Page 85 - Annual Report 2020

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Gunnedah
NSW, Australia Tamworth Strategic Report

Quirindi

Muswellbrook
Mt Arthur Governance at BHP
Singleton
Maitland
Cessnock
Newcastle

NSWEC Port Rail

s1004_v1 Remuneration Report
Coal assets

Looking ahead New South Wales Energy Coal
Queensland Coal will continue to focus on safety with BMA Overview
further embedding the programs and standards implemented in New South Wales Energy Coal (NSWEC) consists of the Mt Arthur
FY2020, and further investment in hard controls. BMC will work Coal open-cut energy coal mine in the Hunter Valley region of
to continue improving safety outcomes through field leadership, New South Wales, Australia. Historically, the site has produced
hazard reporting and risk management at the South Walker coal for domestic and international customers in the energy sector,
Creek and Poitrel Mines, and the Red Mountain coal handling but has shifted to international customers only from the second Directors’ Report
preparation plant. half of FY2020.
For BMA, strong asset-level alignment of operating discipline and Key developments during FY2020
integrated operational plans ensure we focus on maximising value
through the supply chain. This will be achieved by focusing on During FY2020, NSWEC transitioned to a strategy of optimising
bottleneck processes to smooth coal flows leveraging latent coal product quality. This has resulted in a reduction in volumes and
handling preparation plant and logistics capacity. Medium-term an increase in unit costs in the short term, but overall increased
plans remain focused on lifting trucking performance to benchmark realised value. Production volumes were also impacted
rates thereby leveraging the benefits of our transformation program by unfavourable weather impacts from December 2019
and achieving results in the areas implemented. to February 2020, partially offset by strong performance
in the June 2020 quarter driven by record truck utilisation.
Autonomous trucks are being implemented at two Queensland Financial Statements
Coal sites. Daunia with 34 autonomous trucks and Goonyella Truck productivity improvements were delivered in the second half
Riverside with 86 autonomous trucks. Deployment at both sites of FY2020, enabling a step-change improvement across our mining
is expected to be completed early in CY2022. fleets. Annualised truck hours improved by 20 per cent, cycle times
reduced by 10 per cent and payload increased by 3 per cent,
BMC will also plan to focus on improving truck and shovel supported by maintenance strategies and practices that enabled
productivity to ensure optimal utilisation of the coal handling equipment availability in excess of 90 per cent.
preparation plants, and continue to prioritise low-capital
debottlenecking opportunities. BMC will plan to mitigate In FY2020, BHP completed an optimisation of the NSWEC outbound
short-term COVID-19-related price impacts by reducing high supply chain commercial arrangements through a partial
cost production and capital expenditure, but retain the ability divestment of shares and stapled capacity at the Newcastle Coal
to respond should higher prices emerge. Infrastructure Group terminal. The total export capacity of the asset
remains unchanged and the transaction has facilitated a more Additional information
competitive cost position.
Looking ahead
NSWEC continues to plan for the most productive path through
steeply dipping resources (the monocline) and securing the
required regulatory approval to continue operations post FY2026.
Work is underway to review mine planning and operating
alternatives to structurally reduce costs in the near term and ensure
a viable mining operation which is resilient during low price cycles. Shareholder information

BHP Annual Report 2020 83