BHP : For the nine months ended 31 March 2022

Release Time	IMMEDIATE
Date	21 April 2022
Release Number	12/22

BHP OPERATIONAL REVIEW

FOR THE NINE MONTHS ENDED 31 MARCH 2022

Note: All guidance is subject to further potential impacts from COVID-19 during the 2022 financial year.

•  We continue to deliver safe, reliable production and navigate the COVID-19 challenges as the pandemic evolves.

•  Production guidance for the 2022 financial year remains unchanged for iron ore, metallurgical coal and energy coal. Full year total copper production guidance has been lowered to between 1,570 and 1,620 kt, reflecting lowered production guidance for Escondida. Full year nickel production guidance has been lowered to between 80 and 85 kt due to COVID-19 related labour constraints.

•  Full year unit cost guidance(1) for Western Australia Iron Ore (WAIO), Escondida and Queensland Coal remains unchanged. Full year unit cost guidance for New South Wales Energy Coal (NSWEC) has been increased to between US$76 and US$81 per tonne, reflecting a targeted increase in the proportion of higher quality coal to capture more value from the record high prices for higher quality thermal coal.

•  Our potash major projects under development are tracking to plan. The Jansen shaft project is 99% complete while Jansen Stage 1 activities continue to progress at the port, the Jansen site and for the underground mining systems.

•  The divestment of BHP's interest in BHP Mitsui Coal (BMC) to Stanmore Resources Limited is expected to complete on 3 May 2022.

•  Completion of the proposed merger of BHP's oil and gas portfolio with Woodside Petroleum Ltd is targeted for 1 June 2022, subject to the satisfaction of conditions precedent including approval by Woodside shareholders at the Woodside general meeting on 19 May 2022.

Production	Mar YTD22	Mar Q22	Mar Q22 vs Dec Q21 commentary
(vs Mar YTD21)	(vs Dec Q21)
Copper (kt)	1,111.7	369.7	Higher volumes at Olympic Dam following completion of the planned smelter
(10%)	1%	maintenance campaign. This was partially offset by lower volumes at Escondida
mainly due to COVID-19 workforce impacts and public road blockades as a result of
social unrest.
Iron ore (Mt)	189.1	59.7	Lower volumes at WAIO reflecting temporary labour constraints due to COVID-19, train
0%	(10%)	driver shortages and planned maintenance activities. This was partially offset by record
production from the MAC hub with the continued ramp up of South Flank.
Metallurgical coal (Mt)(2)	28.2	10.6	Increased volumes as a result of lower rainfall than the prior period coupled with
(2%)	20%	strong operational performance driven by improved truck productivity.
Energy coal (Mt)(3)	9.8	2.6	Lower volumes due to continued wet weather and COVID-19 related absenteeism
(1%)	(13%)	impacting stripping and mine productivity, as well as an increased proportion of higher
quality products.
Nickel (kt)	58.0	18.7	Lower volumes reflecting temporary labour constraints due to COVID-19 related
(13%)	(13%)	absenteeism and workforce shortages.
24.1	Lower volumes due to reduced seasonal gas demand at Bass Strait and lower well
(6%)	productivity at Atlantis.

Discontinued operations

Petroleum (MMboe)

77.3 2%

Group copper equivalent production decreased by 3%(4) over the nine months ended 31 March 2022 mainly due to lower copper volumes.

Summary

BHP Chief Executive Officer, Mike Henry:

"BHP delivered safe and reliable production in the third quarter. Our WA iron ore business continues to perform strongly as we navigate the state's first major COVID-19 wave, and we remain on track to achieve full year volume and cost guidance. Amid record high prices, our Queensland metallurgical coal business delivered strong underlying performance and benefited from better weather in the quarter.

In copper, Spence production is increasing and the Olympic Dam smelter is performing strongly as it returns to full production following planned maintenance. These gains have been more than offset at Escondida by impacts from COVID-19 and public road blockades in Antofagasta, which are reflected in a revision to overall production guidance.

Our Jansen potash project is on track, with good progress on the shafts, in the underground mining systems and at the port. The merger of our petroleum assets with Woodside has progressed and is set for completion in June 2022, while the divestment of our BMC business to Stanmore should complete in May 2022.

Market volatility and inflationary pressures have increased further as a result of the Russian invasion of Ukraine. We continue our work to mitigate cost pressures through a sharp focus on operational reliability and cost discipline. While we expect conditions to improve during the course of the 2023 calendar year, we anticipate the skills shortages and overall labour market tightness in Australia and Chile to continue in the period ahead.

Our hearts go out to all those impacted by the tragic events in Ukraine. The BHP Foundation has donated US$5 million to aid the response to the humanitarian crisis."

Operational performance

Production and guidance are summarised below.

Note: All guidance is subject to further potential impacts from COVID-19 during the 2022 financial year.

Mar YTD22	Mar Q22	Mar Q22	Previous	Current
Mar	Mar	vs	vs	vs	FY22	FY22
Production	YTD22	Q22	Mar YTD21	Mar Q21	Dec Q21	guidance	guidance
Copper (kt)	1,111.7	369.7	(10%)	(6%)	1%	1,590 - 1,760	1,570 - 1,620	Lowered
Escondida (kt)	714.7	226.4	(13%)	(9%)	(7%)	1,020 - 1,080	1,000 - 1,030	Lowered
Pampa Norte (kt)	204.0	68.2	37%	31%	0%	260 - 300	260 - 300	Unchanged
Olympic Dam (kt)	82.7	39.0	(46%)	(30%)	>100%	140 - 150	140 - 150	Lower end
Antamina (kt)	110.3	36.1	2%	4%	(6%)	120 - 140	120 - 140	Upper end
Iron ore (Mt)	189.1	59.7	0%	1%	(10%)	249 - 259	249 - 259
WAIO (Mt)	186.0	58.7	(1%)	0%	(10%)	246 - 255	246 - 255	Unchanged
WAIO (100% basis) (Mt)	211.1	66.7	0%	0%	(10%)	278 - 288	278 - 288	Unchanged
Samarco (Mt)	3.1	1.0	>100%	13%	(3%)	3 -4	3 -4	Upper end
Metallurgical coal (Mt)(i)	28.2	10.6	(2%)	10%	20%	38 - 41	38 - 41	Unchanged
BMA (Mt)	21.0	7.9	(7%)	3%	26%	-	29 - 31
BHP Mitsui Coal (100% basis) (Mt)	7.3	2.6	18%	41%	4%	-	9 - 10
Queensland Coal (100% basis) (Mt)	49.2	18.5	(4%)	7%	22%	68 - 72	68 - 72	Unchanged
Energy coal - NSWEC (Mt)	9.8	2.6	(1%)	(14%)	(13%)	13 - 15	13 - 15	Unchanged
Nickel (kt)	58.0	18.7	(13%)	(8%)	(13%)	85 - 95	80 - 85	Lowered
Discontinued operations
Petroleum (MMboe)(ii)	77.3	24.1	2%	(5%)	(6%)	-	-

• (i) Completion of the divestment of BMC is expected on 3 May 2022. Full year BMA and BMC production guidance has been itemised under Queensland Coal, however economic and operating control of BMC will transfer to Stanmore Resources Limited once the sale has completed.

• (ii) Given our announcement of a binding share sale agreement for the proposed merger of BHP's oil and gas portfolio with Woodside in November 2021 with completion of the merger expected to occur on 1 June 2022, no further annual production guidance for Petroleum will be provided. The effective date of the merger is 1 July 2021.

Major development projects

At the end of March 2022, BHP had two major projects under development, the US$2.97 billion Jansen mine shafts project and the US$5.7 billion Jansen Stage 1 project. Our major projects under development are tracking to plan.

Corporate update

Portfolio

In February 2022, BHP advanced its early-stage copper interests by investing C$100 million to acquire a five per cent equity interest in Filo Mining, a Toronto Stock Exchange listed exploration and development company. Filo Mining owns the Filo del Sol project located in the Atacama Region of Chile and adjacent to the San Juan Province in Argentina, which is in the advanced exploration stage. The proceeds from BHP's investment will be used for exploration and project studies. Filo Mining and BHP have agreed to form a joint advisory committee to share expertise, exploration concepts, and discuss future project development options.

All conditions precedent under the Share Sale and Purchase Agreement for the divestment of BHP's 80 per cent interest in BMC to Stanmore Resources Limited have been satisfied, and completion is expected to occur on 3 May 2022. The purchase price comprises US$1.1 billion cash on completion, US$100 million in cash six months after completion and the potential for up to US$150 million in a commodity price-linked earnout payable in the 2024 calendar year.

Completion of the merger of BHP's oil and gas portfolio with Woodside is targeted for 1 June 2022, subject to satisfaction of conditions precedent including approval by Woodside shareholders at the Woodside general meeting on 19 May 2022. All required regulatory and competition approvals have been obtained, other than the National Offshore Petroleum Titles Administrator approval which is expected prior to completion. BHP is expected to receive 914,768,948 newly issued Woodside shares at completion and determine a fully franked in specie dividend of the Woodside shares to BHP shareholders. BHP shareholders are expected to be entitled to one Woodside share for every 5.5340 BHP shares they hold on the BHP register at the record date of 26 May 2022. Additional information on the proposed in specie dividend and share distribution can be found in our announcement on8 April 2022.

Samarco

Samarco's Judicial Reorganisation process is continuing in the Commercial Courts of Belo Horizonte, State of Minas Gerais. The Judicial Reorganisation is a process for Samarco to restructure its financial debts in order to establish a sustainable independent financial position that would allow Samarco to continue its operations safely and meet its Renova Foundation obligations. BHP Brasil will continue to support Samarco in this process. The Judicial Reorganisation does not affect Samarco's obligation or commitment to make full redress for the 2015 Fundão dam failure, and it does not impact Renova Foundation's ability to undertake remediation and compensation works. BHP Brasil and Vale each hold a 50 per cent interest in Samarco.

Separately, negotiations are also ongoing with State and Federal Prosecutors and other Brazilian public authorities on the review of the Framework Agreement(5), seeking a definitive and substantive settlement of Brazilian claims relating to the dam failure.

Copper

Mar YTD22	Mar Q22	Mar Q22
vs	vs	vs
Mar YTD22	Mar Q22	Mar YTD21	Mar Q21	Dec Q21
Copper (kt)	1,111.7	369.7	(10%)	(6%)	1%
Zinc (t)	95,624	32,732	(13%)	(2%)	11%
Uranium (t)	1,599	781	(40%)	(6%)	>100%

Copper - Total copper production decreased by 10 per cent to 1,112 kt. Guidance for the 2022 financial year has been lowered to between 1,570 and 1,620 kt, from between 1,590 and 1,760 kt, which reflects lowered production guidance for Escondida.

Our Chilean assets experienced a challenging operating environment in the March 2022 quarter due to a reduction in our operational workforce as a result of a significant increase in COVID-19 cases in Chile, particularly the Omicron variant, and the mitigation measures implemented. This is despite high COVID-19 vaccination rates and continued use of control measures at our operating sites.

Escondida copper production decreased by 13 per cent to 715 kt primarily due to grade decline in the current mining area, the impact of a reduced operational workforce from COVID-19 and public road blockades associated with social unrest affecting access to site for both workers and supplies. Escondida achieved record material mined for the nine months to March 2022 despite these challenges. Production guidance for the 2022 financial year has been lowered to between 1,000 and 1,030 kt, from between 1,020 and 1,080 kt, reflecting the impact of increased COVID-19 cases and related supply constraints, as well as the road blockades. Concentrator feed grade decline in the current mining area remains forecast at approximately 2 per cent for the year. Medium term guidance of an annual average of 1.2 Mt of copper production over the next five years remains unchanged, with production expected to be weighted towards the latter years.

Pampa Norte copper production increased by 37 per cent to 204 kt, reflecting the continued ramp up of the Spence Growth Option (SGO), partially offset by the impact of lower cathode production as a result of grade decline and the public road blockades. Ore stacking grade for cathodes is now expected to decline by approximately 15 per cent for the 2022 financial year due to a change in mine sequencing. Production guidance for the 2022 financial year remains unchanged at between 260 and 300 kt. We continue to progress the plant design modifications required at SGO to achieve planned copper production levels. The Spence guidance to average 300 ktpa (including cathodes) in the first four years of production will be subject to the timing of these modifications being completed.

Olympic Dam copper production decreased by 46 per cent to 83 kt as a result of the execution of the major smelter maintenance campaign which was completed in January 2022. The subsequent smelter ramp up to full capacity was achieved in April 2022, and has delivered 17 per cent higher smelted tonnes compared to the ramp up after the prior maintenance campaign in 2017. Production for the 2022 financial year is expected to be at the lower end of the guidance range of between 140 and 150 kt primarily as a result of COVID-19 related impacts to the completion of the smelter maintenance campaign.

Antamina copper production increased by two per cent to 110 kt, reflecting higher copper head grades. Zinc production decreased by 13 per cent to 96 kt reflecting lower zinc head grades. Production guidance remains unchanged, with copper production expected to be at the upper end of the 120 to 140 kt guidance range, and zinc production between 115 and 130 kt.

Iron Ore

Mar YTD22	Mar Q22	Mar Q22
vs	vs	vs
Mar YTD22	Mar Q22	Mar YTD21	Mar Q21	Dec Q21
Iron ore production (kt)	189,101	59,700	0%	1%	(10%)

Iron ore - Total iron ore production in line with the prior period at 189 Mt. Production guidance for the 2022 financial year remains unchanged at between 249 and 259 Mt.

WAIO production of 186 Mt (211 Mt on a 100 per cent basis) was in line with the prior period. The impacts of temporary labour constraints relating to COVID-19, train driver shortages, planned track renewal works in the March 2022 quarter, and the planned major maintenance on car dumper one and the Jimblebar train load out in the first half were offset by continued strong supply chain performance, including higher car dumper performance, and favourable weather compared to the prior period. South Flank ramp up to full production capacity of 80 Mtpa (100 per cent basis) over three years remains on track with an average rate of 58 Mtpa achieved in the March 2022 quarter contributing to record production from the MAC hub and record lump sales.

Production guidance for the 2022 financial year remains unchanged at between 246 and 255 Mt (278 and 288 Mt on a 100 per cent basis). Production in the June 2022 quarter is expected to be impacted by continued COVID-19 related absenteeism as Western Australia approaches anticipated peak case numbers, and planned car dumper maintenance.

Samarco production was 3.1 Mt (BHP share), following the recommencement of iron ore pellet production at one concentrator in December 2020. Production guidance for the 2022 financial year remains unchanged at between 3 and 4 Mt (BHP share), with production expected to be at the upper end of the guidance range.

Coal

Production

Mar YTD22	Mar Q22	Mar Q22
vs	vs	vs
Mar YTD22	Mar Q22	Mar YTD21	Mar Q21	Dec Q21
Metallurgical coal (kt)(2)	28,230	10,562	(2%)	10%	20%
Energy coal (kt)(3)	9,782	2,577	(1%)	(14%)	(13%)

Metallurgical coal - Metallurgical coal production decreased by two per cent to 28 Mt (49 Mt on a 100 per cent basis). Queensland Coal production guidance for the 2022 financial year remains unchanged at between 38 and 41 Mt (68 and 72 Mt on a 100 per cent basis), of which BMA is expected to contribute between 29 and 31 Mt, and BMC is expected to contribute between 9 and 10 Mt. The divestment of BHP's 80 per cent interest in BMC to Stanmore Resources Limited is expected to complete on 3 May 2022 upon which date the economic interest in and operating control of BMC transfers to Stanmore Resources Limited.

At Queensland Coal, strong underlying operational performance, including improvements in underlying truck productivity, have been offset by significant wet weather impacts across most operations in the first half of the year and labour constraints, including COVID-19 related absenteeism, impacting stripping and mine productivity. Labour shortages and COVID-19 related absenteeism remain a risk for the remainder of the year.

Energy coal - Energy coal production is broadly in line with the prior period at 10 Mt. Production guidance for the 2022 financial year remains unchanged at between 13 and 15 Mt.

At NSWEC, continued wet weather and COVID-19 related labour constraints impacted stripping performance and mine productivity in the March 2022 quarter, offsetting the strong first half operational performance. Higher quality products now make up almost 90 per cent of sales compared to approximately 65 per cent of sales in the prior period, maximising the benefit from the widening price spread.