Page 112 - Annual Report 2020

2.1 Chair’s letter

‘In this unprecedented year, through our
people’s steadfast commitment to keeping
our operations running safely, we have
continued to contribute to local economies
through the jobs we create and the taxes
and royalties we pay.’

Ken MacKenzie
Chair

Dear Shareholder,
We have made good progress on our key priorities of safety, Culture and capability
portfolio, capital discipline, culture and capability and social There is significant opportunity ahead to create more shareholder
value during FY2020. value from BHP’s assets. Our approach to developing our culture
Safety and capability is underpinned by building capability in our leaders
Our highest priority is the safety of our employees and contractors consistent with the practices set out in the BHP Operating System.
in our operations and the communities in which we operate. We invest in our people and capability to support exceptional
performance. We aim to build on our engaged, empowered
There were no fatalities at our operations in FY2020 and our injury
frequency rates are trending in the right direction. Our focus must and inclusive culture that drives continuous improvement with
strengthened self-accountability, performance edge, a hunger
remain on exceptional safety performance and eliminating near
misses with fatality potential. to learn and improve, and a commercial mindset.
Nearly five years have passed since the tragic dam failure at Social value through COVID-19
Samarco. We remain committed to the full and fair remediation and We recognise that we must work with others to address issues
compensation of impacts to the people and the environment in the and opportunities, inside and outside the mine gate, and we
Rio Doce region, in a challenging and complex operating context. must work with a range of stakeholders to create mutual benefit.
Please see section 1.8 for information on our ongoing response. That is consistent with our longer-term interests and those of
Portfolio our shareholders. Without the overt support of the communities
where we operate and other stakeholders, BHP cannot succeed.
At BHP, our strategy is to have the best capabilities, commodities That is why social value is a company priority and is embedded
and assets to create long-term shareholder value and high returns. in our five-year planning process. Our immediate response
We continue to invest and plan for the future while at the same time to the COVID-19 pandemic clearly demonstrates the positive
delivering strong cash returns to our shareholders. Our commodity contribution we have made this year, where it was needed most.
portfolio has remained resilient throughout FY2020. In this unprecedented year, through our people’s steadfast
We believe our products will play an essential role in a decarbonising commitment to keeping our operations running safely, we have
world, and will help us grow value for many decades to come. continued to contribute to local economies through the jobs we
We are confident that we have the right portfolio to meet the create and the taxes and royalties we pay. This includes employing
world’s needs today and for the energy transition to a low carbon hundreds of additional people from the local regions where we
future. We are pleased to release the BHP Climate Change Report operate, establishing social investment funds to help protect
this year, which contains a detailed review of our updated portfolio the most vulnerable from infection, and reducing payment terms
analysis, comparing two BHP planning cases; a non-linear, higher for small, local and Indigenous businesses to support our host
temperature Climate Crisis scenario, and a new 1.5°C scenario, communities around the world.
as well as a set of challenging targets and goals for emissions We also contribute to social value through trust and transparency.
reduction across our business and value chain. In FY2020, our total direct economic contribution was
Capital discipline US$37.2 billion. This includes payments to supply partners,
wages and employee benefits, dividends to shareholders,
BHP’s strong balance sheet, disciplined approach and Capital and taxes and royalties to governments.
Allocation Framework allows us to weather downturns and
unexpected issues, such as the COVID-19 pandemic, from
a position of financial strength.
At the end of FY2020, BHP had six major projects under
development in copper, iron ore, potash and petroleum,
with a combined budget of US$11.4 billion over the life
of the projects.
During FY2020, we have kept capital expenditure below
US$8 billion per annum with net debt at US$12 billion.
The Board announced total dividends of US$1.20 per share
in respect of FY2020, equivalent to a 67 per cent payout ratio.
This is the third consecutive year cash returns to shareholders
have exceeded US$6 billion.

110 BHP Annual Report 2020