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Strategic Report Governance at BHP Remuneration Report Directors’ Report Financial Statements Additional information Shareholder information

1.5 Our strategy

Our strategy is to own and operate large, long-life, low-cost, expandable, upstream assets diversified by commodity,
geography and market.
Our plan to grow value
Consistent with our strategy, we have a plan to create long-term shareholder value. This plan is focused on six key areas:
We have a six point plan to grow value
1 Cost efficiencies – Since FY2012, we have reduced unit costs across BHP by more than 40 per cent. Our simple
focused on
portfolio, standardised systems and greater connectivity across our assets and commodities,
further gains position us to further improve productivity.
2 Latent capacity – We have further opportunities to optimise and debottleneck our existing mine, rig, port, rail and
processing facilities. That means we can get more production, or replace production, from our
attractive returns,
(1)
limited risk existing infrastructure for lower cost. For example, we plan to increase capacity at our Western
Australia Iron Ore asset during FY2019 to a record 290 million tonnes per annum, by improving our
rail signalling system and better utilising our equipment and infrastructure. This will help make full
use of the port, rail network and mines we’ve already built.
3 Major projects – We have a pipeline of potential growth projects that could create significant shareholder value
over the long term, in particular in conventional oil, copper and coal. This includes the Mad Dog
timed for value
and returns Phase 2 project, which has the potential capacity to produce up to 140,000 gross barrels of
crude oil per day, and the Spence Growth Option. In the first 10 years of operation, incremental
production from the Spence Growth Option is expected to be approximately 185 ktpa of payable
copper in concentrate and 4 ktpa of payable molybdenum, with first production scheduled for
the 2021 financial year.
We are also continuing to investigate one of the best undeveloped potash resources in the world
in Jansen in Canada. There are many ways we could realise the value of this project, but Board
approval will be sought only if the project passes our strict investment hurdles and is in the best
interests of our shareholders.

4 Exploration – We are focused on finding new oil and copper deposits through targeted exploration. Production
positive results
of these commodities is declining, while demand is forecast to increase. Exploration is the lowest
reduce risk for cost way to add these resources to the portfolio, and investing now means we can take advantage
future wells of lower exploration costs.
We recently had positive drilling results at Wildling in the US Gulf of Mexico following the discovery
of oil in multiple horizons. Together with the successful bid for Trion and positive drilling results in
the Caribbean, this provides us with additional confidence.
5 Technology – We will continue to develop and introduce new technology that increases efficiency, improves

improves safety,
safety, and unlocks resource. Our diverse portfolio enables us to adapt technology developed
lowers cost and for one commodity to other areas of our business: for example, a tool that has been developed
unlocks resource for assaying iron ore is now being trialled for use in our copper assets.
6 Onshore US – Our regular portfolio review has concluded that the Onshore US assets are non-core and we are

pursuing options to exit our quality acreage. This will take time, which we will use productively to
value and flexibility
maximise the value of our acreage through disciplined development, larger completions, acreage
swaps, gas hedging and divestments.
(1) Assumes all internal and third party approvals received.

16 BHP Annual Report 2017