Page 352 - Annual Report 2020

7.8 American Depositary Receipts fees 7.9 Government regulations
and charges Our assets are subject to a broad range of laws and regulations
imposed by governments and regulatory bodies. These regulations
We have American Depositary Receipts (ADR) programs for touch all aspects of our assets, including how we extract, process
BHP Group Limited and BHP Group Plc. and explore for minerals, oil and natural gas and how we conduct
Depositary fees our business, including regulations governing matters such as
Citibank serves as the depositary bank for both of our ADR environmental protection, land rehabilitation, occupational health
programs. ADR holders agree to the terms in the deposit and safety, human rights, the rights and interests of Indigenous
agreement filed with the SEC for depositing ADSs or surrendering peoples, competition, foreign investment, export, marketing of
the ADSs for cancellation and for certain services as provided by minerals, oil and natural gas and taxes.
Citibank. Holders are required to pay all fees for general depositary The ability to extract minerals, oil and natural gas is fundamental to
services provided by Citibank in each of our ADR programs, as set BHP. In most jurisdictions, the rights to extract mineral or petroleum
forth in the tables below. deposits are owned by the government. We obtain the right to
Standard depositary fees: access the land and extract the product by entering into licences
or leases with the government that owns the mineral, oil or natural
Depositary service Fee payable by the ADR holders gas deposit. The terms of the lease or licence, including the time
Issuance of ADSs upon deposit Up to US$5.00 per 100 ADSs period of the lease or licence, vary depending on the laws of the
of shares (or fraction thereof) issued relevant government or terms negotiated with the relevant
Delivery of Deposited Securities Up to US$5.00 per 100 ADSs government. Generally, we own the product we extract and we
against surrender of ADSs (or fraction thereof) surrendered are required to pay royalties or similar taxes to the government.
Distribution of Cash Distributions No fee Related to our ability to extract is our ability to process the
extracted minerals, oil or natural gas. Again, we rely on
Corporate actions depositary fees: governments to grant the rights necessary to transport and treat
the extracted material to prepare it for sale.
Depositary service Fee payable by the ADR holders
The rights to explore for minerals, oil and natural gas are granted
Cash Distributions (i.e. sale of rights, Up to US$2.00 per 100 ADSs to us by the government that owns the natural resources we wish
other entitlements, return of capital) (or fraction thereof) held to explore. Usually, the right to explore carries with it the obligation
Distribution of ADSs pursuant Up to US$5.00 per 100 ADSs to spend a defined amount of money on the exploration, or to
to exercise of rights to purchase (or fraction thereof) held undertake particular exploration activities.
additional ADSs. Excludes stock
dividends and stock splits In certain jurisdictions where we have assets, such as Trinidad and
Distribution of securities other Up to US$5.00 per 100 ADSs Tobago, a production sharing contract (PSC) governs the
than ADSs or rights to purchase (or fraction thereof) held relationship between the government and companies concerning
additional ADSs (i.e. spin-off shares) how much of the oil and gas extracted from the country each party
Distribution of ADSs pursuant No fee will receive. In PSCs, the government awards rights for the
to an ADR ratio change in which execution of exploration, development and production activities
shares are not distributed to the company. The company bears the financial risk of the
initiative and explores, develops and ultimately produces the field
Fees payable by the Depositary to the Issuer as required. When successful, the company is permitted to use the
Citibank has provided BHP net reimbursement of US$1,157,500 in money from a certain set percentage of produced oil and gas to
FY2020 for ADR program-related expenses for both of BHP’s ADR recover its capital and operational expenditures, known as ‘cost oil’.
programs (FY2019 US$1,229,094). ADR program-related expenses The remaining production is known as ‘profit oil’ and is split
include legal and accounting fees, listing fees, expenses related between the government and the company at a rate determined
to investor relations in the United States, fees payable to service by the government and set out in the PSC.
providers for the distribution of material to ADR holders, expenses Environmental protection, mine closure and land rehabilitation,
of Citibank as administrator of the ADS Direct Plan and expenses and occupational health and safety are principally regulated by
to remain in compliance with applicable laws. governments and to a lesser degree, if applicable, by leases. These
Citibank has further agreed to waive other ADR program-related obligations often require us to make substantial expenditures to
expenses for FY2020, amounting to less than US$0.03 million, minimise or remediate the environmental impact of our assets and
which are associated with the administration of the ADR programs to ensure the safety of our employees and contractors and the
(FY2019 less than US$0.03 million). communities where we operate. Regulations setting emissions
standards for fuels used to power vehicles and equipment at our
Our ADR programs trade on the NYSE under the stock tickers BHP assets and the modes of transport used in our supply chains can
and BBL for the BHP Group Limited and BHP Group Plc programs, also have a substantial impact, both directly and indirectly, on the
respectively. As of 21 August 2020, there were 72,246,006 ADRs on markets for these products, with flow-on impacts on our costs.
issue and outstanding in the BHP Group Limited ADR program and
54,440,980 ADRs on issue and outstanding in the BHP Group Plc For more information on these types of obligations,
ADR program. Both of the ADR programs have a 2:1 ordinary shares refer to section 1.7.
to ADR ratio.
From time to time, certain trade sanctions are adopted by the
United Nations (UN) Security Council and/or various governments,
including in the United Kingdom, the United States, the European
Union (EU) and Australia against certain countries, entities or
individuals, that may restrict our ability to sell extracted minerals,
oil or natural gas to, and/or our ability to purchase goods or
services from, these countries, entities or individuals.

350 BHP Annual Report 2020