves Coal Reserves The information on slide 10 of this presentation that relates to Coal Reserves has been sourced from Wood Mackenzie. BHP Billiton’s estimates of its Coal Reserves are shown below. BHP Billiton Marketable Coal Reserves are compiled by J Field (MAusIMM). J Fiel
Slide 3: The path to improve returns
The path to improve returns • Safe and reliable operations provide the platform for success • Longer-term coal market outlook remains positive • We continue to optimise our simple portfolio of high-quality assets • We will unlock further productivity, reduce costs and release latent capacity Mike He
Slide 4: The path to improve returns
The path to improve returns * Safe and reliable operations provide the platform for success + Longer-term coal market outlook remains positive + We continue to optimise our simple portfolio of high-quality assets + We will unlock further productivity, reduce costs and release latent capacity preside
Slide 5: Experienced team enabled by new Operating Model
Experienced team enabled by new Operating Model • Our new Operating Model supports improved returns • enhanced focus on safety, volume and cost • lower overheads and more effective functional support • accelerated replication of best practice • global centres of excellence for Maintenance, Projects
Slide 6: Safe and sustainable operations
Safe and sustainable operations • ~50% improvement in TRIF since June 20151,2 • focused on the elimination of fatalities and serious incidents • Replication of the Field Leadership Program from Western Australia Iron Ore in FY16 is supporting a safer business • strengthened safety engagement with ou
Slide 7: Metallurgical coal outlook supported by growing demand for high-quality product
Metallurgical coal outlook supported by growing demand for high-quality product Short-term • Cost curve has flattened • Lower prices are leading to closures and reduced investment Long-term • The world continues to require steel and metallurgical coal is essential for pig iron production • China wil
Slide 8: Energy coal will remain an important part of the global energy complex
Energy coal will remain an important part of the global energy complex Short-term • Markets are expected to remain oversupplied in the near term – China’s demand for imports is likely to fall further as domestic overcapacity persists Long-term • Absolute demand expected to increase by 10-15% by the
Slide 9: Our portfolio is resilient in a 2oC world
Our portfolio is resilient in a 2oC world • Warming of the climate is unequivocal, the human influence is clear and physical impacts are unavoidable • We believe the world must pursue the twin objectives of limiting climate change and providing access to affordable energy • we do not prioritise one
Slide 10: A simple portfolio of large, long-life assets
A simple portfolio of large, long-life assets Scale Resource quality Stable geo-political environment Cost position Logistics Metallurgical coal portfolio (coke strength after reaction, %) 80 BHP Billiton 50 Note: Bubble size represents 2016 production 20 <1,000 (Marketable Reserves1, Mt) 2016 seabo
Slide 11: We continue to simplify our portfolio
We continue to simplify our portfolio • We have created a concentrated portfolio of tier 1 assets that retain significant growth optionality • Illawarra Coal and South Africa Energy Coal demerged with South32 • sale agreement entered into for IndoMet Coal • sale of San Juan Mine completed and transi
Slide 12: Continued improvements in productivity…
Continued improvements in productivity… Delivered >US$3 billion in productivity gains since FY121 additional ~US$600 million expected by end-FY17 Most operations will have the bottleneck at the wash plant by end-FY17 targeting wash plant utilisation of 8,000 hours by FY19 improvement driven by a foc
Slide 13: …is sustainably lowering costs…
…is sustainably lowering costs… Absolute cash costs ~25% below FY121 despite higher volumes 56% reduction in unit costs at Queensland Coal 29% reduction in unit costs at NSW Energy Coal Further 16% reduction in absolute costs anticipated by FY172 unit costs down 20% to US$52/t3 at Queensland Coal un
Slide 14: …and releasing latent capacity
…and releasing latent capacity Focus on maximising output from our existing operations allows us to grow without major capital projects Queensland Coal expected to deliver 42.5 Mt in FY16, 44 Mt in FY17 and 46 Mt in FY18 NSW Energy Coal expected to deliver 17 Mt in FY161, 19 Mt in FY17 and 21 Mt in
Slide 15: Enterprise Agreement (EA) renewals
Enterprise Agreement (EA) renewals Caval Ridge, Poitrel, Daunia and Mt Arthur Coal EAs recently approved Progress continuing on Broadmeadow Mine EA BMA has commenced renegotiating the BMA EA 2012 seeking to simplify the EA focus on flexibility to better enable safe productivity improvements and cost
Slide 16: The path to improve returns
The path to improve returns Safe and reliable operations provide the platform for success Longer-term coal market outlook remains positive We continue to optimise our simple portfolio of high-quality assets We will unlock further productivity, reduce costs and release latent capacity Mike Henry, Pre
Slide 17: bhpbilliton
bhpbilliton
Slide 18: BHP Billiton guidance
BHP Billiton guidance Coal FY16e FY17e FY18e Notes Total metallurgical coal production (Mt) 43 44 46 FY16 comprises Queensland Coal and IndoMet Coal. Total energy coal production (Mt) 34 Queensland Coal Production (Mt) 42.5 44 46 Unit cash costs (US$/t) 56 52 Excludes freight and royalties; based on
Slide 19: Breakdown of costs
Breakdown of costs BMA Cash costs (FY16e, %) 9% 8% 29% 9% 10% 18% 17% Contractors and consultants Consumables Labour Port and rail Royalties, rates and taxes Fuel and electricity Other Fixed versus variable split (approximate) (FY16e, %) 35% 65% Fixed Variable NSW Energy Coal Cash costs (FY16e, %) 4
Slide 20: Queensland Coal operations
Queensland Coal operations Newlands Rail System Mackay DBCT Hay Point BMA BMC Mining lease Port Mine locations Rail Goonyella Riverside South Walker Broadmeadow Creek Moranbah Daunia Caval Ridge Poitrel Goonyella Rail System Peak Downs Saraji Norwich Park Rockhampton Emerald Blackwater Blackwater Bl
Slide 21: New South Wales Energy Coal operations
New South Wales Energy Coal operations NSWEC Port Mining lease Rail Mine locations Gunnedah Tamworth Quirindi Muswellbrook Mt Arthur Mudgee Singleton Maitland Cessnock NEWCASTLE 0 50km 1. Based on FY15 sales volumes. • Open-cut coal mine in the Hunter Valley, Australia, with 23 Mtpa of coal handling
Slide 22: Cerrejón Coal operations
Cerrejón Coal operations Taroa Puerto Bolivar Cabo de La Vela Nazareth CARIBBEAN SEA Castilletes Manaure Uribia RIOHACHA C O L O M B I A Maicao GULF OF VENEZUELA Dibulla Albania Barrancas Cerrejón Fonseca San Juan Del Cesar V E N E Z U E L A Villanueva VALLEDUPAR Lapaz 0 50km Note: Port capacity sho
Slide 23: Coal operations material moved and strip ratios
Coal operations material moved and strip ratios BMA (material moved, Bt) (strip ratio1, x) 3.0 18.0 1.5 9.0 0.0 0.0 FY12 FY13 FY14 FY15 FY16e FY17e FY18e BMC (material moved, Bt) (strip ratio1, x) 0.4 12.0 0.2 6.0 0.0 0.0 FY12 FY13 FY14 FY15 FY16e FY17e FY18e NSW Energy Coal (material moved, Bt) (st
Slide 24: bhpbilliton
bhpbilliton 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 Billiton Limited and BHP Billiton Plc Date: June 21, 2016 By: /s/ Rachel Agnew Name: Ra