BHP Group Regulatory News (BHP)

UK Listing Authority Submissions

The following document has today been submitted to the National Storage Mechanism and will shortly be available for inspection at www.hemscott.com/nsm.do:

· 2019 Global Metals, Mining and Steel Conference Presentation.

The document may also be accessed via BHP's website - bhp.com

NEWS RELEASE

BHP CEO speaks at Bank of America Merrill Lynch Global Metals, Mining and Steel Conference

BHP Chief Executive Officer, Andrew Mackenzie, today said BHP's focus remains clear: to maximise cash flow, maintain capital discipline and increase value and returns.

Speaking at the Bank of America Merrill Lynch Global Metals, Mining and Steel Conference in Barcelona, Mr Mackenzie, said BHP's strategy provides the framework to make the most of our portfolio while developing options to secure future success.

Since the beginning of 2016, BHP has strengthened its balance sheet through a US$16 billion reduction in net debt, reinvested US$20 billion in the business and returned more than US$25 billion to shareholders.

"We have increased volumes, reduced costs, and kept our people safer at work. These actions lifted return on capital by around 50 per cent," Mr Mackenzie said. "These are strong outcomes. There is still substantial opportunity to maximise the value of existing assets to release latent capacity and improve performance.

"We have shaped our portfolio around commodities with attractive fundamentals and we hold exploration licences and development options in the world's premier copper, oil and potash basins.

"Developments such as climate change and dramatic shifts in technology present both challenges and opportunities. To make sure that we secure the future prosperity of our Company, we constantly test our current assets and future options against many divergent scenarios for how the world will look well into the future. Decarbonisation, the electrification of transport, the future of work and food security are examples of strategic themes that we monitor.

"For example, Nickel West, which we will now retain in the portfolio, offers high-return potential as a future growth option, linked to the expected growth in battery markets and the relative scarcity of quality nickel sulphide supply.

"While nobody can predict what will happen with absolute precision, I am confident BHP's portfolio can thrive under almost all plausible outcomes in this changing world."

Mr Mackenzie said BHP was well placed in the short, medium and longer term with strict financial discipline and a transparent and consistent approach to capital allocation.

"Our institutionalised capital allocation framework transparently directs cash to its best use, be that development opportunities, the balance sheet, or returns to shareholders. We have a resilient portfolio, a transformation agenda and a suite of options and ideas to create future value at the right time. We have demonstrated this is the right formula for our shareholders.

"Regardless of how the world evolves, BHP is set up for a strong future."

An audio-webcast of the presentation will be made available at: https://edge.media-server.com/m6/p/d2ky883h 

A summary of guidance and project details contained in the presentation is included below.

Guidance

Future options

Note: * Mad Dog northwest water injection and Scarborough IRRs under review with joint venture partners.

Exploration

1. Based on an exchange rate of AUD/USD 0.75 and USD/CLP 663. Unit costs are in nominal terms.

2. Calculated at 2019 analyst consensus price forecasts (except Potash which are at CRU and Integer price forecasts); ungeared, post-tax, nominal rates.

3. Risk profile is based on a BHP assessment of each project against defined quantified and non-quantified risk metrics rated out of 5; 5 represents more risk.

4. IRR of 12% to 25% represents different development options of varying levels of certainty. The upper end of range relates to investment in a potential lower capital and production development towards BFX.

5. Based on CRU and Integer (Argus Media) price assumptions (2025-2035 average mid-case: CRU US$325/t and Integer (Argus Media) US$342/t). Jansen Stage 1 IRR of 14-15% reflects capex range and excludes remaining funded investment of~US$0.3 billion for completion of the shafts and installation of essential service infrastructure and utilities. Jansen Stages 2-4 capex is presented in real terms (July 2019) - those options would be brownfield and predominately require surface infrastructure, with shorter construction schedules and less risk than Stage 1. The execution of future stages would be subject to our review of supply and demand fundamentals and successful competition for capital under our Capital Allocation Framework. However, we expect that each subsequent expansion would be approved for development after the previous expansion had reached 3 to 4 years of full production. The existing shafts are capable of supporting production forStages 2-4.

6. Petroleum exploration and appraisal NPV: Unrisked values at BHP long-term price forecasts.

Further information on BHP can be found at: bhp.com