Belinda Ford, Communications, BHP: I am Belinda Ford from BHP Communications, and I am joined today by our CEO, Brandon Craig, and our CFO, Vandita Pant. We are going to talk today about the recent results that BHP just released. Welcome, Brandon and Vandita.

Brandon Craig, CEO, BHP: Thank you.

Belinda Ford, Communications, BHP: First of all, though, before we get to the results, there was a fatal incident at BMA’s Peak Downs mine in Queensland. Brandon, do you want to address that first before we get into results?

Brandon Craig, CEO, BHP: Yes, I do. I started in this role with the ambition to try and work through my entire tenure without there being a fatality in BHP. I have absolute conviction that we can be a business that is fatal-free, and it is tragic when people inside our industry are fatally injured. Within the first month of starting, we had this event, and of course, I made it a priority to try to get up to Peak Downs to meet with the team so that I could really understand what had happened. I think there is clearly some learnings for us in BHP in terms of how we need to respond to this. As a business, we have made really, really strong progress at eliminating fatalities from this business. So, now when they do come, it is important that we really learn from them.

Belinda Ford, Communications, BHP: I’ll turn now to the results for the year, which were a strong set of results financially for BHP. Perhaps you could step us through some of the key numbers, Brandon. Vandita, if there’s some that you’d like to talk to there, that’d be great.

Brandon Craig, CEO, BHP: Well, the financial results are clearly very, very strong, but I think what really stands out for me is just the strong underlying performance from the business. Year on year, this is a business that just continues to produce record production numbers. You can see that in our iron ore business in Western Australia, which produced another record, and it seems to be a year-on-year process at iron ore that we do records. I think very pleasingly, Escondida performed incredibly well. What you see in our business in BHP is if the two big assets, which is our iron ore business and Escondida in Chile, when those two assets perform, the overall business performs. Both of them had a very, very strong year.

You put that on the back of what has been really resilient iron ore prices, and very strong copper prices that’s produced a really, really exceptional result.

Vandita Pant, CFO, BHP: Yeah, maybe I would add a few things. This is the first year that copper has contributed more than 50% to our EBITDA, to our earnings. We are the largest copper producer, and we’ve reiterated that position this year, isn’t it, Brandon? With 2 million tons of copper produced across our copper assets. A really strong balance sheet with all that cash coming through with very high prices in copper as well as in iron ore. Equally, because of our reliable performance that Brandon was just talking about, really strong balance sheet.

We end the year with less than $9 billion of net debt, and that performance and that balance sheet strength, along with some of the capital unlocks we did during the year of more than $4 billion through Antamina streaming deals, we have managed to give highest dividend for the year in four years to our shareholders, which is fantastic. $8.7 billion of dividend for FY 2026.

Brandon Craig, CEO, BHP: The operating system has played

an essential role in that. Under Mike Henry, we invested a lot of energy across the executive team and all the teams in BHP to put in place a way of working that can really allow this business to drive productivity year in, year out. Again, you can see that reflected in our results. Vandita set out some of the numbers, but across the business, I think we feel quite proud of what we’ve been able to deliver this last year.

Belinda Ford, Communications, BHP: Thanks, Brandon. I know people will be curious what your reflections are after your first 50 days in the role. What are you seeing as you look across BHP and what are your priorities?

Brandon Craig, CEO, BHP: Well, it feels a little bit more than 50 days. This process actually started quite some time ago. The board ran a very thorough process for the election of the CEO, and the one benefit you get from that is you effectively have to put together a plan for what you want to do with the company. You get to revisit the strategy, revisit the priorities, have a very close look at everything from where we want to allocate capital, the commodities we want to be in. Because of all of that, you start with a very clear idea of what it is you want to do. In addition to that, we also made sure we did a very good handover process.

Mike and I spent nearly 8 weeks on the road continuously traveling around the world, connecting with all the critical relationships we have in this business. There are many, across government, across investment banks, across our customers. We managed to see all of them and hand over those relationships. I think overall that was incredibly helpful because it allowed us to, or should I say it allowed me on the 1st of July, to actually have a clear plan of where I would like to take the company. A clear set of relationships that I’d been connected to because of Mike Henry and the way we managed the handover, which has really allowed me to start with a lot of momentum in BHP. Importantly, I do want to stress, this is a case of we, it’s the executive leadership team.

We have an incredible team in BHP, with Vandita Pant and there’s many others on the ELT. They have been fantastic. They’ve got behind the agenda we’ve set out. I think we’re making really good momentum, and that agenda sets out a couple of priorities. The first is we really want to strengthen our foundations across safety, social value and all the critical relationships we have in the business. We want to really push the boundaries on productivity. We have very high aspiration for the further potential that exists in the business. We want to pursue that through our operating system and also how we better leverage technology in BHP. The more we look around us, the more we can see there’s so many opportunities for us to do that. The third is really just how we think about growth.

We think we’re in the right commodities at the moment. I think you can see some of that in the results that have just been released. On the back of that, if we can grow that portfolio further in what I would describe as a programmatic sense, that’ll allow us to add early-stage options, exploration opportunities, and a range of other sort of organic growth options is probably the best way to describe it. Across commodities, we have high conviction in, which is potash and copper, and some smaller projects in iron ore. You put all of that together, I think we have a very good agenda going forward that’ll unlock a lot more value for shareholders. We’re quite excited by that.

Belinda Ford, Communications, BHP: What do we expect to see in copper in terms of growth for BHP? Can you give us a little bit of a flavor, Brandon, of where that growth is coming from in the next decade?

Brandon Craig, CEO, BHP: Well, obviously, as BHP, we are really excited about our future in copper. We have a number of very significant growth projects that we are working on. Some of them are directly BHP-operated projects, and others are joint ventures and partnerships that we have with others. If I go through them quickly, we are expanding Escondida. Escondida is already the world’s largest copper mine, but it is also going through a period of grade decline. We really want to reinvest into that business with a new concentrator that will allow us to lift up production at that facility. Sticking with South America and Argentina, we also have a joint venture with Lundin Mining. We are developing what I think is an incredibly exciting project in Argentina. That project is called Vicuña. It is going to be a multi-stage project that we invest in.

We are hoping to get to a potential final investment decision as early as the end of this calendar year. It stands to be a top 5 copper producer and a top 5 gold producer simultaneously once fully ramped up. For that project in particular, we are really, really excited, and we have made significant progress with all of the engineering, the approvals, and the relationship we have with our counterparty in Lundin is very strong. Then, of course, right here in Australia, we have the Copper South Australia smelter refinery expansion. That has the potential, if we expand it to full capacity, to get all the way to 1 million tons of copper-equivalent production. We have further options that are longer-dated, for example, Resolution in Arizona in the U.S.

You put all of that together, this is a business that can go from 1.4 million tons of attributable copper today to a business that can get to 2 million tons and beyond into the future. Considering 1.4 is already the world’s largest copper producer, it gives you a sense of the scale of what we are currently working on.

Belinda Ford, Communications, BHP: Vandita, can I ask you about how you think about funding that growth? I know that is a question for our shareholders around are we going to see a step-up in CapEx? How should our investors think about it?

Vandita Pant, CFO, BHP: We think about this a lot. We have some fantastic, attractive, high-quality growth options for copper, and we are growing in iron ore. We will have potash come in for production next year. There is growth in BMA from just getting the latent capacity going. All that needs to be funded, as you said. The way I think about this is starting with a very strong balance sheet. We are ending the year with a very strong balance sheet, which is actually below our target net debt range and USD 9 billion. The second thing to think of is that our portfolio, as Brandon just said, is a diversified portfolio by design. The important thing with that is that we get not only large but very resilient cash flows. Whatever the commodity price is, our portfolio will be able to fund all that growth.

In fact, our copper CapEx growth portfolio in Chile, in Copper South Australia, in Vicuña in Argentina, and the long-term optionality in the U.S. with Resolution, all that can be self-funded from Copper’s own generated cash flows. Which is not what many companies can do with a very strong balance sheet already continuing, and of course, a business which continues to perform very well, which has huge generation of capital cash flows. As Brandon was saying, has huge momentum to keep going to the next level as well.

Belinda Ford, Communications, BHP: Thanks, Vandita. Our shareholders always ask us about our portfolio mix. Coming in as our new CEO, Brandon, do you like the portfolio? Are there things that you want to add? How do you think about the portfolio?

Brandon Craig, CEO, BHP: Well, if you have a look at the underlying demand drivers for the commodities that we like, you can see copper as an example. There’s 25 million tons approximately of primary copper production in the world today. That’s going to go to 35 million tons plus. That’s an extra 10 million tons of production that needs to come online. That is a pretty challenging number. When you look at that, the demand for copper is incredibly strong. We sitting in the position as BHP with what I would consider the absolute best projects in the sector for bringing new copper into the market. If you have a look at potash as an example, that’s another area where we expect very significant long-term demand.

That’s a market that’s currently 75 million tons of production, and that’s going to grow to well over 100 million tons by 2050. You can see there’s going to be a future demand of 25 million tons plus. Through our Jansen One and Jansen Two projects, we are hoping to add 8.5 million tons to meeting that demand, and we want to see that production come through over the next decade. We obviously creeping production in iron ore. There’s some smaller investments in iron ore. No less important. They’re really, really important. You’ll see iron ore progressively increase to 305 million tons. If you have a look at BMA, there’s a lot of work going into metallurgical coal or steel-making coal. Because of that, we expect production performance in that asset to increase.

You put all of that together, you can see the market fundamentals for the products and the commodity mix we are in are very strong. We have very good conviction about those. That is why you see the investment coming into the back of those particular choices.

Belinda Ford, Communications, BHP: Turning to China. China’s obviously BHP’s largest market, and we’ve seen iron ore price negotiations be more protracted than usual last year. How have you found the relationship with our major customers in China? Because I know you’ve been there recently.

Brandon Craig, CEO, BHP: I think you see a lot in the media on this particular subject. I would give our shareholders confidence that the relationships with our customers are very, very strong. When I was on the roadshow with Mike again, the first thing we did is go and meet with customers in China. Importantly, just to signal again that those relationships that we have with our customers in China are critically important to our business. We value those relationships. Those relationships have many dimensions. There is clearly a mutually beneficial set of outcomes that happen between the two businesses because there is a level of codependency in a way. Steel mills are dependent on iron ore, and the opposite is also true. We also work together on things like decarbonization projects and a range of other ventures. We have done so for many, many years, and that hasn’t changed.

Those relationships continue to be strong. I am confident they will continue to be strong into the future.

Belinda Ford, Communications, BHP: Turning now to the topic that has been on everyone’s minds around inflation, and particularly around fuel prices and potential fuel shortages. Vandita, what is the impact been for BHP, and how is BHP managing this?

Vandita Pant, CFO, BHP: Yeah. Fuel prices have been elevated, as everyone who is listening to this will know. We have very strong and multiple relationships with different suppliers globally. Those have led us to not have any disruption in our supply chain for diesel, for sulfuric acid, for inputs which are going into ammonia, for our explosives, et cetera. Of course, we have taken, as everyone will know, elevated prices, and that has impacted around USD 200 million in our financials for the year. The volatility is not over yet. As we know, the conflict continues. But equally, we have confidence both in our long-term partnerships with the vendors, as well as how we are managing and optimizing our use of fuel and other inputs as well.

Belinda Ford, Communications, BHP: We’ve seen some increased union activity in Western Australia recently. How’s that impacting BHP, Brandon? And how should we think about that for the company going forward?

Brandon Craig, CEO, BHP: Listen, I think it’s a very important question. We haven’t had the unions in the Pilbara for well over 20 years, and we have used that time as BHP to get into what we would describe as a direct engagement model. We recognize that when we offer competitive pay and conditions, and that when we have a really good relationship with our workforce, that leads to improved work conditions, it leads to improved productivity, and it just simply makes our business a great place to work and a great place for our people to be. So we value that relationship we have with our workforce, and we want to continue to invest in it. The unions clearly have a right to enter into bargaining with us, and we respect the right of our workforce to participate in that. And we will naturally engage in good faith in those discussions.

None of that will take away from our determination to continue to really invest in our people and our teams so that we can continue as BHP to offer the type of workplace that we think is a constructive and positive place to be, where our people are valued, and we can ultimately all win together.

Belinda Ford, Communications, BHP: Changing directions slightly, Vandita. Can you give us some updates on BHP’s decarbonization progress during the year, and specifically the progress on electrification?

Vandita Pant, CFO, BHP: Yeah, sure. Our greenhouse gas emissions have reduced by almost one-third from our baseline of 2020. On renewable, almost 80% of our assets now are powered by renewable energy, and there is more to come in the years ahead. Overall, I would say we are very confident on track for meeting our 2030 target of 30% reduction on the base year of 2020.

Belinda Ford, Communications, BHP: Brandon, you talked a little bit about how you see accelerating BHP’s performance. Can you expand on that a little bit more, and tell us where you see the opportunities for the year ahead?

Brandon Craig, CEO, BHP: Well, I think we started on safety, and it is important I circle back there. This conviction we have in BHP to be a fatal free business is real, and it starts with needing to believe it. I certainly believe it, and we are going to be working really, really hard on making the necessary improvements and investments to become exactly that type of business. In terms of accelerating performance, the operating system has showcased what is possible, but there is still so much more headroom that exists. If you have a look at what we would define as structural productivity, which is the difference between what the technical limit looks like versus where we are today.

We can see there is still scope for significant more productivity out of a business like ours. We can also see that if you couple technology into the value chain of our business, the potential to push out the productivity frontier a little bit further also exists. You can couple these two things together. From that, you can see the scope of potential for further improvements and returns. The final piece in that would really be just the speed with which we can deliver the growth across the BHP Group. We can see the opportunity in potash. We can see the opportunity in copper.

We are working incredibly hard to try and make sure those projects are delivered incredibly quickly so we can get them to final investment decision, then we can deliver the underlying copper-equivalent production growth across the whole group that ultimately will underpin the value of this organization. If we do all of those things really, really well, I think the future is looking really, really bright.

Belinda Ford, Communications, BHP: Thanks, Brandon and Vandita, for joining us today. Thank you to everyone online who is listening in. Before we close, Brandon, is there anything you would like to say to our shareholders?

Brandon Craig, CEO, BHP: I am certainly excited about the future. Let me just say that I think there is so much opportunity ahead of this company. I am really looking forward to working with the rest of my ELT team to be able to deliver a future that I think can unlock those three themes we discussed earlier in the session. I definitely want this to be a safer business for the people that work in it. I absolutely want to pursue improved productivity over time to see how that can unlock further performance. We want to grow the production base of this business, ultimately for the benefit of all of our shareholders and stakeholders. I think the market conditions support that. I think we have the people inside the business that can make that a reality. Because of that, I am really excited by what the future holds.