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Petroleum briefing

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/11/petroleum-briefing

2019-11-15 08:10:40 UTC

11 November 2019, 02:04 PM

2019-11-11 14:04:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 11 November 2019, 02:04 PM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p style="text-align: center;"><strong>Petroleum Briefing </strong></p> <p style="text-align: center;"><strong>Sydney 11 November 2019</strong></p> <p style="text-align: center;"><strong>Geraldine Slattery - President Operations, Petroleum</strong></p> <p style="text-align: left;"><strong><a href="/media-and-insights/news-releases/2019/11/petroleum-briefing">News release</a></strong></p> <p style="text-align: left;"><strong><a href="/-/media/documents/media/reports-and-presentations/2019/191111_petroleumbriefing.pdf?la=en">Presentation</a></strong></p> <p style="text-align: left;"><strong><a href="https://edge.media-server.com/mmc/p/362g83wf">Webcast</a></strong></p> <p style="text-align: left;"><strong><a href="/-/media/documents/media/reports-and-presentations/2019/191111_petroleumbriefingqatranscript.pdf?la=en">Q&A transcript</a></strong></p> <p style="text-align: left;"><strong><a href="/-/media/documents/media/reports-and-presentations/2019/191111petroleumbriefingqatranscript.pdf?la=en"></a></strong><span>Good afternoon, and welcome to BHP’s 2019 Petroleum Investor Briefing. </span></p> <p><span>For those I have not met, I am Geraldine Slattery, President Operations Petroleum, and a member of BHP’s Executive Leadership Team.</span></p> <p><span>I have been with BHP for over 25 years, working in our Petroleum assets here in Australia, as well as the US and UK. </span></p> <p><span>Most recently, I was our Asset President Conventional, looking after our global production operations.</span></p> <p><span>Today, we’re here to talk about the Petroleum business, its place in BHP’s portfolio, and to address the questions on your mind. </span></p> <p><span>I recognise that you have interest in understanding our market outlook and our plans to grow value and returns. We will cover all of this. </span></p> <p><span>More than anything else today, there are a few points I would like you to take away.</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Firstly, we believe oil and advantaged gas are commodities that have the potential to generate strong returns over the long term.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Secondly, we have the assets, and the growth projects to replace, and indeed build on the resilient returns we have enjoyed from the Petroleum business, through the next decade.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Thirdly, our performance track record in exploration through to production gives confidence in our ability to deliver these plans. </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And finally, working in both a sustainable and capitally disciplined way underpins everything we do. This is key to the long-term performance of the Petroleum business.</span></li> </ul> <p><strong><span>We start with our purpose</span></strong></p> <p><span>So let’s begin with our purpose – ‘to bring people and resources together to build a better world.’ </span></p> <p><span>As Andrew Mackenzie and Geoff Healy have shared in recent months, we believe that creating social value is an integral part of creating shareholder value.  </span></p> <p><span>I know that building trust comes from doing the right thing by people and the environment in how we run the business. </span></p> <p><span>It comes from providing access to employment, in providing opportunity to local service providers, and having the highest standards of care for surrounding communities. </span></p> <p><span>Without this trust, we cannot hope to access talent, the most valuable acreage, or the approvals and services needed to competitively deliver on our plans.</span></p> <p><span>Let’s now turn to the specifics of the business.</span></p> <p><strong><span>Petroleum is positioned for long-term value creation</span></strong></p> <p><span>Petroleum has delivered strong returns, and has an attractive outlook. </span></p> <p><span>Our strategy of being in the best commodities, with the best assets, enabled by the best capabilities has delivered strong financial returns over many years. </span></p> <p><span>This strategy is what sets us up to continue such performance.</span></p> <p><span>Our commodity analysis tests against a range of potential scenarios, recognising the inherent uncertainty as we look out several decades.</span></p> <p><span>In any plausible future scenario, we believe oil and advantaged gas will be attractive for decades to come. </span></p> <p><span>We have a pipeline of competitive growth opportunities, with average <span style="color: #1f497d;">r</span>ates of <span style="color: #1f497d;">r</span>eturn of around 25 per cent.</span></p> <p><span>With our existing assets, these position us to deliver an average <span style="color: #1f497d;">return on capital employed</span> of greater than 15 per cent through the next decade.</span></p> <p><span>We also have the talent and the track record in safety, in exploration and in deepwater operations that gives confidence in our ability to deliver on our plans. </span></p> <p><span>Of course, we will always put the safety of our people and sustainability of the environment first and be disciplined in our use of BHP’s capital under the Capital Allocation Framework.</span></p> <p><span>Let me turn now to our assets.</span></p> <p><strong><span>Quality assets delivering value and returns</span></strong></p> <p><span>Over the past five years, Petroleum has had the highest margins in the group, at over 65 per cent, and an average ROCE of approximately 15 per cent.</span></p> <p><span>We take great pride in this performance, but also recognise the need to focus on the longer-term outlook as production from our legacy assets declines over the coming decade.</span></p> <p><span>Maintaining our performance relies on us delivering on our current growth projects, and in advancing further growth opportunities from recent exploration success.</span></p> <p><span>The outlook we share today has the potential to:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Deliver robust EBITDA margins of more than 60 per cent, inclusive of continued exploration investment;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Generate average returns of 12 per cent through the mid-2020s, rising to around 20 per cent in the latter half of the decade;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And, increases the base value of the Petroleum business by 80 per cent.</span></li> </ul> <p><span>This outlook is based on the following assumptions.</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>It is an unconstrained case, which assumes execution of all our unsanctioned projects… at current equity interests… and earliest schedule.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We have used Wood Mackenzie long term price forecasts. </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We have also indicated the sensitivity of financial metrics to US$60 and US$80 Brent oil and US$6 and US$8 LNG. </span></li> </ul> <p><span>As you can see, the returns are resilient across this price range.  </span></p> <p><strong><span>High margin barrels to replace mature asset declines</span></strong></p> <p><span>Many of you may recall that in October 2016, we presented a plan for the Conventional Petroleum business across three core areas: </span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Getting the most from our producing asset base, through high availability and low operating costs;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Delivering and generating high-returns from our pipeline of brownfield and greenfield projects; </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And extending our growth options through exploration and early life-cycle assets.</span></li> </ul> <p><span>I am pleased to say we have more than delivered on these commitments.  </span></p> <p><span>To call out a few highlights<span style="color: #1f497d;">.</span></span></p> <p><span>We have completed two major projects, and have more than <span style="color: #1f497d;">US</span>$3 billion worth of additional investment in major projects underway. These have average returns in excess of 20 per cent.  </span></p> <p><span>Two of these, Atlantis Phase 3 and Project Ruby were not in the firm plan back in 2016. We had identified them as potential upside cases to be further de-risked through seismic imaging. </span></p> <p><span>In 2016, we successfully acquired the Trion asset in Mexico’s first-ever Deepwater Bid Round. This demonstrates the value of investing counter cyclically. <br>  <br> In Trinidad and Tobago, our Exploration program has discovered a material gas resource in the Northern Licenses. </span></p> <p><span>You may remember this was a Frontier basin with the nearest well tests some 200 kilometres away.</span></p> <p><span>And finally, we have expanded our option set, with potential tier one positions in Eastern Canada and Western <span style="color: #1f497d;">Gulf of Mexico</span>. </span></p> <p><span>Collectively, our portfolio now has the potential to deliver average annual production growth of 3 per cent over the next decade, whilst maintaining a competitive return on capital employed and EBITDA margins. </span></p> <p><span>This includes the decline in production from our legacy assets in Australia, which we’ll more than replace with high margin barrels from our oil dominated growth projects in the <span style="color: #1f497d;">Gulf of Mexico</span> in the near term. </span></p> <p><span>Beyond our current suite of options, we will also continue to increase our pipeline of future growth opportunities through exploration and the acquisition of early stage discovered resource. </span></p> <p><span>This builds on our exploration success over the past three years, in adding new resource and providing low cost options to grow the value of the portfolio.</span></p> <p><span>With that, let’s turn to <span style="color: #1f497d;">c</span>apex.</span></p> <p><strong><span>Petroleum investments compete for capital</span></strong></p> <p><span>As you will see, we have many attractive and high returning projects and opportunities in various stages of development and maturity within the portfolio. </span></p> <p><span>As the chart on the right shows, the portfolio would require average annual capex from the 2023 financial year to the 2025 financial year, inclusive of exploration expenditure, of under <span style="color: #1f497d;">US</span>$4 billion. This reduces as the major projects are past their peak investment period.</span></p> <p><span>As I mentioned at the outset, this is an unconstrained view, and all opportunities will compete for capital under the Capital Allocation Framework. </span></p> <p><span>This prioritises maintenance capital, balance sheet strength and payment of a dividend to shareholders, under the payout ratio policy.</span></p> <p><span>Excess cash is allocated to maximise value and returns, with a rigorous comparison with cash returns to shareholders. </span></p> <p><span>There is always fierce competition across the Group for capital through the annual capital prioritisation processes.</span></p> <p><span>Our growth options give us the flexibility to manage our capital in a value optimised way. </span></p> <p><span>Across the BHP Group, including within Petroleum, this includes:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Making further improvements in project economics and capital efficiencies;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Potential sell downs in our high-equity positions to reduce capital spend and monetise value improvements; </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And finally, optimising the phasing of project execution. </span></li> </ul> <p><span>So now, let me briefly touch on how Petroleum fits in the broader BHP portfolio.</span></p> <p><strong><span>Petroleum creates a stronger and more resilient BHP</span></strong></p> <p><span>As I mentioned earlier, Petroleum has been a significant contributor to the Group over many years, with strong cash and EBITDA generation.</span></p> <p><span>As you will shortly hear from Michiel, our analysis gives us confidence in the future demand and the ability to generate returns from oil. </span></p> <p><span>However, our contribution goes beyond our commodity attractiveness and returns.</span></p> <p><span>Our group performance demonstrates that a portfolio of diversified commodity exposures reduces the impact of price volatility, as the chart on the slide illustrates. </span></p> <p><span>We also believe that diversified portfolios enable more rigorous capital allocation, with only the most compelling projects being funded. </span></p> <p><span>In addition, having a strong balance sheet allows counter-cyclical investment, and in the right project as our CFO Peter Beaven describes it – “the holy grail of value creation in our industry.”</span></p> <p style="margin: 0cm 0cm 0pt;"><span>And finally, Petroleum both enhances and benefits from being part of the broader portfolio. </span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We benefit from BHP’s strong balance sheet – a pre-requisite for deep water operations.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We can invest counter-cyclically, which is particularly important in exploration, and has underpinned our success in recent years as we maintained our exploration program in Trinidad and Tobago, and acquired the Trion resource.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We can focus on value over reserve replacement, and be patient for the highest returning opportunities. </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And finally, we benefit from BHP’s integrated geoscience and project expertise.</span></li> </ul> <p><strong><span>Our strategy to maximise value and returns </span></strong></p> <p><span>With that introductory summary, and consistent with our strategic framework of being in the best commodities, best assets with the best capabilities, the agenda for today’s briefing will be:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Michiel with shortly provide detail on the outlook for our commodities.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>I will then return to describe our suite of assets and opportunities.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We will then take some questions.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Following a short break, Sonia will then take you through our exploration strategy.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And then I will conclude with a summary of our capabilities and the value and returns that you can expect.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>There will be another chance for questions after this.</span></li> </ul> <p><span>With that, let me hand over to Michiel.</span></p> <p><strong><span>Oil and gas market outlook</span></strong><span>   </span></p> <p><span>Good afternoon ladies and gentlemen, and thank you Geraldine. </span></p> <p><span>My name is Michiel Hovers and I am the Group Sales and Marketing Officer.</span></p> <p><span>I have been with BHP for 16 years, in various roles throughout our Marketing organisation. </span></p> <p><span>I started off in energy coal, followed by uranium.</span></p> <p><span>Then moved to Singapore to market nickel, followed by looking after the iron ore marketing. </span></p> <p><span>And most recently, before my current role, I was VP of Supply and Marketing for Petroleum based in Houston, where I worked closely with Geraldine and the team. </span></p> <p><span>I am now back in Singapore and responsible for the Marketing organisation for BHP.</span></p> <p><span>It is my great pleasure to share with you today our long-term outlook for the global oil and gas markets.</span></p> <p><strong><span>We are deliberate about the commodities we choose</span></strong></p> <p><span>Before I do that, I would like to touch on BHPs strategy around commodity attractiveness.</span></p> <p><span>As we shared with you in our Strategy Briefing earlier this year, we are very deliberate about the commodities we choose, and assess them against a strict set of criteria. </span></p> <p><span>So what are these criteria:</span></p> <p><span>Firstly, the current and potential size of the market must be large, as we are a large company. This also lessens the potential for single event disruptions that can create significant volatility.</span></p> <p><span>Secondly, we look for favourable demand and supply fundamentals over the long term. We can only grow shareholder value through project options if the market demands these. </span></p> <p><span>Next, We like commodities where the economic rent accrues upstream near the resource - matching our operational capabilities and simultaneously creating a long-term competitive advantage, that cannot be competed away. </span></p> <p><span>Fourth, steep cost curves offer strong margins for low cost assets.</span></p> <p><span>And lastly, we believe that diversified portfolios enable better capital allocation.</span></p> <p><span>So I think that clearly lays out what we are looking for.</span></p> <p><span>Next step then is to use scenario analysis to address future uncertainty.</span></p> <p><span>Using a set of divergent, but plausible scenarios we create bookends to better understand what the future might bring.</span></p> <p><span>We do this for each commodity and also test against a range of strategic themes.</span></p> <p><span>Now, how does Oil and Gas fit into this context? </span></p> <p><strong><span>Fundamentals support our outlook for oil and gas</span></strong></p> <p><span>Our outlook for oil is attractive.</span></p> <p><span>Oil demand will continue to grow, albeit at an increasingly slower pace, until an eventual peak. </span></p> <p><span>Perpetual natural field decline creates a structural supply demand gap – even in our low demand case – which creates the need for inducement economics.</span></p> <p><span>The lower cost supply sources of today, such as core shale, are not large enough to fill this gap. </span></p> <p><span>New, higher cost supply will need to be induced. </span></p> <p><span>This creates a reasonably steep cost curve beyond the mid run.  </span></p> <p><span>The case for natural gas is somewhat nuanced. </span></p> <p><span>The demand profile for natural gas is very healthy: it is diversified and we see consistent growth.</span></p> <p><span>The growth in the LNG segment is even stronger. </span></p> <p><span>Supply of gas, however, is more abundant. </span></p> <p><span>Asset choice is critical.</span></p> <p><span>We like gas assets when they are advantaged on the cost curve, either due to proximity to infrastructure or access to premium markets.</span></p> <p><span>With that intro, let me now move into our outlook for oil and I will start with the demand side.</span></p> <p><strong><span>Oil demand to peak and then decline modestly</span></strong></p> <p><span>For the last four decades, with the exception of the Global Financial Crisis, oil demand has increased every single year. </span></p> <p style="margin: 0cm 0cm 0pt;"><span>Population growth, urbanisation and industrialisation are the main drivers for this trend. </span></p> <p><span>Global growth is therefore not equally distributed across the regions. </span></p> <p><span>OECD demand has already peaked and will continue to decline. </span></p> <p><span>We see non-OECD demand rise from over 50 per cent today to nearly 70 per cent of total demand by 2050, driven primarily by China, India and other emerging Asian countries.</span></p> <p><span>As I mentioned, we tend to think through the future in ranges. In our plausible low demand case, we see demand peaking in the mid-2020s and in our central case we peak 10 years later in the mid-2030s.</span></p> <p><span>As the graph on the right illustrates, the sharp decline in light duty vehicle demand is the main catalyst for this peak. </span></p> <p><span>Light duty vehicles currently account for nearly 30 per cent of oil demand, falling to 10 to 20 per cent by 2050.</span></p> <p><span>In contrast, demand growth comes from other sources of transport aviation, rail, shipping, and medium and heavy duty vehicles. </span></p> <p><span>The greatest source of demand growth, however, comes from industry and petrochemicals. </span></p> <p><span>Petrochemical demand is expected to grow at twice the rate of global GDP. </span></p> <p><span>This includes products like plastics, fertilizers, clothing and packaging. Demand for these products is closely linked to the key macro trends of urbanisation and industrialisation.</span></p> <p><span>Our low demand case includes:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>a much more aggressive rate of EV penetration, well above the vast majority of published mid-cases, </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>significant trend increases in fuel efficiency, and</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>low case macro inputs, constraining non-transport demand. </span></li> </ul> <p><span>We also test our entire portfolio against a set of strategic themes. </span></p> <p><span>How the electrification of transport will evolve, is one of them and I would like to dive, a little deeper, into that.</span></p> <p><strong><span>Electrification of transport: a strategic theme</span></strong></p> <p><span>First, let me give you a few round numbers to illustrate why this is a vitally important question. </span></p> <p><span>Global liquids demand stands at approximately 100 million barrels a day, </span></p> <p><span>60 million are used in transport. </span></p> <p><span>Just under 50 million of these are for road transport.  </span></p> <p><span>So we are talking roughly, about half of the global demand here. </span></p> <p><span>We model electric vehicle adoption very aggressively and have been on the green end of the spectrum on this issue for years. </span></p> <p><span>We see electrification of the Light Duty fleet as a certainty; even in our low adoption case, where it just takes longer. </span></p> <p><span>When I spoke to you 3 years ago, at our 2016 Petroleum briefing, I shared our view on the electrification of passenger vehicles in great detail. </span></p> <p><span>Since then, we have expanded our analysis and taken a deeper dive into the medium and heavy duty vehicle sector – trucks and buses.</span></p> <p><span>The short summary is that buses are highly amenable to electrification, however they only make up 3 per cent of oil demand.</span></p> <p><span>The medium and heavy trucking fleet is more relevant, it makes up 14 per cent of demand, and is the last frontier of electrification. </span></p> <p><span>We believe that battery technology and the weight and cost dynamics will impede accelerated adoption.</span></p> <p><span>In addition, the average truck’s useful life, and therefore the cycle time is quite long, around 17-18 years.</span></p> <p><span>Given these adoption hurdles, we do not expect the electrification of the trucking sector to occur until deep into the second half of this century. </span></p> <p><span>On top of this, in our central case, we see the number of trucks increase from around 60 million today to 100 million units by 2050, leading to a potential growth of demand.</span></p> <p><span>A much more detailed look at our latest insights on electrification of transport can be found in our Prospects blog that we posted today on the BHP website. </span></p> <p><span>Let us move on to the oil supply story.</span></p> <p><strong><span>Compelling long run demand-supply fundamentals</span></strong></p> <p><span>We model global natural field decline conservatively at 3 per cent per year. </span></p> <p><span>At that decline rate, half of today’s supply will need to be replaced by 2035, to meet the demand in our central case.</span></p> <p><span>Now, where is all of this supply going to come from?</span></p> <p><span>US shale has been the major source of new supply. </span></p> <p><span>However, like most industry observers, we see US shale evolving into a more mature stage of production. </span></p> <p><span>Shale will continue to be an important source of supply, however issues, such as CHILD - PARENT - well interference, well spacing, water handling, steep decline rates and last but not least capital discipline are headwinds that slow the rate of growth. </span></p> <p><span>As a result, we see slower growth towards a plateau in the mid-2020s, when US oil production peaks at around 16 million barrels a day, before it starts easing off.</span></p> <p><span>On top of this, it is important to note that not all shale is created equal. </span></p> <p><span>The low cost cores, are finite.</span></p> <p><span>We see core sha<span style="color: #1f497d;">l</span>e move off the margin in the mid 2020s.</span></p> <p><span>Conventional oil fields and deep sea developments will be required to meet the demand.</span></p> <p><span>Those barrels will likely come with greater geopolitical complexity and some, from sources still yet to be found. </span></p> <p><span>That brings me to another important point.</span></p> <p><span>On a global basis the most recent oil investment cycle has lacked the required spend to maintain abundant reserves. </span></p> <p><span>The conventional projects that are coming online over the next year or so, are a result of the previous peak in the cycle. </span></p> <p><span>The last three years have seen very low levels of conventional oil resources being sanctioned for development. </span></p> <p><span>According to the IEA, we are tracking 60 per cent lower than the previous five years. </span></p> <p><span>On top of this, the sharp slowdown in exploration spend, has led to record low new discoveries. </span></p> <p><span>We could be at a turning point here, as in 2019, we have started to see a 20 per cent uptick in <span style="color: #1f497d;">exploration </span>spend. </span></p> <p><span>For these reasons we see a long-term market that stimulates inducement of new, higher cost supply, which leads to a reasonably steep cost curve beyond the mid run. </span></p> <p><span>That, is why we like oil.</span></p> <p><span>But just to stress the point, I want to highlight again, that we think in ranges and we test all our future plans against this range, including the plausible low.</span></p> <p><span>Now let’s turn to gas.</span></p> <p><strong><span>Gas demand diversified and resilient; LNG gaining share</span></strong></p> <p><span>As the world moves to a lower carbon footprint, natural gas increases its share in the global energy market, in parallel with the rise of renewables.</span></p> <p><span>We forecast an incredible strong growth in renewable power, with wind and solar growing by over 7 per cent per annum over the next three decades, to meet almost 40 per cent of the global power generation by 2050.</span></p> <p><span>This number increases to 55 per cent, if we include hydro.</span></p> <p><span>It is important to note that the global energy consumption continues to rise, and we do not see this peaking, i.e. the global energy pie gets bigger.</span></p> <p><span>Gas will also increase its market share. To the expense of coal.</span></p> <p><span>Gas will see diversified growth in the power and industrial sectors and grow at 1.2 per cent CAGR to 2050. </span></p> <p><span>In the power sector, gas becomes a complement to renewables, providing an important source of baseload flexibility for a market increasingly reliant on intermittent renewables. </span></p> <p><span>We do see a risk of renewables potentially leapfrogging gas as a baseload fuel for power in emerging markets that have a relatively young fleet of coal fired power stations.</span></p> <p><span>This is built into our low case, and only starts to become relevant in the very long run, the 2030s. </span></p> <p><span>Now, Pivoting to LNG, you’ll see on the bottom chart that we are currently experiencing an oversupplied market. </span></p> <p><span>This will continue out to the mid-2020s, after which point we expect the demand to outpace supply.</span></p> <p><span>The LNG market currently stands at a modest 45 BCF/Day, relatively small versus the overall large 370 Bcfd gas market. </span></p> <p><span>We are very positive on the demand outlook for LNG. </span></p> <p><span>It is the fastest growing fossil fuel and grows at a very healthy 4 per cent CAGR to 2040 and is on track to close to doubling its share in the global gas market by 2050. </span></p> <p><span>We see regional demand growth in Asia (primarily China and India) as well as Europe. </span></p> <p><span>The strong demand outlook coupled with the natural field decline <span style="color: #1f497d;">will </span>require over 50 new LNG trains to be induced in the next 20 years.</span></p> <p><span>And as the LNG market becomes larger, the impact of new large projects entering the market, will be less likely to create an oversupply, as it does today.</span></p> <p><span>Despite our strong outlook for demand, the overall supply dynamics leave the gas market fundamentally more restrained. </span></p> <p><span>Gas is just more abundant and a more homogenous resource than oil.</span></p> <p><span>As a result we see a flatter cost curve.</span></p> <p><strong><span>Harmonisation develops as the Global LNG market matures</span></strong></p> <p><span>On top of this, the LNG market is transitioning. </span></p> <p><span>The market will continue to harmonise, growing more and more interconnected. </span></p> <p><span>The US export facilities of recent years now connect the US, Europe and Asia into one global LNG market. </span></p> <p><span>The larger spot market<span style="color: #1f497d;">,</span> as well as the liberalisation of the power markets in Asia that are driving a need for more contractual flexibility, have diminished the appetite for long term contracts.</span></p> <p><span>Even more, contracting is moving away from oil indexation, which is now estimated to be only 50 per cent of the market.</span></p> <p><span>So what does that mean for our view on Gas?</span></p> <p><span>We like gas, but due to this harmonisation and the flatter cost curve, we need to be selective in the opportunities we pursue.</span></p> <p><span>We like gas assets that are geographically advantaged, vis-a-vis existing infrastructure, customers or both, creating upstream margins.</span></p> <p><strong><span>Fundamentals support our outlook for oil and gas</span></strong></p> <p><span>So let me summarise my key messages in closing.</span></p> <p><span>We like oil because:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We see a structural supply and demand gap, even when stress tested against our most aggressive assumptions for EV’s.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Even though we call for a peak in demand, natural field decline creates the need for inducement economics. </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>With core shale coming off the margin, this happens at a higher cost than today.</span></li> </ul> <p><span>Natural gas, similarly, displays a supply and demand gap.</span></p> <p><span>The demand profile for gas is very healthy.</span></p> <p><span>It is diversified and we see consistent growth, </span></p> <p><span>with the growth in the LNG sector even stronger. </span></p> <p><span>Supply of gas is, however, more abundant and for this reason asset choice is critical. </span></p> <p><span>It is therefore that we favor oil, but still find gas attractive, when advantaged.</span></p> <p><span>Thank you for your time today. </span></p> <p><span>I will now hand back to Geraldine.</span></p> <p><strong><span>High-return assets and opportunities</span></strong></p> <p><span>Thank you Michiel.</span></p> <p><span>We will now turn to our Asset base in more detail, after which we will have an opportunity to take some of your questions.</span></p> <p><strong><span>Quality assets concentrated in key heartlands</span></strong></p> <p><span>Today, we hold nearly 3.2 billion barrels of oil equivalent in resource.  </span></p> <p><span>We continue to add to this resource base through exploration or acquisition.</span></p> <p><span>And we continue to unlock commercialisation through technology and strategic partnerships. </span></p> <p><span>Our asset base is built around a collection of fields and related infrastructure, concentrated in geographical regions, which create what we call a heartland.</span></p> <p><span>Heartlands provide a competitive advantage: </span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Through differentiated access opportunities, to partnerships, to shared infrastructure and to talent; </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Through deep technical and operating capabilities that allow us to get the most from our assets;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And through the ability to impact social value at a larger scale and over an extended period</span></li> </ul> <p><strong><span>Replenishing the portfolio with high-value resources</span></strong></p> <p><span>Before we get to the specific Assets, at a portfolio level, we see a strong production outlook through the 2020s. </span></p> <p><span>Our production today stems from three producing heartlands in Bass Strait, Western Australia and the US Gulf of Mexico.</span></p> <p><span>As we progress through the early 2020s, the Gulf of Mexico oil assets grow in contribution, followed by major growth through Scarborough, Trion and potentially a Trinidad and Tobago North<span style="color: #1f497d;">ern</span> Gas development.</span></p> <p><span>Turning now to the specifics.</span></p> <p><strong><span>Australia: strong free cash flow generation</span></strong></p> <p><span>Our Australian producing assets are highly cash generative, resilient to price, and will continue to generate strong returns through the mid to late 2020s.</span></p> <p><span>In Bass Strait we are focussed on understanding and commercialising its contingent resource, whilst <span style="color: #1f497d;">we </span>also recognis<span style="color: #1f497d;">e</span> its limited material upside potential beyond the mid 2020s.  </span></p> <p><span>North West Shelf, equally, is a strong cash generator. </span></p> <p><span>Our focus there is on working with our JV partners to enable the Karratha LNG Facility to transition to a third-party tolling facility, given the declining equity gas over the next decade.   <br>  <br> Turning now to Scarborough.</span></p> <p><strong><span>Scarborough: working to advance development</span></strong></p> <p><span>Scarborough offers material growth potential to our Australian portfolio. </span></p> <p><span>Development planning is now technically mature and commercial tolling terms are well advanced to the point where we have increasing confidence in sanction decision readiness in 2020.</span></p> <p><span>As you may have seen on Friday, Woodside <span style="color: #1f497d;">– the operator – </span>has announced a material increase in the 2C resource estimate, to 11.1 Tcf. </span></p> <p><span>A Scarborough development would also unlock potential future upside, through development of the adjacent Thebe and Jupiter gas resources, which contribute an additional ~2 Tcf.</span></p> <p><span>We are targeting a final investment decision in the 2020 calendar year, with potential first production from 2024.</span></p> <p><strong><span>Turning now to the Gulf of Mexico</span></strong></p> <p><span>US Gulf of Mexico: big fields get bigger</span></p> <p><span>Over the early to mid-2020s, we see the Gulf of Mexico contribution growing – from just over 30 per cent of EBITDA today, to about 50 per cent in the 2025 financial year.</span></p> <p><span>Atlantis is a true tier one asset, and continues to yield further high return growth.</span></p> <p><span>The Phase 3 project offers returns of over 40 per cent, and is expected to deliver first oil in the 2020 calendar year.</span></p> <p><span>Beyond this, development planning is underway on multiple further growth projects, including subsea pumping and further infill wells.</span></p> <p><span>Mad Dog Phase 2 is on track.</span></p> <p><span>As in Atlantis, development planning is underway on further growth, through water injection and field extensions.</span></p> <p><span>Shenzi continues to demonstrate our operating capability in the deepwater Gulf of Mexico, with unit costs and uptime remaining <span style="color: #1f497d;">very </span>competitive.</span></p> <p><span>In the early to mid 2020s, we anticipate growth at Shenzi through progressive development of the Wildling discovery to the north.</span></p> <p><span>We anticipate a final investment decision on Wildling Phase 1 in early 2021, with potential first oil in early 2022. </span></p> <p><span>In addition to the named options just mentioned, we have many further unsanctioned projects with IRRs in excess of 20 per cent that have been made possible through advanced technology. </span></p> <p><strong><span>Trion: developing Mexico’s first deepwater development</span></strong></p> <p><span>At Trion, following the success of the 2DEL well, we moved on to 3DEL, which has provided greater confidence around the scale, and quality, of the resource.</span></p> <p><span>With these results, we now have sufficient information to underpin development planning.</span></p> <p><span>Whilst still in the early stages, we are targeting a project breakeven of below US$50 per barrel of oil equivalent, and are confident the Trion development will compete for capital in BHP’s portfolio. </span></p> <p><span>Project sanction is possible from the 2022 financial year, with earliest first oil from 2025. </span></p> <p><strong><span>Trinidad and Tobago: a material, deepwater gas discovery</span></strong></p> <p><span>We have operated in Trinidad and Tobago for nearly 20 years, in the shallow water Angostura field. </span></p> <p><span>Earlier this year, we sanctioned the Ruby brown-field project –  underpinned by continued appraisal and seismic imaging.</span></p> <p><span>In the deep water, in our Northern Licenses, we have declared a 3.5 Tcf (gross) discovery with potential further upside.   </span></p> <p><span>Whilst detailed development studies are just getting started, a hub development appears best suited to this play. </span></p> <p><span>The case we share today assumes access through existing LNG infrastructure in Trinidad and Tobago, which has capacity<span style="color: #1f497d;">,</span> whilst recognising there are multiple development concepts to be considered. </span></p> <p><span>As Operator with high equity interest, we also have scope to optimise the development planning schedule and concept. </span></p> <p><span>Subject to being competitive for capital, we see an FID from 2022.</span></p> <p><strong><span>A healthy pipeline of options supports our future</span></strong></p> <p><span>Let me now return to the strength of the portfolio in aggregate.</span></p> <p><span>We start with our suite of producing assets. </span></p> <p><span>From Bass Strait to Mad Dog, this base delivers strong margins and returns through the next decade.</span></p> <p><span>Sanctioned and well advanced projects bring new, high-return oil into production from the 2021 financial year, effectively replacing field decline from our legacy Australia<span style="color: #1f497d;">n</span> Assets.  </span></p> <p><span>These are highly attractive, with IRRs that range from approximately 20 to 45 per cent. </span></p> <p><span>Beyond this, we have multiple, high-confidence, unsanctioned projects, across green and brownfield – as we have discussed.</span></p> <p><span>And finally, we have a successful exploration and appraisal program that feeds the front end of our pipeline with Trinidad and Tobago North transitioning into Development Planning.  </span></p> <p><span>We also recognise that acquiring early life cycle assets – like Trion – can add value and enhance our portfolio and this remains part of how we seek out future options. </span></p> <p><span>What I’d like to leave with you is that we have a strong base… with near-term high-return new production from already sanctioned projects followed by a healthy pipeline of high-confidence opportunities in various stages of maturity. </span></p> <p><span>With that, we now have time for questions. </span></p> <p><strong><span>Delivering the future through exploration</span></strong></p> <p><span>Welcome back everyone.</span></p> <p><span>I am Sonia Scarselli, the Vice President of Exploration and Appraisal. </span></p> <p><span>Today I will talk about our exploration success and our exciting future opportunities. </span></p> <p><span>I have been at BHP for eight years and worked across Exploration and Production. </span></p> <p><span>I have a PhD in geology… and I started in the industry as a structural geologist… working petroleum systems across multiple basins, such as Atlantic margins, Middle East and South America… just to name a few.  </span></p> <p><span>I sense that the two biggest areas of interest in Exploration are: <span style="color: #1f497d;">W</span>hat are we investing in?<span style="color: #1f497d;"> </span>And <span style="color: #1f497d;">how </span>it create<span style="color: #1f497d;">s</span> value?</span></p> <p><span>I will address these questions for you today. </span></p> <p><strong><span>Our exploration strategy is delivering </span></strong></p> <p><span>Our Exploration strategy has been in place for the past five years… and it is delivering. </span></p> <p><span>Since the 2017 financial year, we have added 758 million barrels of oil equivalent of net 2C contingent resources to the portfolio.</span></p> <p><span>Now, when we talk about Exploration, we are referring to accessing opportunities… exploring those opportunities… and then appraising our discoveries. </span></p> <p><span>What does that look like? </span></p> <p><span>Our strategy targets tier one opportunities and is geographically focused. </span></p> <p><span>Based on our commodity outlook, we have a bias for oil. </span></p> <p><span>Where we find gas, if there is a structural advantage, we will look to commercialise it – if not we will monetise. </span></p> <p><span>We target big reservoir systems with world-class source rocks. </span></p> <p><span>And we go after big traps that can deliver multiple 250 million barrels of oil equivalent discoveries. </span></p> <p><span>Why is that? This allows us to explore these basins for multiple decades. Just like in the Gulf of Mexico.</span></p> <p><span>We focus on competitive opportunities with attractive fiscal terms. And we access the plays early… at high equity. </span></p> <p><span>So our exploration strategy in action targets material, high quality opportunities… which are low in the cost curve… offer scope to build scale over time… and are competitive within the BHP portfolio.</span></p> <p><span>This is underpinned by the “BHP way”. </span></p> <p><span>What does this mean? </span></p> <p><strong><span>Investing in the BHP way underpins our success</span></strong></p> <p><span>This means, we apply a rigorous, bottom-up understanding of how the petroleum system works, from the scale of the tectonic plate to the microscopic pore space in the rock. </span></p> <p><span>We understand the critical play elements and the risk of the system.</span></p> <p><span>And we invest in getting the right data to improve our understanding of the volume, risk and value of our opportunities. </span></p> <p><span>For example, to reduce the technical risk in Western Gulf of Mexico, we acquired an Ocean Bottom Node seismic survey. </span></p> <p><span>Having the right data helps drive the right decisions, and reduces the risk profile ahead of drilling.</span></p> <p><span>Our spend is aligned with this approach, with around a third of our budget invested in seismic data, and half going towards <span style="color: #1f497d;">exploration </span>drilling. </span></p> <p><span>Both of these help mature our current portfolio. </span></p> <p><span>Of course, we must also work on accessing new opportunities to replenish our growth pipeline.</span></p> <p><span>So why invest in exploration today?</span></p> <p><span>While our current portfolio is well placed to deliver in the 2020s, our exploration program is preparing the opportunities for the future. </span></p> <p><span>Given the maturation cycle of opportunities in Petroleum, to be a sustainable return contributor from the late 2020s into the 2030s, we must bring forward additional portfolio options today. </span></p> <p><strong><span>Early access to capture value and enable optionality</span></strong></p> <p><span>As we mentioned, our strategy is to identify and access the right places early in the lifecycle – where most of the value is captured.  </span></p> <p><span>We capture major positions in frontier basins and new plays so we have the opportunity to create new heartlands. </span></p> <p><span>We are doing this now in the Western Gulf of Mexico and Trinidad and Tobago. </span></p> <p><span>As you see on the right we like to access at a high equity. </span></p> <p><span>This allows us to manage risk through the life cycle, including through partnering at the right time. </span></p> <p><span>Our approach to partnerships centres on the following. </span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>Gaining access to resource. For example, partnering with PEMEX allowed entry at Trion, a tier 1 opportunity.   </span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>To bring in understanding and knowledge of an area. For example, in Trinidad and Tobago, our partners are both long-term producers in the region.</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And to manage and share the risk of exploration.</span></li> </ul> <p><span>Being an early mover, at high equity, and with large positions allows us to do three critical things. </span></p> <p><span>1) Manage the risk through the lifecycle. </span></p> <p><span>2) Explore using the BHP Way. </span></p> <p><span>3) And increase our likelihood to build a heartland.</span></p> <p><span>I’ll now share with you some examples that reflect these characteristics. </span></p> <p><strong><span>Orphan Basin: major potential tier 1 oil opportunity</span></strong></p> <p><span>Last year, we accessed the Orphan Basin in Eastern Canada.  </span></p> <p><span>It was identified as having tier one potential, as part of our global endowment study.</span></p> <p><span>We recognised that the main part of the play was under-explored, and still had significant remaining potential. </span></p> <p><span>Geologically, the Orphan Basin is analogous to the North Sea, which we know is one of the most prolific regions in the world. </span></p> <p><span>So why now?</span></p> <p><span>The most recent license round drove the acquisition of new seismic data. That allowed us to map large structures. </span></p> <p><span>We could now understand the scale was big enough, and the risk profile was appropriate. </span></p> <p><span>The rest is history. </span></p> <p><span>We captured two major blocks at 100 per cent equity, giving us exposure to a vast portion of the yet to find potential. </span></p> <p><span>These blocks have multiple opportunities and, on success, allow for follow up.</span></p> <p><span>As we mature the portfolio and work towards drilling of the first exploration well in the 2022 financial year, we will consider partnership.</span></p> <p><strong><span>Western GoM: extending prolific Perdido play sub-salt</span></strong></p> <p><span>In the Western Gulf of Mexico, we are looking to extend the prolific Perdido play, where Trion was discovered. </span></p> <p><span>Western Gulf of Mexico is a great example of where we have a large amount of untested potential.</span></p> <p><span>It sits under the salt and the image quality is extremely poor. </span></p> <p><span>We know there is a world-class source rock and a reservoir system. We just can’t see them.</span></p> <p><span>Multiple technologies have been deployed by the industry to improve the image, but without success.</span></p> <p><span>We designed, and worked with suppliers to acquire, the first industry Ocean Bottom Node seismic technology for a large deepwater exploration project. </span></p> <p><span>We are encouraged by the step change in image quality, and we expanded our footprint at the most recent US Gulf of Mexico lease sale. </span></p> <p><span>So, what can you expect from us over the next few years?</span></p> <p><strong><span>Finding new hydrocarbons – executing our program</span></strong></p> <p><span>We will be returning to Trinidad and Tobago North to appraise these discoveries. </span></p> <p><span>In the southern licenses, we are still evaluating oil potential in the area, and how to further commercialise the gas discoveries at LeClerc and Victoria.</span></p> <p><span>In Mexico, we have exploration activity with the Trion license.</span></p> <p><span>In Central Gulf of Mexico, we are maturing drillable options in our existing heartland. </span></p> <p><span>And in the Western Gulf of Mexico, we are awaiting the seismic data.  </span></p> <p><span>In Eastern Canada, we are in the early stage of maturing drillable prospects. </span></p> <p><span>In parallel, we continue to evaluate and bring forward opportunities for further access so that we can replenish our pipeline. </span></p> <p><span>To conclude, the key points I would like to leave you with today are:</span></p> <ul style="list-style-type: disc;"> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>That our exploration strategy <span style="color: #1f497d;">is delivering</span>;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"> <span>We have added 758 million </span><span>barrels of oil equivalent</span><span> of 2C contingent resources since the 2017 financial year;</span> </li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>We have done this through a focus on understanding the geology and getting the right data;</span></li> <li style="margin: 0cm 0cm 0pt; color: #000000;"><span>And we are continuing to build the pipeline for the future. </span></li> </ul> <p><span>With that, I would like to welcome Geraldine back to the stage.</span></p> <p><span>Thank you.</span></p> <p><strong><span>Capabilities to deliver on our strategy</span></strong></p> <p><span>Thank you, Sonia.</span></p> <p><span>Having heard about the broad suite of opportunities within the portfolio, I wanted to now talk to our capabilities and culture, as it is our people that underpin everything we have talked about.</span></p> <p><strong><span>Social value is an integral part of our business</span></strong></p> <p><span>Let me start with social value.</span></p> <p><span>Our commitment to our people, the communities we operate in and the environment is evident through our performance.</span></p> <p><span>Over the past five years, we have reduced the frequency of high potential injuries – those that have the potential to cause a fatality – by 44 per cent.</span></p> <p><span>This is a key metric we use to understand our safety performance and from which we learn.</span></p> <p><span>Furthermore, over the past five years, we have seen an approximate reduction <span style="color: #1f497d;">of 60 per cent </span>in the frequency of total recordable injuries. </span></p> <p><span>Beyond safety, we recognise how a diverse and inclusive organisational culture enables higher performance and allows us to attract and retain the best talent. </span></p> <p><span>We rank as a global leader in this space across industry sectors well beyond the resources sector.</span></p> <p><span>In the environment, we are focused on reducing greenhouse gas emissions at producing assets. <span style="color: #1f497d;">And w</span>e’ve had good results, through efficiency improvements across our operated assets. </span></p> <p><span>Beyond that, on all new developments, such as Trion, the engineering requirements specifically incorporate a greenhouse gas reduction plan. </span></p> <p><span>This demands inclusion of considerations in power generation efficiency, low fugitive emission equipment, and elimination of routine flaring. </span></p> <p><span>Finally, in our Mexico operation, we have delivered up to double the license requirements for local content. </span></p> <p><strong><span>Exploration strategy rest is delivering success</span></strong></p> <p><span>As you heard from Sonia, we see our capabilities in exploration as a competitive advantage today. </span></p> <p><span>In saying that, I recognise we have had mixed performance in times past.</span></p> <p><span>We have learned from <span style="color: #1f497d;">this</span>, and reset our strategy five years ago – as Sonia described – and our recent results show we are on a stronger trajectory.</span></p> <p><span>To put some numbers to that, BHP ranks in the top third of peer companies for average deepwater exploration finding costs at US$2.60 per barrel of oil equivalent.</span></p> <p><span>In addition, we also rank in the top third in terms of average discovery size. </span></p> <p><span>These metrics flow straight through to higher full-cycle returns and faster times to development. </span></p> <p><strong><span>High performance culture delivering results</span></strong></p> <p><span>Staying with returns.</span></p> <p><span>A continued focus on productivity has led to a 25 per cent reduction in unit costs over the past five years despite a 12 per cent reduction in volumes. </span></p> <p><span>To share an example, through a zero-based organisational re-design, we successfully removed all Shale related overhead from the business on its exit earlier this year – with no trailing costs right from the point of exit<span style="color: #1f497d;">.</span></span></p> <p><span>Beyond our producing assets, our deepwater drilling performance benchmarks very well. </span></p> <p><span>This is enabled through application of new technologies in automation and surveillance and in a high performance team culture – from the rig floor to the office.</span></p> <p><span>With drilling accounting for 40 to 50 per cent of typical exploration and development costs, this is an important value driver. </span></p> <p><span>Finally, to Transformation, and how we think about unlocking future value.</span></p> <p><strong><span>Transformation unlocking new opportunities</span></strong></p> <p><span>We look across the lifecycle, and focus on the big value drivers in each area.</span></p> <p><span>In exploration we are adopting technologies that give us better image quality, which in turn increases the likelihood of finding the best prospects. </span></p> <p><span>Sonia shared how we are applying this in practice in Western <span style="color: #1f497d;">Gulf of Mexico</span>.</span></p> <p><span>In project development, we are integrating digital and subsea engineering solutions, which increases performance and resource recovery. This has direct relevance to our Shenzi operation, and to our Trion development.</span></p> <p><span>And in production, reservoir and well surveillance again allows us to get the most from our assets. This shows up at Pyrenees, where a further infill project has been enabled through well imaging tools.</span></p> <p><span>In summary, I am confident that we have the capabilities required to execute on our plans and take us through the next phase of development. </span></p> <p><strong><span>Petroleum delivers value and strong returns</span></strong></p> <p><span>So how does all of this translate to value and to returns? </span></p> <p><span>As we have demonstrated, our portfolio has the potential to deliver average production CAGR of 3 per cent over the next decade.</span></p> <p><span>We maintain competitive ROCE and EBITDA margins, which are resilient through the price cycle. </span></p> <p><strong><span>High margin barrels drive production growth and returns</span></strong></p> <p><span>Our average 3 per cent production CAGR over the next decade comprises our base production, sanctioned projects and unsanctioned opportunities.</span></p> <p><span>Our sanctioned oil dominated projects will commence production from next year, replacing barrels lost from field decline.</span></p> <p><span>Our unsanctioned growth opportunities give us the potential to grow our production volumes whilst maintaining our strong returns</span></p> <p><span>This demonstrates the power of our heartlands through the competitive embedded unsanctioned growth options in the Gulf of Mexico and Western Australia.</span></p> <p><span>Additionally, we have competitive discovered resources in Wilding, in Trion, and in Trinidad <span style="color: #1f497d;">and Tobago </span>North. </span></p> <p><span>Beyond that, we are testing future tier one oil opportunities in Trinidad<span style="color: #1f497d;"> and Tobago</span>, Western Gulf of Mexico and Eastern Canada. </span></p> <p><strong><span>Petroleum investments compete for capital</span></strong></p> <p><span>All projects will compete for capital under our Capital Allocation Framework. </span></p> <p><span>This means, that while we have a broad suite of attractive opportunities, only the most competitive on a risk/return basis will progress. </span></p> <p><span>Over 75 per cent of potential capital spend through to the late-2020s is associated with projects yet to be sanctioned. And because of our high equity interest and operatorship, we retain significant flexibility in phasing and scale.</span></p> <p><span>Finally, over 50 per cent of our total potential capital investment is in oil opportunities. </span></p> <p><strong><span>Delivering strong margins, high returns and value</span></strong></p> <p><span>The outlook we have presented today has the potential to deliver strong EBITDA margins and returns. </span></p> <p><span>These margins have exposure to the upside in price<span style="color: #1f497d;">,</span> yet are protected in a low price environment.</span></p> <p><span>Our average ROCE is <span style="color: #1f497d;">about</span> 12 per cent rising to almost 20 per cent in the latter half of the decade. </span></p> <p><span>Our options have the potential to increase base value by up to 80 per cent.</span></p> <p><span>This starts with our sanctioned projects, which are on track to deliver first production – in the form of high margin Gulf of Mexico barrels – from 2020.</span></p> <p><span>We have high confidence in our unsanctioned projects. While these have embedded flexibility, they have potential to deliver from as early as the mid-2020s – with Scarborough, more Gulf of Mexico, and Trion. </span></p> <p><span>Our discovery in Trinidad and Tobago North is material, with development planning now underway.  </span></p> <p><span>And finally, we have additional value associated with our exploration program.</span></p> <p><span>Importantly, these are distributed along the development lifecycle, which provides value creation opportunities well into the next decade.</span></p> <p><strong><span>Petroleum is positioned for long-term value creation</span></strong></p> <p><span>In summary, Petroleum is a great business enabled by our strategy. </span></p> <p><span>It has an attractive commodity outlook. </span></p> <p><span>Our assets and growth pipeline are resilient across a wide range of prices. </span></p> <p><span> And, we have the capabilities, supported by our commitment to social value and to capital discipline, to maintain and indeed grow superior returns through the next decade</span></p> </div> <div class="col-12"> <div class="tags"> <ul> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

BHP President Operations Petroleum, Geraldine Slattery, today said Petroleum is set to deliver strong returns and contribute significant value for BHP through the 2020s and beyond, built on a foundation of quality assets, and attractive growth option

https://web.archive.org/web/20191115081040/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/11/petroleum-briefing

BHP

Transforming how we transform

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/transforming-how-we-transform

2019-11-15 08:10:42 UTC

30 October 2019, 10:59 AM

2019-10-30 10:59:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 30 October 2019, 10:59 AM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p>Jonathan Price, Chief Transformation Officer - IMARC 2019 - Wednesday, 30 October </p> <p>It is a pleasure to be here in Melbourne. Before I begin, I’d first like to acknowledge the Traditional Owners of the land on which we are meeting. I pay my respects to their Elders, past and present, and the Aboriginal Elders of other communities who may be here today.</p> <p>I am the Chief Transformation Officer at BHP and a member of the Executive Leadership Team. After starting my career as a process improvement engineer in a nickel refinery, I have been with BHP for more than 13 years working across a variety of roles in Western Australia, London and now Singapore. </p> <p>When I first contemplated the Chief Transformation Officer role I must admit that, like many of you, I asked myself “what’s the job?”. In my view, BHP had already been in various stages of change throughout its existence.</p> <p>As I defined the opportunity for BHP, it was not about changing the strategy, restructuring the company or rolling out a major new IT system. Instead, the opportunity was to begin transforming the way we transform, and that is what I will talk about today.</p> <p>Although Transformation is not a new term in our industry or with public companies more broadly, I believe BHP’s approach has a number of unique characteristics. These will not only change the way we operate; rather they compel us to change how we change.</p> <p>Of course transformation has its challenges, but we know we can turn these in to opportunities. </p> <p>The result will be a new type of resources company, to the benefit of all our stakeholders.</p> <p>Before I get in to the way in which we are responding to these challenges, I want to step back and firstly talk about the way our industry has evolved.</p> <p><strong>Incremental change</strong></p> <p>In the two decades since I first set foot on a mine site, many things have changed. </p> <ul> <li>Global warming has gone from being a fringe scientific concept to a daily headline;</li> <li>Centres of demand and global growth have shifted from the west to the east;</li> <li>A drone is no longer a term used to describe a boring person, but a game-changing technology widely available on the high street;</li> <li>And, we now have more computing power in our pockets, than was used to power the entire Apollo space mission.</li> </ul> <p>Yet the core processes, equipment and organisational models that allow a resources company like BHP to run, have remained strikingly similar. </p> <p>Why? </p> <p>Simply put: the way we operate has served our shareholders, our communities and our people well. We have weathered cycles, shifting from periods of rapid growth to swiftly reducing costs… all the while leveraging our experience of having seen it all before.</p> <p>Over time, as a company driven by scientists and engineers we have created a culture that is rational, methodical and results-orientated. As a trained process engineer, I can attest that we take great comfort in robust processes. </p> <p>Given our focus on safety, we were also predominantly risk averse. </p> <p><strong>Controlling the controllables</strong></p> <p>This approach has created a lot of shared value. </p> <p>However, over the last decade in particular, BHP has transformed as the China boom tailed off. </p> <p>For starters, we have had a laser-like focus on what we call ‘controlling the controllables’.</p> <p>This has been the essence of our productivity drive that began in earnest more than 5 years ago. To boil it down, it was about doing more with less. It is where our rationality and methodical thinking has literally paid dividends.</p> <p>We simplified our portfolio with the South32 demerger and created a global operating model, leaving us with a small number of large, high-quality assets and a highly connected workforce. </p> <p>Central to this is our enterprise-wide business operations system. It ensures transparency of vital data, whether you are in the Bowen Basin or the Gulf of Mexico. And our YAMMER platform helps connect all our people so they can ask for help, link-up with subject matter experts or celebrate their successes.  </p> <p>This has made it easier to reduce unit costs, by more than 20 per cent across the portfolio, because we were able to benchmark and share best practice over fewer, similar businesses. </p> <p>We were also able to grow through highly capital efficient projects.</p> <p>This wave of productivity was great for us and great for our shareholders, delivering billions of dollars of benefits to our bottom line.</p> <p>Further gains are now harder won, and new technology and new ways of working from other industries are influencing the sector. Automation has become more common and different skillsets such as software engineers, and data analysts have started to enter the industry. These new skills will augment, not displace, our core skills in science, engineering, commerce, human resources and finance.</p> <p>The realisation has struck that the next wave of productivity will come in an entirely different form. As such, we can’t expect that what has worked in the past, will lead to success in the future. </p> <p>And so, to realise the full potential of our amazing orebodies, we must transform the way we have typically transformed.</p> <p><strong>A different type of change</strong></p> <p>It is not new to anyone in this room that the imperative to change, and to change quickly is stronger than it has ever been. </p> <p>The third industrial revolution brought with it digitisation and automation. The fourth industrial revolution, with greater emphasis on connectivity through data, will build on this and have significant implications for the way we live, the way we work, and the way companies like BHP operate.</p> <p>Our workforce will expect more from us with opportunities to rapidly develop new skills and work more flexibly, in service of an inspiring purpose.</p> <p>Our reliance on new technology will increase vastly.</p> <p>And societal expectations will rightly continue to demand more from a public company than just profits.</p> <p>Transforming the resources sector therefore becomes critical for our long-term sustainability. </p> <p>Change will be a constant, so we need to be set-up to think about it differently, and respond to it in a new way. </p> <p>After all, the electric light did not come from the continuous improvement of candles, but a radical approach to solving an age-old problem.</p> <p><strong>BHP’s transformation</strong></p> <p>So let’s look more specifically at BHP’s transformation. </p> <p>At BHP our strategy is to have the best assets, in the best commodities with the best capabilities. And our transformation is working in service of this strategy.</p> <p>Given our combination of long-life assets in attractive commodities, this is not about inventing new products for new markets. We are, and will remain, a resources company.</p> <p>To illustrate the difference: Amazon went from being an online book store, to also owning bricks and mortar grocery stores, to also providing cloud computing services. This shift in focus has served them well. But BHP already has world-class products. Products that are valued by our customers and needed by the world. And that won’t change drastically, any time soon.</p> <p>Therefore, we focus on maximising the performance of our existing business; what many refer to as transforming the core. </p> <p>We do this by redefining and excelling at the capabilities needed to run this core business, and run it better than anyone else could. Our Transformation will ensure we develop the best capabilities, now and for the future.</p> <p>The outcome of this will be a different BHP and a new type of resources company altogether. We will be an exciting place to work, where bright minds come together to provide the resources the world needs.  </p> <p>Beyond this vision, the benefit will be stable and predictable operations that are both safer and more productive, an organisation with flexibility to rapidly adapt and capture opportunities, and the potential to unlock new resources that are not currently viable based upon conventional operating approaches.</p> <p>If we do it right, there is potential for some significant outcomes including reducing safety incidents by 80 per cent globally, and unlocking value worth tens of billions of dollars from our business. </p> <p>So what do we need to do to achieve that? </p> <p><strong>Creating conditions for success</strong></p> <p>After nearly two years leading transformation programs at BHP I want to give you an insight in to what I’ve seen and what I’ve learnt.</p> <p>I will start by reiterating the well-worn statistic that 70 per cent of transformations fail. There are no ways to game the system… no ‘seven steps to transformation nirvana’, no secret sauce. There is no miracle cure, so I’m not going to stand here and offer one. </p> <p>Similarly, I won’t state the obvious, like the necessity of board and leadership support – which, for the record, we have well covered. </p> <p>Instead I will share with you three specific challenges that relate to our transformation. I believe these are unique. If we tackle them right, we will create a sustainable competitive advantage for BHP.</p> <p>These are:</p> <ul> <li>Our 130-year legacy as a resources business;</li> <li>The absence of a burning platform and a business that’s in great shape;</li> <li>And scepticism from those that have seen this all before.</li> </ul> <p>Disrupting a legacy</p> <p>The first challenge we have is addressing the 130-year legacy that has been established by a very successful business. Our ways of working, behaviours and culture have played a huge part in that success.</p> <p>What do we keep and what do we leave behind to become a new type of company? </p> <p>How do we help our people build on our strengths while not allowing these to limit our potential? </p> <p>And how do we adopt new ways of working while continuing to keep people safe and deliver results?</p> <p>The answer is to make sure people remain our number one priority. </p> <p>People are at the heart of our transformation. That is because people are at the heart of our business. </p> <p>We need to give them the space to improve and innovate. Of course we provide the appropriate training and tools. But the game changer here is inverting the typical leadership model: allowing our leaders to become coaches and empowering our front line employees to take decisions and drive change.</p> <p><strong>Starting from strength</strong></p> <p>The second challenge we have faced is driving change when there is no burning platform. </p> <p>Many companies are forced to transform because of financial duress or an existential threat. Fortunately neither applies to BHP.</p> <p>We start from a position of strength, not stress. </p> <p>As enviable as that sounds, it does make it harder to lift the activation energy of an organisation.</p> <p>While we don’t have a burning platform, we do have a burning ambition… to be even better than we are today and develop our sector leading capabilities.</p> <p>Our strength allows us to invest. We will invest in technology, innovation and – most importantly – our people, to build a safer, simpler and more productive company.</p> <p>But strength today doesn’t guarantee success tomorrow and history teaches us about the dangers of complacency – just ask Kodak and Blockbuster. </p> <p>The global backdrop against which we operate is increasingly volatile. And we already see constant change in the forces affecting our industry.</p> <p>Growing ESG pressures;</p> <ul> <li>Heightened geopolitical uncertainty and trade disputes;</li> <li>Transitioning to a low-carbon economy;</li> <li>And attracting the right talent to the industry…</li> </ul> <p>…are just a few challenges that will only grow in the future.</p> <p>However, with our portfolio of Tier One Petroleum and Minerals assets, we are uniquely placed to navigate these challenges. The Petroleum industry has built a track record of innovation throughout the last decade. Now, it is our Minerals business that must take up the baton of innovation and sustainably deliver the products needed to support the transition to a low carbon world. </p> <p>When we are successful we will deliver more value through Transformation than through either exploration or acquisition. The prize is tens of billions of dollars of value, as we not only confront these challenges, but capitalise to create shared value.</p> <p>Just because we are currently in a strong and stable position, doesn’t mean it will last. </p> <p>We need to be more agile to face an uncertain future.</p> <p>There is no time to waste, and at BHP we feel a sense of urgency.</p> <p><strong>Creating sticky change</strong></p> <p>The third point I’d like to make, is that past programs have been and gone, and some of our people have seen this many times. So they question ‘what’s different this time around?’</p> <p>The difference is that we will transform – meaning that we will create a new organisation and way of working from which there is no going back.</p> <p>We do this by building our future state into the fabric of BHP - our systems, structures, processes and routines – and supporting our people to build the skills and capabilities they need to be successful.</p> <p>This requires a holistic and coordinated effort coupling smart design with a relentless focus on implementation. Doing this well, drawing on a team of 72,000 people and the support of our partners and communities, we will make our changes stick.</p> <p><strong>Our vision</strong></p> <p>So there are three pretty unique challenges that we have responded to. </p> <p>But what does this look like on the ground?</p> <p>Let me share with you my vision using an example relating to some of the unsung heroes of our organisation – the maintenance function.</p> <p>Let’s call our protagonist ‘Sally the Supervisor’. Sally works in our iron ore business in Western Australia. She helps keep the equipment running that is vital in pumping out close to 290 million tonnes of high-quality iron ore every year.</p> <p>Prior to Transformation, Sally’s day was really focused on just getting the job done. Unfortunately, this involved a lot of unplanned reactive work. </p> <p>‘Fire, ready, aim’ seemed to be the situation to which the team had become accustomed. </p> <p>As more conditions for success are put in place, things change for Sally. She feels empowered, trusted and valued. </p> <p>BHP has invested to allow Sally to develop new skills, with a particular focus on improvement. Putting these to the test at work gives her a feeling of accomplishment. She feels more connected to BHP’s purpose, and is excited about her future prospects.</p> <p>She is supported by her leader, who coaches and encourages her to pursue all of her improvement ideas. If they don’t work, she is encouraged to learn, and try again. </p> <p>Systems have always been a necessary evil for Sally, but BHP has invested in new systems and tools that make life simpler, and a lot more interesting. Led by the Maintenance and Engineering Centre of Excellence, the data and analytics power of the function is truly impressive.</p> <p>With a predictive approach, and data at her fingertips, Sally can now take decisions with a lot more certainty.</p> <p>This is not just a story about Sally. The results show improved business outcomes. </p> <p>Overall equipment uptime has increased by more than 5%. In a 24/7 operation this means higher volumes and lower costs. Her people are also far safer because they have the time, the processes and the freedom to plan their work. </p> <p>This is just one view of what the future of BHP may look like for crews across all of our operations. We have already seen countless examples of this success across BHP. Seeing this – and creating more – is what drives myself and my team.</p> <p>I will now wrap-up. </p> <p>At BHP we have embarked on a different type of Transformation. Not only are we changing how we operate, we are changing the way we go about dealing with change.</p> <p>We are transforming the way we transform.<br>  <br> If it was easy, then everyone would do it, and the ASX would be full of outperforming companies. </p> <p>What we have learnt, is that we need our people on side before we can do anything. If we handle the challenges properly, then the opportunity for safer, stable and more predictable operations is well within reach. And beyond that, the opportunity is limitless.</p> <p>We have already made progress and I see a lot of positive action around the globe. I look forward to seeing stories like Sally’s coming to life as BHP transforms in to a new type of company, for the benefit of all our stakeholders.</p> <p>Thank you.</p> <br> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=topic%3dTechnology%20and%20Innovation">Technology and Innovation</a></li> <li><a href="/searchresults?r=category%3dSpeeches">Speeches</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

Jonathan Price, Chief Transformation Officer - IMARC 2019 - Wednesday, 30 October

https://web.archive.org/web/20191115081042/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/transforming-how-we-transform

BHP

Responsible sourcing, diversity and inclusion and climate change

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/responsible-sourcing-diversity-and-inclusion-and-climate-change

2019-11-15 08:10:45 UTC

28 October 2019, 09:05 PM

2019-10-28 21:05:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 28 October 2019, 09:05 PM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p><strong><img alt="" width="499" height="281" src="/-/media/images/2019/191029_sundeep_singh_imarc_1500.jpg?h=281&w=499&la=en"></strong></p> <p><strong>Sundeep Singh, Group Procurement Officer - IMARC 2019 - Tuesday, 29 October </strong></p> <p>It’s great to be a part of one of Australia’s most important events for the Mining and Resources industry and at the heart of world mining here in Melbourne.</p> <p>I would like to start by acknowledging the traditional owners and the custodians of the land on which we meet today, the Wurundjeri people of the Kulin Nation I pay my respects to their Elders past and present. </p> <p>As I look around the room today, it gives me great pleasure to see familiar faces </p> <p>A tremendous representation of the Australian and international mining and resources community. </p> <p>Now with so many of our suppliers and partners in the room, it would be remiss of me to not start by thanking you thanking you for the critical work and the value you add to our business every single day.</p> <p>Whether it is an emergency call out, a service that has not been contracted or innovating with us for a better future - we couldn’t deliver for our shareholders, our local communities, and employees; without the partnership of our suppliers. </p> <p>I’ll be the first to acknowledge that in the past we haven’t always got it right with our suppliers and their experience has been varied. </p> <p>But today we are in a good place. </p> <p>Today, we are focussed much more on seeking to establish a supplier relationship model based on sustainable mutual commercial value built on long lasting partnerships that unlock value for all of our businesses.  </p> <p>So this leads me to our topic of conversation today – how the resources industry – and BHP, in collaboration with our partners, can work to make better business decisions. </p> <p>Business decisions that have the potential to positively impact those around us - decisions about inclusion and diversity,  decisions about responsible sourcing and  decisions sustainability.</p> <p>BHP has a focus on these areas because they are good for business, good for BHP. </p> <p>But here’s the thing. Done well, responsible sourcing, inclusion and diversity, and sustainability measures – also offer incredible value for others. </p> <p>Shared value.  Social value.</p> <p>Like two sides of the one coin.</p> <p>The biggest opportunity in better decision making is the design and performance of your supply chain.  The supply chain, as the name suggests, is only as strong as its weakest link</p> <p>As BHP’s group procurement officer, our supply chain spans 60 countries, 10,000 partners with an annual spend of US $20 billion across our capex and opex portfolio in FY19. We source 215,000 different types of material and equipment for our Australian operations alone. That’s a lot of decisions, a lot of investments  and a lot of scope to positively influence.</p> <p>Working together to partner toward more productive and sustainable relationships we  create a competitive advantage and opportunities that will be hard to replicate. </p> <p>So where are these opportunities in responsible sourcing, inclusion and diversity, and sustainability? </p> <p>Let’s start with inclusion and diversity.</p> <p>In 2016 BHP set ourselves an aspirational goal to be a gender balanced organisation by 2025.</p> <p>At the time, the mining industry had 16% female representation.  BHP was slightly better at 17.6%.</p> <p>A bold move that some understood, others didn’t.</p> <p>Why did we do this?</p> <p>It was good for business.  Our data shows that more inclusive and diverse teams outperform other teams on safety, productivity and culture. </p> <ul> <li>Better on safety - with up to 67% lower injury rate. </li> <li>Better on productivity – with up 11% better adherence to schedule; and  </li> <li>Better on culture – with 28% lower unplanned absence and up to 21% more pride in their work. </li> </ul> <p>Three years on since announcing our aspirational goal, women now represent 24.5% of our workforce. </p> <p>So just under one in four employees are female – an improvement of 7% since announcing our goal. </p> <p>But it’s not just our own BHP workforce that’s transforming to embrace inclusion and diversity.</p> <p>We’ve partnered with the markets top labour hire providers such as WorkPac, Hays, Chandler Macleod and to share our commitment to a diversified workforce and amplify these efforts beyond the gates of BHP.</p> <p>It is in our contracts to have and incentivise, greater diversity and this has resulted in a 15% increase in female candidate conversion rate over the past 12 months (16-31% of all personnel onboarded are female).We partner with organisations like MEGT, an Australian non-profit organisation that supports local employers, apprentices and trainees, who now make sure women represent 40% of suitable applicants.  Again it’s a commitment from both organisations and it’s been written into our contracts.</p> <p>We’re working with other suppliers like ESS Compass, Blackwoods and Komatsu to make sure the machines we use, the clothes we wear, the food we eat and the camps we live in are more inclusive. </p> <p>Another example is the work that we have done with Kal Tire, a tire management and fitment organisation that supplies to our Spence operation in Chile. This job requires physical strength, which has been historically restricted to larger men. </p> <p>We worked with Kal Tire to implement a program that trained women to complete the task and also implemented a zero weight arm  </p> <p>it saves people lifting a torqueing tool that can weigh around 20kgs by simply holding the tool in position when torqueing each bolt. </p> <p>As you can see from the photo – trying to hold the tool above your head while torqueing each bolt onto these huge tyres can be strenuous for anyone –   myself included. The program eliminated the need for physical strength as a pre-requisite for the role, making it not only safer, faster but also more inclusive.   </p> <p>So in summary - yes we still have a way to go to truly realise the increased performance benefits of gender balanced and inclusive teams. But we’re on the right track.</p> <p>Turning to responsible sourcing, I think the ‘why’ on this topic is pretty well understood. </p> <p>No-one wants to work with unethical suppliers. Having high risk partners is ultimately expensive for everyone and represents significant exposures. Human Rights violations are the furthest anyone could possibly be from shared value.  </p> <p>Ethical sourcing means three things at BHP – it means policy, governance and collaboration. </p> <p>To achieve this we have set up a Human Rights Centre of Excellence that work with us to apply BHP’s own UN Human Rights framework and our human rights policy statement to every transaction we make. </p> <p>This is then backed by our Global Contract Management System (GCMS) – a system that ensures transparency and visibility of any risk. This system allows us to continually review, and deepen our assessment of our suppliers. Through the system, we know that 96% of our direct suppliers are concentrated in 10 countries.</p> <p>According to Verisk Maplecroft’s Modern Slavery Index 2019, of these top ten supplier countries of origin, only two per cent are based in high risk countries.</p> <p>We then work with a third party auditor to conduct reviews across a range of labour conditions, including wage and working hours, workplace health and safety issues, environmental conditions and the frameworks in place to manage these risks.</p> <p>This level of transparency is making human rights a critical business consideration for anyone that wants to do business with us. </p> <p>Greater collaboration is another.    </p> <p>Let me give you an example of how this plays out.</p> <p>Last month we partnered with Dyno Nobel to invest in a blast technology research program that will improve the safety, productivity and sustainability of our Australian operations.</p> <p>As well as researching ways to lift safety through reduced nitrous oxide fumes that result from blasting and driving productivity from improved fragmentation via differential energy blasts, this partnership represents a joint commitment to eradicate the use of palm oil in the explosive manufacturing process.</p> <p>And as you may know a recent and rapid increase in palm oil production, has resulted in an increase in deforestation - destroying habitats, displacing local communities and contributing to climate change.  </p> <p>As a part of our agreement, Dyno Nobel will only use certified sustainable raw materials and products. If they use forestry-based products, including palm oil, they will give us information on the country and company of origin, and evidence that they are certified sustainable.</p> <p>If palm oil is included, Dyno Nobel will include a timeline and plan for its replacement with an alternative product. </p> <p>Sustainability is one of our core Charter Values and climate change is one of the most material business and social issues that we face today. Addressing it is not new for us – we have been measuring, reporting and setting targets to reduce greenhouse gas emissions since the 1990s.</p> <p>We accept the science and recognise the importance of both limiting climate change and providing continued access to energy and materials. </p> <p>We have a target to keep our operational emissions below FY17 levels to 2022. This is supported by a long term goal to achieve net zero operational emissions by 2050. </p> <p>But as I mentioned before, we want to partner with people beyond the mine gate. The emissions our customers produce from using our products are significantly higher than those from our operations. So we are working with our suppliers and customers to reduce emissions from the transportation, processing and use of our products. Ambitious emissions targets will only be achieved by a supply chain that allows us to collaborate with partners like Adelaide-based Voltra who last year helped to develop the world’s first electric UTE, ahead of Tesla.</p> <p>Whilst the world’s first electric UTE may not receive a warm welcome on the hill at Bathurst, it is a welcome addition to a growing fleet of LEV’s that will significantly reduce our category 1 emissions. </p> <p>But it won’t be enough.</p> <p>Let me share with you a number that is uncomfortable. </p> <p>If shipping were a country it would be the sixth largest emitter of CO2 in the world, with more emissions than Germany or Canada.</p> <p>Ocean freight is one area at the very end of our industry’s supply chain that hasn’t traditionally been a focus from a sustainability perspective is vital to our success as a reliable global supplier.  </p> <p>BHP is one of the largest dry bulk charterers in the world. The Commercial Maritime team procure freight for a quarter of a billion tonnes of iron ore, coal and copper   and over 1,500 voyages each year. The combined distance these ships travel is the equivalent of 29 trips to the moon!</p> <p>Our Maritime team are taking a lead role in driving changes in industry to increase the focus on safety, environmental sustainability, innovation and efficiency.</p> <p>In 2017, BHP along with others collaborated with RightShip, the world’s leading maritime risk management organisation to introduce a C02 ratings system that moves charters towards ships with lower emissions. </p> <p>In response we have seen ship owners improve engine performance and reduce drag </p> <p>This resulted in a 12% decline in the C02 of the vessels we charter. </p> <p>In July this year, we released the world’s first bulk carrier tender for LNG-fuelled transport for up to 27 million tonnes of iron ore. </p> <p>Introducing LNG-fuelled ships into BHP’s maritime supply chain will eliminate NOx (nitrogen oxide) and SOx (sulphur oxide) emissions and significantly reduce CO2 emissions along the busiest bulk transport route globally.</p> <p>A partnership approach. Shared responsibility equals shared value. </p> <p>There is no better approach to success than the famous Henry Ford saying ‘If everyone is moving forward together, then success takes care of itself’.</p> <p>I love the work we are doing with our suppliers. Work that demonstrates what’s possible when we partner, when we challenge and transform together. When we go after shared value.</p> <p>The opportunities presented to us by a supply chain that connects us with a more inclusive, responsible and sustainable version of ourselves. Because it’s good for business, good for shareholders.</p> <p>More partners not willing to exclude.</p> <p>More partners not willing to ignore.</p> <p>More partners not willing to accept </p> <p>More partners committed to building a more ethical supply chain</p> <p>An industry that is committed to value and partnerships that are good for business.</p> <p>And that is what I am asking of you now.</p> <p>To act. Join us. To partner with us.</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=topic%3dInclusion%20and%20Diversity">Inclusion and Diversity</a></li> <li><a href="/searchresults?r=topic%3dClimate%20Change">Climate Change</a></li> <li><a href="/searchresults?r=category%3dSpeeches">Speeches</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

Sundeep Singh, Group Procurement Officer - IMARC 2019 - Tuesday, 29 October

https://web.archive.org/web/20191115081045/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/responsible-sourcing-diversity-and-inclusion-and-climate-change

BHP

BHP Operational Review for the quarter ended 30 September 2019

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/bhp-operational-review-for-the-quarter-ended-30-september-2019

2019-11-15 08:10:46 UTC

17 October 2019, 08:30 AM

2019-10-17 08:30:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 17 October 2019, 08:30 AM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p><a href="/-/media/documents/media/reports-and-presentations/2019/191017_bhpoperationalreviewforthequarterended30september2019.pdf?la=en">BHP Operational Review for the quarter ended 30 September 2019</a> (975KB PDF)</p> <p><a href="/-/media/documents/media/reports-and-presentations/2019/191017_bhpoperationalreviewforthequarterended30september2019_excelversion.xlsx?la=en">BHP Operational Review for the quarter ended 30 September 2019</a> (387KB Excel)</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=category%3dOperational%20Reviews">Operational Reviews</a></li> <li><a href="/searchresults?r=category%3dNews%20Releases">News Releases</a></li> <li><a href="/searchresults?r=category%3dExchange%20Releases">Exchange Releases</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

BHP has released its Operational Review for the first quarter of the FY20 financial year, with strong operational performance across the portfolio.

https://web.archive.org/web/20191115081047/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/bhp-operational-review-for-the-quarter-ended-30-september-2019

BHP

Social Value Briefing

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/social-value-briefing

2019-11-15 08:10:48 UTC

08 October 2019, 11:45 PM

2019-10-08 23:45:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 08 October 2019, 11:45 PM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <h4 style="text-align: center;"><strong>BHP Social Value Briefing<br> 8 October 2019<br> Chief External Affairs Officer, Geoff Healy</strong></h4> <p style="text-align: center;"><strong> </strong></p> <p style="text-align: left;"><a href="/-/media/documents/media/reports-and-presentations/2019/191008_socialvaluebriefing.pdf?la=en">View the presentation</a></p> <p style="text-align: left;"><a href="/media-and-insights/news-releases/2019/10/social-value-briefing">View the news release</a></p> <p style="text-align: left;"><a href="https://edge.media-server.com/mmc/p/2jmqym8m" target="_blank">Listen to the audio webcast</a></p> <p style="text-align: left;"><strong><span style="text-decoration: underline;"> </span></strong></p> <p><strong>Slide 4: Social value briefing – from licence to value</strong></p> <p>If there is a phrase that gets to the heart of the evolution of our thinking it is: ‘from licence to value’. </p> <p>We believe we must move from ‘social licence’ to ‘social value’; or from ‘tolerance and acceptance’ to ‘trust and partnership’. </p> <p>We know this will be a challenging evolution.  </p> <p>Today, I am going to explain why this transition - from licence to value underpins our strategy. </p> <p>And it is on this point that I want to be very clear.</p> <p>For us, it is – plain and simple – good business. </p> <p>We are part of a society that expects more of us. </p> <p>We recognise that our success depends on our ability to earn their trust and confidence. </p> <p>And we know that this means improving the way we do business at all levels, from local to global. </p> <p>When we make business decisions, both financial value and social value considerations come into play: each depends on the other for the decision to be effective. </p> <p>This point is key to this presentation. We know that the way we make business decisions has the potential to positively or negatively impact those around us, often materially. </p> <p>We recognise that balancing financial value and social value sometimes calls for trade-offs. It is ultimately a matter of judgment as to how to draw the right balance. </p> <p>We must be deliberate about this. It must be everyone’s responsibility at BHP.</p> <p>Ensuring that these key judgments are made by the right people, with the right information, at the right time, across the entirety of BHP, is our objective. </p> <p>If we can get this right, and by right I mean embedded to our core, we firmly believe we will win access to the best talent, resources and markets and set ourselves up to deliver a sustained competitive advantage.</p> <p><strong>Slide 5: We start with our purpose</strong></p> <p>This year, after more than a decade, we updated our Company purpose to capture the aspirations of all our stakeholders. It is:</p> <p>To bring people and resources together to build a better world.</p> <p>Our purpose reflects ‘why’ we exist. </p> <p>It was developed for our people, by our people. They display it on their work boards all over BHP: drawing a direct link between our purpose, our strategy and their role. </p> <p>It is part of our corporate charter, and part of our Board’s governance charter. </p> <p>Our financial performance both enables our purpose, and depends upon it. </p> <p><strong>Slide 6: The materials we provide are essential for modern life</strong></p> <p>You can see our purpose in action – our commodities provide the infrastructure, energy, appliances and devices vital to today’s world. </p> <p>Our products aren’t optional or nice to have. </p> <p>They are not tailored to lifestyle choices that have readily available substitutes.</p> <p>To put it simply - our products are essential to every day life.</p> <p>Our iron ore and metallurgical coal provide the steel that underpins global economic development – from industrialisation to urbanisation, raising living standards for billions of people.</p> <p>Our oil, gas and energy coal products power global mobility – and everyday modern life.</p> <p>Our copper and nickel is essential in the transition to a lower-carbon future.</p> <p>Electric cars require four times as much copper as a standard car; and nickel sulphate is needed for the lithium-ion batteries that power those cars. And, every part of a wind turbine relies on copper or steel.</p> <p>And finally, our potash option could play a part in addressing food security issues as dietary patterns evolve and the world’s arable land diminishes.</p> <p>As we bring those products from the ground to the market, they also generate wealth across our value chain. We have directly contributed in FY2019:</p> <p>• US$4 billion in wages and salaries;<br> • US$2 billion in payments to local suppliers;<br> • US$9 billion in taxes and royalties;<br> • US$18 billion in dividends and interest; and<br> • US$94 million in direct community social investment.</p> <p>While these numbers are large, and our commodities are essential, the sustainability of our business relies on the equitable distribution of value, and in delivering our products responsibly.  </p> <p><strong>Slide 7: We take a long term view</strong></p> <p>Delivering our products responsibly means taking a long-term view. Andrew, our CEO, says it well: ‘The longevity of BHP’s assets means that we must think and plan in decades.’ </p> <p>The use of ‘decades’ is deliberate.</p> <p>Our Escondida mine in Chile, for example, was nine years from discovery to first production, took 25 years to reach peak production; has now been in operation for almost thirty years.</p> <p>We have been operating our Western Australian Iron Ore mines since the 1960s.</p> <p>You can see our footprint on this slide. The map and figures show our global presence. Yet our footprint is distinctly grounded in ‘the local’. </p> <p>That is the nature of our industry. We make a relatively small number of large, long-term capital investments that are structurally immobile. We can’t just close up the factory and relocate when the going gets tough.</p> <p>When we invest in a region, we become an intrinsic part of the local community for decades. Sometimes, we create those communities. </p> <p>Our portfolio is simple – yet the inherent risks are complex and wide-ranging.</p> <p>• ~80 per cent of our EBITDA is concentrated in Western Australia, Queensland and the northern Atacama region of Chile.<br> • 55 per cent of our revenue is derived from China.<br> • Over 80 per cent of our products emit CO2 in our customers’ value chain.</p> <p>An imbalance in our community relations in a few locations has the potential to fundamentally impact our business: from a reset of fiscal terms, to the refusal of necessary permits and approvals.</p> <p>A disorderly transition to decarbonisation has the potential to threaten the viability of entire commodities in our product suite. </p> <p>And a social and environmental disaster, such as another significant tailings dam failure, has the potential to be existential.</p> <p>These risks are real and we manage them every day. </p> <p>But on the flipside, we know that if we manage well our transition – from ‘licence to value’ – we will create a core competitive advantage that will be hard to replicate. </p> <p>Retreating, or seeking a quick, short-term fix, will not work. Getting it right will be differentiating, and value creating. </p> <p><strong>Slide 8: We have a strong record of sustainable business practices</strong></p> <p>I talked earlier about changing societal and stakeholder expectations of business. </p> <p>Let me be clear – responding to shifts in expectations is not new. </p> <p>Operating responsibly has been a pillar of our risk-management framework; you’ve heard about our focus on social licence in presentations for many years.</p> <p>Our commitment is evident in the investments we’ve made and in the initiatives we’ve undertaken. We have: </p> <p>• Reduced the number of high potential injuries by more than 40 per cent in the last three years. <br> • Trebled the number of women hired since 2015.<br> • And invested over US$1.7 billion in social investments in the last decade.</p> <p>The box in the lower-left corner shows our increased transparency around workplace fatalities. To give you a bit of context:</p> <p>We used to keep our investigations and findings confidential. </p> <p>For the last ~5 years we have released our full investigation report – in all its detail – to our workforce and to the industry. </p> <p>We recognise that learning from events must prevail over all else.</p> <p><strong>Slide 9: We have a strong record of sustainable business practices continued</strong></p> <p>All of these commitments stand for nothing unless we hold ourselves to account and are transparent. </p> <p>We have made public our emissions targets, our water stewardship efforts, and the taxes and royalties we pay.</p> <p>Transparency is - rightly - only heading one way.</p> <p><strong>Slide 10: But the world is changing </strong></p> <p>While our foundations are strong, we know that change is accelerating, and - so must we - to stay competitive.</p> <p>Along the top row, you can see some of the most fundamental changes impacting global corporations today.</p> <p>These include: </p> <p>• the rise of political populism and employee advocacy; <br> • the effects of income inequality on regional communities; and<br> • the influence of ESG among asset managers. </p> <p>The bottom row shows the pressures particular to our sector:</p> <p>• Governments nationalising resources – and setting decarbonisation targets.<br> • A challenge in attracting talent - with a 41per cent fall in mining-engineering-course enrolment in Australia in recent years; and <br> • And a lack of optimism – with nearly 7 in 10 people believing the best days of the mining industry are in the past. </p> <p>The bar, as you can see, is higher for us as a resource company, than for those in other industries – this notwithstanding the essential nature of our products. And that is why we must move. </p> <p><strong>Slide 11: Social value: licence to operate is not enough</strong></p> <p>And here’s what acceleration looks like. I touched on it earlier, and you can see it on-screen. </p> <p>A concrete example of this ‘licence-to-value’ transition can be seen in our approach to water management: We use ground, surface and sea water for everything, from processing ore to controlling dust. </p> <p>Every single one of our assets depends upon water. </p> <p>However, population growth, climate change, and societal and community expectations have increased pressure on the world’s water resources. </p> <p>To achieve ‘social licence’, we must obtain relevant permits, meet legal requirements, and avoid water discharge breaches. </p> <p>However, we recognise that ‘a licence’ to use water is not enough because water is a precious global commodity; the management of which is emerging as one of the world’s most pressing long-term issues. </p> <p>We know we simply must use water in a socially equitable, environmentally sustainable, and economically beneficial way.</p> <p>That is why we have embarked on a water stewardship program. </p> <p>We have invested around US$4 billion in a water desalination plant in Escondida to secure a sustainable water-supply.</p> <p>We have set group-wide water usage targets and integrated them into planning for every asset. And, we were the first in our industry to release a Water Report in 2018. </p> <p>This is what it looks like for us to move from ‘licence’ to ‘value’ in the context of a critical business enabler.</p> <p><strong>Slide 12: Social value creation drives our competitive advantage</strong></p> <p>As I mentioned at the start, this transition is business-critical. </p> <p>On the right, you can see the outcomes – the competitive advantages – that come from embedding social value at the heart of our strategy:</p> <p>To obtain access to the best resources, we must be the partner-of-choice for governments.  </p> <p>To secure the best talent, we must be committed to making a positive societal impact. </p> <p>And, to secure the best partners, we must be trusted by our community partners.</p> <p>One word is key here: access. There are two sides to that access. </p> <p>One, protecting and maintaining the access we currently have. </p> <p>And two, securing access to new resources, new talent, and new partnerships to take full advantage of future opportunities. </p> <p>Take Trion as an example - our oil development option in offshore Mexico. We were awarded the tender to develop this resource, making us the first international investor in Mexico to secure that right in 80 years. </p> <p>We believe it was our commitment to social as well as financial value that allowed us to seize this opportunity.</p> <p><strong>Slide 13: We are embedding social value at every level of BHP</strong></p> <p>To capture these competitive advantages, we know we must ‘hardwire’ social value into decision-making at every level of BHP. And that is exactly what we are doing. </p> <p>As this slide shows, social value is now part of:</p> <p>• Our annual ‘5-year’ planning process – through which we deliver the strategy of BHP; and <br> • Our Company scorecard – by which we determine employee bonuses, from the front line to the CEO. </p> <p><strong>Slide 14: Ground-up: each asset has a social value plan</strong></p> <p>The embedding process begins at the asset: because that is where value generation begins for us. </p> <p>What we’re doing at Western Australia Iron Ore exemplifies how we’re making this real on the ground:</p> <p>WAIO management reviews its five-year-plans every year, and what key milestones it has to meet. </p> <p>A number of those milestones – for example, the completion of our South Flank project, or any future plans to deploy more autonomous equipment – have the potential to be impacted by issues in our communities: from Perth, to Port Hedland to Newman.</p> <p>To best understand these issues we must first engage with our key stakeholders.</p> <p>The WAIO team polls its communities monthly and annually to identify what is material to them, and how we are managing those issues. </p> <p>Land use conflict, transformational impacts on jobs and local procurement, and the stability of our fiscal terms – are all risks we encounter today.</p> <p>This information is then fed into the annual prioritisation process through a ‘social value assessment’.</p> <p>The senior leadership considers this assessment against the business milestones, and then decides on which actions to include in the five year plan. </p> <p>The plan is then taken to the Executive Leadership Team and Board, and approved for execution or not. </p> <p>That level of rigour, planning and evaluation is happening at each of our assets in a common way. </p> <p>As a result, over time we will be able to more effectively see ahead to unearth risks and create opportunities: in and across all of our assets. </p> <p>But beyond hardwiring social value into planning, it must be part of every leader’s mind-set and day job. </p> <p>Execution is a collective responsibility.</p> <p>Our site based General Managers and their teams make hundreds, if not thousands, of decisions each year that have a social value dimension. To name a few:</p> <p>The ‘home base’ of their workforce: residential, fly in fly out, drive in drive out. </p> <p>The structure of their workforce: permanent or casual. </p> <p>The mix of procurement: local, regional, national, and global. </p> <p>There is no process for this. It simply requires leaders with the capability and the authority to get on with it and make good judgements.   </p> <p><strong>Slide 15: Top-down: a global focus on the issues that matter most</strong></p> <p>All of our individual asset plans are aggregated at the global level. </p> <p>They give us a detailed portfolio view of the most critical social value issues. </p> <p>Coupled with insights we hear from you, our investors, and societal trends more broadly, we identify the priority areas that we see as most important for our business over the short to long term. </p> <p>If these areas are not already covered by our assets, the Group sets targets the assets must meet. </p> <p>You can see the three areas we have identified on-screen, along with the global ambitions we have set for ourselves in each area. </p> <p><strong>Slide 16: Our Climate Investment Program</strong></p> <p>Here is an example of the action we are taking to create social value at a global and local level. </p> <p>We operate in regions that may impose, over time, increased carbon costs.  This represents risk to our portfolio.</p> <p>And as I mentioned earlier, over 80 per cent of our EBITDA comes from products that emit carbon dioxide in processing or use.</p> <p>We recognise that we must work with our suppliers, customers and others to reduce these emissions across the value chain to protect demand for our products. </p> <p>To manage these fundamental risk exposures, we have made a US$400 million commitment over five years to develop technologies to reduce emissions, from both our own operations, as well as those generated in our value chain.</p> <p>We’ve set public targets for our operational emissions (scope 1 & 2) and we have committed to work with others to address scope 3 emissions. </p> <p>On Scope 3, we know we can’t require our customers to reduce emissions. Unlike the control that we can exercise in our operational environments, working in our supply-chain requires influence and collaboration.  </p> <p>Recognising this, we will work with others to drive actionable projects that reduce greenhouse gas emissions both up and down our supply chain.</p> <p>By making sure our own ‘house is in order’ and by protecting demand for our products, we will preserve and create value for BHP. </p> <p>Our climate investment fund is global in focus and is being managed, on a portfolio-basis, by a dedicated team; the fund has an embedded governance process, and the team will consider opportunities from inside and outside the company.</p> <p>We are committed to doing this with the same rigor and discipline we apply to any capital management. </p> <p><strong>Slide 17: Our Samarco response</strong></p> <p>At BHP we also know too well the implications of failure.</p> <p>The tragedy at Samarco is a part of our Company and our history, and the impact of that event will never be forgotten. </p> <p>Our response has been led by an underlying commitment to do the right thing. </p> <p>This commitment, to the people and the environment harmed by the disaster, remains as resolute as it was on day one. </p> <p>This work is being carried out through the Renova Foundation. </p> <p>We have also done everything we reasonably can to ensure a tragedy like this never happens again. </p> <p>We have reviewed the structural integrity of our significant dams; established a Taskforce to drive safer tailings management and enhanced our global tailings standards. </p> <p>We are also determined to play our part in ensuring tailings management standards are lifted across all of industry. </p> <p><strong>Slide 18: People</strong></p> <p>Social value is as I said being created at all assets across our business.</p> <p>At Saraji in Queensland, a fleet of trucks operates continuously to remove the overburden that sits above the metallurgical coal. </p> <p>That requires a team of relief truck drivers to ‘hot-seat’, or take over while drivers have scheduled meal breaks – also called ‘crib relief’.</p> <p>Previously we brought in relief drivers from outside the region. This was costly and didn’t benefit the local community. </p> <p>Following discussions with the Dysart Women in Mining Group, we realised we could tap into the local workforce if we adjusted the relief shifts so they aligned with school hours. </p> <p>So, we changed the schedule. </p> <p>This has unlocked a new talent pool; secured a more stable and flexible workforce; and injected AUD$4m of wages into the local community.</p> <p>I have a few more examples but I’d like to pause and highlight a point from earlier in the presentation – social value comes from hundreds of business decisions – large and small - across BHP every year. </p> <p>Ultimately we want social value to be as organic and as embedded in our decision-making as safety is today. </p> <p>Let me give you two more examples. </p> <p><strong>Slide 19: Environment</strong></p> <p>At the other end of the scale, we are transforming the way we are managing water and power at Escondida. </p> <p>Escondida is located in the desert in Chile, and is the world’s largest copper mine. </p> <p>Copper grades are declining at Escondida – so to maintain production we must increase throughput – which essentially means move and process more rock. </p> <p>To do this – we need more water in a water-scarce area. </p> <p>But moving this water to site needs a lot more power. So, we need more power, but we need it at lower cost, with fewer emissions.</p> <p>So, we invested some years ago - as I mentioned earlier – more than US$4 billion in a desalination plant to reduce our draw on the local aquifers, and to secure a sustainable water supply.</p> <p>And we’re now in the late stages of securing a long term contract for renewable power supply that could deliver significant cost savings relative to our current gas-fired supply. </p> <p>That means Escondida is in the process of transitioning to 100 per cent renewable power, and 100 per cent desalinated water over the medium-term.</p> <p>Taken together, our actions with the government and others, have: </p> <p>• forged a path to ‘environmental resilience’; <br> • delivered a sustainable way forward for the world’s largest copper mine to deliver an essential product to market with attractive returns on capital; and<br> • set the national standard in Chile. </p> <p><strong>Slide 20: Communities</strong></p> <p>One final example is from our community priorities: the Tjiwarl Land Use Agreement.</p> <p>Indigenous people commonly have title in the lands on which we explore and operate. </p> <p>Our core business has been tied to indigenous communities for over a hundred years. We invest deeply in developing relationships of trust with our traditional owners.  </p> <p>Almost all of our operations at Nickel West lie on or adjacent to the lands of First Nations peoples.</p> <p>Over a number of years, BHP engaged with the Tjiwarl people with a view to entering a long term land-use agreement. This agreement was reached in early 2019. </p> <p>For the Tjiwarl, it delivers opportunities for employment and procurement; it provides cultural security for special places; and it creates financial sustainability for their community.</p> <p>For us, it provides confidence that we can operate our mines and expand them consistent with our long term nickel strategy.</p> <p>This may sound straightforward, it is not. The Tjiwarl people have litigated against almost every land user, bar BHP.</p> <p><strong>Slide 21: Social value looks outward, not inward</strong></p> <p>I want to finish on the role of brand, and communication, and their connection with social value.</p> <p>Almost four years ago, we decided to tell our story around value creation: starting with who we are, and building to what we do. </p> <p>Research told us nearly 100 per cent of Australians recognised BHP, but had little knowledge of what we did, or our broader economic contribution. </p> <p>Our research also confirmed that when communities feel connected to us, and see us as contributing fairly, the pressure for populist rent-seeking policies significantly reduces.   </p> <p>Since 2017, we have undertaken targeted campaigns at both national and regional levels; and we’re seeing a measurable difference in public perception. </p> <p>We know this broad based support in cities and regions is essential to creating value and returns for all stakeholders, and in particular for shareholders.</p> <p>The chart on the right reflects Australian favourability – we are not perfect – but we are definitely heading in the right direction.</p> <p><strong>Slide 22: Social value briefing: from licence to value</strong></p> <p>And that’s the direction we must keep moving in. </p> <p>While our products are essential to modern life, our sector faces unprecedented challenges to its future.</p> <p>The winners will be those who can see past the risks to the opportunities and who can grasp them and turn them into a competitive advantage.</p> <p>This is the spirit that underpins our transition from licence to value.</p> <p>We know that when we consider social impacts in our decision-making; and when we build respectful and mutually beneficial relationships, we create sustainable value for all of our stakeholders; and in particular for our investors.</p> <p>We are determined to assess and communicate our progress regularly and transparently.</p> <p>And we expect to be judged on the results we produce and the value we create, for you as investors, as well as our broader stakeholders. </p> <p>We are committed to that path. </p> <p>Thank you.</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=region%3dGlobal">Global</a></li> <li><a href="/searchresults?r=topic%3dBiodiversity%20and%20Water">Biodiversity and Water</a></li> <li><a href="/searchresults?r=topic%3dClimate%20Change">Climate Change</a></li> <li><a href="/searchresults?r=topic%3dEducation%20and%20Training">Education and Training</a></li> <li><a href="/searchresults?r=topic%3dEnhancing%20Livelihoods">Enhancing Livelihoods</a></li> <li><a href="/searchresults?r=topic%3dHealth%20and%20Wellbeing">Health and Wellbeing</a></li> <li><a href="/searchresults?r=topic%3dInclusion%20and%20Diversity">Inclusion and Diversity</a></li> <li><a href="/searchresults?r=topic%3dIndigenous%20Communities">Indigenous Communities</a></li> <li><a href="/searchresults?r=topic%3dSafety">Safety</a></li> <li><a href="/searchresults?r=topic%3dProductivity">Productivity</a></li> <li><a href="/searchresults?r=category%3dCommunity">Community</a></li> <li><a href="/searchresults?r=category%3dSpeeches">Speeches</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

Chief External Affairs Officer, Geoff Healy, on why our contribution to communities makes good business sense.

https://web.archive.org/web/20191115081048/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/10/social-value-briefing

BHP

2019 Annual Reporting Suite

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/09/2019-annual-reporting-suite

2019-11-15 08:10:51 UTC

17 September 2019, 08:30 AM

2019-09-17 08:30:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 17 September 2019, 08:30 AM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p>Today, BHP released its 2019 Annual Reporting Suite, an in-depth look at BHP's operations and performance over the 2019 financial year.<br> <strong><br> Annual Report 2019</strong><br> <br> An in-depth look at BHP's operations and performance over the 2019 financial year.<br> <br> <a href="/-/media/documents/investors/annual-reports/2019/bhpannualreport2019.pdf?la=en">Annual Report 2019</a> (PDF 6.7 MB)</p> <p><strong>Economic Contribution Report 2019</strong><br> <br> <a href="/-/media/documents/investors/annual-reports/2019/bhpeconomiccontributionreport2019.pdf?la=en">Economic Contribution Report 2019</a> (PDF 1.6 MB)<br> <br> <a href="/-/media/documents/investors/annual-reports/2019/bhpeconomiccontributionreportextract2019.pdf?la=en">Economic Contribution Report 2019 (Extract) </a>(PDF 674 KB)</p> <p><a href="/-/media/documents/investors/annual-reports/2019/2019-bhp-economic-contribution-report-xml.xml?la=en">Economic Contributions Report 2019</a> (XML 67 kb)</p> <p><strong>Sustainability Report 2019</strong><br> <br> <a href="/-/media/documents/investors/annual-reports/2019/bhpsustainabilityreport2019.pdf?la=en">Sustainability Report 2019</a> (PDF 11 MB) </p> <p>The Sustainability Reporting Navigator 2019 indicates the sections of BHP’s Sustainability Report 2019, Annual Report 2019, Economic Contribution Report 2019, Climate Change: Portfolio Analysis Report, Climate Change: Portfolio Analysis Views after Paris and Modern Slavery Act 2015 (UK) FY2019 Statement that specifically address what we have done to address the GRI standards and uphold the 10 principles of the International Council on Mining and Metals and the United Nations Global Compact. The BHP Sustainability Report 2019 also serves as our Advanced Level Communication on Progress for the UN Global Compact.</p> <p><a href="/-/media/documents/investors/annual-reports/2019/bhpsustainabilityreportnavigator2019.pdf?la=en">Sustainability Report Navigator 2019</a> (PDF 1.3 MB)</p> <p><a href="/-/media/documents/investors/annual-reports/2019/bhpscope3emissionscalculationmethodology2019.pdf?la=en">Scope 3 Emissions Calculation Methodology</a> (PDF 260 KB)</p> <p><strong>Form 20-F 2019</strong><br> <br> BHP is subject to the US Securities and Exchange Commission (SEC) reporting requirements for foreign private issuers. A Form 20-F is filed annually with the SEC.<br> <br> American Depositary Receipt holders may receive a hard copy of the company’s complete audited financial statements free of charge upon request by telephoning Citibank Shareholder Services (+1 781) 575 4555 (outside US) or +1 877 248 4237 (+1 877 CITIADR) (toll free within the US)</p> <p><a href="/-/media/documents/investors/annual-reports/2019/bhpform20f2019.pdf?la=en"><span style="text-decoration: underline;">Form 20-F</span></a> (PDF 6 MB)</p> <p><a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630.xml?la=en">XBRL Instance Document</a><br> <a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630-1.xsd?la=en">XBRL Taxonomy Extension Schema</a><br> <a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630_cal.xml?la=en">XBRL Taxonomy Extension Calculation Linkbase</a><br> <a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630_def.xml?la=en">XBRL Taxonomy Extension Definition Linkbase</a><br> <a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630_lab.xml?la=en">XBRL Taxonomy Extension Label Linkbase</a><br> <a href="/-/media/documents/investors/annual-reports/2019/bhp-20190630_pre.xml?la=en">XBRL Taxonomy Extension Presentation Linkbase</a></p> <p>View XBRL data <a href="https://www.sec.gov/cgi-bin/viewer?action=view&cik=811809&accession_number=0001193125-19-245975&xbrl_type=v" target="_blank">here</a>.</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=region%3dGlobal">Global</a></li> <li><a href="/searchresults?r=category%3dAnnual%20Reports">Annual Reports</a></li> <li><a href="/searchresults?r=category%3dExchange%20Releases">Exchange Releases</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

BHP released its 2019 Annual Reporting Suite, an in-depth look at BHP's operations and performance over the 2019 financial year.

https://web.archive.org/web/20191115081051/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/09/2019-annual-reporting-suite

BHP

BHP Results for the year ended June 2019

https://www.bhp.com/media-and-insights/news-releases/2019/08/bhp-results-for-year-ended-30-june-2019

2019-11-15 08:10:52 UTC

20 August 2019, 08:30 AM

2019-08-20 08:30:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 20 August 2019, 08:30 AM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p><iframe width="560" height="315" src="https://www.youtube.com/embed/T1Z1Vf2GBRs" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture"></iframe></p> <p>BHP released its results for the year ended 30 June 2019 at approximately 8:30am on 20 August 2019. Andrew Mackenzie, Chief Executive Officer and Peter Beaven, Chief Financial Officer reviewed the Company's operating and financial performance.</p> <ul> <li> <a href="/investor-centre/financial-results-and-operational-reviews/2019-financial-results" target="_self">Overview</a> </li> <li> <a href="/-/media/documents/media/reports-and-presentations/2019/190820_bhpresultsfortheyearended30june2019.pdf?la=en" target="_blank">News release</a>  </li> <li> <a href="/-/media/documents/media/reports-and-presentations/2019/190820_bhpresultsfortheyearended30june2019_presentation.pdf?la=en" target="_blank">Results presentation</a> </li> <li><a href="https://edge.media-server.com/mmc/p/vd25ua3y" target="_blank">Webcast</a></li> <li><a href="/-/media/documents/media/reports-and-presentations/2019/190820_bhpresultsfortheyearended30june2019_investorandanalystbriefingspeech.pdf?la=en" target="_blank">Investor and Analyst briefing speech</a></li> <li><a href="https://edge.media-server.com/mmc/p/p7dpng9z" target="_blank">Investor and analyst briefing Q&A recording - session 1</a></li> <li><a href="/-/media/documents/media/reports-and-presentations/2019/190820_bhpresultsfortheyearended30june2019_investoranalystbriefingqanda.pdf?la=en">Investor and analyst briefing Q&A transcript - session 1</a></li> <li><a href="https://edge.media-server.com/mmc/p/i4fj3v7x" target="_blank">Investor and analyst briefing Q&A recording - session 2</a></li> <li><a href="/-/media/documents/media/reports-and-presentations/2019/190820_bhpresultsfortheyearended30june2019_investoranalystbriefingqanda_session2.pdf?la=en">Investor and analyst briefing Q&A transcript - session 2</a></li> </ul> <p><iframe width="560" height="315" src="https://www.youtube.com/embed/Hrqv4dzxEDw" frameborder="0" allow="accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture"></iframe></p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dGlobal">Global</a></li> <li><a href="/searchresults?r=region%3dGlobal">Global</a></li> <li><a href="/searchresults?r=category%3dFinancial%20Results">Financial Results</a></li> <li><a href="/searchresults?r=category%3dExchange%20Releases">Exchange Releases</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

BHP has released its results for the 2019 Financial Year.

https://web.archive.org/web/20191115081052/https://www.bhp.com/media-and-insights/news-releases/2019/08/bhp-results-for-year-ended-30-june-2019

BHP

Rag Udd VP Technology Global Transformation BHP at GW3 Future Workforce Summit 2019

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/08/rag-udd-vp-technology-global-transformation-bhp-at-gw3-future-workforce-summit-2019

2019-11-15 08:10:53 UTC

09 August 2019, 09:00 PM

2019-08-09 21:00:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 09 August 2019, 09:00 PM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p>**Check against delivery**</p> <p><strong>Rag Udd, VP Technology Global Transformation, BHP</strong></p> <p><strong>Speech given at GW3 Future Workforce Summit 2019</strong></p> <p><strong>Mackay, Australia</strong></p> <p>Thanks for the warm introduction. It’s my great pleasure to be here today.  </p> <p>First, I want to acknowledge the traditional owners of the land on which we meet today, the Yuibera<strong> </strong>[You-ee-bera] people.</p> <p>I pay my respects to their Elders past, present and emerging.</p> <p>BHP, and myself, are very proud to be supporting this event – and our broader partnership with the Greater Whitsunday Alliance.</p> <p>More importantly though, we are really pleased to be an active participant in this conversation today, in what we believe is an important time for the region.</p> <p>I’m here today in my capacity as BHP’s Vice President of Technology, Global Transformation.</p> <p>It’s an exciting role – and I’m looking forward to sharing more about our technology and transformation agenda. </p> <p>But, as many of you know, my former role at BMA saw me spend well over half my time here - in this region.</p> <p>Mackay, Moranbah, Dysart, Emerald, Blackwater, the Bowen Basin.</p> <p>I’ve spent countless hours at our operations, on the highways, in the towns.</p> <p>Talking with our people, talking with local business operators, talking with the community more broadly.</p> <p>In my down time, I have also been lucky enough to spend time a lot of time trying hopelessly to catch fish.</p> <p>As you’ve probably gathered, I’m extremely fond of this region.</p> <p>And I’ve experienced first-hand the immense capability and commitment of everyone that calls it home.</p> <p>That’s why I want to be involved in conversations like the one we’re having today.</p> <p>And why I am committed in my role with BHP to working collaboratively, to co-create shared value from the uptake of technology at our mines here in Central Queensland…. together.</p> <p>Today we are here to talk about the future for all of us.</p> <p>As the promotion for the event stated – “transformation starts today”.</p> <p>I’d like to share a little bit about ‘what’ this means at BHP.</p> <p>But before we get into that I want to be clear on the “Why” and the “How” – because, in my view, that’s actually going to be really important part as we go through a transformation.</p> <p>‘How’ the nature of work is changing – and, how, we need to prioritise people -  whether it be the people who currently work for BHP, or the next generation -  as we learn more about the change.</p> <p>‘How’ we can’t do this alone and need to work in partnership across the region – with community leaders, government and educators – to solve shared challenges, and co-create solutions. </p> <p>‘How’, as we innovate and transform, we want to create opportunities for our supply chain to do the same, especially local businesses in the regions where we operate.</p> <p>Creating a mindset where, on balance, our people, communities, and industries are excited about the change and the opportunities that transformation can bring. </p> <p>Creating an environment where people are leaning into the change, will allow us to capitialise on the benefit that this inevitable change will bring.</p> <p>But let’s start with the Why.</p> <p>Like any business or region, we must stay ahead of our competitors to survive and thrive – here in Queensland and around the world.</p> <p>Whether it’s through enhanced skills and capabilities, safer operations, or faster movement of resources to market.</p> <p>Importantly, when we achieve that competitive advantage, it means that others around us also benefit from the work we do.</p> <p>And when others are benefitting – the value is shared.</p> <p>As the world continues to change – so too does our industry – and we must not lose sight of our position within a larger eco-system.</p> <p>More to the point, we must not lose sight of the need for shared value.</p> <p>And this is especially relevant here in Central Queensland.</p> <p>·         Whether it’s creating more permanent employment opportunities – and investing in skills and training to prepare for the future of work; </p> <p>·         Whether it’s working in partnership and collaborating to solve shared challenges; or</p> <p>·         Whether it’s enabling local businesses to innovate and grow with us.</p> <p>All of these things – and much more – are vital factors in ensuring we can and will thrive for the long-term.</p> <p>So, ‘what’ does transformation mean to BHP?</p> <p>Where have we come from? And where are we going?</p> <p>Our industry has helped fuel the digital era – or the fourth industrial revolution as it’s become known. There’s no doubt about it.</p> <p>Copper for mobile phones, steel (iron ore and coal) for driverless cars and nickel for batteries.</p> <p>While we’re proud of our role in this revolution – the truth is mining hasn’t progressed at the same pace.</p> <p>Until recently, our advances have been mostly incremental. </p> <p>Bigger trucks, faster trucks, and learning to operate and maintain them more effectively and safely.</p> <p>In fact, our approach to transformation and technology has been one of evolution - not revolution. </p> <p>And while that approach has brought us many rewards, what we know is that it will not deliver the step change that is now possible, in the world and in the time in which we now live. </p> <p>Let me give you a couple of examples to provide a clearer picture for where we are heading.</p> <p>For those that aren’t familiar, the Coal Handling Preparation Plants – or Prep Plants as we know them – help us prepare coal from the ground to the market. </p> <p>We crush, wash, clean and sort coal to prepare it for our customers.</p> <p>We built our first prep plant at Blackwater over 50 years ago.</p> <p>If you were to build a new prep plant similar to the size at Blackwater, it would set you back around $AUD750M.</p> <p>And while their value to the production of coal is immense, the way they are operated has remained largely unchanged<strong> </strong>since they were first introduced. They are reliant on judgement and information arrived at in batches of time – like a shift report.</p> <p>Fast forward to today, and through the advent of decision analytics, we see great potential to very rapidly enhance the productivity of our prep plants and achieve a whole new level of through-put.</p> <p>To make this happen, we will install hundreds of sensors throughout the plants.</p> <p>The sensors will provide real-time information from equipment in the field – from chemical properties, yield, temperatures, to speed and rotation of motors, water flows and much more.</p> <p>Once fully implemented, we will be able to optimise what we do – as we do it in real time.</p> <p>And we expect a greater return on our coal because we have the ability to optimise instantaneously.  This will still involve people – they’ll just work in a different way.</p> <p>Elsewhere at our sites, we have been impressed by the safety and productivity gains delivered through the latest geospatial technology.</p> <p>Drones are allowing us to gather more information about our sites than ever before.</p> <p>We can quickly and accurately measure many things, from bund heights, to stockpiles, review compliance to plan and understand where we need to make changes to improve safety or boost productivity.</p> <p>Most importantly drones are making mining safer.</p> <p>Deploying technology that removes surveyors from our pits takes them out of harm’s way.</p> <p>They’re spending less time driving utes and more time driving improvement.</p> <p>Another example that demonstrates how technology could change the face of mining that I’d like to share with you is our study into autonomous haulage.</p> <p>Through the study, which spans both BMA and BHP’s Iron Ore business, we see potential for up to 500 autonomous trucks to be introduced to our open cut operations.</p> <p>Here in Queensland, we hope to start converting our first fleet this fiscal year.</p> <p>It’s an ambitious target - that would see about a tenfold increase to the existing fleet of autonomous trucks BHP already has operating at our Jimblebar mine in Western Australia.</p> <p>For us Jimblebar is an excellent demonstration of what can be achieved when we push the boundaries.</p> <p>The site’s improved safety and productivity outcomes make a strong case for change. It’s now one of the safest operations in our portfolio.</p> <p>In fact, since the introduction of autonomous haulage, significant events and injuries in haulage have dropped by nearly 90 per cent.</p> <p>Jimblebar is also now our benchmark site for productivity.</p> <p>In short, costs are down and tonnes are up. </p> <p>Equally importantly though, our team at this site have embraced the opportunity to change. To learn new skills, to re-train, to be early-adopters.</p> <p>And I want to take this opportunity to clear up a common misconception.</p> <p>Often it’s assumed that transformative technology, like automation, suggests no people are involved. </p> <p>That’s simply not true.</p> <p>Our team at Jimblebar, which operates both a fully autonomous truck and drill fleet, is made up of over 800 people.</p> <p>The fact is the technology is only as good as the people who run it.</p> <p>At BHP, we know that people must be at the heart of our transformation.</p> <p>In Queensland, we have over 10,000 proud, passionate miners that work in our business.</p> <p>The people in the towns and regions where we operate. The people in this room – and beyond.</p> <p>That’s why at BHP we have committed to investing on a number of fronts, to create a stronger foundation to realise the future.</p> <p>Firstly, we know people are seeking stability in employment – and so too are we.</p> <p>We’ve heard the strong calls to reduce long-term labour hire and create more permanent employment.</p> <p>Our investment in BHP’s Operations Services (OS) has come about as a direct answer to those calls, and is one of the key ways that we plan to deliver the stability that a permanent job brings.</p> <p>To date, OS has already resulted in 400 new full time jobs within our Queensland operations – and soon we will commence recruitment for another 400 permanent roles.</p> <p>We’re proud of that achievement, and excited to welcome 800 new people into the fold to support the delivery of a safe, stable and sustainable performance.</p> <p>Critically, we expect around half of those people will live in regional communities.</p> <p>And while we’re transitioning to a more permanent workforce, at the same time we are also steadfastly focused on preparing our people for the changing nature of work.</p> <p>In other words, we’ll create the jobs, but please understand that the jobs will change over time. So, in preparation for tomorrow, we know we must build a tech savvy workforce today.</p> <p>A recent report commissioned by Queensland University of Technology and the State Government identified that automation and robotics will create over 725,000 new jobs in the next 10 years.</p> <p>As a business, we are keenly focused on re-skilling, training and creating options - to allow people to make the most of the opportunities in front of them – both now and into the future.</p> <p>For example, we have partnered with the Queensland Resources Council, TAFE and the State Government to deliver training programs to enhance foundational digital skills.</p> <p>The training will reach thousands of employees… if they want it.</p> <p>At our mines, where the changing nature of work will probably be most significantly felt, we have also launched a development program focused on preparing for the roles of the future.</p> <p>Through this program, we aim to create the best environment for change, by giving people the tools to prepare for it.</p> <p>So everyone can take control, make their own decisions and shape their own future.</p> <p>This includes learning more about autonomous equipment and operations, transition pathways, training and re-skilling requirements.   </p> <p>At our Goonyella Riverside mine, where this program is underway, participants have been excited by the options and opportunities – and have shown a real willingness to focus on their development.</p> <p>Over time, as the nature of work changes, it will mean fewer equipment operators. But it will mean more controllers, more builders and more technicians.</p> <p>New jobs. Jobs that are augmented through the use of technology.</p> <p>It will mean less physical and less routine jobs. But it will mean more dynamic, fulfilling careers.</p> <p>We are also working hard to prepare the next generation – partnering on a number of fronts to tackle the STEM skills gap.</p> <p>In fact, BHP has contributed more than $55 million to STEM programs across Australia.</p> <p>That means a lot, to a lot of people– especially here in Central Queensland.</p> <p>It means, just last month, a group of students from Moranbah and Dysart High Schools attended the Hopper Down Under conference, spending invaluable time with some of the best female technologists in the Asia-Pacific.</p> <p>It means 60 high school students – from across Central Queensland – are completing Remote Pilot certificates as part of their senior studies, giving them the highest qualifications for Drone Piloting in Australia.</p> <p>And soon, it will mean vocational students will have the option to study automation at TAFE – here in Queensland. Enabling them to possess cutting edge, and highly sought-after, autonomous competencies.</p> <p>There are many more fantastic examples like the ones I’ve just shared, and each of them have two core ingredients that point to how we are approaching our transformation:</p> <p>·         Firstly, people in our business and the region are at the centre; and</p> <p>·         Secondly, partnerships. As we help people prepare for the future, we want to do it together.</p> <p>And this takes us to another key aspect of what I’d like to discuss today. Another ‘how’.</p> <p>We can do a lot, as an organisation and as an industry, to solve for the future.</p> <p>But we can do MORE when we combine our capabilities with others. In fact, I believe we are all stronger when we work together.</p> <p>And there’s no better example than Central Queensland.</p> <p>As new technology becomes available in our sector, strong partnerships in this region will be essential.</p> <p>Its why, late last year, we sat down with GW3 to understand how we could contribute to the region’s future.</p> <p>Through GW3 and beyond, we want to bring our expertise to the table and be part of a collective approach to enhancing prosperity across this great region – for generations to come.</p> <p>One of the other exciting initiatives in the region that we are partnering on to position it for future success is the Resources Centre of Excellence.</p> <p>This Centre was announced last year by the Palaszczuk Government and the Mackay Regional Council.</p> <p>BHP is also committed to making this centre a success.</p> <p>We are committing nearly half a million dollars [$475,000] to bring the centre to life.</p> <p>Importantly, we want to apply our expertise and know-how in establishing the Centre’s systems and processes.</p> <p>Helping to ensure its long-term sustainability and value to the region.</p> <p>For us, that’s an investment of money and effort that makes perfect sense.</p> <p>The centre will be a critical nexus between research, education and industry.</p> <p>It will be a one-of-a-kind facility in Queensland, featuring an underground mining simulator, a research lab; and enhanced, state of the art, education facilities.</p> <p>Crucially this is another vote of confidence in Central Queensland.</p> <p>An area that we intend to be part of for the long-haul.</p> <p>Another key area we are eager to focus on is education and training.</p> <p>This week the Palaszczuk Government announced a state-wide program offering free apprenticeships for young Queenslanders.</p> <p>It’s an excellent initiative, which we fully support.</p> <p>But we must make sure those apprenticeships will deliver the skills our State needs.</p> <p>To keep Queensland and Queenslanders on the cutting edge of what’s possible.</p> <p>Businesses, like ours, and industry working with government – more closely than ever before – to set the next generation up for success, now and into the future.</p> <p>And in return, we will be able to continue creating fulfilling jobs in great regions like this one.</p> <p>Last, but by no means least, I’d like to talk about the importance of our suppliers.</p> <p>We know that growing smaller businesses with our business creates value for local communities.</p> <p>Our BHP Local Buying Program is an excellent example of how we are doing that. Last year, BHP spent well over 100 million dollars with local businesses in Queensland through this vital program.</p> <p>As we accelerate on our transformation journey, we know we must also embrace new ways of working and new partners to do it with.</p> <p>Looking, listening and learning beyond our business and industry. </p> <p>Engaging with suppliers, developers and entrepreneurs and, in turn, sharing value and stimulating growth.</p> <p>One great, recent example, is a partnership we’ve embarked on through an open innovation hub earlier this year.</p> <p>Through that collaboration we launched a competition to improve access to our mines.</p> <p>Site access has long been a frustration for us – especially here in Queensland – and it often results in delays in getting people onto our mines.</p> <p>The challenge reached 8,000 innovators around the world over the course of a month.</p> <p>Twenty-seven companies submitted novel solutions and – after a discovery session with the top seven – we are now progressing our discussions with an Australian company and hope to pilot the solution at one of our mine’s soon.</p> <p>Like I said, we must embrace new ways of working.</p> <p>Another illustration of how we are doing this is our Supply Innovation program.</p> <p>In a nutshell, it’s a platform that’s designed to connect our unique mining challenges with local suppliers and innovators.</p> <p>We started this concept in South America, it’s now running at Olympic Dam in South Australia and soon we hope to pilot it here in Queensland.</p> <p>But we know we still have work to do to improve the way we engage with local businesses.</p> <p>Particularly the innovators that are going to be critical to helping us remain globally competitive into the future.</p> <p>In partnership with AustMine, we are proud to have recently helped establish the nation’s first truly representative forum for mining and its services sector - or METS as we know it.</p> <p>The first meeting of this working group kicked off last month and key players from this region were at the table.</p> <p>As we move forward, we want to use our collective networks – which crisscross the country – to drive meaningful collaboration and value creation for all.</p> <p>Today I’ve spoken at length about ‘what’ and ‘how’, but as I draw to a close, I want to return to where I started - ‘why’.</p> <p>Why are we here? Why now?</p> <p>Because – as you say – “transformation starts today”.</p> <p>It spans all industries. It’s rapidly gaining pace. And, it’s game-changing.</p> <p>If we are not in that game, the future will simply leave us behind. And, the benefits will be captured elsewhere.</p> <p>Clearly that’s an outcome I’m not prepared to accept. </p> <p>Instead, I believe there’s enormous potential for this region to be at the forefront of the fourth industrial revolution. </p> <p>I know a lot of people believe that shifting the views of Queenslanders is a difficult proposition… and some might think it’s not possible. </p> <p>I don’t agree.  I know the people in this region – when presented with a challenge, we lean into the challenge.  And that’s what we need to do here.</p> <p>Collectively, we have the opportunity to lead – but the window is small and others will go ahead of us if we don’t.</p> <p>To do this, we must lean into the unknown and invent it together.</p> <p>We must engage in frank conversations – like we are today – about what it actually means.</p> <p>But most importantly, we must convert our conversations into action.</p> <p>I applaud GW3 for bringing us all together today. Let’s use this opportunity wisely and with a sense of urgency.</p> <p>Let’s work together to identify the specific actions and initiatives needed to set up our local people, businesses and industries for success.</p> <p>Like I said earlier, at BHP, we are absolutely committed to bringing our expertise to the table, co-designing solutions and creating shared value.</p> <p>But to be clear, this isn’t just a BHP challenge - or even a challenge that’s exclusive to mining. </p> <p>It effects all of us – and it demands our collective effort.</p> <p>I urge all levels of Government to come to the table too.</p> <p>We know the best outcomes occur when federal, state and local governments work together.</p> <p>We can never forget that regional Queensland is the engine room for the State’s economy – and it makes an enormous contribution to our nation.</p> <p>And we must ensure regional Queenslanders are prepared for the future of work.</p> <p>Now is the time. No one has all the answers – but we all need to step up.</p> <p>So today, I say to you - join me - and let’s create this future together.</p> <p>Thank you.</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=community%3dMelbourne">Melbourne</a></li> <li><a href="/searchresults?r=community%3dLondon">London</a></li> <li><a href="/searchresults?r=assets%3dCorporate">Corporate</a></li> <li><a href="/searchresults?r=topic%3dTechnology%20and%20Innovation">Technology and Innovation</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

Rag Udd VP Technology Global Transformation BHP speaks at GW3 Future Workforce Summit 2019

https://web.archive.org/web/20191115081053/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/08/rag-udd-vp-technology-global-transformation-bhp-at-gw3-future-workforce-summit-2019

BHP

Diggers and Dealers 2019 - Think Nickel

https://www.bhp.com/-/media/documents/media/reports-and-presentations/2019/190804_diggersdealers2019.pdf

2019-11-15 08:10:55 UTC

05 August 2019

2019-08-05 00:00:00 UTC

Nickel West Asset President Eduard Haegel spoke at the Diggers and Dealers Mining Conference in Kalgoorlie, WA.

https://web.archive.org/web/20191115081055/https://www.bhp.com/-/media/documents/media/reports-and-presentations/2019/190804_diggersdealers2019.pdf

BHP

James Palmer BMA Asset President speaks at Bowen Basin Mining Club 2019

https://www.bhp.com/media-and-insights/reports-and-presentations/2019/07/james-palmer-bma-asset-president-speaks-at-bowen-basin-mining-club-2019

2019-11-15 08:10:58 UTC

25 July 2019, 01:00 PM

2019-07-25 13:00:00 UTC

<div class="wrap"> <div class="col-12"> <div class="article-header"> <div class="date"> 25 July 2019, 01:00 PM </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div> <div class="rte col-9 col-offset-2"> <p><strong>**Check against delivery**</strong></p> <p> <strong>James Palmer, BMA Asset President<br> Speech given at Bowen Basin Mining Club<br> Mackay, Australia</strong></p> <p> </p> <p>Good afternoon - and thank you for that introduction.</p> <p>First, I want to acknowledge the traditional owners of the land on which we meet today, the Yuibera people.</p> <p>I pay my respects to their Elders past, present and emerging - and I look forward to our shared future.</p> <p>I also wish to acknowledge Member for Mackay, the Honorable Julieanne Gilbert and Mackay Mayor Greg Williamson who join us today.</p> <p>I also thank Julieanne and Greg for their continued support of the resources industry across Mackay and the broader Bowen Basin.</p> <p>And finally thank you to everyone here today.</p> <p>This is my first opportunity to speak to this audience, and I believe it has come at a really important time for our industry.</p> <p>Not least because of the serious need for all of us – everyone in this room – to reset for safety following the events of recent weeks and months.</p> <p>I will speak to the safety challenges that we are confronting shortly.</p> <p>But first I want to share a little more about myself, and how I’ve come to lead the BHP Mitsubishi Alliance - or BMA as we’re affectionately known.</p> <p>I am a proud Queenslander through and through.</p> <p>I grew up in Childers, a petrol stop that I am sure many of you know from your trips down to Brisbane.</p> <p>I am the son of two teachers, in English and Science/Maths.</p> <p>So not surprisingly, I grew up with a strong understanding of the pathways and possibilities created by education and mining!</p> <p>In fact, the drive to learn has remained with me throughout my career – but more on that a little later.</p> <p>My first job in the mining industry was at the Gregory Mine as an Engineering Vacation student.</p> <p>Since then, work has taken me a long way from Childers – both here in Australia - and abroad.</p> <p>And while my career has taken me far, I will always be a product of regional Queensland.</p> <p>A regional education. Regional jobs. Regional opportunities.</p> <p>And, now that I’m back in Queensland, I am focused on my three main passions:</p> <ul> <li>My family<br> <br> </li> <li>Mining - its past, present and future; and<br> <br> </li> <li>The Maroons - although I’m still coming to terms with this year’s result.</li> </ul> <p>Today, I want to take this opportunity to share my vision for BMA with all of you.</p> <p>That includes looking at what’s directly in front of us – our commitment to safety and high performance – and, then in the mid to long-term, I want to share what my vision is for the future.</p> <p><strong>About BMA</strong></p> <p>Before I do that, I hope you can indulge me for a moment as I explain a little bit about who we are.</p> <ul> <li>We are the world’s largest producer of seaborne metallurgical coal.<br> <br> </li> <li>We run a highly integrated system of seven coal mines, connected by third parties, and our own BMA Rail fleet, and we take product to market through Hay Point Coal Terminal – located just down the road from here – which we own and operate, as well as third party ports.</li> </ul> <ul> <li>We are the largest private employer in Central Queensland – engaging a workforce of approximately 10,000 proud, passionate people and the many thousands more, like many of you, who work with us!<br> <br> </li> <li>We prioritise sourcing goods and services from the State and regional communities in which we operate - so that others around us also benefit from the work we do.</li> </ul> <p>In FY19 alone – BHP, including both BMA and BMC, spent over 100 million dollars with local businesses through the Local Buying Program.</p> <p>BMA is also a significant contributor to the prosperity of Queensland as a whole – through employment, contracting and procurement and, of course, through royalties.</p> <p>To give you a sense of the financial scale of our operations in FY18, the royalties we paid to Queensland amounted to almost 1.5 billion dollars.</p> <p><strong>Safety</strong></p> <p>So now, as I said earlier, I’m eager to share my view on safety at what is a critical time for our industry.</p> <p>Ultimately, I hope this vision is shared by everyone in this room and across our sector.</p> <p>What I want to see is a safer and more inclusive workplace.</p> <ul> <li>An industry where we all go home safe at the end of the day.<br> <br> </li> <li>An industry that’s fatality-free.</li> </ul> <p>But the truth of the matter is, that is not the reality we know in our sector right now.</p> <p>The statistics are confronting - six fatalities in the past 12 months.</p> <p>At BMA, there is no way of avoiding the tragic facts over the past few years.</p> <ul> <li>In 2015 we lost Laurie Donovan<br> <br> </li> <li>In 2017 we lost Daniel Springer and<br> <br> </li> <li>We lost Allan Houston just over six months ago.</li> </ul> <p>As a leader you never want to receive the call that one of your people has been hurt or killed at work.</p> <p>And my phone buzzed early on New Year’s morning, while I was back home in Childers, with news of Allan’s fatal accident.</p> <p>As we all know, no one ever has good news at that time in the morning.</p> <p>And I can assure you it was an experience that will stay with me forever.</p> <p>Equally enduring though, is a commitment to do everything possible to ensure this never happens again.</p> <p>For this reason</p> <ul> <li>Internally, over the past six months, we have been reviewing and resetting our safety standards and refocusing on our life-saving critical controls.  <br> <br> </li> <li>At BHP and BMA, we are also an active participant in the current industry-wide safety re-set – working closely with the Palaszczuk government, the Queensland Resources Council, and fellow operators and,<br> <br> </li> <li>Next month, as we do annually, we will be participating in the Queensland Mining Industry Health and Safety conference – with a particular focus on reforms that will strengthen the safety culture in the resources sector.</li> </ul> <p>To be candid, we recognise we have more work to do – and we can’t ever be complacent about safety.</p> <p>Safety never stops – but, at BMA, we are encouraged by the statistics for the last quarter, which tell us that we are improving, by setting standards we can be proud of!</p> <p>And I am committed to maintaining this momentum.</p> <p>As we always say to our people, our achievements and performance mean nothing – if we don't all go home safe at the end of the day.</p> <p><strong>Performance</strong></p> <p>I am going to switch gears now.</p> <p>Building on my immediate vision for safety, I now want to share my view on performance.</p> <p>Sector-wide the Queensland mining industry is in a very strong position.</p> <p>Queensland coal exports set a new state record in June - with over 21 million tonnes of metallurgical and thermal coal exported.</p> <p>That result was an 11 per cent increase in coal exports on the same month last year.</p> <p>I believe that, despite the rhetoric globally, these figures underscore how the world’s demand for quality Queensland coal continues to grow.</p> <p>At the same time we continue to enjoy strong met coal prices.</p> <p>But – as we all know – we must prepare for the reality that they will level out – not crash – but level out for sure.</p> <p>For an organisation the size and scale of BMA, it’s imperative that our operations are competitive at every point in the cycle.</p> <p>To achieve that goal, we need to do three things:</p> <ol> <li>We must be safe<br> <br> </li> <li>We must be stable; and<br> <br> </li> <li>We must be sustainable.</li> </ol> <p>If we can nail that trifecta, which I know we can, we will achieve the most from our current portfolio, for us, and those around us.</p> <p>In simple ‘what’, ‘how’, and ‘why’ terms:</p> <ul> <li>‘What’, we must maximise the value of our world-class coal assets<br> <br> </li> <li>‘How’, with best-in-class operational capabilities<br> <br> </li> <li>‘Why’, to create long-term competitive advantage.</li> </ul> <p>And when we achieve that competitive advantage it flows onto the creation of jobs here in Central Queensland, regional contracting and procurement and other business opportunities – something BMA is invested in for generations to come.</p> <p>In short, it means that others around us also benefit from the work we do.</p> <p>Now, this leads me to my vision for the future.</p> <p><strong>The future</strong></p> <p>To be frank, at BMA, we know we can still generate a lot more value from our existing operations.</p> <p>In fact we believe the potential is enormous.</p> <p>We have a transformation agenda underway designed to unlock that potential by delivering the next wave of productivity gains, which will in turn further increase capacity across our operations. </p> <p>As I said earlier, this is about the mid to long-term. The future.</p> <p>There are two elements of this transformation agenda that I’d like to talk about.</p> <p>It may surprise some of you that the first – and most important part of our transformation that I want to highlight – is our people.</p> <p>Like I’ve mentioned our workforce is made up of over 10,000 proud, passionate people.</p> <p>We know that what we do today will determine how our workforce and our communities are prepared for the decades ahead.</p> <p>That’s why we have committed to investing more in our people, to create a stronger foundation to realise the future.</p> <p>That means more investment in skills building and training.</p> <p>Spending to build a better culture at BMA, and empowering our people and our partners to help us find better ways of working,  and it also means more permanent jobs.</p> <p>We’ve heard the strong calls from our workforce – and indeed the communities where we operate – to reduce long-term labour hire and create more permanent employment.</p> <p>BHP’s Operations Services – or OS as it is known – has been developed specifically to help answer those calls and is one of the key ways that we’ll do that.</p> <p>OS continues to create both permanent roles and operational stability for us.</p> <p>To date it has seen 400 full time jobs already generated within BMA – and soon we will commence recruitment at other sites which will see another 400 permanent roles created.</p> <p>We’re proud of that achievement and excited to welcome 800 new people who are supporting the delivery of a safe, stable and sustainable performance.</p> <p>Importantly, we expect that around half of those people will live in regional communities.</p> <p>While we’re transitioning to a more permanent workforce at the same time we are also steadfastly focused on preparing our people for the future of work.</p> <p>According to McKinsey, by 2030 half of the future workforce will need advanced coding and software design skills.</p> <p>So, in preparation for tomorrow, we know we must build a tech savvy workforce today.</p> <p>As a business, we are keenly focused on upskilling and reskilling, training and creating a workforce that can make the most of the opportunities in front of us - now and beyond.</p> <p>For example, we have partnered with the Queensland Resources Council, TAFE and the State Government to deliver training programs to enhance foundational digital skills.</p> <p>The training will reach hundreds of employees.</p> <p>At our sites, where the changing nature of work will perhaps be most significant, we have also launched a concerted development program focused on preparing for the roles of the future.</p> <p>Through this program we are creating the environment and providing people with the tools to be prepared for the change, so everyone can take control, make their own decisions and shape their own future.</p> <p>This includes learning more about autonomous equipment and operations, transition pathways, training and upskilling requirements.   </p> <p>We are also working hard to prepare for the workforce of tomorrow – partnering on a number of fronts to tackle the STEM skills gap.</p> <p>In fact, BHP has contributed more than $55 million to STEM programs across Australia.</p> <p>And that means a lot, to a lot of people – especially here in Central Queensland.</p> <ul> <li>It means a lot to high school students who are completing Remote Pilot certificates as part of their senior studies, giving them the highest qualifications for Drone Piloting in Australia.<br> <br> </li> <li>It also means a lot to regional school principals, who recently toured the State’s best schools for automation and robotics. Now, they are embedding learnings in their own communities – ensuring students here have access to cutting-edge curriculum.<br> <br> </li> <li>And, it will mean a lot to vocational students, who will soon have the option to study automation at TAFE – here in Queensland – when, as part of collaborative effort, we replicate a course that has just been created in Western Australia.</li> </ul> <p>And, now to the second - and perhaps far less surprising element of our transformation agenda - I’d like to talk more about Technology. </p> <p>As you would expect it is one of the major drivers of our transformation.</p> <p>So what does increased technology and transformation look like at BMA?</p> <p>What have we done so far, and where are we headed?</p> <p>In our industry, like so many others, technological change is not new.</p> <p>But if I am honest, I would also acknowledge that these advances have mostly been incremental in nature.</p> <p>Over the past 50 years mining has by and large focused on efficiency through increased scale and speed – bigger trucks, faster trucks and learning to operate and maintain them more effectively and safely.</p> <p>And while this has brought us many rewards, we are convinced that the next phase of development will be driven by technology. </p> <p>For us, that will mean everything from increased automation through to greater integration across the value chain.</p> <p>Critically we also see immense potential for it to make our people safer.</p> <p>And we are already seeing that across our business.</p> <p>One great example is at Jimblebar Mine in the Pilbara, where BHP operates a fully autonomous haulage fleet. </p> <p>Significant incidents there involving trucks have decreased by almost 90 per cent.</p> <p>It’s also vital for us to keep pace with progress we are seeing from our competitors around the world – including here in Queensland.</p> <p>A few ways that we are doing that, which I’m happy to share with you today, are through the development of our Integrated Remote Operations Centre – or IROC as we know it – and our increasing application of transformative geospatial technology.</p> <p>Established just over two years ago, the IROC has created an extensive suite of training and upskilling opportunities for our people – many of whom are long-term miners.</p> <p>Over 50 per cent of the IROC’s mine control team have formerly operated heavy vehicles.</p> <p>Now, they’re helping drive our entire coal supply chain - from pit to port.</p> <p>Our IROC has also achieved gender balance from the outset, and above average for Indigenous employment – which is important as we play our part in changing the face of mining. </p> <p>Elsewhere, we continue to be impressed by the safety and productivity gains delivered through the latest geospatial technology.</p> <p>Drones are allowing us to gather more information about our sites than ever before.</p> <p>We can quickly and accurately measure many things, from bund heights, to stockpiles, review compliance to plan and understand where we need to make changes to improve safety or boost productivity.</p> <p>Most importantly though, drones are also making mining safer.</p> <p>By deploying technology that removes surveyors from our pits, they are out of harm’s way, and spend less time driving utes and more time driving improvement!</p> <p>Another example I’m eager to share with you is our study into autonomous haulage.</p> <p>Through the study, which spans both BMA and BHP’s Iron Ore business, there’s potential to for up to 500 autonomous trucks to be introduced in our open cut operations.</p> <p>It’s an ambitious target - that would see about a tenfold increase to BHP’s existing fleet of autonomous trucks already operating at Jimblebar today.</p> <p>But, like I said earlier, the results from Jimblebar – particularly the safety improvements – continue to make a strong case for change.</p> <p>Before I go any further, I want to reiterate the point I made earlier.</p> <p>We are deeply committed to preparing our workforce - and the workforce of tomorrow – for the advent of transformational technology, like autonomous haulage.</p> <p>And maximising opportunities!</p> <p>Over time as we progress – yes, let’s be transparent – this will likely mean our business has fewer operators physically on the equipment.</p> <p>But it will mean more controllers, more builders and more technicians.</p> <p>It will mean less physical and less routine jobs. But it will mean more dynamic, fulfilling careers.</p> <p><strong>Supply Chain </strong></p> <p>So what does transformation mean for our supply chain?</p> <p>There’s no doubt that one of the greatest contributions BHP makes to the places where we operate is engaging our suppliers to solve our challenges and in turn, stimulate innovation.</p> <p>Growing smaller businesses – like yours– with our own, creates shared value for our local communities.</p> <p>We also know that many of the best ideas come from those who are either more agile than us or further advanced on the journey than we are.</p> <p>As we accelerate on our transformation journey, we know that we have to embrace new ways of working and new partners to do it with.</p> <p>Looking, listening and learning beyond our business and industry.</p> <p>The BHP Local Buying Program is a great example of this contribution in action.</p> <p>Since its inception seven years ago, BMA and BMC have spent well over 300 million dollars with local businesses through this vital program.</p> <p>We’ve also made it easier for local businesses to competitively bid, through a streamlined procurement and payment process, including 21-day payment terms.</p> <p>Our Supply Innovation program is another example.</p> <p>In a nutshell, it’s an open platform that’s designed to connect our unique mining challenges with suppliers and innovators.</p> <p>We started this concept at Escondida in South America, it’s now running at Olympic Dam in South Australia and soon we hope to pilot it here in Queensland.</p> <p>Very excitingly, at Escondida, the initiative recently delivered a new maintenance robot – the first of its kind – created by a local Chilean business.</p> <p>Not only does the robotic arm keep workers out of what can be a dangerous environment, but it also performs the work much faster.</p> <p>This a big a win for us – particularly as our people are safer.</p> <p>It’s also a win for local suppliers – and I look forward to keeping you updated on our plans to replicate its success here in Queensland.</p> <p><strong>Creating shared value</strong></p> <p>Finally, as I draw to a close, I want to talk to you about the increasing importance of creating shared value.</p> <p>Now is a time when our people, our communities and our planet demand more of us.</p> <p>As the world continues to change – and so too does our industry and indeed BMA itself – we must not lose sight of our position within a larger eco-system.</p> <p>More to the point, we must not lose sight of the need for others to also benefit from the work we do.</p> <p>And this is especially relevant in Central Queensland.</p> <ul> <li>Whether it’s ensuring that everyone goes home safe every day<br> <br> </li> <li>Whether it’s creating more permanent employment opportunities<br> <br> </li> <li>Whether it’s investing in skills and training to prepare for the future of work, or<br> <br> </li> <li>Whether it’s prioritising local contracting and procurement.</li> </ul> <p>All of these things – and much more – are vital factors in ensuring we can and will thrive for the long-term.</p> <p>And we all have a role to play. Not just large companies like ours. It’s every single person in this room.</p> <p>We have entered an era that will present significant opportunities for those who create shared value – and significant challenges for those that don’t.</p> <p><strong>Conclusion</strong></p> <p>I’ve covered a lot of ground today – so thanks for bearing with me.</p> <p>Before I go, I’d like to quickly summarise with three key points</p> <p>Firstly - I hope you, like me, and everyone at BMA, is focused on creating an industry where we all go home safe at the end of the day. There’s no greater priority.</p> <p>Secondly - We must be competitive at every point in the cycle, and we will achieve this through safe, stable and sustainable performance.  </p> <p>And finally, at BMA, we have the future in our sights, I hope this is something we can all focus on together as a collective, with an emphasis on creating shared value.</p> <p>I look forward to working with you to seize the opportunities ahead of us.</p> </div> <div class="col-12"> <div class="tags"> <ul> <li><a href="/searchresults?r=businessactivity%3dMinerals%20Australia">Minerals Australia</a></li> <li><a href="/searchresults?r=community%3dBrisbane">Brisbane</a></li> <li><a href="/searchresults?r=community%3dEmerald">Emerald</a></li> <li><a href="/searchresults?r=community%3dBlackwater">Blackwater</a></li> <li><a href="/searchresults?r=community%3dMoranbah">Moranbah</a></li> <li><a href="/searchresults?r=community%3dMackay">Mackay</a></li> <li><a href="/searchresults?r=community%3dDysart">Dysart</a></li> <li><a href="/searchresults?r=community%3dCairns">Cairns</a></li> <li><a href="/searchresults?r=community%3dNebo">Nebo</a></li> <li><a href="/searchresults?r=commodity%3dCoal">Coal</a></li> <li><a href="/searchresults?r=assets%3dBMA">BMA</a></li> <li><a href="/searchresults?r=topic%3dProductivity">Productivity</a></li> <li><a href="/searchresults?r=topic%3dSafety">Safety</a></li> <li><a href="/searchresults?r=topic%3dTechnology%20and%20Innovation">Technology and Innovation</a></li> </ul> </div> <div class="social-share with-email"> <button class="social-share__btn js-open-social-share"> <i class="icon icon-social-media"></i> </button> <ul> <li> <button class="close-btn js-close-social-share"> <i class="icon icon-cross"></i> <span class="vh">Close</span> </button> </li> <li> <a class="addthis_button_facebook" title="Share to Facebook"> <i class="icon icon-facebook"></i> <span class="vh">Facebook</span> </a> </li> <li> <a class="addthis_button_twitter" title="Tweet to Twitter"> <i class="icon icon-twitter"></i> <span class="vh">Twitter</span> </a> </li> <li> <a class="addthis_button_google_plusone_share" title="Share to Google+"> <i class="icon icon-gplus"></i> <span class="vh">Google Plus</span> </a> </li> <li> <a class="addthis_button_linkedin" title="Post to LinkedIn"> <i class="icon icon-linkedin"></i> <span class="vh">LinkedIn</span> </a> </li> <li> <a class="addthis_button_email" title="Email"> <i class="icon icon-envelope"></i> <span class="vh">Email</span> </a> </li> </ul> </div> </div> </div>

BMA Asset President James Palmer speaks at the Bowen Basin Mining Club 2019

https://web.archive.org/web/20191115081058/https://www.bhp.com/media-and-insights/reports-and-presentations/2019/07/james-palmer-bma-asset-president-speaks-at-bowen-basin-mining-club-2019

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