BHPLF BHP Billiton Ltd (PK)

Mike Henry

BHP Chief Executive Officer

Summary

Operational excellence

Guidance

Strong performance, Escondida up 22%

Executing to plan

Strong underlying performance at all other assets, including at WAIO, where recent completion of the Port Debottlenecking Project (PDP1) has unlocked greater throughput, and at BMA where production increased 14% (excluding production from the now divested Blackwater and Daunia mines).

We maintain sector leading cost discipline and remain on track to deliver FY25 unit cost guidance across all assets.

Growth

Social value

Clear pathways for copper growth

Decarbonising our assets and value chain

In January 2025, we completed the formation of Vicuña Corp., a 50/50 joint venture with Lundin Mining to develop the Filo del Sol and Josemaria copper projects. BHP’s total cash completion payment was US$2.0 bn.

Copper (kt)

Escondida (kt)

Pampa Norte (kt)ⁱ

Copper South Australia (kt)

Antamina (kt)

Carajás (kt)

Iron ore (Mt)

WAIO (Mt)

WAIO (100% basis) (Mt)

Samarco (Mt)

Steelmaking coal – BMA (Mt)ⁱⁱ

BMA (100% basis) (Mt)ⁱⁱ

Energy coal – NSWEC (Mt)

Nickel – Western Australia Nickel (kt)ⁱⁱⁱ

HY24 includes 11 kt from Cerro Colorado which entered temporary care and maintenance in December 2023. Excluding these volumes, HY25 production decreased 1%. Production guidance for FY25 is for Spence only. Refer to copper and the production and sales report for further information.

HY24 production includes 3.5 Mt (6.9 Mt on a 100% basis) from the Blackwater and Daunia mines which were divested on 2 April 2024. Excluding these volumes, HY25 production increased 14%. Refer to steelmaking coal and the production and sales report for further information.

WA Nickel ramped down and entered temporary suspension in December 2024. Refer to nickel and the production and sales report for further information.

Unit costs (at guidance FX)

At HY25, unit costs at Escondida, Spence and WAIO are expected to be within their respective guidance ranges. Unit costs at Copper SA and BMA are expected to be higher than their respective guidance ranges predominantly due to the weather-related power outage, and the longwall move and maintenance activity in HY25 respectively

Operating costs

For FY25, unit cost guidance for all assets remains unchanged, with Copper SA now expected to be in the upper half of its range

Operating costs

Average realised exchange rates for HY25 of AUD/USD 0.66 (guidance rate AUD/USD 0.66) and USD/CLP 947 (guidance rate USD/CLP 842)

Income statement

Impact of the weather-related power outage on Copper SA

i EBITDA

Negative EBITDA for WA Nickel

i EBITDA

The Group’s adjusted effective tax rate for HY25 is expected to be within the guidance range of 33 – 38%

Taxation expense

Cash flow statement

Working capital movements

i Operating cash flow

Net cash tax paid

i Operating cash flow

Dividends received from equity-accounted investments

h Operating cash flow

Impact of BHP Brasil’s obligations relating to the Samarco dam failure

i Investing cash flow

Final consideration from the divestment of BMC completed in FY22

h Investing cash flow

Final consideration in relation to the sale of a 15% interest in Western Ridge at WAIO in FY22

h Investing cash flow

Dividends paid to non-controlling interests

i Financing cash flow

Payment of the H2 FY24 dividend

i Financing cash  flow

Balance sheet

The Group’s net debt balance as at 31 December 2024 is expected to be between US$11.5 and US$12.5 bn. Following the execution of the final Samarco Settlement Agreement, the Group’s balance sheet will be impacted by the associated cash payments. See iron ore section for further information on Samarco. For FY25, the Group’s net debt balance is expected to increase to around the top end of the net debt target range of US$5 to US$15 bn following completion of the Vicuña transaction and payment of the H2 Samarco settlement obligations

Net debt

Exceptional items

Financial impact of the Samarco dam failure

Exceptional item

Costs associated with WA Nickel transitioning into temporary suspension

Exceptional item

Numbers are not tax effected, unless otherwise noted.

There will be a corresponding balance sheet, cash flow and/or income statement impact as relevant, unless otherwise noted.

Financial impact is the subject of ongoing work and is not yet finalised. See iron ore section for further information on Samarco operations.

Further information in Appendix 1

Detailed production and sales information for all operations in Appendix 2

Production

987 kt _10%

HY24 894 kt

FY25e 1,845 – 2,045 kt

Average realised price

US$3.99/lb _9%

HY24 US$3.66/lb

Total copper production increased 10% to 987 kt. Copper production guidance for FY25 remains unchanged at between 1,845 and 2,045 kt.

Escondida _{644 kt 22% (100% basis)}

Escondida achieved a 10-year production record in HY25, primarily due to higher concentrator feed grade of 1.03% (HY24: 0.81%) and higher recoveries as mining progressed into areas of higher-grade ore as planned. This was partially offset by planned lower cathode production, as the integration of the Full SaL project continued. The project remains on track for first production later in FY25.

Production guidance for FY25 remains unchanged at between 1,180 and 1,300 kt. Concentrator feed grade for FY25 is expected to remain above 0.90%.

Pampa Norte _{126 kt 9%}

Copper South Australia _{145 kt 6%}

Other copper

Production

131 Mt _1%

HY24 129 Mt

FY25e 255 – 265.5 Mt

Average realised price

US$81.11/wmt _22%

HY24 US$103.70/wmt

Iron ore production increased 1% to 131 Mt. Production guidance for FY25 remains unchanged at between 255 and 265.5 Mt.

WAIO _{128 Mt 1% | 145 Mt (100% basis)}

Production increased as a result of continued strong supply chain performance with record volumes delivered from the Central Pilbara hub (South Flank and Mining Area C) following the completion of the ramp up of South Flank in FY24 and a 9% increase in productive movement across the asset. In addition, PDP1 which was delivered in CY24, has unlocked improved car dumper cycle times and ship loader performance. This was partially offset by the planned increase in tie-in activity of the multi-year Rail Technology Program (RTP1) and wet weather in December.

Production guidance for FY25 remains unchanged at between 250 and 260 Mt (282 and 294 Mt on a 100% basis), with production now expected to be in the upper half of the range.

Samarco _{2.8 Mt 9% | 5.5 Mt (100% basis)}

Production increased in line with the resumption of latent pelletising plant capacity and restart of the second concentrator in December, ahead of schedule. This will increase production capacity to ~16 Mtpa of pellets (100% basis) once fully ramped up, which is expected by early FY26. Production guidance for FY25 remains unchanged at between 5 and 5.5 Mt, with production now expected to be in the upper half of the range.

On 25 October 2024, BHP announced an agreement between the Federal Government of Brazil, the State of Minas Gerais, the State of Espírito Santo, the public prosecutors and public defenders (Public Authorities) and Samarco, BHP Brasil and Vale (Agreement). The Agreement delivers a full and final settlement of the Framework Agreement obligations, the Federal Public Prosecution Office civil claim and other claims by the Public Authorities relating to the dam failure¹. The Agreement was ratified by the Supreme Court of Brazil in Brasilia on 6 November 2024.

The Agreement creates separate ‘Obligation to Pay’ and ‘Obligations to Perform’ for BHP Brasil. As announced on 25 October 2024, the cash impact of the Obligation to Pay was expected to be ~R$11.0 bn in FY25, ~R$7.0 bn in FY26 and ~R$5.0 bn in FY27 (100% basis). The Obligations to Perform were expected to be ~R$6.6 bn in FY25, ~R$14.7 bn in FY26 and ~R$3.1 bn in FY27 (100% basis)². The cash impact of the obligations relating to the Samarco dam failure was US$637 m in HY25³. The HY25 financial impacts associated with the Agreement are the subject of ongoing work that will not be finalised until the release of the financial results on 18 February 2025.

Coal

Steelmaking coal

Production

8.9 Mt _21%

HY24 11.3 Mt

FY25e 16.5 – 19 Mt

Average realised price

US$206.37/t _23%

HY24 US$266.43/t

BMA _{8.9 Mt 21% | 17.9 Mt (100% basis)}

Production increased 14% (excluding 3.5 Mt in HY24 from the now divested Blackwater and Daunia mines) underpinned by improved strip ratios and increased prime stripping as a result of an uplift in truck productivity. This was partially offset by slower production rates at Broadmeadow following the longwall move due to geotechnical characteristics as well as the planned increase in raw coal inventory to improve the stability of the value chain.

Production guidance for FY25 remains unchanged at between 16.5 and 19 Mt (33 and 38 Mt on a 100% basis), with production now expected to be in the upper half of the range. We remain focused on restoring value chain stability, in particular building raw coal inventory, which will continue into CY26.

Under the final settlement agreement, Samarco is the primary obligor for the settlement obligations and BHP Brasil and Vale are each secondary obligors of any obligation that Samarco cannot fund or perform in proportion to their shareholding at the time of the dam failure, which is 50% each.

All financial obligations are presented on a real, undiscounted basis and will accrue inflation at IPCA inflation rate. Payments will be made in Brazilian Reais. The FY25 scheduled Obligation to Pay payment will include CY24 and CY25 instalments.

Calculated based on actual transactional (historical) exchange rates.

Energy coal

Production

7.4 Mt _1%

HY24 7.5 Mt

FY25e 13 – 15 Mt

Average realised price

US$124.42/t _1%

HY24 US$123.29/t

NSWEC _{7.4 Mt 1%}

Production was broadly in line despite a higher proportion of washed coal. Inventory was drawn down to offset the impacts of reduced truck availability and unfavourable weather conditions.

Production guidance for FY25 remains unchanged at between 13 and 15 Mt, with production now expected to be in the upper half of the range.

We still expect an outcome from the NSW Government in Q3 FY25 regarding the modification to extend the mining consent to 30 June 2030.

Group & Unallocated

28 kt _31%

HY24 40 kt

Average realised price

US$16,386/t _12%

HY24 US$18,602/t

Production decreased significantly as expected, as we successfully transitioned the Nickel West supply chain (and West Musgrave project) into temporary suspension in line with schedule. Production outcomes benefited from the drawdown of inventory to realise additional value.

We expect costs to be elevated in HY25, as a result of operational and ramp down activities combined with the drawdown of inventory as the operations transitioned to temporary suspension.

We have redeployed over 800 employees, with the majority moving to roles across the Australian operations. BHP intends to review the decision to temporarily suspend Western Australia Nickel by February 2027.

No production guidance has been provided for FY25.

Copper

Iron ore

511 kt _7%

Q1 FY25 476 kt

66 Mt _2%

Q1 FY25 65 Mt

Steelmaking coal

Energy coal

4.4 Mt _2%

Q1 FY25 4.5 Mt

Lower production due to significant wet weather and the longwall move at Broadmeadow, partially offset by inventory drawdown.

3.7 Mt _1%

Q1 FY25 3.7 Mt

Nickel

8.0 kt _59%

Q1 FY25 19.6 kt

Inventory was drawn down as operations transitioned into temporary suspension as planned.

Copper (US$/lb)^{ii, iii, iv}

Iron ore (US$/wmt, FOB)^v

Steelmaking coal (US$/t)^{vi, vii}

Thermal coal (US$/t)^viii

Nickel metal (US$/t)^ix

Based on provisional, unaudited estimates. Prices exclude sales from equity accounted investments, third party product and internal sales, and represent the weighted average of various sales terms (for example: FOB, CIF and CFR), unless otherwise noted. Includes the impact of provisional pricing and finalisation adjustments.

The large majority of copper cathodes sales were linked to index price for quotation periods one month after month of shipment, and three to four months after month of shipment for copper concentrates sales with price differentials applied for location and treatment costs.

At 31 December 2024, the Group had 427 kt of outstanding copper sales that were revalued at a weighted average price of US$3.95/lb. The final price of these sales will be determined over the remainder of FY25. In addition, 430 kt of copper sales from FY24 were subject to a finalisation adjustment in the current period. The displayed prices include the impact of these provisional pricing and finalisation adjustments.

Sales from Carrapateena and Prominent Hill acquired through the purchase of OZL are included since Q4 FY24 period.

The large majority of iron ore shipments were linked to index pricing for the month of shipment, with price differentials predominantly a reflection of market fundamentals and product quality. Iron ore sales for HY25 were based on an average moisture rate of 7.0% (HY24: 6.7%).

The large majority of steelmaking coal and energy coal exports were linked to index pricing for the month of scheduled shipment or priced on the spot market at fixed or index-linked prices, with price differentials reflecting product quality.

From FY25, steelmaking coal refers to hard coking coal which is generally those steelmaking coals with a Coke Strength after Reaction (CSR) of 35 and above. Comparative periods include impacts from weak coking coal, which refers generally to those steelmaking coals with a CSR below 35, which were sold by Blackwater and Daunia mines, divested on 2 April 2024.

Export sales only. Includes thermal coal sales from steelmaking coal mines.

Relates to refined nickel metal only, excludes intermediate products and nickel sulphate.

FY25 guidanceⁱ

Current

Escondida (US$/lb)

Spence (US$/lb)

Copper SA (US$/lb)ⁱⁱ

WAIO (US$/t)

BMA (US$/t)

FY25 unit cost guidance is based on exchange rates of AUD/USD 0.66 and USD/CLP 842.

Calculated using the following assumptions for by-products: gold US$2,000/oz, and uranium US$80/lb.

Escondidaⁱⁱⁱ

Spence

WAIO (100% basis)

BMA (100% basis)

Medium term refers to a five-year time horizon unless otherwise noted.

Unit cost guidance is based on exchange rates of AUD/USD 0.66 and USD/CLP 842.

Medium term refers to FY27 onwards. Production for FY25 and FY26 is expected to average between 1,200 and 1,300 ktpa.

Potash

complete

Potash

complete

Group production and sales summary

By commodity

Metals production is payable metal unless otherwise noted.

Throughout this report figures in italics indicate that this figure has been adjusted since it was previously reported.

Copper

Lead

Zinc

Gold

Silver

Uranium

Molybdenum

Iron ore

Steelmaking coal¹

Energy coal