BHP Group Limited

Hello and thank you for joining us to hear about BHP's results for the 2024 financial year. I'm joined today by our Chief Financial Officer, Vandita Pant. The company performed well again this year, operationally and financially. We delivered reliable operational performance, achieving a number of records. However, tragically, a colleague was fatally injured on the job in January, and this is a heavy reminder of the imperative to continue our relentless efforts to eliminate fatalities and serious injuries from BHP. Our strong underlying operational and financial performance is enabled by our simple, clear strategy and the discipline with which we execute it. This includes our differentiated portfolio of the best assets in the most attractive commodities, as well as our approaches to operational excellence and capital allocation. Our portfolio is focused on large, long-life assets in commodities that are set to benefit from the megatrends playing out around us. A growing population, increasingly urbanized, seeking higher standards of living and embarking on the energy transition. We are passionate about operational excellence. This focus ensures we unlock maximum value from our assets and the capital we have deployed, and consistently deliver high operating margins and good returns. The combination of these attributes delivers strong, consistent cash flows. Coupled with our resilient balance sheet and the discipline embedded through our capital allocation framework, this gives us the ability to fund our growth and deliver attractive returns to shareholders. The creation of broader social value is also vital to our business and goes hand in hand with long-term shareholder value. Our actions throughout the 2024 financial year are consistent with that strategy, pursuing operational excellence, creating social value and shaping our portfolio for the future. This proven strategy consistently delivered keeps BHP in a strong position to create value now and for decades to come. Reflecting our focus on operational excellence, this past year we met final production and unit cost guidance at all of our assets. This includes record production at Western Australian Iron Ore, Spence and Carapatena. We widened our lead as the lowest cost iron ore producer in the world and grew copper production by 9% for the second consecutive year. We are now producing almost 300,000 tons of additional copper each year, making us the company with the fastest growing copper exposure over that period, with a further 4% expected in 2025. Supported by this strong underlying performance, we've determined a final dividend of 74 US cents per share, which takes our total dividends for the year to $7.4 billion, continuing our track record of delivering attractive cash returns to shareholders. In addition to our sharp focus on safety and unlocking the greatest potential returns for shareholders through our existing operations, we're also continuing to invest in value-adding growth and are shaping BHP for the future. Stage one of our Janssen potash project is ahead of its initial schedule, with first production forecast for late 2026, and stage two is in execution. At Copper South Australia, we've already unlocked more synergies faster than anticipated at the time of the Oz Minerals acquisition, and we're increasingly excited by the growth pathway both there and in South America with our work on a pipeline of projects in Chile indicating attractive returns. We have also recently announced an agreement to form a significant joint venture with Lundin Mining related to a future copper growth opportunity in Argentina. In recent months, we made the difficult decision to temporarily suspend our Western Australian nickel operations in light of the very tough market conditions for that industry. We understand the impact that has on the team there and the surrounding communities and are working closely with them to both mitigate the near-term impacts and to ensure the business is best placed to restart operations if and when market circumstances warrant. Everything we do must be done safely. The safety of our people and those around us remains our absolute priority. And the loss of a coworker in a light vehicle accident at our Siraji mine was tragic. And it is paramount that we continue our efforts to reduce and eliminate fatal risk from our business. Our structured work in this regard is helping to reduce the frequency of high potential injuries. Those incidents that had the potential to result in a fatality and in which someone was injured. We improved on this measure by 36% during the year. Safety will remain an area of utmost focus for me and for the leadership team. We made very good progress this year on our social value goals. We remain on track to meet our 2030 operational greenhouse gas emissions reduction target, where we've cut emissions by 32% from our 2020 baseline. This has been achieved even with a slight expected increase in operational emissions this year, as activity lifted across our business. Our 2024 Climate Transition Action Plan, published today, reaffirms our commitment to achieving challenging and credible greenhouse gas emissions reduction targets and goals, and continues the multi-decade action we've been taking on climate change since we set emission intensity targets for our operations in the 1990s. Today, BHP's operational greenhouse gas emissions are among the lowest of our competitors. Following strong support from shareholders for our 2021 Climate Transition Action Plan, we look forward to engaging with our shareholders on our 2024 plan as we move towards our second Say on Climate vote at our upcoming Annual General Meeting. We continue to make meaningful progress towards a more inclusive and diverse workforce, a key enabler of better safety and productivity. We increased female employee participation across the group to over 37%, up almost two percentage points from last year, and our global leadership team is balanced. We increased our spend with small, local, and indigenous businesses to $3.3 billion, including more than 600 million with indigenous businesses, which was up 83% on last year, Our total economic contribution across the regions we operate in was over $49 billion, which includes $11.2 billion in taxes and other payments to governments, around 85% of which was in Australia. These are strong numbers, representative of a healthy company performing well. And I'll now hand over to Vandita to go a little further into the results.

Thanks, Mike. Before we get into the results, I want to say that it is a privilege and an honor to have been appointed BHP's Chief Financial Officer in March. Having been with BHP for more than eight years as Chief Commercial Officer and before that as Group Treasurer and Head of Europe, it is clear to me that our incredible assets, proven strategy, capital allocation framework, and superior operational capability truly set BHP apart. we delivered another strong set of results this year, enabled by the disciplined execution of our strategy. Underlying EBITDA increased by 4%, with a healthy margin of 54%. Our adjusted effective tax rate, including royalties, was around 42%, which gave us an underlying attributable profit of $13.7 billion and a return on capital employed of 27%. Our total attributable profit was $7.9 billion after net exceptional charges of $5.8 billion. These included a $2.7 billion non-cash impairment of Western Australia nickel business, a $3.8 billion charge for the Samarco dam failure, partly offset by a $674 million gain on the sale of BMA's Blackwater and Downia mines. Underpinned by a focus on operational excellence, we continue to generate significant cash. This year, we generated more than $20 billion of net operating cash flow. This enabled us to invest $9.3 billion in our business, 31% more than last year, reduce net debt to $9.1 billion, and deliver attractive returns to our shareholders. Our full-year dividend is 146 US cents per share. Our underlying EBITDA was higher year on year due to solid operational performance and higher prices for key commodities. We performed well in areas within our control. While we spent more on maintenance, labor, exploration, and business development reflected in the $800 million change in costs shown in the waterfall, overall, Our productivity and cost discipline helped us to mitigate the effects of inflation. While we experienced a global inflation rate of 4%, predominantly driven by higher labor costs, unit costs across our major assets increased less than 3%. And we met our final unit cost guidance at each of our assets. Our operations performed well across the portfolio. In I&O, we delivered record production volumes at an EBITDA margin of 68%. We achieved this with strong performance and cost discipline across the supply chain. South flank completed its ramp up to the full production capacity and the port de-bottlenecking project PDP-1 enabled us to get this to market. Veo has been the lowest cost iron ore producer globally for over four years now. And this year, with C1 costs of just $15.84 per ton, we further extended our lead. In copper, strong performances from our operations underpinned an EBITDA margin of 51%. Overall, copper production was our highest in over 15 years. Escondida achieved its best production outcome in four years. Spence had another record year. And at Copper South Australia, successful integration of the Oz mineral assets and strong underlying performance delivered a number of operational records. BMA production was impacted by the higher stripping needed to improve supply chain stability and restore inventory levels. Pleasingly, we're starting to see signs of improvement, but it will take time to recover. We also completed the sale of the Blackwater and Donia mines, further upgrading our steelmaking coal portfolio to focus on higher quality coals, and further simplifying our operations and transport logistics. New South Wales energy coal continued to deliver strong operating results, and we are on track with our plans to stop mining there in 2030. In July, we made the decision to temporarily suspend our Western Australia nickel business, including both the Nickel West operations and the West Musgrave project. While we still expect demand for nickel to grow substantially, significant global oversupply and higher costs mean our nickel business was losing money. We see that oversupply continuing for some time to come until later this decade, so we have chosen to suspend operations from October this year. The suspension preserves the option to restart if and when conditions get better. Now let me talk about our Capital Allocation Framework or CAF. The CAF is the mechanism by which all users of capital compete in order to maximize value and returns for our shareholders. It sits at the core of BHP and has delivered strong results. Our balance sheet is in great shape, we have consistently delivered attractive cash returns to shareholders, and we continue to execute our strategy through reinvestment into our business. The first step to achieving any of this, however, is through our focus on operating and capital productivity to maximize the cash we have available to allocate. we consistently deliver a high baseline of cash flows, having generated net operating cash flow above $15 billion for all but one of the past 15 years. We have achieved this due to the quality of our portfolio and our focus on operational excellence and cost discipline, despite market and operating conditions varying greatly over that time. This stability is a hallmark of BHP. We have a lot of opportunities in front of us to invest for attractive returns. Looking forward, we expect to increase our capital and exploration expenditure as we unlock productivity, work to decarbonize our assets, and deliver growth in future-facing commodities. We expect to spend around $10 billion in the 2025 financial year, of which majority will be directed to growth and improvement, for example, smaller projects that enable better productivity. In the medium term, we plan to spend around $11 billion per year on average, but can flex this for value as we phase projects to match market dynamics and cash flow generation. Around two-thirds of spend is expected to go towards future-facing commodities, including more spend on Janssen and growth at our copper assets. Mike will touch more on these later. We will also spend on our steelmaking commodities, in particular at Veo, as we creep production more than 305 million tonnes per year. To wrap up, we have reported a strong set of results for the 2024 financial year. We remain focused on operational excellence and we remain committed to our capital allocation framework to make sure we keep generating long-term shareholder value. With that, I will hand back to Mike for an update on the business.

Thanks, Vandita. Looking ahead now to what the world looks like for us in the near term. We expect global economic growth slightly above 3% for the 2024 and 2025 calendar years, so similar to last year. Developed economies will face gradual relief from the lingering effects of higher interest rates. And India is set to continue as the world's fastest growing major economy. However, China is experiencing an uneven recovery among its end-use sectors. While we see steady growth in some parts of the economy important to commodity demand, like conventional infrastructure, zero and low emissions technologies, machinery, automotive, and shipbuilding, its property market remains under pressure. The effectiveness of recently announced pro-growth policies will be key to China achieving its official target of around 5% growth in 2024. Overall, while these dynamics will support continued strong demand for our products, growth in supply over the next couple of years will likely result in a small to mild surplus for a number of those and continued price volatility. Our ongoing leadership on cost and cash flow position us well in this environment. The longer-term fundamentals that drive demand for our products have not changed. Population growth, urbanization, rising living standards and increasingly the infrastructure of decarbonization are expected to drive demand for steel, non-ferrous metals and fertilizers for decades to come. The demand outlooks for copper and potash are particularly durable. Global demand for copper is projected to grow by around 70% between 2021 and 2050. driven by continued urbanization and industrialization, underpinning traditional copper demand, a growing wealthier population in developing countries, driving adoption of more copper-containing goods such as air conditioners, refrigerators and electronics, and infrastructure upgrades and replacement of aged capital stock in the developed world. The energy transition, including renewables, electric vehicles, and power infrastructure to enable it, and the need for data centers to support increasing computerization and use of artificial intelligence, will be layered on top of that demand. We are not yet seeing an adequate supply-side response to meet this forecast demand. The challenges to bringing on new supply remain significant, and that's reflected in consensus long-term copper price expectations inching upwards. BHP stands to benefit given our incumbent position, our world-leading copper resource position, and our healthy pipeline of growth options. We're also confident about the outlook for potash, in which we hold a world-class resource in Canada, an investment-friendly jurisdiction. Similar to copper, we expect global demand for potash to grow by around 70% by 2050. Again, driven by rising population and improving living standards, but also changing diets and the need to improve productivity of existing land. And as an indicator of the strong appetite for this product and excitement about having another supplier in a relatively concentrated market, we already have memorandums of understanding in place with buyers around the world with respect to sales as the mine ramps up. The Janssen Potash project is strategically significant for the future of BHP. It stands to create value for many decades over several potential stages. The team is making excellent progress on construction and readying it for the start of operations. On site, significant work has been done on the permanent head frame of the service shaft. The structure of the wet and dry mills is shown on the right of this slide and power generation infrastructure. And we've started work on stage two, which was approved in October last year. Stage one is now over 50% complete and remains ahead of our original schedule with first production just over two years away. Our focus on technology, our scale and our modern approach to mining and processing is expected to see Janssen enter the market at the low end of the global cost curve and to generate strong EBITDA margins and cash at all points in the cycle. In copper, we are in a very good position today. BHP has the largest copper resource of any company in the world. But simply having the resources isn't enough. To get the most out of them, we strive to be the best operators, more productive, consistent and reliable. We've delivered the largest absolute growth over the past two years. More growth, in fact, than the annual production of a lot of other companies. Today, we are one of the world's largest copper producers, and we have a pathway towards well over 2 million tonnes per year of copper production. So our strong position is set to become even stronger. For those that want to invest in copper today, BHP is very well placed. Copper South Australia is a key part of that industry-leading copper story. In recent years, Olympic Dam has achieved more consistent, strong operational performance, and that has certainly been the case since the last smelter rebuild in 2021. In the past year, the team has successfully integrated Carapatena and Prominent Hill, unlocking significant synergies in the process. Together, the strong underlying operational performance and the expanded asset base provide a stable foundation from which we can invest in growth with confidence. The best way to deliver this growth is in phases. This would allow us to leverage Olympic Dam's existing smelter and refinery infrastructure and better match processing capacity with planned mine and concentrator growth over time, into the 2030s. This makes for a more capital-efficient and value-accretive pathway. The first of these phases, the smelter and refinery expansion, or SRE project, involves installing a new primary smelting furnace in front of Olympic Dam's existing smelter, converting it to a two-stage smelter and an expansion of the refinery. Phase one would deliver value on multiple fronts. First, it would allow us to process all of our copper concentrate from the province in-house, unlocking value through, for example, a reduction in treatment and refining charges and transport costs. Second, it would be sized for growth, including a near doubling in volumes from Carapetina as its block cave comes on towards the end of the decade, and growth from Olympic Dam through investments in a new decline and expansion of the southern mining area. The timing of these is indicated in the bottom left of this slide. SRE is expected to help unlock around $1.5 billion in synergy value from the Oz Minerals acquisition, including $600 million already captured to date, underscoring the value we saw in that deal and the potential of this world-class province. We expect a final investment decision on phase one in the first half of the 2027 financial year. And if approved, this would see copper production grow from 310 to 340,000 tons per year today to over 500,000 tons in the early 2030s. Including byproducts, this equates to around 700,000 tons in copper equivalent terms, 100% owned by BHP. The second phase would further expand smelting and refining capacity, potentially to 650,000 tonnes of copper per year by the mid-2030s, to match production growth as we further define and develop our upstream options, including Oak Dam and continued growth from Olympic Dam. In addition to the growth from our Australian copper operations, we've made good progress in narrowing down the growth pathways at our Chilean copper assets. At Escondida, our projects are shaping up well. They have the potential to add around 200,000 tonnes per year of incremental copper production, with attractive returns in the range of 14-19% and competitive capital intensities. We'll take a staged approach to executing these, with some, like the Laguna Sica expansion and a potential new concentrator, ready for final investment decisions sooner than others, like some of the leaching options. At Spence, we're looking at the potential expansion of the concentrator and extending the life of our leaching operations. And finally, at Cerro, Colorado, where we still have 1.7 billion tons of inferred resource, there's the potential to restart operations with the application of novel leaching technologies a bit further down the line. We look forward to taking investors and analysts to our Chilean copper assets later this year, where we'll be able to be more expansive on these growth pathways and projects. In addition to organic growth, over the past several years, we've also been building a portfolio of early stage investments where we seek to gain exposure to undeveloped resources with world-class potential. In late July, we progressed one of these. with the agreement to jointly acquire Filocorp with Lundin Mining, to acquire 50% of the Jose Maria project from Lundin Mining, and to form a 50-50 joint venture between us to advance the Filo del Sol and Jose Maria copper projects in the Vicuña district in Argentina and Chile. This is a rare opportunity to grow our pipeline of long-term copper options by securing access to what we consider to be one of the most significant copper discoveries globally in recent decades. And it creates a long-term partnership with Lundin in which both parties bring complementary skills and experience to the table. The proposed transaction, which is expected to complete in the March 2025 quarter, builds on a multi-year relationship between BHP and Lundin, through which we've developed a strong understanding of the resource potential of the Vicuna District and possible pathways for development. In the near term, while Philo continues exploration at Philo del Sol, we'll be focused on setting up the joint venture with Lundin and working with them to determine the best path forward to develop this emerging copper district and deliver long-term economic and social value for stakeholders. We intend to update the market on the timeline for technical studies in the first half of 2025. So, in closing, BHP is in great shape. Our differentiated portfolio and clear strategy provide a platform for consistently delivering great results and outperforming our competitors. Our proven track record of excellence in operations has resulted in an EBITDA margin of on average 55% over the last decade, over 10 percentage points higher than our next closest major competitor. This gives us not only greater profitability and ability to fund returns and growth, it also gives us greater resilience. Our projects have typically come in on time and on budget, a track record that stacks up very well against others. And when combined with our capital allocation discipline, this has delivered a superior return on capital over the long term. We begin this year energized and focused. We will continue to execute the clear strategy that we've laid out and continue to create value and returns for our shareholders and stakeholders now and well into the future. Thank you.

Thank you for standing by and welcome to the BHP Fall Year Results Investor and Analyst Question and Answer Session. Firstly, I advise you that this conference is being recorded today. To ask a live audio question, press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio question interface. Press join queue and if prompted, select allow in the pop up to grant access to your microphone. If you have any issues asking a question via the web, a backup phone line is available. Dial in details can be found on the request to speak page or on the home tab under asking audio questions. For more detailed instructions on how to use the platform, select the documents tab. An online user guide is available to view. When selected, the document will open within the Lumi platform. You will still be able to listen to the meeting while viewing the documents. If you have not yet joined the question queue, please do so now by pressing the request to speak button. I will introduce each caller by name and ask you to go ahead. You will then hear a beep indicating your microphone is live. I would now like to hand the conference over to Mike Henry.

Well, thank you, Operator, and welcome, everybody. Thank you for joining us today. In the room here with me are Vandita Pant, our Chief Financial Officer, and Tristan Lovegrove, our Group Investor Relations Officer. I'm going to keep my opening remarks short, given the presentation, but there are a few key points that I'd like to leave you with. The first being consistency. BHP performed well again this year, both operationally and financially. We delivered reliable operational performance with a number of records, and we continue to manage inflation well. The actions we've taken in 2024 are consistent with the strategy that you've heard us speak about over the years, a portfolio of the best assets that we operate very well in the most attractive commodities that are set to benefit from the megatrends playing out around us. Second point I'd like to leave you with is cash flow. Ours is a business that consistently delivers a high baseline of cash flows through the cycle. And this year we generated more than 20 billion US dollars of net operating cash flow. We've now generated net operating cash flow above 15 billion US dollars for all bar one the past 15 years. And with healthy and consistent cash flows and our strong balance sheet, we have the ability to fund growth and deliver attractive returns to shareholders. And thirdly, growth. We have a strong and expanding set of growth options. Janssen Stage 1 is ahead of its initial schedule, with first production forecast for late 2026, and Stage 2 is in execution. At Copper South Australia, we've already unlocked more synergies faster than anticipated at the time of the Oz Minerals acquisition. And we're increasingly excited by the growth pathway, both there in South Australia and in South America, with our work on a pipeline of projects in Chile indicating attractive returns. And we've also recently announced an agreement to form a significant joint venture with Lundin Mining related to a future copper growth opportunity in Argentina. So all up, BHP is in great shape, performing well with plenty of growth in the pipeline. We are well positioned for the year and decades ahead. And with that, operator, I will open it up to questions.

Thank you. Your first question comes from Paul Young from Goldman Sachs. Paul, please go ahead and ask your question.

Thank you. Morning, Mike. Morning, Vendita. Hope you're well. Mike, a lot of focus in the presentation on copper growth and The balance sheet's very strong at the moment. I just want to dive into a couple of items, particularly starting with South Australia copper. Some really good extra details on project timelines, also the synergies, talking now 650,000 tonnes of copper potentially, and we've got a maiden resource at Oak Dam. So I'm curious around how you balance free cash on returns in South Australia, considering you spent a bit over a billion dollars in FY24. And overall, how do we think about returns overall on the investment in South Australia?

Okay, so returns numbers, we obviously haven't included those in this presentation, Paul, unlike Escondida, and that's simply by virtue of the fact that there's further work progressing there. But in due course, as we usually do, we'll come out with our view on CapEx and returns. On your main question around how we balance between free cash flow generation and investment, Let me take you back to what we said at a time when Olympic Dam was operating less reliably. We made a few points then. One, we said we recognize that for us to invest in growth, we have to be able to do so from a stable platform. And therefore, we went about investing in both technical capability and asset integrity at Olympic Dam. And we've seen the benefit of that in recent years. That then underpinned our confidence in pursuing Oz Minerals. And you can see both the effectiveness with which we've integrated those assets and the quite material synergy opportunity that lies ahead. But it's not just all future. We've already captured circa $600 million NPV in synergies, which is larger and quicker than we had originally anticipated. Now, the other point that we made at the time was that returns for, at that time it was just Olympic down, but the same thing would apply to the broader resource base at Copper South Australia. The returns escalate quite quickly as scale grows. And so as we go forward, assuming that we continue on with a stable underlying operational base and the economics of investment stack up, we'll back ourselves in terms of project execution capability to invest in the asset to unlock long-term returns. all of that is predicated upon that investment stacking up well under the capital allocation framework with the other opportunities that we have within BHP. And I hope that you can see in this presentation that not only do we have an expanding set of options in copper, we also, of course, have Janssen both in execution, but also potential future growth stages at Janssen as well. Yeah, thanks, Mike.

And then maybe sticking on copper, And switching over to Philo and Jose Maria in particular, you know, a huge project potentially, you know, maybe a $15 billion project, you know, lots of flagpole spent potentially. And it does look like that will fall in potentially on the same timeframe as some of your other major projects in that 28 to 2035 timeframe. I'm just curious about, you know, showing the returns at On Escondido, they're at 14% to 19%. How do you think about returns on Phila, considering that it's a major project that sets potentially multi-decade? How do you think about the returns or hurdle rate for a project of this scale?

So I'm going to ask Vandita to talk a little bit about the capital allocation framework and how projects come together under that. But let me just start by saying what a great opportunity that we have ahead of us with this quite rich portfolio of copper growth options that we have now. Now, specifically in respect of the filo opportunity, it is not that often that one comes across the opportunity to access what could be a very significant, in global terms, new copper basin. And that's what Argentina and the Vicuña district represent for us. So certainly, you know, exciting future prospect. The other point that I would note is that it's not just filo. Of course, we've also acquired 50% of Lundin Mining's Jose Maria deposit, which is about 10 kilometers away from filo. And it's a more advanced project in terms of project planning and approvals. And so together with Lundin, we'll be sitting down in the period ahead and working through what the optimal development pathway is for those two deposits in tandem. But Vandita, did you want to provide any further comments on kind of the capital allocation framework and how we think about competing projects and returns?

Yeah, sure. So from capital allocation framework perspective, as you know, Paul, we look at how the projects compete across returns, across stages of development, and make sure that we have a resilient balance sheet to support this growth. So if I look at medium term, 27 to 29, Of course, there are projects which taper off during that time of 11 billion of our guidance in that Janssen, given the timing, will come off. Janssen 1 would be done by that time, which means we can accommodate more copper growth projects, both for Copper SA and Chile. We have, of course, 305 of Vale creep up to production during that time. So that is included. But nickel, of course, given our recent decision, has come out of our numbers. And some of the 330, up to 330 kind of studies are in, but projects are not. But overall, you can see that we have quite a resilient balance sheet with a 9.1 billion of net debt right now. Range allows us that flexibility to phase the projects, sequence the projects, look at optionality and look at what what we can do in terms of the growth. Filo currently is not in these numbers because, of course, the transaction is yet to close. But we feel quite comfortable to have a good balance sheet, financial discipline, a lens for value on growth, which I think is really critical to have good returning projects and let those projects compete. A good problem to have, as Mike said.

Thank you. Your next question comes from Lyndon Fagan from JP Morgan. Lyndon, please go ahead.

Cool. Good morning. Thanks for the call. Look, my question is back on the FY26 CapEx with a step up to $11 billion. I can see consensus is about $9 billion. So the market's got a couple of billion to solve for. And Van Dieter, I know your comments about Nickel West dropping out. There's been some pretty significant spend there in recent years that has dropped out. So what are we actually missing to solve for that $11 billion? It'd be good to get a bit more detail there. And is that the new base going forward now, considering medium term is also $11 billion? I've got a follow-up as well. Thanks.

Sure, sure, Lyndon. So from that $11 billion, you know, usual, our bucket on maintenance stays the same. It's around $3 billion odd, which also includes some of the stripping numbers. We are increasing our spend, of course, on potash. Potash last year was $1.1 billion. This year, FI25 will be $1.8 billion and FI26 will have a Janssen 2 kicking in easily. even higher, and then it tapers off. Our projects on copper start to also take a higher spend out of 26. I should remind you that there is quite a bit of fleet replacement in many of our assets. Veo has some fleet replacement. Escondida has haul trucks and shovel replacement also in there. And Western Bridge is a being executed over next two years as well. So overall in the mix, the 11 billion for 26 includes higher growth projects for copper, includes a higher spend over next two years in potash. Maintenance remains roughly the same number and some improvement projects which are mainly fleet replacement related.

Okay, thanks. And look, my follow-up's just on iron ore. A lot of focus on today's pack is on copper, and there's really very little on iron ore, which is still your main earnings driver. And the question I had really is about the project to 330. I can't help feel as though that's been put on the back burner a little bit. Obviously, the studies are continuing, but there's not a lot of detail at all in terms of really wanting to execute that. Mike, I noticed in the past you've talked about maybe it's not 3.30, it's something in between 3.05 and 3.30. So maybe just a refresh on the way the business is thinking about that would be great. Thanks.

Okay, so first point, Lyndon, please don't read anything into the fact that we've made more of copper growth in this presentation in terms of what that says about iron ore. Position absolutely unchanged when it comes to either the iron ore and the optionality to expand to 330. And that position is that it's exactly that. So as we've said in the past, all we're doing is creating the option for us to go from 305 to 330 should market circumstances change. and kind of the economic view, the risk returns profile for that tranche of growth be attractive for us, but that we wouldn't know that until a couple of years' time. Now, in terms of the half of your question, Linda, was around, well, how do we get from 305 to 330? What I may have said previously is simply that it's not a single decision. There would obviously be a number of enabling projects that would need to occur for it to take us from 305 to 330. That's part of the study work. And that each project would be considered on its own merits. or each capital investment would be considered on its own merits in terms of returns. So it's conceivable that we could end up with a series of projects where some of those are attractive, some of them less attractive, and so we elect not to go all the way. But the point is that we haven't made a decision about any of that growth beyond 305, and that all we're doing at this point is the underpinning study work to give us the option to be able to trigger that if we think it's the right thing to do under the capital allocation framework.

Your next question comes from Rahul Anand from Morgan Stanley. Rahul, please go ahead.

Hi, good morning. Thanks for the call. Look, you've talked a bit about the CapEx side. I just wanted to touch a bit on the proper expansion opportunities on slide 19. So perhaps if you can help me understand, Mike, firstly, in terms of expense, obviously we had a slower start in terms of recovery and throughput but you've talked about expansion further there can you give me a bit of colour around what you're thinking obviously the current capacity is around 35 million tonnes per annum your initial targets for recovery were 88% and we're running a bit below that where do you see the scope for this project and is that recovery target then going to be a different number as in I'm trying to understand whether the initial targets for the asset apply still or not

So there were a number of numbers that we were using there, Rahul. Obviously, the first focus at Spence has been to stabilize operations post the Spence growth option. And we were clear previously that we had two issues that we were grappling with. One was recoveries. The other one was the tailings facility. And we've... been investing incremental capital in securing the recoveries or getting us closer to the recoveries that were originally anticipated, as well as in dealing with some of the early challenges that we had around the tailings facility. Now, what we're talking about here, so in the presentation, it's a different, and specifically the slide that you're referring to, that's something different from that. So this is saying that as we look at expansion options in copper across the portfolio, We've been clear about some of the opportunities lie at Escondido, and we've provided capital intensities and returns numbers there. But we don't want it to be lost on the market. We also have further potential expansion opportunities at Spence. We have the potential to bring Cerro Colorado back in due course. And so on. Now, those things are still works in process, but broad brush, they would involve us moving to application of further leaching expense to sustain production over time. Vandita, is there anything you wanted to add?

Yeah, sure. As you know, our cathode production there is coming down as the feed grade reduces. And hence, the CPY leaching option is something that we're looking at for Spence. In fact, we have applied for approvals for that. And that is something which can extend the volumes in Spence for 14 odd years. So what you see on slide 19 is talking about that. into the 30s as well there.

Got it, okay. And look, second one perhaps for you, Vandita. I just wanted to touch upon the capital allocation framework a bit as well in terms of the payouts. Obviously, you have a minimum payout figure of circa 50%, which you've paid over for this year. And we finished the position in a strong net debt position. However, if we look forward in some of the commentary on this call as well as talked about, a bit higher capex than where consensus was for both 25 and 26. You've potentially got, you know, two and a bit payments, two and a bit billion coming out for the FILO acquisition. And then you've also got provisions and also contingent liabilities looking into the future. So I guess my question then is around How do you look at that net debt range and where do you really need to be within that range, bottom half above or the top half, to be able to sort of start thinking about any sort of payments above that 50% level in terms of a special or should we just be thinking about 50% going forward for the foreseeable future?

Yeah, Rahul, so our capital allocation framework, the beauty of that framework is that we do look at a rigorous application every six months from a dividend perspective that you mentioned. Of course, 50% is something which is important to our shareholders. We're very cognizant of that. But in terms of performance, outlook, how the value accretive projects are going, where the balance sheet is, all of that gets into the mix for decisions on the top-up around dividends. But if I were to step back and say, as you rightly said, really resilient balance sheet, we are very comfortable with the balance sheet where it is today. And in fact, can swing anywhere in that range and for the right projects. As we have always said, you have seen us say this for years. that if we had a pathway back into the range, we will be happy to even go higher than that if needed. But right now, given the range of capex that we've talked about, 11 billion, it excludes a few of the things that you mentioned. Given the flexibility, available in our net debt range and where balance sheet is. We feel they are comfortable in terms of allocation of really maximizing value for growth projects, but also looking at cash returns. But this is a good problem to have, and we're feeling quite focused on making sure that the growth projects can be triggered And returns can be managed as well, given where the balance sheet is.

So I'm just going to add, Rahul, to a couple of points. One is that it's A difficult question to answer in the sense that one of the variables in the decision-making process is how we see the outlook over the coming 6, 12, 24 months. So how we're seeing markets and so on. So that's part of the board consideration when we sit down at each reporting period to determine the go-forward dividend. But the other point I would make is that we've been and you see this kind of embedded in the foundation of the capital allocation framework. We really get the importance of cash dividends to to to to shareholders. And we see the value that gets created from holding cash dividends or returns to shareholders and reinvestment in the business intention here. because of the competition that creates internally for capital, which gives us overall better projects and better returns. So we make the determination every six months. As Vandita said, there's some flex around the things that we can control, but there's a real appreciation for the importance of shareholder returns.

Your next question comes from James Redfern from Bank of America. James, please go ahead.

Hi, Mike and Vendita. Hope you're well. Maybe first question on iron ore, please. So you talked about the study to 330 million tonnes. It had been completed in calendar year 25 and had been approved subject to market conditions. So I guess I'm wondering, so BHP is the lowest cost producer globally, which is great, but if we assume iron ore prices would be low, $90 a tonne, you know, in 26, 27, would... Are you able to comment on whether that justifies the way of expansion of 330 going ahead? Thank you.

So really can't, so it will compete with other projects under the CAFJM. So part of the answer lies in what the returns and risks look like for the other projects in the portfolio. And the better job that we're doing there, the more likely it is that other projects will out-compete for capital. To be clear, what we've said is the studies will be coming to a head in 2025. That's different from saying that we're intending to pull the trigger or otherwise in 2025. All we're saying is we get the option when the studies are completed, we can then elect as to when we decide to pull the trigger. And we would be looking at both the natural things around capex, cost of production and so on, but also the market outlook. But we've been clear that we see the iron ore market being under increasing competition on a go-forward basis, but we're very well positioned for that competition given where we sit on the cost curve. But at the end of the day, all these things will come back into the mix, compete under the capital allocation framework for capital. And as Vandita said earlier, we've got a growing good challenge in that we've got more attractive growth projects and opportunities for that capital coming through as we've made clear in this presentation.

Okay, thanks, Mike. My second question is, It just relates to South Australia copper. So you did provide indicative IRRs at 14% to 19% in the capex intensity for the Chilean copper growth options, which is great, and we'll find out more details at the site visit in November. But just returning to South Australia copper... The smelter and refinery expansion at Limby Dam is probably the largest, or one of the largest islands I should say, in addition to the potential development of Oak Dam. Potential FID for the smelter expansion is FY27. When do you think we get some more details on the capex for that OD expansion please?

So I don't want to give an exact timing, James, other than to say that we've got a track record. We don't come out and surprise people with an outcome. There's a process through which we give an internal deliberation. Once we've got a sufficient level of confidence, then we'll come out and provide early indicative numbers to the market, both on capex and returns. And you saw us do that with Janssen as well. We'll follow exactly the same path here on Copper South Australia.

Thank you. Just to remind everybody that if you wish to ask a question, please press the request to speak button at the top of the broadcast window. The broadcast will be replaced by the audio questions interface. Press join queue and if prompted, select allow in the pop up to grant the access to your microphone. If you have any issues asking a question via the web, a backup phone line is available. Dial-in details can be found on the Request to Speak page or on the Home tab under Asking Audio Questions. If you have not yet joined the audio question queue, please do so now by pressing the Request to Speak button. Your next question comes from Khan Pekar from RBC. Khan, please go ahead.

Good morning, Mike and Mandita. Two questions from me. First, just wanted to build on Paul's question on phyllo. I know the transaction is live, but maybe if you can give an understanding of sort of the conceptual development of Jose Maria and phyllo. Not really around timing, more around staging. It seems like Jose Maria will be progressed first and then phyllo oxides and sulphides and what existing infrastructure you can use around the region. Thanks, I'll follow up with the second one.

Okay, so broad brush, Colin, it's exactly as you said. Given that Jose Maria is further advanced in terms of studies and the approvals path, and all of this is subject to further work between Lundin Mining and ourselves, but at a high level, some of the initial thinking is around developing Jose Maria first, and then backing philo uh into that over over uh time still no definitive uh timelines um but i we we have said that we'll be working that up with uh lindy and uh just remind me tristan we've said that we'd be coming forward with some more detail on that and any sort of beyond existing infrastructure

So the thing what is changing, of course, is the exciting opportunity to bring two projects and look at the integrated development plan, which also means where infrastructure can be put in, given the, as you know, the difference in altitude between the two and the ability to share infrastructure, etc. So all that will be considered in the integrated development plan, which we'll work through with the Lundin mining.

Colin, just to make sure I understand the question, are you talking about infrastructure for the development or are you talking about, you mentioned existing infrastructure, so I wasn't quite sure. Infrastructure for the development, okay. Obviously, power and water and so on is yet to be determined. We do understand that over the long term, there would be further infrastructure needing to be developed for both water and power, but that would form part of the development plan.

Your next question comes from Rob Stein from Macquarie. Rob, please go ahead.

Thanks for the opportunity. Just regarding WAIO and the capital intensity increase there from a sustaining point of view, how much of that capital underpins growth above 305? So to put it another way, can we expect to see capital intensity discounts go from $305 to $330 by virtue of what you're spending to sustain the business currently? And I've got a follow-up to think.

No. So I think big picture, the way to see this, Rob, is that the... trench of expansion to 305 will be better capital intensities than any potential expansion from 305 to 330, albeit that latter expansion could also be attractive just solely looking at capital intensities relative to greenfield developments or the brownfield expansions of some others. Now, you are seeing in the near term, due to fleet replacement and so on, a bit of an increase in the sustaining capital draw of the whale business, but the numbers are still quite low relative to the competition because we've got these big mines and we don't have to turn over that capital quite as frequently as others.

The 305-related capex really relates to then PDP-1 or de-bottlenecking project, which has been coming to fruition, and RTP-1, which is the rail technology project.

Okay. And then switching gears a bit, just on the copper build of projects to support the growth, you speak to a new concentrator. Just to be specific, is that the replacement for Los Colorados or is that a concentrator in addition to Los Colorado?

No, this will be a replacement for Los Colorados, Rob, because, of course, in order to access the high grade that sits below Los Colorados, we'll need to demob it in due course.

Your next question comes from Lachlan Shaw from UBS. Lachlan, please go ahead and ask your question.

Yeah, morning, Mike and Vandita. Thanks for the time. My first question is just on Wayo and, you know, I guess the expansion. So when you're looking at the returns to investment to go to 305 or 330, does the analysis factor in any expected impact on broader price from bringing more tons into the market? I'll come back with my second.

Short answer, yes, absolutely, Lachlan. That's one of the key things that we look at is the market consequences of any expansion decision that we may take, and that then gets factored into the economics. You had a second question? Okay, great.

That's helpful. Thank you. Yeah, I do. I just wanted to focus on the CapEx epic again and just a small one of clarification, hopefully. So I'm just noticing that in the medium term, maintenance and decarb capital eases a little bit lower. Can you just talk to what's going on there, please? Thank you.

And not really, Lachlan. In fact, the DCAB capex will go up at the end of the decade.

I think he's referring to maintenance capital as well as overall.

We do have a wave of fleet replacement is coming in in the near term, as well as a bump in deferred stripping. So, of course, fleet replacement can be a bit lumpy, and we're seeing one of those lumps come through now, and we've seen this increase from $800 million to $1.2 million in deferred stripping in the period ahead.

Sorry, just a quick clarification. The fleet replacement is actually in improvement capital rather than maintenance.

So maintenance stays around 3 billion. Last year was 3 billion. Guidance for this year is also 3 billion. But as Mike said, it includes deferred stripping, which is increasing a little bit.

Thank you. Your next question comes from Paul McTaggart from Citigroup. Paul, please go ahead.

Morning, all. Thanks for the additional color around the Chilean copper growth options. But I did want to ask, at the end of that FY40 time frame, can you give us a sense of where we are in terms of grade for sulfide versus reserve grade? Because it would give us a sense of then beyond that, what might have to happen, because you've got a relatively modest uplift in output from the U.S. Candida concentrate. I'm just wondering what that kind of grade decline after that end of FY40 is.

So if I understand the question correctly, you're asking what the long-term grade at Escondida is going to be in the post-2040 period. And Tristan, maybe if you can follow up with the exact numbers. Exactly, sir. We see the decline down to, from memory, it's 0.7-ish. But let me follow up, Lachlan. Just because of the timeframes involved being so far out, we'll try to give you a sense for where it retreats to by that point in time.

So, Paul, it goes below 0.8, obviously, in the end of this decade. We don't actually give sort of the clarification where the grade goes next decade. But let's see if we can help you in any way we can.

I think the broader point I would draw out here is really two things. One is grade decline isn't exactly a feature that's specific to Escondida. We all face it. What you can see coming through in these results is our efforts that are looking quite positive at this point to offset grade decline at Escondida with the projects that we've provided some detail around. and what we're doing across the broader portfolio to not only offset grade decline, but to grow underlying copper production in the face of the significant opportunity that we see ahead of us. And that's off of us, based on us being one of the largest copper producers already, the most significant resources of any company out there in terms of copper, and expanding further through things like the opportunity that we've announced with Lundin, and through the integration of the Oz Minerals assets. So we're pretty confident and excited about our position on copper currently and what lies ahead for us, not just kind of on the 2040 timeframe, but even nearer dated than that, as we unlock some of these opportunities towards the back end of this decade.

Thank you. Your next question comes from Glyn Lawcock from Baron Joey. Glyn, please go ahead and ask your question.

Morning, Mike Venditta. Just firstly on copper. I mean, you've got a lot on your plate now with three districts that you're going to focus on. Obviously, you can solve for the funding, but what about the physical ability to deliver the three districts? And do you think the company has the ability to execute on a fourth, if you were to add a fourth district as well? And I've got a second thing.

Yeah, so great question, Glenn, and one where we always have to be humble and recognize that time has passed and we've tried to take on too much. It's created challenges. I think in this case, a couple of things to say. One is we do have a growing track record of solid execution when it comes to major capital projects, including in inflationary environments. We've put in place better disciplines when it comes to project planning and execution. And in fact, we refer to how our outcomes stack up relative to the competition in that regard. And the fact that you end up with projects across different jurisdictions can actually be helpful because you don't have projects kind of bunching up on one another. But there will be limits to that. Now, I predict that the limits are going to be less related to... you know, the ability to execute, albeit we have to be very cognizant of that, the limits will be rather related to us wanting to continue to drive fierce competition for capital under the CAF. And as Vandita, you know, highlighted earlier, we'll be thinking about project sequencing to give us, you know, the best returns under the CAF, but also to allow us to manage within the envelope that we have around things like net debt, cash returns to shareholders, and so on.

Yeah, sure. I get that, Mike. And before I ask my second, I mean, like, it's going to be hard to sequence, though. You've got a partner in the Pecunia district who will want to move that forward. You've got to move and you've got to deal with the grade decline at Escondida. And to get the synergies out of Copper SA, you've got to do what you've got to do. So you don't have a lot of flex, really, do you, physically?

Well, we will. So keep in mind that some of these are still early-ish on in their planning phases. We have to see how timelines on an unconstrained basis firm up before we even get to the point of needing to sequence. But having said that, within any of these projects, there's always an opportunity to flex within a certain time range. And more often than not, our interests will be aligned with partners because part of the flex will come back to how we go about optimizing returns, not just across the BHP portfolio, but for the project in question. Now, Of all the companies out there, if you look at the stability of our cash flows, our track record when it comes to project execution, I think we've got greater ability to deal with this growing opportunity than some others would. But we're going to have to be thoughtful and deliberate about it, which I think is your point, Glenn. Yeah, sure. Thanks.

And then just switching gears to iron ore, just your thoughts at the moment. I mean, is this just a cyclical downturn or do you think it's now the start of a structural downturn? And in answering that, you know, we've seen a 30 million ton increase in port stocks in China. Vale admitted they increased intentionally their port stocks by 10 million tons this year to enable blending. Has BHP done similar to enable blending? Like you've taken a permanent change in your port stocks? Thanks.

We've taken the step in recent years of increasing trading along the coast, so iron ore stocks and trading along the coast in China. Not of the same order of magnitude as some others, but it's certainly an activity that we have underway. Your main question is, well, what are we seeing, or the main part of your question was, what are we seeing play out in the iron ore markets currently? I come back to, you know, what we've predicted is the broad trajectory for iron ore for a number of years now, which is that we see steel plateauing in China. It's plateaued at a high level above a billion tons per annum. In due course, it will begin to contract. We will see pig iron contracting more rapidly as more scrap comes into the cycle and therefore iron ore demand. or the iron ore market contracting as well. It's what's driven our strategy to be at the very low end of the cost curve and to improve the quality of the product suite. And you see the benefits of that strategy playing out in real time, where we've got significantly higher cash margins than the next quarter. well, then the competition in the Pilbara to the tune of at least $8 US per ton. And we continue that focus. Now, I would remind everyone that there is a bench of probably, Vandita, about 170 million tons or thereabouts. of high cost production in the market of, you know, between 80 and 100 US dollars per ton production costs. So it takes a lot for prices to move sustainably below that level. And I think you're seeing that play out in terms of market pricing, even in the face of the increase in port stocks.

And if I may add, Mike, out of that 170, 90% of that bench is above $90.

So 90 to 100. Yeah.

Thank you. Your next question comes from Lyndon Fagan from JP Morgan. Lyndon, please go ahead and ask your question.

Thanks very much for the follow-up. Can I ask about the Anglo deal? So now that you've got Philo, Jose Maria, potentially $10 billion of deployment there in the medium term, does this extinguish the Anglo deal?

So, look, what I said at the time... Yeah, so they're off pursuing their own plan, Lyndon, and so disappointing outcome, obviously, because we thought there was value to be created for both sets of shareholders. But I was at pains at the time to say that that wasn't plan A. Plan A is everything you see, you know, because, of course, all the work that we're talking about now in this results presentation was already underway at the time. And so we had a pretty high degree of confidence about what we could do within our existing portfolio to unlock more of our copper resources more quickly. Of course, in the subsequent period, we've undertaken the Filo transaction in partnership with Lundin. And so we're, you know, they're executing their plan, we're executing our plan, and it's a plan that we have growing confidence around and you see that being reflected in the results this time.

Thanks, and the FY... We've got the FY31 to FY40 block on...

We can hear you intermittently. Why don't you give it a go again?

Okay, sorry about that. I'm not sure what's happening. Slide 19, the FY31 to FY40 period. I'm just wondering if you can tell us where copper production crossed in that block.

FY31 to FY40, yeah, it's, I think, so if I, I think, Where we expect to see the trough is actually prior to that, Lyndon. So we'll see Escondida grade coming off 2027 and beyond. And as we've been clear about in previous results presentations, all of this great work that's underway at Escondida around projects won't come in quite on time to offset that trough. So there'll be a brief period of production dipping, but then it grows from there. So if that's what you were focused on, We should actually expect it to happen pre the end of this decade. And then by the end of the decade, more production to be coming on, both, you know, from the from Escondido and Chilean assets and as well as copper South Australia.

Your next question comes from Rob Stein from Macquarie. Rob, please, can you go ahead and ask your question?

Thanks for the follow-up. Just a question on BMA. We're seeing obviously from cost guidance that it's moving in the right direction. Is there a future for that asset where it's a bit more of a value of volume approach given that lower production may lead to lower cost and also supports the market a little bit better?

So for us, it's always about value, Rob. Now, that's not what's led to some of the lower production numbers that we've had in recent periods. That's more been around some of the operational challenges that we've encountered. And just like we do with other businesses, because of where we sit on the cost curve, the likely outcome for us is to focus on productivity. And within the capital that we have deployed, the highest returning opportunity is likely to be for us to continue doing as good a job as we can on reliably operating day in and day out. But a couple of other things to keep in mind. It's a fundamentally different portfolio today than it was, say, three or four years ago. We've gone from circa 50% of the premium quality products to 90% now in the portfolio. So we're targeting a very specific portfolio. We're targeting the coals that are likely to be most valued by customers as they seek to decarbonize their operations. And as we've been clear with our medium-term guidance, we think the focus on productivity, because that's not growth capital, that's a productivity outcome. is likely to see production inching upwards, but against a backdrop of strong demand as well. As India, what Vendita probably triples their steel production by the 2050s. And of course, they're reliant upon imported coke and coal. And we think there's still a case to be made as well for some of the Chinese coastal mills. to be importing higher quality coal. So we see the opportunity is significant. We're very well positioned for that opportunity. But the focus is really on making the most of the capital that we already have deployed in the business.

Thank you.

Your next question comes from Lachlan Shaw from UBS. Lachlan, please go ahead and ask your question.

Thanks very much for the follow-up question. Mike, this was really one, I guess, on the portfolio. And just looking at, you've got a fair bit coming up in Australia, obviously plenty to do in South Australia copper, WAO, but also plenty outside of Australia. I just wondered if you had any observations about how relative returns of projects in Australia are stacking up versus projects offshore, given Australia's We're seeing a fair bit of movement now in industrial relations and labour, same job, same pay, but also changes in tax rates elsewhere, for example, in Chile. So can you give us any insight into the sort of patterns you're seeing there, please?

Thank you. Sure. It's... So it's going to be a little bit dependent on projects, the specific projects to state the obvious. And so you'll see something like the lift from where we are today and way out to 305, likely to be very high returning because the brownfield, very straightforward brownfield expansion, low capital intensities, through to more significant capital investment, like what is being contemplated for Copper South Australia. We've been strong advocates, not just for BHP and our sector, but for the nation as a whole to have policies in place that support global competitiveness. And those include related to industrial relations and labor productivity, tax policies, energy policies, and so on. And certainly, you know, with some of what's been enacted recently, we fear that there's drag being created in terms of underlying competitiveness. But that is but one factor that then goes into determining project returns. And the world's not static. Of course, in some other jurisdictions, you also have changes to tax policy, albeit, you know, if I use the Chilean example, done in collaboration with the industry with an eye on what's required to maintain investment attractiveness and competitiveness versus, you know, in the case of Queensland coal, where it was done with disregard for the industry and without consultation. And so that's one of the things that weighs up into our view of risk and it impacts on the underlying outcomes as well in terms of how damaging they are to the sector. At the end of the day, we have a capital allocation framework in place on an ongoing rolling basis. We bring projects in from all around the world, be they in iron ore or copper or Australia versus Chile versus Canada versus Argentina. And we weigh up the relative risk returns profile. And that's what then drives, you know, what sequence we adopt around the projects and which ones make it past the gate and into execution. Vandita, is there anything you wanted to add?

No, I think that's well covered. Thanks.

Your next question comes from Paul Young from Goldman Sachs. Paul, please, can you go ahead and ask your question?

Yeah, thanks. Thanks again, Mike and Vendita. Mike, a question around inorganic opportunities in copper and the comments you made about going above the top of the net debt target range. If there's a pathway back in, that makes sense. And a lot of companies say the same thing, but just specifically on the Anglo transaction, actually. And when you're assessing Anglo, there was a lot of discussion in the market around implied capital intensity issues. on the copper assets once you strip out the other divisions. And I know you've shown capital intensity as an example on slide 19 on the Escondida expansions, but that's just a rule of thumb to sort of just measure things. But so I guess the question I have is how much weight do you put on that when people were talking about that? Or for you, when you assess this transaction, are you looking more about a replacement value in dollar billion and also just future growth options in DCF?

So we don't start from the perspective of it's cheaper to buy than build, and therefore we have to pursue acquisitions. We've been clear from the get-go that we're not going to be driven to pursue acquisitions. We'll be opportunistic about them, and we'll only pursue them where we can see value being unlocked for BHP shareholders in absolute terms. Now, the reality is you're going to see some instances where build, is cheaper on a capital intensity term and higher returning than acquiring anything, even when that acquisition looks attractive. In other instances, a build might look less attractive in terms of headline capital intensity, but it provides you with longer runway and so on. So it's hard to adopt the rule of thumb around these things. The reality with the Anglo transaction was that we certainly saw an opportunity for BHP shareholders, and we believed Anglo shareholders, to create more value but you know at the end of the day they elected to choose their own to pursue their own plan we've continued on with our our plan a and you see that reflected in the results presentation today okay thanks mike there are no further questions from the phone at this stage Okay, well, everyone, I just wanted to thank you for joining. I hope you can see that the underlying performance of the company continues to be strong and consistent. Very simple strategy. We continue to execute on it, including building up the growth pipeline in commodities that we believe are going to be most attractive and stand to benefit greatest from the big megatrends playing out around us. So lots to come. And BHP is set up quite well to continue to deliver great value for not just the year ahead, but for decades to come. Thank you.

Ladies and gentlemen, thank you for your interest. You may all disconnect.