BHP Group Ltd. Q2 FY2021 earnings call

• Strong first half operationally and financially, with a record interim dividend of 101 cents per share. Operational records at Wayúu, Escondida, and Olympic Dam. Projects like Atlantis Phase 3 and SGO had first production, and a 28% stake in Shenzi was acquired. Focus on building options in future-facing commodities and ESG leadership with new climate change commitments. - Net profit before one-off items up 16% to USD 6 billion, net operating cash flow USD 9.4 billion, underlying earnings up 21% to USD 14.7 billion at 59% margin, return on capital employed 24%, and net debt at target range.

Net profit before one-off items was up some 16% to USD 6 billion. Net operating cash flow reached USD 9.4 billion for the half. Underlying earnings before interest, tax, and depreciation was up some 21% to USD 14.7 billion at a margin of 59%, and return on capital employed was 24%. Iron ore and copper prices contributed to strong and stable cash flow. Revenue contribution details were not explicitly broken down by product segment in absolute terms beyond these overall figures.

• Commodity outlook is promising. Potash seen as attractive with price support expected later in the decade. Jansen project on track for mid-year final investment decision. Maintained guidance for met coal costs, with costs higher in first half due to maintenance and weather but still within guidance. Copper guidance maintained with tighter range but full-year guidance unchanged.

• Thermal coal disposal environment is dynamic, with focus on demerger or trade sales over up to 2 years. Jansen project market cautious. Biden administration ban on new oil permits in federal waters impact unclear. Met coal costs higher in first half due to maintenance and weather. COVID impacts on copper production (reduced manning expectations continuing) and shipments (heavy weather off Chile coast).

Q: On climate change, how do you plan to approach Scope 3 and should we expect Scope 3 targets soon?

A: Focus on ocean freight (launching world's first tender for LNG fuel bulk carriers) and steelmaking (partnerships with China Baowu Group and JFE) to drive carbon emission reductions. No immediate plan to change targets but focus on tangible action for reductions.

Q: On thermal coal disposal structure, with no real market price, is responsible rundown and rehab most likely?

A: Focus is on demerger into newly listed vehicle or trade sales, with up to 2 years for the process, 6 months in and still progressing options.

Q: On Jansen, current IRR and required potash price for 15% IRR?

A: Will assess project fundamentals further before sanction, but potash seen as attractive with price support later in the decade, project needs to compete under capital allocation framework.

Q: Impact of Biden admin ban on new oil permits in federal waters on Gulf of Mexico assets?

A: Broad plans not impacted, operating assets running well, but policy implications still being worked through.