BHP Group released an operational review for the quarter ended 30 September 2021. Importantly, the quarterly update notes that production and cost guidance remains unchanged for the 2022 financial year. This may help steady the share price.
The company gave updates on major transactions, like the Jansen Stage 1 potash project and the Shenzi North project in the Gulf of Mexico, both of which are tracking to plan. The merger of BHP’s petroleum business with Woodside is also progressing to plan, with transaction documents expected in November 2021. This deal will create a global top 10 independent energy company.
Quarterly production was marginally higher in petroleum (3% year-on-year) and significantly higher in energy coal, up 17%. It’s probably not ideal that fossil fuels are leading the way at the moment. In copper, iron ore, metallurgical coal and especially nickel, volumes were lower.
Unsurprisingly, the report also highlights a number of ESG-related initiatives. For example, Olympic Dam will reduce its operational emissions through the use of renewable energy from Australia’s largest solar-wind hybrid plant.
BHP has also entered into an agreement with South Korea’s POSCO, one of the world’s largest steelmakers, to work together to reduce greenhouse gas emissions in the integrated steelmaking value chain.
Another major corporate project at BHP is underway to move from a Dual Listed Company structure to a unified economic entity. BHP will collapse the current structure with parent companies in Australia and the United Kingdom to a structure under a single Australian parent company.
The listings in Australia, London and Johannesburg would be maintained.Investors who want to work through the full report can find it here.