Page 9 - BHP Economic Contribution Report 2020

BHP operations 3 Our contribution
4
2 Our approach
1 5

1 Evaluation and exploration 2 Development 3 Extraction and process 4 Rehabilitation and closure 5 Commercial function Our payments

We invest in discovering new We invest in studies, trials and We extract and process We close our operations We sell our products, procure
resources, to meet the needs infrastructure with the goal commodities, safely through one or a combination suppliers, organise freight
of future generations. of creating the maximum value and sustainably. of rehabilitation, ongoing and manage market risks
from resources. management or – in consultation to maximise value.
with the community – a transition
to an alternative use. Additional information

How we contribute How we contribute How we contribute How we contribute How we contribute
Payments to suppliers Capital expenditure Net profits – corporate taxes paid Payments to suppliers and contractors Payments to suppliers and contractors
Wages paid to employees Payments to suppliers and contractors Royalties paid from extraction Corporate taxes paid if alternative Wages paid to employees
Permits, licence fees and Wages paid to employees Payments to suppliers and contractors revenue streams from post-mining Corporate, employment and sales
employment taxes Employment and sales taxes, Wages paid to employees land use are found taxes, import duties
No royalties or corporate tax import duties Employment and sales taxes, Lower employment and sales taxes
No royalties or corporate tax import duties Low or no royalties
Contributions to communities in which Contributions to communities in which
we operate we operate

Evaluation and exploration work is Development involves construction of Once extraction begins, royalties Land no longer required for operations Sales and Marketing and Procurement
largely about creating the potential for facilities, excavation and any supporting and resource taxes begin to be paid. is rehabilitated. Rehabilitation activities are separate core businesses of BHP,
future value. Payments to governments infrastructure that is required. This can Employment taxes increase as the are often interwoven with the continuing connected under the Commercial
during the exploration phase are usually extend to construction of whole towns, operating workforce commences. development of nearby operations. function. They are the link between
relatively low, reflecting the high levels including schools, medical facilities and Corporate income tax may also begin Payments to governments will be lower, BHP’s global operations, our customers
of investment and risk of this work. recreation areas. More jobs are created, to be paid; however, this is often lower as will employment and payments and our local and global suppliers,
Permits, licence fees and employment both directly in construction and more in the early years of an operation as tax to suppliers and contractors, but and aligned to our assets.
taxes make up the majority of payments broadly through the provision of goods losses from the construction phase are post-mining land uses may generate We sell and transport our products and
to governments. Contributions to the and services to the site and workforce. o†set against income. Over the life of new revenue streams for BHP and the obtain the goods and services that
community include payments to suppliers Contributions to local communities the operation, payments to governments local community. flow into our supply chain.
and contractors for any construction begin to be made. Payments to will be significant and can often equal Contributions include payments to
or excavation, and wages to employees governments are largely in the form as much as 50 per cent of profit. suppliers, with a significant amount of
(often for highly skilled and specialist of indirect taxes (such as goods Community contributions continue spending directed to businesses in the
roles, such as geologists, metallurgists and services taxes or excise fees) through the operating life. Payments communities in which we operate.
and environmental scientists). on equipment and materials, and to shareholders, lenders and investors We also employ more than 2,300
employment taxes. also increase as income from operations people in our Commercial function
is generated. As we invest in long-term globally. The contribution of our other
assets, we also create high-value, businesses is enhanced by the
long-term job opportunities and build activities of our Commercial function.
strong relationships with communities, Sales and Marketing maximise the
suppliers and contractors. prices received for the sale of our
products and Procurement ensures our
unit costs are competitive, maintaining
the sustainability of our operations.

BHP Economic Contribution Report 2020 7