UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
April 16, 2014
| BHP BILLITON LIMITED (ABN 49 004 028 077) (Exact name of Registrant as specified in its charter) |
BHP BILLITON PLC (REG. NO. 3196209) (Exact name of Registrant as specified in its charter) |
| VICTORIA, AUSTRALIA (Jurisdiction of incorporation or organisation)
171 COLLINS STREET, MELBOURNE, VICTORIA 3000 AUSTRALIA (Address of principal executive offices) |
ENGLAND AND WALES (Jurisdiction of incorporation or organisation)
NEATHOUSE PLACE, VICTORIA, LONDON, UNITED KINGDOM (Address of principal executive offices) |
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: x Form 20-F ¨ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
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NEWS RELEASE
bhp billiton
resourcing the future
Release Time
IMMEDIATE
Date 16 April 2014
Number 08/14
BHP BILLITON OPERATIONAL REVIEW
FOR THE NINE MONTHS ENDED 31 MARCH 2014
BHP Billiton maintained strong momentum in the nine months ended March 2014 with record production achieved for four commodities and at 10 operations.
Strong operating performance throughout the period, the relatively limited impact of the wet season and the continued ramp-up of Jimblebar underpinned record production at Western
Australia Iron Ore of 163 million tonnes (100% basis). Full-year production guidance has been raised by a further five million tonnes to 217 million tonnes (100% basis).
Queensland Coal achieved record annualised production of 69 million tonnes (100% basis) in the March 2014 quarter. A sustainable improvement in productivity and the successful
ramp-up of Daunia has underpinned an increase in total metallurgical coal production guidance to 43.5 million tonnes for the 2014 financial year.
Petroleum
liquids production increased by 16% to 77 million barrels of oil equivalent for the nine months ended March 2014, underpinned by a 71% increase at Onshore US. As a result of the successful divestment of Liverpool Bay and well remediation
activities in the Hawkville that are now complete, total petroleum production for the 2014 financial year is expected to be approximately 245 million barrels of oil equivalent. The overall reduction in full-year guidance has been mitigated by
an increased contribution from higher-margin crude and condensate.
Full-year copper production guidance remains unchanged at 1.7 million tonnes, with a strong
June 2014 quarter anticipated.
BHP Billiton Chief Executive Officer, Andrew Mackenzie, said: “Our productivity agenda continues to deliver outstanding
results, underpinning a 10 per cent1 increase in production so far this year. Having achieved record iron ore and metallurgical coal production during the first nine months of this year, we have raised full-year guidance for both commodities.
The strong contribution from our high-margin Gulf of Mexico operations and the predictability of Escondida’s performance is also pleasing. We continue to expect cumulative production growth of 16 per cent1 over the two years to the end of
the 2015 financial year.
“During the period, the fourth pellet plant at Samarco achieved first production and commissioning at Caval Ridge commenced ahead of
schedule. Our newest hard coking coal mine will add to our uniquely diversified and opportunity-rich portfolio of large mining and petroleum operations. Group capital and exploration expenditure remains on track to decline by 25 per cent in the
2014 financial year, before declining again next year. By maintaining strict financial discipline and a focus on our four pillars of Iron Ore, Copper, Coal and Petroleum, we continue to believe that an average rate of return of greater than 20%2 is
achievable for our major development options.”
Note: Unless specified otherwise: variance analysis relates to the relative performance of BHP Billiton and/or
its operations during the nine months ended March 2014 compared with the nine months ended March 2013 or the March 2014 quarter compared with the December 2013 quarter; production volumes, sales volumes and capital and exploration expenditure from
subsidiaries (which include Escondida, Jimblebar, BHP Billiton Mitsui Coal and our manganese operations) are reported on a 100 per cent basis; production volumes, sales volumes and capital and exploration expenditure from equity accounted
investments (which include Antamina, Samarco and Cerrejón) and other operations are reported on a proportionate consolidation basis. Abbreviations referenced in this report are explained on page 11.
Summary
Production summary
Total petroleum production (MMboe)
Copper (kt)
Iron ore (kt)
Metallurgical coal (kt)
Energy coal (kt)
Alumina (kt)
Aluminium (kt)
Manganese ores (kt)
Manganese alloys (kt)
Nickel (kt)
MAR 2014 YTD
181.3
1,257.1
147,387
33,192
55,129
3,853
898
6,047
465
112.3
MAR 2014 QTR
60.9
413.9
49,567
11,467
17,723
1,250
286
1,801
162
34.1
MAR YTD14 vs MAR YTD13
3%
2%
21%
24%
2%
7%
3%
(4%)
9%
(1%)
MAR Q14 vs MAR Q13
10%
(5%)
23%
28%
11%
3%
(6%)
(10%)
13%
(19%)
MAR Q14 vs DEC Q13
6%
(6%)
1%
(1%)
0%
(8%)
(5%)
(18%)
(2%)
(10%)
BHP Billiton maintained strong momentum in the nine month period ended March 2014 with
record production achieved for four commodities and at 10 operations. In total, production increased by 10 per cent1 during the period and is expected to grow by 16 per cent1 over the two years to the end of the 2015 financial year.
Record production at Western Australia Iron Ore (WAIO) for the nine month period was underpinned by strong operating performance, the relatively limited impact of
the wet season and the continued ramp-up of Jimblebar. Despite tie-in activities associated with the commissioning of the first replacement shiploader scheduled for the June 2014 quarter, we have raised production and sales guidance for the 2014
financial year to 217 Mt (100 per cent basis). In total, we have raised production guidance for this high-margin business by 10 Mt (100 per cent basis) during the course of the year.
Metallurgical coal production for the nine month period increased by 24 per cent to a record 33 Mt and included record production at all Queensland Coal operations3. As a
result, total metallurgical coal production guidance for the full year has increased by 2.5 Mt to 43.5 Mt.
Following the successful divestment of Liverpool Bay,
production guidance for the 2014 financial year has been rebased to 245 MMboe. The two per cent reduction to previous guidance also reflects lower gas and natural gas liquids production in the Hawkville area of the Eagle Ford, although planned well
remediation activities have now been completed. Total Onshore US production of approximately 107 MMboe is now anticipated for the 2014 financial year and primarily reflects a lower contribution from natural gas. The overall reduction in full-year
guidance has been mitigated by an increased contribution from higher-margin crude and condensate, predominantly from our Gulf of Mexico operations.
During the
March 2014 quarter, the fourth pellet plant at Samarco achieved first production and commissioning at Caval Ridge commenced ahead of schedule. The Samarco Fourth Pellet Plant project will not be reported in future Operational Reviews. BHP
Billiton’s share of capital and exploration expenditure in the 2014 financial year is expected to decline by 25 per cent to US$16.1 billion4, as planned.
We continued to simplify our portfolio during the period with the successful divestment of Liverpool Bay. In the last two years alone, the Group has announced or
completed divestments in Australia, the United States, Canada, South Africa and the United Kingdom, including petroleum, copper, coal, mineral sands, uranium and diamonds assets. As we announced to the market on 1 April 2014, we continue to
actively study the next phase of simplification, including structural options, but we will only pursue options that maximise value for BHP Billiton shareholders.
BHP Billiton operational review for the nine months ended 31 March 2014
2
Petroleum and Potash
Production
Crude oil, condensate and natural gas liquids (Mboe)
Natural gas (bcf)
Total petroleum production (MMboe)
MAR 2014 YTD
77,280
624.4
181.3
MAR 2014 QTR
27,254
202.0
60.9
MAR YTD14 vs MAR YTD13
16%
(5%)
3%
MAR Q14 vs MAR Q13
31%
(3%)
10%
MAR Q14 vs DEC Q13
14%
0%
6%
Total petroleum production – Total petroleum production for the nine
months ended March 2014 increased by three per cent to 181.3 MMboe.
Following the successful divestment of Liverpool Bay, production guidance for the 2014
financial year has been rebased to 245 MMboe. The two per cent reduction to previous guidance also reflects lower gas and natural gas liquids production in the Hawkville area of the Eagle Ford, although planned well remediation activities have now
been completed. Total Onshore US production of approximately 107 MMboe is now anticipated for the 2014 financial year and primarily reflects a lower contribution from natural gas. The overall reduction in full-year guidance has been mitigated by an
increased contribution from higher-margin crude and condensate, predominantly from our Gulf of Mexico operations.
Crude oil, condensate and natural gas liquids
– A 16 per cent increase in liquids production for the nine months ended March 2014 was underpinned by a 71 per cent increase at Onshore US. This was supported by a doubling of production at Atlantis as volumes benefited from the
start-up of a new production well in the September 2013 quarter. We expect to carry strong momentum at Atlantis into the 2015 financial year with a further two production wells scheduled for completion in the coming months.
An 84 per cent increase in liquids production at Pyrenees in the March 2014 quarter followed the completion of major planned maintenance during the December 2013 quarter and
the start-up of three new production wells during the period.
Production in the Eagle Ford accelerated at the end of the March 2014 quarter and we continue to
expect growth in Onshore US liquids production of approximately 75 per cent for the full year as a significant inventory of completed wells is brought online.
Natural gas – Natural gas production for the nine months ended March 2014 declined by five per cent to 624 bcf. The successful delivery of first gas from
Macedon partially offset lower seasonal demand at Bass Strait and natural field decline at Haynesville, which reflected our decision to prioritise Onshore US development drilling in the liquids-rich Black Hawk region of the Eagle Ford.
Projects Project and ownership
North West Shelf Greater Western Flank-A (Australia) 16.67%
(non-operator)
Bass Strait Longford Gas Conditioning Plant (Australia) 50% (non-operator)
Capital expenditure (US$m)
400
520
Initial production target date Capacity
CY16
CY16
Progress
To maintain LNG plant throughput from the North West Shelf
operations.
Designed to process approximately 400 MMcf/d of high-CO2 gas.
On
schedule and budget. The overall project is 70% complete.
On schedule and budget. The overall project is 29% complete.
BHP Billiton operational review for the nine months ended 31 March 2014
3
Onshore US drilling and development expenditure totalled US$3.4 billion in the nine months ended March 2014. As anticipated, the rate of
expenditure reduced in the March 2014 quarter to US$1.0 billion, in-line with our planned annual investment program of approximately US$4.0 billion. Approximately 75 per cent of drilling activity occurred in the Eagle Ford, with the majority
focused on our Black Hawk acreage.
Petroleum exploration
Exploration and
appraisal wells drilled during the quarter or in the process of drilling as at 31 March 2014.
Well Rydal-1 Bunyip-1
Location
Carnarvon Basin WA-255P
Carnarvon Basin WA-335P
Target Oil Gas
BHP Billiton equity
50% (operator)
52.5% (operator)
Spud date
13 January 2014
4 February 2014
Water depth
752 m
1,187 m
Total well depth
3,268 m
4,579 m
Status
Plugged and abandoned Hydrocarbons encountered Non-commercial
Plugged and abandoned Hydrocarbons encountered Under evaluation
Petroleum exploration
expenditure for the nine months ended March 2014 was US$434 million, of which US$231 million was expensed. A US$600 million exploration program, largely focused on the Gulf of Mexico and Western Australia, is planned for the 2014 financial year.
Potash
Project and ownership
Jansen Potash (Canada) 100%
Investment (US$m) 2,600
Scope
Investment to finish the excavation and lining of the production and service shafts, and
to continue the installation of essential surface infrastructure and utilities. The rate of shaft development is expected to reflect our level of investment.
Progress On budget. The overall project is 25% complete.
We believe that
Jansen is the world’s best undeveloped potash resource and is likely to be one of the lowest cost sources of supply once fully developed. Investment in Jansen could underpin a potential fifth pillar of BHP Billiton, given the opportunity to
develop a multi-decade, multi-mine basin in Saskatchewan.
Shaft excavation resumed in the March 2014 quarter following a thorough review of the activities
completed to date. Learnings are being adopted as we continue to progress the production and service shafts in a staggered manner to mitigate risk and optimise their development. With our investment premised on the attractive longer-term market
fundamentals for potash, we will continue to modulate the pace of development as we seek to time our entrance to meet market demand, thereby maximising shareholder returns.
As a result of this measured approach, the level of expenditure in the 2014 financial year is now expected to be approximately 25 per cent below prior guidance of US$800
million. While the shafts are no longer expected to be completed in the previously defined timeframe, this does not affect our US$2.6 billion budget or longer-term development plans as the shafts are not on the critical path. On the basis of our
current projections for market demand, the Jansen mine could ramp-up to its theoretical design capacity of approximately 10 Mtpa in the decade beyond 2020.
BHP
Billiton operational review for the nine months ended 31 March 2014
| 4 |
Copper
Production
Copper (kt)
Lead (t)
Zinc (t)
Silver (koz)
Uranium oxide concentrate (uranium) (t)
MAR 2014 YTD
1,257.1
141,861
80,819
26,295
2,944
MAR 2014 QTR
413.9
47,577
19,409
8,757
966
MAR YTD14 vs MAR YTD13
2%
(4%)
(2%)
(4%)
(1%)
MAR Q14 vs MAR Q13
(5%)
(3%)
(36%)
(4%)
4%
MAR Q14 vs DEC Q13
(6%)
(1%)
(41%)
(1%)
(4%)
Copper – Total copper production for the nine months ended March 2014 increased by
two per cent to 1.3 Mt. Our guidance for the 2014 financial year remains unchanged at 1.7 Mt.
Escondida copper production of 830 kt for the nine months ended March
2014 was broadly unchanged from the prior period as an increase in mill throughput and concentrator utilisation offset declining ore grades. As a result of these productivity-led gains, Escondida remains on track to produce approximately 1.1 Mt of
copper in the 2014 financial year before increasing to approximately 1.3 Mt in the 2015 financial year.
Antamina achieved record copper production for the nine
months ended March 2014. This was underpinned by record mining and milling throughput, and higher average ore grades in the first half of the year. Full-year copper production at Antamina is expected to be broadly unchanged from the 2013 financial
year given a decline in copper ore grades in the second half of the year, consistent with the mine plan.
A seven per cent increase in copper production at Pampa
Norte in the March 2014 quarter reflected improved recoveries at both Cerro Colorado and Spence. Full-year copper production at Pampa Norte is expected to be broadly unchanged from the 2013 financial year.
Olympic Dam copper production for the nine months ended March 2014 increased by 10 per cent and was underpinned by record mining and hoisting rates. Planned maintenance is
expected to impact the smelter over a 20-day period in the June 2014 quarter. Full-year copper production at Olympic Dam is expected to be broadly unchanged from the 2013 financial year.
Lead/silver – Lead and silver production for the nine months ended March 2014 decreased by four per cent as record material mined was offset by lower average ore grades at
Cannington, consistent with the mine plan. Antamina achieved record silver production for the period.
Zinc – Total zinc production for the nine months ended
March 2014 was broadly unchanged from the prior period. Uranium – Uranium production for the nine months ended March 2014 was broadly unchanged from the prior period.
BHP Billiton operational review for the nine months ended 31 March 2014
5
Projects
Project and ownership
Escondida Oxide Leach Area Project (Chile) 57.5%
Escondida Organic Growth Project 1 (Chile)
57.5%
Escondida Water Supply (Chile) 57.5%
Capital expenditure (US$m)
721
3,838
3,430
Initial production target date Capacity
H1 CY14
H1 CY15
CY17
Progress
New dynamic leaching pad and mineral handling system. Maintains oxide leaching capacity.
Replaces the Los Colorados concentrator with a new 152 ktpd plant.
New
desalination facility to ensure continued water supply to Escondida.
On schedule. Budget under review following challenges associated with civil engineering works,
which have since been resolved. The overall project is 88% complete.
On schedule and budget. The overall project is 71% complete.
On schedule and budget. The overall project is 8% complete.
BHP Billiton operational review
for the nine months ended 31 March 2014
Major increase in Mineral Resource at Escondida
BHP Billiton today announced a 28 per cent increase in the Mineral Resource at Escondida compared to a previous estimate as at 30 June 2013. The increase largely reflects
the inclusion of 46 km of in-fill drilling that has continued to delineate the Escondida Este deposit, which is adjacent to the Escondida mine.
The Escondida
Mineral Resource estimate includes the Escondida and Escondida Norte deposits that jointly provide ore feed to a concentrator and heap leach processing complex. The neighbouring deposits are centred on Eocene-aged feldspar porphyry bodies intruded
into Palaeozoic and Mesozoic rhyolite and andesite volcanic units. Vertically extensive hypogene mineralisation (chalcopyrite with or without bornite) has been overprinted by sub-horizontal high-grade supergene enrichment (chalcocite with or without
covellite). Oxidised brochantite with or without chalcocite occurs above the supergene enrichment zone.
Mineral Resource estimates are largely based on 2 m samples
obtained from diamond HQ and NQ diameter core (DDH) drill holes and a lesser quantity of 5.5 inch Reverse Circulation (RC) holes. The most recent estimate is based on approximately 2,300 km of drilling in 7,400 holes.
Core samples are hydraulically split and RC chips are riffle split. Samples are crushed to 90 per cent minus 10 mesh and pulverised to 95 per cent minus 150 mesh. Pulps
(200 grams) are analysed by 3-acid digestion for total copper, iron and arsenic with Atomic Absorption (AA) measurement. Acid soluble copper is analysed by sulphuric acid digestion and measured by AA.
Estimation is performed by ordinary kriging using search criteria consistent with a geostatistical model separately developed for numerous ore constituents according to the
appropriate geological controls. Mineral Resources have been classified considering the spatial distribution and density of drill holes, geological framework and copper grade continuity (Table 1).
Table 1. Nominal drill grid spacing for Mineral Resource category
Classification
Measured (average)
Indicated (average)
Inferred (maximum)
Oxide
40x40 m
60x60 m
90x90 m
Mixed
45x45 m
60x60 m
110x110 m
Sulphide
60x60 m
115x115 m
350x350 m
The cut-off grade used to differentiate waste from mineralisation is 0.30 per
cent total copper for the Sulphide and Mixed resources whereas the Oxide resources are reported above 0.20 per cent acid soluble copper. These cut-off grades are based on break-even economic analysis and assumed open-pit extraction and
concentrator or heap leach processing.
Mineral Resources (100%)5
As at
31 March 2014 As at 30 June 2013
Deposit
Copper
Escondida6
Ore Type
Oxide
Mixed
Sulphide
Measured Resource
Mt
118
63
5,220
%TCu
0.80
0.78
0.65
Indicated Resource
Mt
66
48
2,590
%TCu
0.67
0.51
0.52
Inferred Resource
Mt
36
75
10,200
%TCu
0.58
0.45
0.51
Total Resource
Mt
220
186
18,000
%TCu
0.72
0.58
0.55
Total Resource
Mt
221
231
13,890
%TCu
0.71
0.59
0.57
BHP Billiton interest %
57.5
Additional information is contained in Appendix 1.
BHP Billiton operational review for the nine months ended 31 March 2014
7
Iron Ore
Production
MAR 2014 YTD
MAR 2014 QTR
MAR YTD14 vs MAR YTD13
MAR Q14 vs MAR Q13
MAR Q14 vs DEC Q13
Iron ore (kt) 147,387 49,567 21% 23% 1%
Iron ore – Iron ore production for the nine
months ended March 2014 increased by 21 per cent to a record 147 Mt and included a 23 per cent increase in WAIO production. This record result was underpinned by strong operating performance, the relatively limited impact of the wet season and the
continued ramp-up of Jimblebar. The significant improvement in equipment and labour productivity achieved during the period will also enable Orebody 18, the last of our contractor-run sites, to transition to be owner-operated early in the 2015
financial year.
Despite tie-in activities associated with the commissioning of the first replacement shiploader scheduled for the June 2014 quarter, we have raised
production and sales guidance for the 2014 financial year to 217 Mt (100 per cent basis). In total, we have raised production guidance for this high-margin business by 10 Mt (100 per cent basis) during the course of the year.
The ramp-up of phase one capacity at Jimblebar to 35 Mtpa (100 per cent basis) is expected to be completed by the end of the 2015 financial year. Longer term, a low-cost option to
expand Jimblebar to 55 Mtpa (100 per cent basis) and the broader debottlenecking of the supply chain are expected to underpin further capital-efficient growth in capacity to approximately 260 Mtpa to 270 Mtpa (100 per cent basis).
Samarco production of 4.6 Mt (100 per cent basis) in the March 2014 quarter was affected by tie-in activities associated with the Fourth Pellet Plant project, which achieved first
production during the period.
Total iron ore production for the 2014 financial year is now expected to be 197 Mt.
Projects
Project and ownership
Capital expenditure (US$m)
Initial production target date
Capacity
Progress
Samarco Fourth Pellet Plant (Brazil) 50%
1,750
H1 CY14 Increases iron ore pellet production capacity by 8.3 Mtpa to 30.5 Mtpa.
First
production was achieved in Q1 CY14. On schedule and budget. The overall project is 99% complete.
BHP Billiton operational review for the nine months ended
31 March 2014
8
Coal
Production
MAR 2014 YTD
MAR 2014 QTR
MAR YTD14 vs MAR YTD13
MAR Q14 vs MAR Q13
MAR Q14 vs DEC Q13
Metallurgical coal (kt) 33,192 11,467 24% 28% (1%)
Energy coal (kt) 55,129 17,723 2% 11% 0%
Metallurgical coal – Metallurgical coal production for the nine months ended March 2014 increased by 24 per cent to a record 33 Mt. This strong result
reflected the successful ramp-up of Daunia and record production at all Queensland Coal operations3.
Queensland Coal achieved annualised production of 69 Mt (100
per cent basis) in the March 2014 quarter as a sustainable increase in truck and wash-plant utilisation rates supported an overall improvement in performance. A longwall move at the Broadmeadow mine is scheduled for the June 2014 quarter.
Illawarra Coal production increased by four per cent from the December 2013 quarter as the Dendrobium mine recovered from an extended outage. Longwall moves at the
Appin and West Cliff mines are scheduled for the June 2014 quarter.
Continued strong performance at Queensland Coal has underpinned an increase in total
metallurgical coal production guidance to 43.5 Mt for the 2014 financial year.
Energy coal – Energy coal production of 55 Mt for the nine months ended March
2014 was broadly unchanged from the prior period. Record production at our New South Wales Energy Coal and Cerrejón assets was offset by reduced customer demand for our Navajo Coal product and lower production at BECSA. The decline in
production at BECSA reflected the impact of adverse weather conditions on our operations and extended outages at both a local utility and the Richards Bay Coal Terminal.
Total energy coal production guidance for the 2014 financial year remains unchanged at 73 Mt.
Projects
Project and ownership
Capital expenditure (US$m)
Initial production target date
Capacity
Progress
Caval Ridge (Australia) 50%
1,8707 CY14
Greenfield mine development to produce an initial 5.5 Mtpa of export metallurgical coal.
Commissioning commenced in Q1 CY14, ahead of schedule. The final cost is expected to be under budget. The overall project is 98% complete.
Hay Point Stage Three Expansion (Australia) 50%
1,5057
CY15
Increases port capacity from 44 Mtpa to 55 Mtpa and reduces storm vulnerability.
On revised schedule and budget. The overall project is 82% complete.
Appin
Area 9 (Australia) 100%
845
CY16
Maintains Illawarra Coal’s production capacity with a replacement mining domain and capacity to produce 3.5 Mtpa of metallurgical coal.
On schedule and budget. The overall project is 63% complete.
BHP Billiton operational review
for the nine months ended 31 March 2014
9
Aluminium, Manganese and Nickel
Production
MAR 2014 YTD
MAR 2014 QTR
MAR YTD14 vs MAR YTD13
MAR Q14 vs MAR Q13
MAR Q14 vs DEC Q13
Alumina (kt) 3,853 1,250 7% 3% (8%)
Aluminium (kt) 898 286 3% (6%) (5%)
Manganese ores (kt) 6,047 1,801 (4%) (10%) (18%)
Manganese alloys (kt) 465 162 9% 13% (2%)
Nickel (kt) 112.3 34.1 (1%) (19%) (10%)
Alumina – Alumina production for
the nine months ended March 2014 increased by seven per cent to 3.9 Mt and included records at both the Worsley and Alumar refineries. While two planned calciner outages at Worsley constrained production during the March 2014 quarter, volumes are
expected to recover as the refinery processes stockpiled hydrate in future periods.
Aluminium – Aluminium production for the nine months ended March 2014
increased by three per cent to 898 kt and included record production at Hillside. However, challenging conditions in the aluminium industry continue to persist. As a result, capacity at Alumar will be curtailed by 58 ktpa (BHP Billiton share) in the
June 2014 quarter. This follows the suspension of 45 ktpa (BHP Billiton share) of capacity at Alumar in the September 2013 quarter. In January 2014, BHP Billiton commenced formal stakeholder consultation regarding the proposed cessation of aluminium
smelting activities and associated services at Bayside from the end of June 2014. The Bayside cast house will be supplied by our Hillside smelter as we continue to assess its future.
Manganese ores – Manganese ore production for the nine months ended March 2014 decreased by four per cent to 6.0 Mt. Higher than usual rainfall at GEMCO which impacted feed
rates and yields, and planned maintenance in South Africa, led to an 18 per cent decline in production in the March 2014 quarter.
Manganese alloys – Manganese
alloy volumes increased by nine per cent from the nine months ended March 2013, which was affected by the temporary suspension of operations at TEMCO.
Nickel
– Nickel production for the nine months ended March 2014 was broadly unchanged from the prior period, despite planned maintenance at both Cerro Matoso and the Nickel West Kwinana refinery in the March 2014 quarter.
On 31 October 2013, production at the Nickel West Leinster Perseverance underground mine was suspended following a significant seismic event. A subsequent review of the incident
determined it was unsafe to resume operations. The Rocky’s Reward open-cut mine, near Leinster, will provide a temporary alternative ore supply to the integrated Nickel West asset. As a result, total saleable nickel production at Nickel West in
the 2014 financial year is expected to remain broadly unchanged from the previous year, before declining by approximately 10 per cent in the 2015 financial year.
BHP Billiton operational review for the nine months ended 31 March 2014
10
Minerals exploration
Minerals exploration expenditure in the nine months ended March 2014 was US$282 million, of which US$242 million was expensed. Greenfield minerals exploration is predominantly
focused on advancing copper targets within Chile and Peru.
This report represents the Interim Management Statement for the purposes of the UK Listing
Authority’s Disclosure and Transparency Rules. There have been no significant changes in the financial position of the Group in the quarter ended 31 March 2014.
1 Refers to copper equivalent production based on average realised product prices for the 2013 financial year, as disclosed in the 2013 Annual Report.
2 Ungeared, after tax, nominal dollars.
3 Excludes the Gregory open-cut operation which ceased
production on 10 October 2012.
4 Represents the share of capital and exploration expenditure (on an accruals basis) attributable to BHP Billiton shareholders.
Includes BHP Billiton proportionate share of equity accounted investments; excludes non-controlling interests and capitalised deferred stripping.
5 Competent
Persons – L. Soto (MAusIMM), M. Cortes, (MAusIMM).
The statement of Mineral Resources is presented on a 100 per cent basis, represents an estimate as at 31
March 2014, and is based on information compiled by the above named Competent Persons. Mr. Soto and Mr. Cortes are full time employees of Minera Escondida Ltda., are members of The Australasian Institute of Mining and Metallurgy, and have sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity they are undertaking to qualify as Competent Persons as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr. Soto and Mr. Cortes consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.
6 The change in Mineral Resource from the statement as at 30 June 2013, apart from depletion due to production, is mostly due to a revised estimate stemming from an additional 303
km drilling, including 46 km of development drilling in the area known as Escondida Este. The new data also includes 106 km of drilling in the Pampa Escondida deposit to improve understanding of the transition zone between the deposits. In-fill
drilling has enabled reclassification of Inferred to Indicated Resource and Indicated to Measured Resource.
7 Excludes announced pre-commitment funding.
The following abbreviations have been used throughout this report: billion cubic feet (bcf); grams per tonne (g/t); kilograms per tonne (kg/t); kilometre (km);
metre (m); million barrels of oil equivalent (MMboe); million cubic feet per day (MMcf/d); million tonnes (Mt); million tonnes per annum (Mtpa); per cent total copper (%TCu); standard cubic feet (scf); thousand barrels of oil equivalent (Mboe);
thousand ounces (koz); thousand tonnes (kt); thousand tonnes per day (ktpd); tonnes (t).
BHP Billiton operational review for the nine months ended 31 March 2014
11
Further information on BHP Billiton can be found at:
www.bhpbilliton.com.
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Australia
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United Kingdom
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Americas
Ruban Yogarajah
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BHP Billiton Limited ABN 49 004 028 077
Registered in Australia
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Melbourne Victoria 3000 Australia
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Members of the BHP Billiton Group which is headquartered in Australia
BHP Billiton operational
review for the nine months ended 31 March 2014
12
BHP BILLITON PRODUCTION SUMMARY
QUARTER ENDED YEAR TO DATE % CHANGE
MAR YTD14 MAR Q14 MAR Q14
MAR DEC MAR MAR MAR vs vs vs
2013 2013 2014 2014 2013 MAR YTD13 MAR Q13 DEC Q13
Petroleum
Crude oil, condensate and NGL (Mboe) 20,871 23,973 27,254 77,280 66,610 16% 31% 14%
Natural gas (bcf) 207.3 202.7 202.0 624.4 659.8 (5%) (3%) (0%)
Total
petroleum production (MMboe) 55.4 57.7 60.9 181.3 176.6 3% 10% 6%
Copper
Copper (kt) 433.7 439.9 413.9 1,257.1 1,227.7 2% (5%) (6%)
Lead (t) 49,080
47,839 47,577 141,861 147,398 (4%) (3%) (1%)
Zinc (t) 30,193 32,855 19,409 80,819 82,324 (2%) (36%) (41%)
Gold (oz) 46,157 45,655 43,883 134,583 128,699 5% (5%) (4%)
Silver (koz) 9,093 8,850 8,757
26,295 27,311 (4%) (4%) (1%)
Uranium (t) 926 1,008 966 2,944 2,961 (1%) 4% (4%)
Molybdenum (t) 321 379 281 1,118 1,185 (6%) (12%) (26%)
Iron ore
Iron ore (kt) 40,205 48,867 49,567 147,387 122,167 21% 23% 1%
Coal
Metallurgical coal (kt) 8,966 11,540 11,467 33,192 26,792 24% 28% (1%)
Energy coal (kt) 16,002
17,767 17,723 55,129 53,884 2% 11% (0%)
Aluminium, Manganese and Nickel
Alumina (kt) 1,213 1,352 1,250 3,853 3,615 7% 3% (8%)
Aluminium (kt) 303 302
286 898 869 3% (6%) (5%)
Manganese ore (kt) 2,008 2,200 1,801 6,047 6,271 (4%) (10%) (18%)
Manganese alloy (kt) 143 166 162 465 426 9% 13% (2%)
Nickel (kt) 42.1 37.8 34.1 112.3 113.8
(1%) (19%) (10%)
Throughout this report figures in italics indicate that this figure has been adjusted since it was previously reported.
BHP Billiton operational review for the nine months ended 31 March 2014 13
BHP BILLITON PRODUCTION
QUARTER ENDED YEAR TO DATE
BHP Billiton MAR JUN SEP DEC MAR MAR MAR
interest 2013 2013 2013 2013 2014 2014 2013
Petroleum
Production
Crude oil, condensate and NGL (Mboe) (1) 20,871 23,441 26,053 23,973 27,254 77,280
66,610
Natural gas (bcf) 207.3 214.5 219.7 202.7 202.0 624.4 659.8
Total
petroleum production (MMboe) 55.4 59.2 62.7 57.7 60.9 181.3 176.6
Copper (2)
Copper
Payable metal in concentrate (kt)
Escondida (3) 57.5% 222.6 223.0 205.1 208.0 190.6 603.7 608.5
Antamina 33.8% 25.2 34.7 41.9
42.4 33.0 117.3 105.0
Pinto Valley 100% 5.3 10.8 10.9 1.6 - 12.5 5.8
Total
253.1 268.5 257.9 252.0 223.6 733.5 719.3
Cathode (kt)
Escondida (3) 57.5%
75.3 79.3 73.2 77.5 75.8 226.5 218.6
Pampa Norte (4) 100% 56.4 64.7 43.5 59.4 63.4 166.3 167.9
Pinto Valley 100% 1.2 1.3 0.8 0.1 - 0.9 3.6
Olympic Dam 100% 47.7 47.9 27.9 50.9 51.1 129.9
118.3
Total 180.6 193.2 145.4 187.9 190.3 523.6 508.4
Total Copper 433.7
461.7 403.3 439.9 413.9 1,257.1 1,227.7
Lead
Payable metal in concentrate (t)
Cannington 100% 48,899 66,666 46,287 47,259 47,214 140,760 146,759
Antamina
33.8% 181 368 158 580 363 1,101 639
Total 49,080 67,034 46,445 47,839 47,577 141,861 147,398
Zinc
Payable metal in concentrate (t)
Cannington 100% 11,045 20,206 16,033 16,123 10,074 42,230 36,075
Antamina 33.8% 19,148 25,675
12,522 16,732 9,335 38,589 46,249
Total 30,193 45,881 28,555 32,855 19,409 80,819 82,324
Gold
Payable metal in concentrate (oz)
Escondida (3) 57.5% 18,626 17,593 17,347 19,384 15,253 51,984 53,936
Olympic Dam (refined
gold) 100% 27,531 38,477 27,649 26,271 28,630 82,550 74,763
Pinto Valley 100% - - 49 - - 49 -
Total 46,157 56,070 45,045 45,655 43,883 134,583 128,699
Silver
Payable metal in concentrate (koz)
Escondida (3) 57.5% 743 890 891 982 1,078 2,951 2,070
Antamina 33.8% 802 1,297 1,205 1,350 961 3,516 2,655
Cannington 100% 7,323
9,101 6,361 6,306 6,465 19,132 21,961
Olympic Dam (refined silver) 100% 214 266 190 212 253 655 614
Pinto Valley 100% 11 48 41 - - 41 11
Total 9,093 11,602 8,688 8,850 8,757 26,295 27,311
Uranium
Payable metal in concentrate (t)
Olympic Dam 100% 926 1,105 970 1,008 966 2,944 2,961
Total 926 1,105 970 1,008 966 2,944 2,961
Molybdenum
Payable metal in concentrate (t)
Antamina 33.8% 321 376 458 379 281 1,118 1,185
Total 321 376 458 379 281 1,118 1,185
Refer footnotes on page 16.
BHP Billiton operational review for the nine
months ended 31 March 2014 14
BHP BILLITON PRODUCTION
QUARTER ENDED YEAR TO DATE
BHP Billiton MAR JUN SEP DEC MAR MAR MAR
interest 2013 2013 2013 2013 2014 2014 2013
Iron Ore
Production (kt) (5)
Newman (6) 85% 13,028 15,408 15,362 14,186 15,544 45,092 37,589
Yarrie 85% 296 - 202 428 206 836 1,106
Area C Joint Venture 85% 10,983 12,552
11,814 11,383 11,282 34,479 32,165
Yandi Joint Venture 85% 13,302 17,027 18,146 17,135 15,622 50,903 43,027
Jimblebar (7) 85% - - 700 2,894 4,632 8,226 -
Samarco 50% 2,596 2,702 2,729 2,841 2,281 7,851
8,280
Total 40,205 47,689 48,953 48,867 49,567 147,387 122,167
Coal
Metallurgical coal
Production (kt) (8)
BMA 50% 5,327 6,696 6,705 7,494 7,461 21,660 15,949
BHP Mitsui Coal (9) 80% 1,862 1,846 2,057
2,114 1,995 6,166 5,217
Illawarra 100% 1,777 2,316 1,423 1,932 2,011 5,366 5,626
Total 8,966 10,858 10,185 11,540 11,467 33,192 26,792
Energy coal
Production (kt)
South Africa (10) 90% 7,302 7,902 7,937 7,036 7,398 22,371 23,725
USA 100% 3,351 2,752 3,145 2,896 2,359 8,400 10,039
Australia 100% 3,837 4,893 5,372 4,544
5,018 14,934 13,117
Colombia 33.3% 1,512 3,014 3,185 3,291 2,948 9,424 7,003
Total 16,002 18,561 19,639 17,767 17,723 55,129 53,884
Aluminium, Manganese
and Nickel
Alumina
Saleable production (kt) Worsley 86% 911 961 946 1,024 936
2,906 2,714
Alumar 36% 302 304 305 328 314 947 901
Total 1,213 1,265 1,251
1,352 1,250 3,853 3,615
Aluminium
Production (kt)
Hillside 100% 178 181 184 183 172 539 484
Bayside 100% 24 24 24 24 23 71 72
Alumar 40% 37 39 35 28 26 89 115
Mozal 47.1% 64 66 67 67 65 199 198
Total 303 310 310 302 286 898 869
Manganese ore
Saleable production (kt)
South Africa (11) 44.4% 859 939 864 944 782 2,590 2,551
Australia (11) 60% 1,149 1,307 1,182 1,256 1,019 3,457 3,720
Total 2,008 2,246 2,046 2,200
1,801 6,047 6,271
Manganese alloy
Saleable production (kt)
South Africa (11) (12) 60% 86 104 86 94 91 271 270
Australia (11) 60% 57 78 51 72 71 194 156
Total 143 182 137 166 162 465 426
Nickel
Saleable production (kt)
Cerro Matoso 99.9% 12.3 12.8 12.0 12.3 9.8 34.1 38.0
Nickel West 100% 29.8 27.5 28.4 25.5 24.3 78.2 75.8
Total 42.1 40.3 40.4 37.8 34.1 112.3 113.8
Refer footnotes on page 16.
BHP Billiton operational review for the nine
months ended 31 March 2014 15
BHP BILLITON PRODUCTION
(1) LPG and ethane are
reported as natural gas liquids (NGL). Product-specific conversions are made and NGL is reported in barrels of oil equivalent (boe).
(2) Metal production is
reported on the basis of payable metal.
(3) Shown on 100% basis following the application of IFRS 10 which came into effect from 1 July 2013. BHP Billiton
interest in saleable production is 57.5%.
(4) Includes Cerro Colorado and Spence.
(5) Iron ore production is reported on a wet tonnes basis.
(6) Newman includes Mt Newman Joint
Venture and Wheelarra.
(7) Shown on 100% basis. BHP Billiton interest in saleable production is 85%.
(8) Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.
(9) Shown on 100% basis. BHP Billiton interest in saleable production is 80%.
(10) Shown on
100% basis. BHP Billiton interest in saleable production is 90%.
(11) Shown on 100% basis. BHP Billiton interest in saleable production is 60%, except Hotazel
Manganese Mines which is 44.4%.
(12) Production includes Medium Carbon Ferro Manganese.
BHP Billiton operational review for the nine months ended 31 March 2014
16
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR 2013
JUN 2013
SEP 2013
DEC 2013
MAR 2014
MAR 2014
MAR 2013
Petroleum
Crude oil, condensate and NGL (Mboe)
Crude oil and condensate
Bass Strait
1,934 2,229 2,247 1,958 2,095 6,300 6,584
North West Shelf 1,526 1,646 1,865 1,497 1,504 4,866
5,222
Stybarrow 323 401 348 317 282 947 1,321
Pyrenees 1,659 1,817 1,707
1,295 2,386 5,388 6,643
Other Australia (1) 15 12 14 12 11 37 47
Atlantis (2)
1,471 2,594 2,953 3,988 3,734 10,675 5,401
Mad Dog (2) 791 649 732 496 704 1,932 2,066
Shenzi (2) 3,580 3,378 3,467 3,201 3,467 10,135 11,371
Onshore US (3) 3,071 3,614 5,044 4,238
5,589 14,871 8,087
Trinidad/Tobago 331 259 320 314 279 913 1,069
Other
Americas (2) (4) 384 403 378 373 329 1,080 1,161
UK (5) 326 282 142 305 254 701 941
Algeria 1,207 1,210 1,142 1,156 1,069 3,367 3,832
Pakistan 71 65 62 52 49 163 208
Total 16,689 18,559 20,421 19,202 21,752 61,375 53,953
NGL
Bass Strait 1,405 1,753 2,001 1,603 1,621 5,225 4,800
North West Shelf 323 312 399 234 276 909
1,062
Atlantis (2) 96 200 255 348 288 891 359
Mad Dog (2) 55 - 38 24 36 98
143
Shenzi (2) 269 224 266 252 280 798 963
Onshore US (3) 2,004 2,375 2,656
2,295 2,986 7,937 5,256
Other Americas (2) (4) 13 9 11 10 12 33 46
UK (5) 17
9 6 5 3 14 28
Total 4,182 4,882 5,632 4,771 5,502 15,905 12,657
Total crude
oil, condensate and NGL 20,871 23,441 26,053 23,973 27,254 77,280 66,610
Natural gas (bcf)
Bass Strait 23.4 33.6 34.2 22.7 21.2 78.1 90.1
North West Shelf 31.3 30.3 34.2 30.3 31.4 95.9
100.7
Other Australia (1) 5.2 4.5 9.3 15.1 13.2 37.6 16.9
Atlantis (2) 0.5
0.8 1.3 1.9 1.8 5.0 2.0
Mad Dog (2) 0.2 0.1 0.1 0.1 0.1 0.3 0.4
Shenzi (2)
0.8 0.8 0.8 0.8 0.8 2.4 3.9
Onshore US (3) 115.7 118.1 114.9 105.3 109.7 329.9 361.3
Trinidad/Tobago 8.8 9.1 9.9 9.7 9.3 28.9 27.2
Other Americas (2) (4) 0.6 0.3 0.3 0.3 0.2 0.8
1.4
UK (5) 6.4 4.1 3.5 6.2 5.4 15.1 15.0
Pakistan 14.4 12.8 11.2 10.3 8.9
30.4 40.9
Total 207.3 214.5 219.7 202.7 202.0 624.4 659.8
Total petroleum
production (MMboe) (6) 55.4 59.2 62.7 57.7 60.9 181.3 176.6
(1) Other Australia includes Minerva and Macedon. Macedon achieved first production in August 2013. (2)
Gulf of Mexico volumes are net of royalties.
(3) Onshore US volumes are net of mineral holder royalties.
(4) Other Americas includes Neptune, Genesis and Overriding Royalty Interest.
(5) UK includes
Bruce/Keith and Liverpool Bay. BHP Billiton completed the sale of its 46.1% operated interest in Liverpool Bay on 31 March 2014. (6) Total boe conversions are based on 6,000 scf of natural gas equals 1 boe.
BHP Billiton operational review for the nine months ended 31 March 2014
17
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR JUN SEP DEC MAR MAR MAR
2013 2013 2013 2013 2014 2014 2013
Copper
Metals production is payable metal unless otherwise stated.
Escondida, Chile (1)
Material mined (kt) 94,567 98,665 93,744 93,814 96,420 283,978 294,004
Sulphide ore milled
(kt) 18,964 19,295 18,276 19,584 21,051 58,911 54,610
Average copper grade (%) 1.44% 1.42% 1.37% 1.30% 1.12% 1.26% 1.40%
Production ex mill (kt) 229.3 231.9 210.6 214.4 195.5 620.5 631.1
Production
Payable copper (kt) 222.6 223.0 205.1 208.0 190.6 603.7 608.5
Payable gold concentrate (fine
oz) 18,626 17,593 17,347 19,384 15,253 51,984 53,936
Copper cathode (EW) (kt) 75.3 79.3 73.2 77.5 75.8 226.5 218.6
Payable silver concentrate (koz) 743 890 891 982 1,078 2,951 2,070
Sales
Payable copper (kt) 215.8 228.2 192.3 228.1 173.2 593.6 608.0
Payable gold concentrate (fine
oz) 18,325 15,831 12,490 18,602 20,889 51,981 53,210
Copper cathode (EW) (kt) 59.1 95.0 63.0 86.7 76.4 226.1 208.0
Payable silver concentrate (koz) 720 908 836 1,076 1,046 2,958 2,055
(1) Shown on 100% basis
following the application of IFRS 10 which came into effect from 1 July 2013. BHP Billiton interest in saleable production is 57.5%.
Pampa Norte, Chile
Cerro Colorado
Material mined (kt) 14,964 16,303 15,771 17,487 15,939 49,197 46,753
Ore milled (kt) 4,350 4,351 4,161 4,501 4,508 13,170 13,061
Average copper
grade (%) 0.65% 0.82% 0.78% 0.76% 0.75% 0.76% 0.62%
Production Copper cathode (EW) (kt) 14.6 21.2 17.6 19.4 22.0 59.0 50.3
Sales
Copper cathode (EW) (kt) 13.7 21.7 17.3 17.6 12.4 47.3 48.6
Spence
Material mined (kt) 28,861 28,646 24,331 27,911 25,037 77,279 82,401
Ore milled (kt) 4,041 4,146 4,860 4,788 4,735 14,383 11,954
Average copper grade (%) 1.38%
1.16% 1.11% 1.25% 1.23% 1.20% 1.28%
Production
Copper cathode (EW) (kt) 41.8
43.5 25.9 40.0 41.4 107.3 117.6
Sales
Copper cathode (EW) (kt) 29.8 57.9 25.9
35.9 40.0 101.8 103.5
BHP Billiton operational review for the nine months ended 31 March 2014
18
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR JUN SEP DEC MAR MAR MAR
2013 2013 2013 2013 2014 2014 2013
Copper
Metals production is payable metal unless otherwise stated.
Antamina, Peru
Material mined (100%) (kt) 48,032 56,254 56,428 50,872 45,837 153,137 151,760
Sulphide ore
milled (100%) (kt) 10,330 12,424 11,765 12,521 11,729 36,015 34,356
Average head grades
- Copper (%) 0.88% 1.03% 1.21% 1.15% 1.00% 1.12% 1.07%
- Zinc (%) 0.93% 1.02% 0.56% 0.72%
0.54% 0.61% 0.73%
Production
Payable copper (kt) 25.2 34.7 41.9 42.4 33.0
117.3 105.0
Payable zinc (t) 19,148 25,675 12,522 16,732 9,335 38,589 46,249
Payable silver (koz) 802 1,297 1,205 1,350 961 3,516 2,655
Payable lead (t)
181 368 158 580 363 1,101 639
Payable molybdenum (t) 321 376 458 379 281 1,118 1,185
Sales
Payable copper (kt) 24.1 31.9 41.3 44.5 30.2 116.0 106.5
Payable zinc (t) 16,062 22,560 16,123 18,397 10,158 44,678 49,455
Payable silver (koz) 772
1,165 1,503 1,367 910 3,780 2,722
Payable lead (t) 115 262 297 368 405 1,070 721
Payable molybdenum (t) 371 283 411 442 347 1,200 1,288
Cannington, Australia
Material mined (kt) 810 802 893 974 773 2,640 2,344
Ore milled (kt) 713 866 750 852 779 2,381
2,279
Average head grades
- Silver (g/t) 364 401 315 274 311 299 345
- Lead (%) 7.7% 9.1% 7.4% 6.7% 7.3% 7.1% 7.4%
- Zinc (%) 2.7% 3.8% 3.2% 3.1%
2.4% 2.9% 2.7%
Production
Payable silver (koz) 7,323 9,101 6,361 6,306 6,465
19,132 21,961
Payable lead (t) 48,899 66,666 46,287 47,259 47,214 140,760 146,759
Payable zinc (t) 11,045 20,206 16,033 16,123 10,074 42,230 36,075
Sales
Payable silver (koz) 7,265 7,793 7,844 6,548 6,127 20,519 22,465
Payable lead (t) 48,661
64,633 56,500 47,185 43,649 147,334 154,022
Payable zinc (t) 9,439 21,056 17,286 18,241 11,020 46,547 36,139
BHP Billiton operational review for the nine months ended 31 March 2014
19
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR JUN SEP DEC MAR MAR MAR
2013 2013 2013 2013 2014 2014 2013
Copper
Metals production is payable metal unless otherwise stated.
Olympic Dam, Australia
Material mined (1) (kt) 2,448 2,750 2,897 2,717 2,495 8,109 6,797
Ore milled (kt) 2,353 2,641
2,404 2,641 2,421 7,466 7,259
Average copper grade (%) 1.73% 1.86% 1.85% 1.86% 1.90% 1.87% 1.78%
Average uranium grade (kg/t) 0.50 0.56 0.53 0.52 0.54 0.53 0.52
Production
Copper cathode (ER) (kt) 44.7 45.1 25.9 47.6 48.4 121.9 109.1
Copper cathode (EW) (kt) 3.0 2.8
2.0 3.3 2.7 8.0 9.2
Uranium oxide concentrate (t) 926 1,105 970 1,008 966 2,944 2,961
Refined gold (fine oz) 27,531 38,477 27,649 26,271 28,630 82,550 74,763
Refined silver (koz)
214 266 190 212 253 655 614
Sales
Copper cathode (ER) (kt) 40.1 46.4 26.8
43.3 47.5 117.6 108.4
Copper cathode (EW) (kt) 3.1 3.5 2.1 2.8 2.5 7.4 9.2
Uranium oxide concentrate (t) 816 1,374 930 1,037 732 2,699 2,774
Refined
gold (fine oz) 24,678 38,394 21,675 32,226 31,129 85,030 70,854
Refined silver (koz) 211 275 176 177 262 615 645
(1) Material mined refers to run of mine ore mined and hoisted.
Pinto Valley, US (1)
Production
Payable copper (kt) 5.3 10.8 10.9 1.6 - 12.5 5.8
Copper cathode (EW) (kt) 1.2 1.3 0.8 0.1 - 0.9 3.6
Payable silver (koz) 11 48 41 - - 41 11
Payable gold (oz) - - 49 - - 49 -
Sales
Payable copper (kt) 2.6 9.9 10.0 - - 10.0 3
Copper cathode (EW) (kt) 1.1 1.4 1.1 0.2 - 1.3 3.5
Payable silver (koz) 11 48 41 - - 41 11
Payable gold (oz) - - 49 - - 49 -
(1) On 11 October 2013 BHP Billiton completed the sale of its Pinto Valley operations.
BHP Billiton operational review for the nine months ended 31 March 2014
20
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR 2013 JUN 2013 SEP 2013 DEC 2013 MAR 2014 MAR 2014 MAR 2013
Iron Ore
(kt)
Iron ore
Pilbara, Australia
Production (1)
Newman (2) 13,028 15,408 15,362 14,186 15,544 45,092 37,589
Yarrie (3) 296 - 202 428 206 836 1,106
Area C Joint Venture 10,983 12,552 11,814 11,383 11,282
34,479 32,165
Yandi Joint Venture 13,302 17,027 18,146 17,135 15,622 50,903 43,027
Jimblebar (4) - - 700 2,894 4,632 8,226 -
Total 37,609 44,987 46,224 46,026 47,286 139,536
113,887
Total production (100%) 44,245 52,926 54,258 53,638 54,812 162,708 133,985
Sales
Lump 9,339 11,284 10,292 9,996 11,230 31,518 27,483
Fines 28,370 34,621 35,235 35,756 35,888 106,879 87,567
Total 37,709 45,905 45,527 45,752
47,118 138,397 115,050
Total sales (100%) 44,363 54,006 53,561 53,808 55,018 162,387 135,351
(1) Iron ore production and sales are reported on a wet tonnes basis.
(2) Newman includes Mt
Newman Joint Venture and Wheelarra.
(3) Yarrie ceased production on 25 February 2014.
(4) Shown on 100% basis. BHP Billiton interest in saleable production is 85%.
Samarco, Brazil
Production (1) 2,596 2,702 2,729 2,841 2,281 7,851 8,280
Sales 2,515 2,651
2,676 3,025 2,036 7,737 8,364
(1) Iron ore production and sales are reported on a wet tonnes basis.
BHP Billiton operational review for the nine months ended 31 March 2014
21
PRODUCTION AND SALES REPORT
QUARTER ENDED YEAR TO
DATE
MAR 2013 JUN 2013 SEP 2013 DEC 2013 MAR 2014 MAR 2014 MAR 2013
Coal
(kt)
Metallurgical coal
Queensland Coal
Production (1)
BMA
Blackwater 1,157 1,539 1,691 1,655 1,759 5,105 3,893
Goonyella 1,478 1,816 1,737 1,999 2,041 5,777 4,405
Peak Downs 1,225 1,140 1,112 1,201 1,314
3,627 3,405
Saraji 711 971 1,197 1,195 1,108 3,500 2,478
Gregory Joint
Venture 657 854 464 850 654 1,968 1,669
Daunia 99 376 504 594 585 1,683 99
Total BMA 5,327 6,696 6,705 7,494 7,461 21,660 15,949
BHP Mitsui Coal (2)
South Walker Creek 1,188 1,215 1,298 1,313 1,312 3,923 3,136
Poitrel 674 631
759 801 683 2,243 2,081
Total BHP Mitsui Coal 1,862 1,846 2,057 2,114 1,995 6,166 5,217
Total Queensland Coal 7,189 8,542 8,762 9,608 9,456 27,826 21,166
Sales
Coking coal 4,933 6,316 6,123 6,517 7,030 19,670 14,552
Weak coking coal 2,029 2,417 2,397
2,505 2,594 7,496 5,394
Thermal coal 75 30 160 271 122 553 551
Total 7,037
8,763 8,680 9,293 9,746 27,719 20,497
(1) Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.
(2) Shown on 100% basis. BHP Billiton interest in saleable production is 80%.
Illawarra, Australia
Production (1) 1,777 2,316 1,423 1,932 2,011 5,366 5,626
Sales
Coking coal 1,595 1,877 1,084 1,495 1,581 4,160 5,155
Thermal coal 145 436 359 318 460 1,137 974
Total 1,740 2,313 1,443 1,813 2,041 5,297 6,129
(1) Metallurgical coal production is reported on the basis of saleable product. Production figures include some thermal coal.
BHP Billiton operational review for the nine months ended 31 March 2014
22
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR 2013 JUN 2013 SEP 2013 DEC 2013 MAR 2014 MAR 2014 MAR 2013
Coal
(kt)
Energy coal
South Africa (1)
Production 7,302 7,902 7,937 7,036 7,398 22,371 23,725
Sales
Export 3,604 3,363 2,504 4,087 3,179 9,770 10,572
Local utility 4,171 4,353 4,543 3,811 3,478
11,832 13,655
Inland 32 24 - - - - 98
Total 7,807 7,740 7,047 7,898 6,657
21,602 24,325
(1) Shown on 100% basis. BHP Billiton interest in saleable production is 90%.
New Mexico, USA
Production
Navajo Coal (1) 1,944 1,569 1,670 1,400 975 4,045 5,899
San Juan Coal 1,407 1,183 1,475 1,496
1,384 4,355 4,140
Total 3,351 2,752 3,145 2,896 2,359 8,400 10,039
Sales -
local utility 3,275 2,815 3,129 2,950 2,360 8,439 9,960
(1) BHP Billiton completed the sale of Navajo Mine on 30 December 2013. As BHP Billiton will retain
control of the mine until full consideration is received, production will continue to be reported by the Group.
NSW Energy Coal, Australia
Production 3,837 4,893 5,372 4,544 5,018 14,934 13,117
Sales
Export 4,505 4,289 4,037 4,887 4,346 13,270 13,180
Inland 174 478 446 332 270 1,048 689
Total 4,679 4,767 4,483 5,219 4,616 14,318 13,869
Cerrejón, Colombia
Production 1,512 3,014 3,185 3,291 2,948 9,424 7,003
Sales - export 1,774
3,157 3,155 3,067 2,647 8,869 7,106
BHP Billiton operational review for the nine months ended 31 March 2014 23
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR 2013
JUN 2013
SEP 2013
DEC 2013
MAR 2014
MAR 2014
MAR 2013
Aluminium, Manganese and Nickel
(kt)
Alumina
Saleable production
Worsley, Australia 911 961 946 1,024 936 2,906 2,714
Alumar, Brazil 302 304 305 328 314 947
901
Total 1,213 1,265 1,251 1,352 1,250 3,853 3,615
Sales
Worsley, Australia 910 1,031 897 961 986 2,844 2,646
Alumar, Brazil 296 329 278 320 262 860
946
Total 1,206 1,360 1,175 1,281 1,248 3,704 3,592
Aluminium
Production
Hillside, South Africa 178 181 184 183 172 539 484
Bayside, South Africa 24 24 24 24 23 71 72
Alumar, Brazil 37 39 35 28 26 89 115
Mozal, Mozambique 64 66 67 67 65 199 198
Total 303 310 310 302 286 898 869
Sales
Hillside, South Africa 166 191 180 173 187 540 476
Bayside, South Africa 27 26 24 24 24 72 79
Alumar, Brazil 39 38 34 28 25 87 126
Mozal, Mozambique 76 65 68 74 72 214 199
Total 308 320 306 299 308 913 880
Manganese ore
Saleable production
South Africa (1) 859 939 864 944 782 2,590 2,551
Australia (1) 1,149 1,307 1,182 1,256 1,019
3,457 3,720
Total 2,008 2,246 2,046 2,200 1,801 6,047 6,271
Sales
South Africa (1) 835 970 920 714 915 2,549 2,521
Australia (1) 1,326 1,102 1,078 1,445 1,252
3,775 3,476
Total 2,161 2,072 1,998 2,159 2,167 6,324 5,997
Manganese alloy
Saleable production
South Africa (1) (2) 86 104 86 94 91 271 270
Australia (1) 57 78 51 72 71 194 156
Total 143 182 137 166 162 465 426
Sales
South Africa (1) (2) 89 110 88 87 113 288 275
Australia (1) 68 61 54 63 85 202 166
Total 157 171 142 150 198 490 441
(1) Shown on 100% basis. BHP Billiton interest in saleable production is 60%, except Hotazel Manganese Mines which is 44.4%.
(2) Production includes Medium Carbon Ferro Manganese.
BHP Billiton operational review for the
nine months ended 31 March 2014
24
PRODUCTION AND SALES REPORT
QUARTER ENDED
YEAR TO DATE
MAR 2013
JUN 2013
SEP 2013
DEC 2013
MAR 2014
MAR 2014
MAR 2013
Aluminium, Manganese and Nickel
(kt)
Nickel
Cerro Matoso, Colombia
Production 12.3 12.8 12.0 12.3 9.8 34.1 38.0
Sales 13.0 13.1 12.6 12.3 10.0 34.9 39.0
Nickel West, Australia
Saleable production
Nickel contained in concentrate 3.1 3.0 3.4 2.4 2.5 8.3 8.5
Nickel contained in finished matte
9.7 8.6 8.8 6.1 6.1 21.0 23.1
Nickel metal 17.0 15.9 16.2 17.0 15.7 48.9 44.2
Nickel production 29.8 27.5 28.4 25.5 24.3 78.2 75.8
Sales
Nickel contained in concentrate 3.1 3.0 2.7 2.8 2.3 7.8 7.6
Nickel contained in finished matte
9.0 9.7 7.8 7.4 5.3 20.5 22.7
Nickel metal 19.5 17.7 15.3 17.2 16.7 49.2 46.5
Nickel sales 31.6 30.4 25.8 27.4 24.3 77.5 76.8
BHP Billiton operational
review for the nine months ended 31 March 2014
25
Appendix 1
Executive summary
Escondida and Escondida Norte
Mineral Resources as at 31 March 2014 in 100 per cent terms*
– reported in compliance with the 2012 JORC Code.
Ore Type Measured Resource Indicated Resource Inferred Resource Total Resource BHP Billiton interest
Mt %TCu Mt %TCu Mt %TCu Mt %TCu %
Oxide 118 0.80 66 0.67 36 0.58 220 0.72
57.5
Mixed 63 0.78 48 0.51 75 0.45 186 0.58
Sulphide 5,220 0.65 2,590 0.52
10,200 0.51 18,000 0.55
Escondida and Escondida Norte
Mineral Resources as at
30 June 2013 in 100 per cent terms – reported in compliance with the 2012 JORC Code.
Ore Type Measured Resource Indicated Resource Inferred Resource Total
Resource BHP Billiton interest
Mt %TCu Mt %TCu Mt %TCu Mt %TCu %
Oxide 112
0.79 70 0.68 39 0.54 221 0.71 57.5
Mixed 80 0.76 66 0.55 85 0.45 231 0.59
Sulphide 5,190 0.67 2,030 0.54 6,670 0.51 13,890 0.57
The Escondida and
Escondida Norte mines are nearby supergene-enriched porphyry copper deposits that share common processing plants. They are reported as a single operating unit.
The
change in Mineral Resource from the statement as at 30 June 2013, apart from depletion due to production, is mostly due to a revised estimate stemming from an additional 303 km drilling (204 km from Escondida and 99 km from Escondida Norte).
The new Escondida data includes exploration drilling in the area known as Escondida Este (south portion) (46 km) allowing an extension of the resource block model
to increase the size of the sulphide body at depth.
Additionally, 106 km of drilling from the Pampa Escondida prospect have been used by the Escondida modelling
process in order to improve the transition zone between both deposits.
The new data also includes in-fill drilling that has improved the confidence on the estimate
to promote Inferred to Indicated Resource and Indicated to Measured Resource category.
*Total Resource as at 31 March 2014 does not perfectly reflect the summation
of Measured, Indicated and Inferred categories due to rounding. Tonnages have been rounded using two significant figures for values lower than 100 and three significant figures for values greater than 100.
The following abbreviations have been used throughout this report: centimetre (cm); kilogram (kg); kilometre (km); metre (m); millimetre (mm); million tonnes (Mt); parts per
million (ppm); per cent total copper (%TCu); thousand tonnes (kt); tonnes (t).
BHP Billiton operational review for the nine months ended 31 March 2014 –
Appendix 1
1
1. Introduction
This report covers resources and
is issued in support of the BHP Billiton declaration of Mineral Resources for the March 2014 Operational Review publication of the Escondida and Escondida Norte deposits. The two deposits comprise the mining component of the Escondida operations
that is reported as a singular operating entity. Escondida is one of the largest open-pit porphyry copper operations in the world, owned by BHP Billiton (57.5 per cent), Rio Tinto (30 per cent), JECO Corporation consortium comprising Mitsubishi,
Nippon Mining and Metals (10 per cent) and Jeco 2 Ltd (2.5 per cent). The Mining Exploitation right is granted from the Chilean Government and is valid indefinitely (subject to payment of annual fees).
Escondida is located in the Atacama Desert, Chile, 170 km southeast of the city of Antofagasta and produces copper cathode and copper concentrate. The cathodes are transported by
privately owned rail to ports at Antofagasta and Mejillones and concentrate is transported by the Escondida owned pipeline to its Coloso port facilities.
2. Tenure
Escondida has a Mining Exploitation right for mining the ore bodies of the Escondida and Escondida Norte deposits as well as Exploration Lease rights for select
properties surrounding the existing operation. A Mining Exploitation concession permits the concession holder to mine the area indefinitely with an annual payment of corresponding license fees.
The Mining Exploitation and Exploration Lease rights are granted from the Servicio Nacional de Geología y Minería and are administered in-house by the Escondida
Mining Concessions Department. The infrastructure and the pipeline corridor to the coast are administered under an ‘Easement’ or Right of Way permit. There are no impediments (environmental, legal, socioeconomic or infrastructure permits
or factors) which can obstruct the current mining operation. Figure 1 shows the Mining Property boundaries of Escondida.
BHP Billiton operational review for the
nine months ended 31 March 2014 – Appendix 1
2
475.000
490.000
7.330.000
7.315.000
475.000
490.000
7.300.000
7.315.000
7.330.000
500.000
7.300.000
ESCONDIDA
ALEXIS 1 AL 1424
CATITA 1 AL 376
GUILLERMO 1 AL 368
COLORADO 501 AL 977
COSTA 1 AL 1861
DONALDO 1 AL 612
AMELIA 1 AL 1049
PAOLA 1 AL 3000
RAMON 1 AL 640
ROLA 1 AL 1680
N E S W
Figure 1: Escondida location plan and property boundaries
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
3
3. Deposit geology
The Escondida and Escondida
Norte copper deposits lie in the Escondida-Sierra de Varas shear lens of the Domeyko Fault System (Mpodozis et al., 1993). Both deposits are supergene-enriched copper-molybdenum porphyries with primary mineralisation related in space and time to
multi-phase middle Eocene to early Oligocene intrusive bodies of monzonite to granodiorite composition. Cretaceous and Palaeozoic volcanic and volcaniclastic units of andesite and rhyolite host the porphyry bodies and important quantities of
mineralisation. Figure 2 presents the mine geology of Escondida and Escondida Norte; a more detailed illustration of the deposit geology is presented in Figure 3.
A
107500 N
B
15000 E
17500 E
A
107500 N
B
15000 E
17500 E
107500 N
B
15000 E
17500 E
114500 N
A
113000 N
17500 E
19000 E
B
A
114500 N
A
113000 N
17500 E
19000 E
B
114500 N
A
113000 N
17500 E
19000 E
B
Figure 2: Mine geological setting for Escondida (upper row) and Escondida Norte (lower row)
of lithology (left column), alteration (middle column) and mineral zones (right column). Dashed lines shows location of sections. See Figure 3 for explanation of geological units.
The Escondida and Escondida Norte deposits include intrusive and extrusive rocks of Palaeozoic and Cretaceous to Oligocene ages. In Escondida several intrusive pulses can be
distinguished with ages from middle Eocene to early Oligocene (44-33 Ma) hosted in andesitic rocks of Cretaceous age. Escondida Este is part of this porphyry system, overlapping each other in space, but with Escondida Este distinguished by
distinctly later intrusive pulses. Escondida and Escondida Este also show differences related to the host rocks, because Escondida Este is hosted in Palaeozoic rocks that are similar to the host rocks of Pampa Escondida and Escondida Norte. Recent
unpublished studies have identified structural discontinuities in the eastern portion of Escondida that juxtapose Cretaceous and Palaeozoic rocks. These structures have been defined by the exploration team as strands of the Panadero Fault, a
regional pre-mineral structure that controlled the emplacement of intrusive pulses related to both Escondida and Escondida Este.
Pampa Escondida is located between
Escondida and Escondida Norte showing continuity in a NE trend associated with pulses of porphyry intrusions. Figure 3 shows the regional geology setting, and includes the spatial distribution of these deposits.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
4
Recent alluvium (Holocene)
Salar
(Miocene-Holocene)
Pampa de Mulas Formation: Piedmont gravel (late Oligocene-middle Miocene)
Granodiorite, dacite, andesite, + rhyolite porphyries (middle-late Eocene, ~38-34 Ma)
San
Carlos strata: Siliciclastic + volcaniclastic rocks Eocene)
Diorite, quartz diorite, manzodiorite, + quartz monzonite intrusions (middle Eocene, ~43-41 Ma)
Augusta Victoria Formation: Andesitic + dacite volcanic rocks (late Paleocene-early Oligocene)
Gabbro, diorite, + monzodiorite intrusions (Late Cretaceous, ~77-72 Ma)
Santa Ana Formation:
Siliciclastic rocks (Late Jurassic-Neocomian)
El Profeta Formation: Limestone + gypsum (Late Triassic-Kimmeridgian)
Diorite to granite intrusions (late Paleozoic-Late Triassic)
La Tabla Formation: Rhyolitic +
andesitic volcanic rocks (Late Carboniferous-Early Permian)
Subsurface limit of San Carlos strata
Porphyry copper deposit (>0.3 % Cu)
Observed fault
Inferred fault
High-angle reverse fault
Syncline
Figure 3: Regional geology setting, modified from Urzúa, 2009 in Hervé
et al., 2012
Overprinting the primary mineralisation, a secondary supergene leaching and enrichment process developed with the local formation of copper oxide
mineralisation, predominately occurring as brochantite. The enrichment process importantly generated laterally-continuous and sub-horizontal high-grade sulphide mineralisation zones across the deposit. The dominant copper sulphide minerals within
the supergene mineral zone are chalcocite and covellite. The primary hypogene mineralisation is mainly present in the deepest parts of the ore body and is defined with the presence of chalcopyrite and bornite.
Three main alteration assemblages are recognised as important controls on copper grade:
Quartz-Sericite-Clay that is related in part to secondary supergene mineralisation, and in part as primary pyrite- bearing alteration, that consists of quartz,
sericite and clays that occurs with pyrite, chalcocite and covelline association that averages 1.0 per cent total copper grade.
Potassic alteration that
occurs as K-feldspar in the porphyry units and in the andesitic rocks as secondary biotite alteration and associated with mineralisation of chalcopyrite, magnetite, primary covellite and pyrite and averages 0.8 per cent total copper grade.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
5
Sericite-Chlorite-Clay occurs in the periphery of the deposit, generally in more mafic host rocks. The assemblage consists of chlorite +
sericite and clays associated with pyrite, chalcopyrite, chalcocite and molybdenite and averages 0.6 per cent total copper grade.
Figure 4 details examples of
geological units in Escondida and Escondida Norte.
A
B
A
B
LITHOLOGY
Gravel
Green Granodiorite
Quartz Porphyry
Breccia
Feldespatic Porphyry
Andesites
ALTERATION
Argilic
Qz-Src-Clay
Src-Chl-Clay
Propylitic
K Feldespar-Biotite
MINERAL_ZONES
Leached Capping
Oxide
Mixed
High Enrichment
Low Enrichment
Pyrite-Chalcopyrite
Figure 4: Escondida (left) and Escondida Norte (right) geological sections. Geology (upper row), alteration (middle row) and mineral zones (lower row).
Following is a brief description of milestones related to Escondida Este discovery, in order to put into context the discovery dates and the conversion of the exploration results
into Mineral Resources.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
6
Escondida Este discovery
Milestone 1: Predictive
Model (Exploration), June 2008. Historical Drill holes Review to generate a new Conceptual Model and define Exploration Targets.
Milestone 2: Escondida Este (North
Area) Discovery, January 2009. Discovery intercept: RD-8307 (1,571 m length) 1,190 m @ 0.80 % TCu, 250 ppm Mo.
Milestone 3: Escondida Este (South Area)
Discovery, December 2010. Discovery intercept: RD-8996 (1,978 m length) 856 m @ 0.80 % TCu, 207 ppm Mo.
Milestone 4: Delimitation of Escondida Este mineral
deposit, January 2013. Exploration stage work concluded with 101 drill holes, 176 km including validated logging data and chemical analysis for TCu, SCu, As, Mo, Ag, Au, Zn, Pb and Mn.
Escondida Este (north Escondida Este (south Delimitation of Escondida
portion) Discovery hole.
portion) Discovery hole Este mineralisation
RD-8307, RD-8996, In total 101 Drill holes
1,190m@0.80%CuT 856m@0.80%CuT (176,000metres)
FY2008 FY2009 FY2010 FY2011 FY2012 FY2013
Exploration Predictive Incorporation of
Model – Exploration Escondida
Este in May
Target Definition. Review 2013 Resource Model
of historical data.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 7
4. Data acquisition
Geological data considered for
modelling purposes was derived from in-pit mapping, blast holes and drill logging. All data was captured digitally and stored in an acQuire database. The resource modelling incorporated all data validated as at 28 April 2013.
The average turnaround time between sample collection and data available in database was three months.
4.1 Drilling and logging
The total drilling available for resource modelling of Escondida and
Escondida Norte is now approximately 7,400 holes totalling 2,300 km. Since the initial exploration in the early 1980s four drilling methods have been used. These include:
Conventional open rotary holes*;
Reverse circulation (RC) drill holes;
Diamond drilling (DDH) - HQ (63.5 mm diameter) with reduction to NQ (47.6 mm) and BQ (36.4 mm) as required. PQ holes (85 mm) for metallurgical purposes; and
Combination of RC and diamond drilling.
Table 1 shows the number of holes and cumulative
length of drilling for each drilling method. The combined drill holes (RC-DDH) have been used mainly to save drilling cost by using RC to drill through barren overburden, and switching to DDH method shortly above mineralised rock. The local presence
of water will force a change in the drilling method from RC to DDH, even if the hole is still in overburden.
Table 1: Drilling method distribution
Drilling method
Drill holes (number)
Length (km)
DDH 1,565 496
RC 3,378 669
RC-DDH 2,486 1,155
Total 7,429 2,320
With the exception of the diamond drilling in unconsolidated gravels, the
average recovery (RC and Diamond) for any given lithology exceeded 90 per cent. This was calculated by either the sample weight recovery percentage of the theoretical weight for RC samples or by direct length measurement of the drill core
recovered from each sample run. An overview map of Escondida (Figure 5a) and Escondida Norte (Figure 5b) highlights the additional drilling (May 2012 – May 2013) used in the May 2013 resource model.
Figure 5a shows 106 km of drilling from the Pampa Escondida prospect, drilled before the 2013 financial year, which have been used for first time in the Escondida modelling process
in order to improve the transition zone between Escondida and Pampa Escondida.
*Conventional rotary holes (96 drill holes, mainly at the early exploration of the
deposit) are excluded from the resource estimation process. This was due to the low confidence in their QA/QC, namely poor and undocumented weight recoveries, inherent contamination associated with open hole drilling and poorly documented
procedures.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 8
111000 N
115000 N
110000 N
114000 N
109000 N
113000 N
108000 N
18000 E
19000 E
20000 E
107000 N
106000 N
105000 N
14000 E
15000 E
16000 E
17000 E
18000 E
19000 E
Current Topography
Infill DH
Exploration DH
Pampa Escondida DH
Figure 5: Additional drill holes (May 2012 - May 2013) over Escondida
(5a) and Escondida Norte (5b) incorporated into May 2013 resource models
Geological logging was captured using a Tablet-pc and entered into an acQuire
database. Logged features include:
Lithology: Includes granodiorite, quartz porphyry, feldspar porphyry, andesite and breccia;
Alteration: Main and subordinate alteration, description of mineralogical species and associated intensity; and
Mineralisation: Ore minerals, proportion and relations, mineralisation styles, vein types, etc.
4.2 Survey
Prior to June 2000, the locations of the drill hole collars were
surveyed by conventional surveying techniques after which a high resolution GPS system was implemented. All collar locations were measured using high-definition GPS before and after drilling, with the latter measurement considered final. Differences
between both measurements are less than 30cm. Approximately 10 per cent of collar locations were checked by the same contractor, but using a different surveyor. The differences reported for all of the location checks are smaller than 10 cm.
The drill hole orientation was historically determined primarily by one of three techniques: prior to 2000, single-shot cameras collected orientation measurements
at intervals of approximately 50 m; the “Maxibor” instrument that obtained orientations at 3 m of separation from February 2000 to August 2003; and a multi-shot instrument that determined orientations at 6 m of separation from August 2003
through 2012. The Continuous North Seeking Gyroscope was implemented in 2012 and is still in use today.
Other techniques for measuring orientation have also been
used for a small number of drill holes, including ATV (Acoustic Televiewer, with orientation measurements every 10 m) and real time gyroscope (measurements every 20 m).
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 9
In general, the down-hole deviation of drill holes is minimal, rarely exceeding a cumulative deviation of 1° per 100 m for both
diamond and RC drilling. More significant cumulative deviations that average 2° per 100 m, have occasionally occurred with high pressure RC drilling.
4.3
Sampling and assaying
Escondida has two core facilities, one located on site and the other located in Antofagasta. Both core facilities are fitted with racks for
drill core storage and are used for sample receiving, core logging, and sample preparation for assay. Additionally, the site core facility has a warehouse for storing the RC drill cuttings, assay pulps, and 10 mesh rejects.
The core facilities are segregated away from the main mining operations and have restricted access regulations in place. The facilities are managed by the Minera Escondida Ltda.
Sample Control & Database Superintendent.
Diamond drill sampling was conducted on 2 m intervals, mainly obtained from hydraulic core splitting. Less than
five per cent of cores have been cut using a core saw, that was recently acquired to split core of good physical core quality. One half of the split core is sent for preparation and analysis and the remaining half stored on site for reference and
metallurgical sampling. In the case of the PQ core, one half is sent for metallurgical test work, one quarter is sent for preparation and chemical analysis while the remaining quarter is retained for reference. RC cuttings from 2 m sample intervals
were reduced to approximately 20 kg at the rig site, using a riffle splitter according to a standardised splitting protocol with the remainder of sample discarded.
Field duplicate samples (three per cent of total analysed samples) correspond to paired samples obtained from the first splitting process in the case of RC and a
quarter of the core in the case of DDH.
All assay samples are crushed to 90 per cent passing 10 mesh, subsequently reduced to a 1 kg sample by a rotary
splitter. The sample is then pulverised to 95 per cent passing 150 mesh to produce three 200 gram duplicate pulp samples for chemical analysis. The RC and diamond sampling flowchart is presented in Figure 6.
DIAMOND DRILLHOLE SAMPLING PROCEDURE
Core Cutting
Crusher
90% < 10#
Rotary Splitting
1 Kg R Reject
Pulverizer
95% <150# 1 Kg
200 gr 200 gr 200 gr
Replicates and Standars Insertion
Tcu, SCu, Fe, As Analysis
RC DRILLHOLE SAMPLING PROCEDURE
Reverse Circulation
(2 m sample)
Splitter
Crusher
90% < 10#
Rotary Splitting
1 Kg R Reject
Pulverizer
95% <150# 1 Kg
200 gr 200 gr 200 gr
Replicates and Standars Insertion
Tcu, SCu, Fe, As Analysis
Figure 6: Diamond and RC sampling flowchart
BHP Billiton operational review for the nine
months ended 31 March 2014 – Appendix 1 10
All assaying is performed externally by Geoanalítica, Verilab and SGS laboratories, located in Antofagasta, with routine chemical
analysis for TCu (Total Copper), SCu (Acid-soluble Copper), Fe (Iron) and As (Arsenic). TCu has routinely been carried out by atomic absorption spectrometry (AAS) after a hot nitric-perchloric acid digestion, although in a number of assays aqua
regia alone was used. SCu is obtained using citric-sulfuric acid digestion, then filtered and analysed by AAS.
Fe and As were analysed using the same digestion
solutions as for TCu however the results for Fe represent only a partial analysis, as the digestion will not remove primary oxide iron (e.g. magnetite). Fe and As have not being routinely assayed throughout the mine history; the coverage is about
66 per cent of the data set for both elements. To address this issue a different interpolation strategy was adopted compared to the copper grade estimation.
4.4 Quality of assay data and laboratory tests
A rigorous and effective QA/QC
program was implemented and improved during the Escondida history. Key aspects include:
a bar code drill sample labelling system to permit the submission of blind
samples from the drilling for analysis;
control samples (10 per cent of total samples assayed) comprise blanks (in Escondida’s case low grade samples),
internal reference samples, duplicate samples for RC drill holes, replicates of composites for DDH and RC drill holes and certified reference materials; and
use of
certified external laboratories for assaying.
A summary table showing the results of the accuracy and precision of TCu samples from the past six years (2008
–2013) is shown below. Typically two laboratories are used each year (Geoanalitica-CIMM, Geoanalitica-SGS).
Table 2: Precision and Accuracy for TCu, 2008-2013
2008 2009 2010 2011 2012 2013
Duplicates 98.5% 97.3% 98.4% 98.5% 97.0% 96.4%
Precision Replicates 98.4% 98.8% 98.8% 98.7% 96.1% 95.1%
Accuracy IRM 98.2%
98.5% 98.3% 98.6% 98.4% 98.1%
Results indicate that for 2013, 96.4 and 95.1 per cent of Duplicate and Replicate samples, respectively, are within the
acceptable deviation limits (10 per cent for duplicates and 30 per cent for replicates in terms of relative differences). An accuracy of 98.1 per cent (bias level of 1.9 per cent) was achieved.
Dry density has been determined for 15 cm drill core samples collected at intervals of approximately 10 m. Density is calculated using a wax immersion method. Approximately 32,000
density samples have been used in the density modelling process (24,000 for Escondida and 8,000 for Escondida Norte).
4.5 Verification of sampling and assaying
Protocols have been defined in order to assure data verification and data storage of both physical and electronic records.
Currently the geological data is captured electronically in the field (bar codes used for RC and Diamond drill samples) and entered directly in an acQuire database. The analytical
data is electronically provided by laboratories and loaded into the database using specifically designed and automated interfaces.
Upon capture into the database
and prior to any export for modelling and resource estimation purposes, survey, geology and assay data is validated. The database is located on the Escondida server and backed up daily.
An internal audit of the database has been completed annually since 2005. This involved a manual check on five per cent of the information, including survey, grades, collars and
geological coding (mineral zone, alteration and lithology). These audits on average determine a total error rate of less than one per cent.
The integrity and
validity of Escondida’s drilling database, managed by the Minera Escondida Ltda. Database Administrator, was audited by Consultores de Recursos Minerales (CRM) prior to inclusion into the May 2012
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 11
Resource Model. The conclusion was that the “management of the database is competent, and the quality of the database and the
contained data is more than sufficient to support the resource estimation and reserve statement”.
5. Resource estimation
Escondida and Escondida Norte have been extensively drilled, with approximately 2,300 km incorporated in the 2013 resource estimate. Accompanied by a rich geological knowledge base
acquired over the past 30 years of exploration and operation, the drilling grid is considered to be sufficiently spaced to confidently define the geological domains for modelling purposes. Current data density produces a large amount of Measured
Resource for the next 30 years of planned production (greater than 70 per cent). Other key points to note, supporting the resource estimation include:
· the Escondida mineralisation remains open at depth. The hypogene component trends NE while the mineralised supergene blanket trends in a NW direction;
Escondida Norte has similar mineralised trends as Escondida but with significant short-range vertical variability in the Top of Dominant Sulphides surface;
Escondida and Escondida Norte are long established and geologically mature ore bodies which have been subjected to many professional studies (internal and
external) and revised by the Competent Persons. Since the 2012 financial year, two Resource Competent Persons were nominated by Minera Escondida Ltda. One is responsible for data acquisition to geological modelling and is based on-site. The second
one is responsible for resource estimation to reporting activities and is based in Antofagasta; and
physical samples compositing was only applied for the
unmineralised leach cap horizon where alternating 14 and 16 m intervals were prepared by combining seven or eight 2 m samples. This practice was undertaken to approximately 10 m above any type of mineralised zone in order to economise on sample
preparation and analytical cost in barren intervals.
5.1. Assumptions
Cut-off
parameters
The cut-off grade used to differentiate waste from mineralisation is 0.30 per cent of total copper for the Sulphide and Mixed resources whereas the
Oxide resources are reported above 0.20 per cent of soluble copper. These cutoff grades are based on break-even economic analysis, taking into account the poor metallurgical behaviour and low degree of confidence on the metallurgical test work
of low-grade material. Cost assumptions are determined as part of an annual planning cycle that is used to estimate the Life of Asset production plan and subsequently publically reported Ore Reserves.
Mining factors
Escondida operates two open pits, Escondida and Escondida Norte, each with 15m
bench heights. The operation is a conventional shovel-truck combination with a selective mining unit of 25 m x 25 m x 15 m.
Metallurgical factors
Copper in sulphide is recovered through two processing options: high grade is treated by milling and flotation, while lower grade is treated by sulphide leach. Oxide is recovered
through an acid leaching process. Metallurgical recoveries for the concentrator process have been estimated on a block by block basis using geostatistical techniques to interpolate laboratory test values coming from drill hole samples test work.
Leach recovery is based on global average recovery of individual copper minerals (chalcopyrite, covellite, chalcocite, and brochantite) that are applied to a block-by-block estimate of copper mineral content interpolated from drill hole data.
Environmental factors
Escondida honours Chilean law with its environmental,
health, safety and community considerations, incorporating BHP Billiton Corporate policy and site specific issues such as the use of standard processes for contractor selection including contracts which define KPIs for safety and environmental
requirements.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 12
5.2. Estimation and modelling techniques
Utilising
Vulcan software, the resource modelling adopted a dynamic 3D methodology which allowed the on-screen interpretation and updating of solids from the existing resource model with new drill hole data. Three variables –lithology, alteration and
copper sulphide mineralisation were modelled - lithology and alteration, based on composited 15 m intervals and the mineralisation zones (Minzones) that considered two methodologies:
Minzones below Top Dominant Sulphides (TDS) are deterministic and interpreted as surfaces honouring contacts directly from drill holes.
Minzones above TDS are modelled using a probabilistic approach by Multiple Indicator Kriging (MIK) to estimate the proportion of different Minzones with variable degrees of
oxidation (Preece, 2001). This approach is generally taken when the spatial distribution of the attribute in question is difficult to accurately predict by manual interpretation. The erratic occurrence of the oxide mineralisation is suitable for
such an approach.
A description of the main variables interpreted and interpolated are shown in the Table 3.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 13
Table 3: Main variables interpreted and interpolated
Variable Description Methodology
litologia Lithology Interpreted
minzone Mineralogical zones Interpreted
alteracion Hydrothermal alteration Interpreted
dominios Structural domains Interpreted
ed_cut Estimation domains for Tcu
arc_ox generation of fine size particles, indicator (0-1) Probabilistic interpretation
propiedad Mine property MEL: 1,2 CMZ: 0
categ_rec Resource category Assigned based in
uncertainty
codmat Material code based in copper grade and minzone
densidad
Dry Density Interpolated
cut Total Copper (%) Interpolated
cus Soluble copper
(%) Interpolated
fe Total Iron (%) Interpolated
as Arsenic (ppm) Interpolated
py Pyrite (%) Interpolated
s2 Sulphur (%) Interpolated
cspcc Copper grade supplied by the Chalcocite (%) Interpolated
cspcv Copper grade supplied by
the Covellite (%) Interpolated
cspcpy Copper grade supplied by the Chalcopyrite (%) Interpolated
bwi Bond Work Index (Kwh/ton) Interpolated
spi Sag Power Index (min) Interpolated
rec_flc Flotation recovery for Los Colorados concentrator (%) Interpolated + scaled up
rec_fls
Flotation recovery for Laguna Seca concentrator (%) Interpolated + scaled up
rec_lixaci Acid leach recovery (%) Empirical Model based on copper grades
rec_sl_350 Sulphide leach recovery (%) Empirical model based on copper mineralogy
rec_flsd
Flotation recovery for Laguna Seca debottlenecking (%) Interpolated + scaled up
rec_fogp1 Flotation recovery for OGP1 concentrator (%) Interpolated + scaled up
consac_net Net acid consumption (Kg/ton) Empirical model based on geological groups
tpoh_lc_mel Throughput Los Colorados (tons/hour) Empirical model based on Hardness (bwi-spi)
tpoh_ls_mel Throughput Laguna Seca (tons/hour) Empirical model based on Hardness (bwi-spi)
tpoh_lsd Throughput Laguna Seca Debottlenecking (tons/hour) Empirical model based on Hardness (bwi-spi)
tpoh_ogp1 Throughput OGP1 (tons/hour) Empirical model based on Hardness (bwi-spi)
congrade_lc
Copper grade in concentrate from Los Colorados (%) Empirical model based on copper mineralogy
congrade_ls Copper grade in concentrate from Laguna Seca (%)
Empirical model based on copper mineralogy
con_fe_lc Iron grade in concentrate from Los Colorados (%) Calculation based on in situ grade
con_fe_ls Iron grade in concentrate from Laguna Seca (%) Calculation based on in situ grade
con_as_lc Arsenic grade in concentrate from Los Colorados (%) Calculation based on in situ grade
con_as_ls Arsenic grade in concentrate from Laguna Seca (%) Calculation based on in situ grade
con_py_lc Pirite grade in concentrate from Los Colorados (%) Calculation based on in situ grade
con_py_ls Pirite grade in concentrate from Laguna Seca (%) Calculation based on in situ grade
con_s2_lc Sulphur grade in concentrate from Los Colorados (%) Calculation based on in situ grade
con_s2_ls Sulphur grade in concentrate from Laguna Seca (%) Calculation based on in situ grade
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 14
Other key points include:
The Copper Estimation
Domains are defined by a combination of lithology, alteration and mineralisation zones.
Estimation was carried out by ordinary kriging into blocks of dimension 25
x 25 x 15 m using a three pass search strategy with increasing search dimensions from 50 m up to 600 m. Each pass adjusts the interpolation criteria based on geostatistical analysis and level of data support for each element by Estimation Domain.
Different revisions are made in order to validate the resulting interpolated model versus composites based on visual inspections, statistical comparisons and swath
plots.
Comparison with previous models and in-situ model reconciliation is used for validating final results.
Direct grade capping was included at sample support using a local approach to identify outlier samples. No additional restriction for outliers was applied during the interpolation
process.
Contact analysis has been carried out to define the composite sharing strategy. Generally soft boundaries are used for sulphide mineralogical zones and
hard boundaries for units of the leached-oxide zone.
Tonnages are estimated on a dry basis.
Dry density is estimated as a continuous variable by ordinary kriging interpolation. The methodology adopted for the interpolation uses mineralogical units (Minzone) as controls
for the spatial distribution of the variable in each deposit. An average density, by geological grouping, is assigned to the blocks without interpolated value.
6.
Mineral Resource statement
6.1. Resource classification
Conditional
simulation models have been used since 2007 as part of the resource classification process. For obtaining a distribution of grades through conditional simulation, the following concepts were considered:
Density and spatial disposition of information (data conditioned);
Geological continuity
(geological features have been simulated); and
Grade continuity (grade distribution has been simulated).
An uncertainty model was also designed to quantify the uncertainty of the copper grade estimate considering monthly production volumes (panels). The uncertainty model quantifies
the dispersion of the simulated distribution of grade for each panel and the estimation of grade will be more reliable for panels with a less dispersed distribution of grade.
The schematic concept of the classification methodology is represented in Figure 7 where the uncertainty on grade estimation is a function of geological and/or copper grade
heterogeneity and the amount of conditioning data (drill hole composites).
Geological / Grade Heterogeneity Low High Abundant Scarce Conditioning Data Abundance
Figure 7: Resource classification concept
BHP Billiton operational review for
the nine months ended 31 March 2014 – Appendix 1 15
For the 2013 resource models the Mineral Resources were classified as follows:
Measured Resources - an estimate of the in-situ tonnes and grade with sufficient confidence that, with further mine planning, the resource can be used to predict recovered or
saleable ore tonnes and grade to within ±10 per cent on an annual basis and within ±15 per cent on a quarterly basis (for the mining method being used at planned capacity and at the planned cut-off grade) at 95 per cent
confidence.
Indicated Resources - an estimate of the in-situ tonnes and grade with sufficient confidence that, with further mine planning, the resource can be used
to predict recovered or saleable ore tonnes and grade to within ±15 per cent on an annual basis (for the mining method being used at planned capacity and at the planned cut-off grade) at 95 per cent confidence.
Inferred Resources – an estimate of the in-situ tonnes and grade with sufficient confidence that the resource can be recovered and saleable ore tonnes and grade will each be
predicted to within ±25 per cent on a global basis at 95 per cent confidence.
Table 4 shows data support in terms of nominal drill grid spacing for
each Mineral Resource category.
Table 4: Nominal drill grid spacing
Classification
Oxide
Mixed
Sulphide
Measured (average)
40x40 m
45x45 m
60x60 m
Indicated (average)
60x60 m
60x60 m
115x115 m
Inferred (maximum)
90x90 m
110x110 m
350x350 m
Block model sectional views of the Escondida and Escondida Norte resource classifications are presented as Figures 8, 9, 10 and 11.
W E
3000 L 2500 L 2000 L 1500 L 14000 E 15000 E 16000 E 17000 E 18000 E
Original Topography Measured Indicated Inferred
Figure 8: Escondida Mineral Resource
classification W-E section looking north
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
16
NW SE
3000 L 2500 L 2000 L 1500 L 14000 E 15000 E
16000 E 18000 E 19000 E 20000 E
Original Topography Measured Indicated Inferred
Figure 9: Escondida Mineral Resource classification SE-NW section looking NE
W E
3000 L 2500 L 18000 E 19000 E
Original Topography Measured Indicated Inferred
Figure 10: Escondida Norte Mineral Resource
classification E-W section looking north
N S
3000 L 2500 L 114000 N 113000 N
Original Topography
Measured
Indicated
Inferred
Figure 11: Escondida Norte Mineral Resource classification N-S section looking east
BHP
Billiton operational review for the nine months ended 31 March 2014 – Appendix 1 17
6.2. Mineral Resource limits
Escondida uses an
optimised Whittle pit to define limits of the declared resources. Geotechnical, metallurgical and cost assumptions are determined as part of an annual planning cycle that is used to estimate the Life of Asset production plan and subsequently
publically reported Ore Reserves.
The BHP Billiton high-price protocol is used to define the Mineral Resource reporting limits instead of the mid-price protocol,
which is used for Ore Reserves. The Commodity Price Protocol (CPP) for copper develops a long-run equilibrium price based on fundamental supply and demand.
Figure
12 shows the relationship between Resource and Reserve pit for both Escondida and Escondida Norte deposits.
Escondida
Resource pit Reserve pit (pushbacks)
3500 L 3000 L 2500 L 2000 L 1500 L 1000 L 15000 E 16000 E
17000 E 18000 E 19000 E
Escondida Norte
3500 L 3000 L 2500 L 17000 E 18000 E
19000 E
Resource pit Reserve pit (pushbacks)
Figure 12: Escondida and
Escondida Norte Mineral Resource classification E-W sections looking north
7. Reconciliation
7.1. Ore Reserves reconciliation
A tabulation of the reconciliation factors (F1, F2 &
F3) for the 2013 financial year is provided below in Table 5.
Table 5: FY13 Ore Reserve reconciliation
Concentrators
Sulphide Leach
Oxide Leach
Reconciliation FY13 (%basis)
Tonnes Grade Metal Tonnes Grade Metal Tonnes Grade Metal
Grade control / Reserve F1
91 97 88 117 98 115 110 97 107
Process feed / Grade control F2
106 100 107 -- -- -- 100 -- --
Market sales / Reserve F3
N/A* N/A* 93 N/A* N/A* -- N/A* N/A* --
* Due to the major difference in the mass and the
copper grade between in situ ore and saleable product the F3 reconciliation factors were calculated only for saleable copper, in this sense N/A means non applicable.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
18
Reconciliation factors largely fall within the tolerance limits of ±10 per cent on an annual basis. Overestimation of copper
metal content in concentrator feed is explained largely by a 9 per cent overestimation in ore tonnes, combined with slight overestimation of copper grade and 3 per cent ore loss due to ore control demarcation. The over-estimation of
concentrator feed directly causes the underestimation of Sulphide Leach ore. These deviations in the resource model are mainly due to the presence of narrow low-grade zones at the periphery of the Escondida Norte deposit that were not detected by
the current drilling pattern. The F2 factor shows a greater amount of sulphide reported by process feed than reported in the grade control model, due to a low grade sulphide ore that was sent to the concentrator due to operational lowering of the
cut-off grade. Considering the amount of low grade sulphide sent to the concentrator, the F3 factor shows an overestimation of seven per cent of saleable copper in concentrate for last 12 months. The F3 measured by comparing reserve model against
concentrate production is mostly explained by five per cent model overestimation and three per cent of ore loss due to the ore control demarcation process. Metallurgical recovery prediction accounts for an additional one per cent of underestimating
the copper metal production.
It is not possible to calculate the F2 and F3 reconciliation factors for Sulphide Leach using the standard 12-month period.
Run-of-mine heap leach pile is built by direct truck dump and lacks tonnage/grade measurement at the sulphide leach pad. In addition, the long production cycle of heap leaching makes it difficult to identify the source of the copper produced for a
specific 12-month period. Escondida will continue to explore alternative ways to reconcile operational performance.
F1 reconciliation factor for Oxide ores
indicates 10 per cent underestimation of oxide tonnages, mostly due to the occurrence of erratic and small bodies in the oxide zones mined during the 2013 financial year. The oxide plant is fed by rehandled ores stockpiled from the mine
operations, making F2 and F3 calculations nearly meaningless for annual periods. Escondida will continue to explore alternatives to reconcile operational performance.
8. Independent audit and review
During the 2013 financial year (May 2013) an external
Resources and Reserves audit for Escondida and Escondida Norte was completed by Consultores de Recursos Minerales SA and NCL Limitada. No significant issues or concerns were raised by the auditors. The main conclusion was:
“The resource estimates and resource/reserve classifications meet international standards and the stated resource and reserves are compliant with the AusIMM JORC standards and
the United States Securities Exchange Commission (SEC) Industry Guide 7.”
The most recent BHP Billiton internal Group Audit Services (GAS) audit (undertaken
every two years) was completed in November 2011 concluding that overall the Mine Planning and Ore Reserve (MPOR) process was rated as requiring some improvement. A number of minor weaknesses in the design and operating effectiveness of risk
mitigating controls were identified.
In terms of Resource modelling one finding was reported:
“The interpretation of lithology in Escondida Norte was not consistent with the drilling data in 3 drill holes”
This finding has been corrected; all agreed actions in order to include additional modelling controls have been completed.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
19
9. Risk and opportunity assessment
A detailed risk
analysis was last completed in April 2012. During the 2013 financial year the exercise was a review and update of the 2012 financial year analysis with a focus on identifying the main risks that can affect the current reserves declaration. The
results are presented in the Table 6. The deviation in the resource model or overestimation is the most important risk for this process and was considered as a material risk.
Table 6: Register of Mineral Resource and Reserve risks
Risk issue Cause Rating Further
actions Responsibility and completion date
Severity RRR* MFL**
Deviation in
the resource model (Overestimation)
Lack of geological information, grades and metallurgic (drilling Deficit))
300 90 1000
Infill drilling campaigns and metallurgical testing
Geology Manager/ongoing
Geotechnical instability affecting the ultimate pit
Failure to comply with the geotechnical recommendations (angles - drains)
10 1 1000
Data collection and geotechnical characterisation of rock mass modelling with acceptable uncertainty
Geotechnical superintendent/ongoing
Uncertainty of economic factors that define the
reservation
Uncertainty of market conditions
External Factors
Utilisation protocols BHP Billiton prices review
Long term planning Superintendent/ongoing
Failure information management
Poor information transfer protocol between
areas
30 3 100
Generate the transfer process and information management
Long term planning Superintendent/ongoing
Loss of the right of the mining
concession area
Litigation to prevent exploitation
30 3 300
Application of existing procedures PR-FI5-041-P-5 rev 2 PR-FI5-041-P-2 rev 2
Chief of mining
property
Loss of rights or operating permit
Environmental incident product of
operation
30 0.9 300
Application procedure management and hazardous
substances
Manager environment/ongoing
Errors in the mine planning process
Poor information transfer protocol between areas
100 10 100
Generate the transfer process and information management
Long term planning superintendent
Geotechnical instability in super-deep pits (1 km)
Failure to comply with the
geotechnical recommendations (angles - drains)
100 10 100
Participate in
Large Open Pit workshop, focused directly on 1 km pits
Geotechnical superintendent/ongoing
Incorporation of inferred mineral in defining the final pit reserves
Lack of geological
information, grades and metallurgic (drilling Deficit))
100 3 100
Maintain
internal and external audits to the resource and reserve statement
Manager planning and manager geology/Biannual
RRR*: residual risk rating.
MFL**: maximum foreseeable loss.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
20
10. Conclusions and recommendations
The activities
relating to the resource estimation (drilling; sampling; geological logging and modelling; grade estimation; geometallurgical characterisation and resource classification) have been developed using standard procedures and industry best practices.
Well-established modelling procedures and the biannual external audit process provide a high confidence level to the resource estimates. Changes generally are
mainly due to the additional drilling because changes in modelling procedures have not been significant.
Better understanding of the geological features will be
needed for the deeper portion of the Escondida deposit. At this time this mineralisation could be scheduled far into the future.
11. References
Amec. 2009. Resources and Reserves Audit. Project No.: 3075. Minera Escondida Limitada. Operada por BHPBilliton. Escondida. June 30, 2009. Volumen I & II. Internal report.
Australasian Code for Reporting of Mineral Resources and Ore Reserves (The JORC Code 2012 Edition). Prepared by the Joint Ore Reserves Committee of The
Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC), Effective 20 December 2012 and mandatory from 1 December 2013.
Clarke, K. Pinto, D. 2009. Escondida y Escondida Norte, Definición de dominios de estimación EDA Mayo-2010. Noviembre 2009. Superintendencia de Estimación de
Recursos. Gerencia de Calidad y Control de Mineral. Vicepresidencia de Planificación y Estudio. Minera Escondida limitada. Reporte Interno.
Consultores de
Recursos Minerales S.A. & NCL Ltda. Resource and Reserve Audit Escondida and Escondida Norte. Prepared For: Minera Escondida Ltda, 30 May, 2013. Internal report.
García, F. 1967. Geología del Norte Grande de Chile. Sociedad Geológica de Chile. Symposium sobre el Geosinclinal Andino, 1962. N°3, p
138, Santiago.
Hervé, M; Sillitoe, R; Wong, Ch; Fernandez, P; Crignola, F; Ipinza, M and Urzúa, F. 2012. Geologic Overview of the Escondida Porphyry
Copper District, Northern Chile. Society of Economic Geology. Special Publication N°16, pp 55-78.
Mpodozis, C.; Marinovic, A.; Smoje, I. y Cuitiño, L.
1993. Estudio geológico- estructural de la Cordillera de Domeyko entre la Sierra Limón Verde y Sierra Mariposas. Región de Antofagasta. Servicio Nacional de Geología y Minería. p 232.
Preece, R. 2001. Indicator kriged model of mineral zones above top of dominant sulfide surface, Escondida October 2001 resource model. Prepared For: Minera Escondida, Ltda.
BHP Billiton operational review for the nine months ended 31 March 2014 – Appendix 1
21
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| BHP Billiton Limited and BHP Billiton Plc | ||||
| Date: April 16, 2014 | By: | /s/ Nicole Duncan | ||
| Name: | Nicole Duncan | |||
| Title: | Company Secretary | |||