BHP plans Capex of $7.6 bn in 2023 fiscal

BHP investment in renewable energy

BHP is planning capital and exploration expenditure of approximately $7.6 billion in 2023 fiscal and $9 billion for the 2024 financial year, including a $0.4 billion exploration program planned in the 2023 financial year.

In the medium term, capital and exploration expenditure of approximately $10 billion per annum on average is expected.

BHP said average annual sustaining capital expenditure guidance over the medium term, excluding costs associated with carbon abatement and automation programs, for WAIO has increased from $4.50 per ton to approximately $5 per ton to support medium-term volume creep, asset integrity and end of life fleet replacement.

In the wake of the Queensland royalty announcement, BMA is reassessing future investment decisions and is unable to provide annual sustaining capital expenditure guidance at this time. Capital expenditure on operational decarbonisation is expected to be around $4 billion in aggregate until the 2030 financial year.

BHP said its capital and exploration expenditure reached $6.1 billion in the 2022 financial year. BHP’s Capex was lower than guidance of $6.5 billion due to favourable exchange rate movements. BHP’s Capex included maintenance expenditure of $2.8 billion and exploration expenditure of $256 million.

BHP said profit from operations increased to $34.1 billion from $25.5 billion in 2021 fiscal as a result of higher coal and copper prices, strong underlying operational performance, including record sales at WAIO and near-record concentrator throughput at Escondida, disciplined cost control supported by cost reduction initiatives across assets and favourable exchange rate movements.

BHP said attributable profit of $30.9 billion includes an exceptional gain of $7.1 billion against 2021’s  $11.3 billion, which includes an exceptional loss of $5.8 billion. The exceptional gain of $7.1 billion  reflects a net gain on merger of BHP’s Petroleum business with Woodside of $8.2 billion, and a gain on disposal of BMC of US$840 million.

BHP Chief Executive Officer Mike Henry said: “BHP delivered strong operational performance and disciplined cost control to realise record underlying earnings of $40.6 billion and record free cash flow of $24.3 billion.”