必和必拓 (BHP) 2020 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by, and welcome to BHP Investor and Analyst Q&A Teleconference. (Operator Instructions) Please be advised that today's conference is being recorded.

I'd now like to hand the conference over to your speaker and host today, Mr. Mike Henry, Chief Executive Officer of BHP. Thank you. Please go ahead, sir.

Good morning, everyone. I've got Peter here with me as well. Really happy to be here. We've got a strong set of results. And of course, I'm very pleased with the opportunity to lead BHP.

Now I'll touch briefly on results. A great set of numbers, underpinned by strong underlying operating performance. We checked everyone's safe. Obviously, most importantly, everyone made it home to family and friends at end of shift. No significant operational disruptions. In fact, we've had a steady 12 months now, most certainly during the half, and cost control has been strong. Meaning, that all of the benefit of higher prices, USD 1.5 billion, has flowed directly through to higher EBITDA. This, in turn, has supported a 46% increase in underlying earnings per share. Net debt starts with -- at $12 billion, a great thing. Strong balance sheet. And we've declared our second highest ordinary dividend ever.

If I turn that down, we're seeing the near-term outlook. Our operational performance means we are on track to meet cost and production guidance for the full year. Coronavirus, of course, presents some near-term uncertainty. But if -- our view is that if the epidemic is contained by the end of the quarter, then we expect the overall impact to be muted with some catch-up on lost demand for most of our commodities by the financial year-end. Of course, the impact on people has been tragic.

Let me turn now to how I'm seeing the company and the future. I'm very fortunate to be taking up the reins from Andrew Mackenzie with the company's foundations strong. We have a differentiated portfolio that's diversified, exposed to different markets and to different points in the economic development cycle. We have some of the world's best assets, supporting margins and giving us high-return organic growth options. We have a strong balance sheet, supporting resilience and our ability to invest countercyclically, all backed up, of course, by the discipline and competition stimulated through the capital allocation framework.

We've delivered some outstanding outcomes on social value. In the last half, moved to full desalinization and green energy in Chile, and a strong brand in our production basis. Now to be absolutely clear, I am wholly committed to our approach on social value, and we will achieve the commitments that we've set out.

So overall, our foundations are strong, but there's further to go. Further to go on safety and sustainability and further to go on performance. In a changing world, we need to be fast-paced and commercial in our approach. We cannot stand still. And I see immense potential in the company. And to unlock more of it, there's a few things we need to strengthen. We need to become even safer with a focus on eliminating fatalities and high potential injuries.

In the face of market uncertainty and overall slowing rates of growth in commodity demand, a greater proportion of value growth will come from an unrelenting focus on being great at what we do. We have to be lean and high-performing across all parts of BHP, and we've spoken about the 5 specific things that we'll focus on.

Then in respect to portfolio, an obvious question is about the future fit of the portfolio. In my view, our view, is that we have a demonstrably strong and resilient portfolio for today and for the foreseeable future. Why? Well, this comes back to things like the time it takes for the world to transition to a decarbonized economy; the client curves in existing commodities like petroleum, which means that globally, more investment is required, and that creates opportunity for ourselves and others; lack of substitutability of a number of our commodities' position and cost curve and so on. We have been very thoughtful and deliberate about this portfolio we constructed over time.

Having said all of that, clearly, the world trend is towards decarbonization. We've been active advocates for this, and we've been taking tangible action. I referenced Chile earlier. In the last half, a move to full renewable power in Chile that's going to reduce our emissions footprint there by 60%. So we're already taking tangible action.

We also produced some of the products that will be essential as the world transitions to a lower-carbon economy, and which will continue to prosper in that world. We will, though, in my view, need to create more options in future-facing commodities so that we can be even more resilient and so that we can grow value over the long term. And these options are going to come from both within our existing footprint. So creating more options in the resources we have, as well as through securing more resources with main focus on exploration and early-stage entry, all supported by this disciplined approach to capital allocation we put in place.

So in short, I intend for BHP to be unquestionably the industry's best operator. Safer, lower cost, more reliable and more productive, with our portfolio and capabilities fit for the future. And through these outcomes, we will reliably grow value and returns for decades to come.

And so with that, I'll open it up to questions.

(Operator Instructions) Our first question comes from the line of Richard Hatch from Berenberg.

First one is just on iron ore. I appreciate FX helped you out in terms of the costs, but are you seeing any opportunities to kind of grind those costs any lower? Can you just talk a little bit about that? And also, obviously, with Rio reducing its shipping guidance yesterday, are you seeing any kind of follow-on impacts to your own operations? That's the first one.

Okay. So I'll address those points in reverse order. In terms of impacts on our business, yes, we've seen impacts as a result of the cycle. But I'm comfortable to say that we remain in line with -- or on track to achieve full year guidance on both production and costs. On that basis, seeing some of the one rates from the team coming back from the cycle.

Now in reducing costs further, without a doubt, there's further to go on costs. Where is that going to come from? Well, let me start with the half that was. This is a half where it was certainly better than the same period in prior year in spite of the fact that we had a fairly heavy maintenance regime during the half, and as a result of that, volumes were lower. So there'll be the natural -- not having the same burden of maintenance costs in the second half and volumes will be higher.

But it doesn't stop there. We have further to go in terms of cost-outs in the business through labor productivity, through getting more out of the equipment that we have installed. And not all of the cost improvement that we have ahead of us is going to come through volume dilution as we creep towards the 290 million tonnes that we've spoken about. I do believe that there's further to go in terms of nonvolume dilution-related cost-out.

Okay. And then my second one is just on Olympic Dam and transitioning to positive EBITDA this half, but still it continues to be negative in terms of return on capital employed. Can you just give us an update on what the latest is there and what you're doing, and how you're trying to sort of improve the financial and return metrics of the asset, please?

So the -- so basically, the plan that we've been pursuing at Olympic Dam has been focused on increasing operational reliability. So we've been plagued by historic underinvestment and asset integrity in what is a integrated processing system. And so we're needing to invest in remediating asset integrity to secure more reliable operations. That will give us more throughput capacity. With that capacity, then we want to maximize production through higher grade. That's come through investing in the Southern -- in opening up the Southern Mining Area. Those 2 things coming together will give us higher, more stable production, a lower cost base because, of course, part of that asset integrity spend is in OpEx, that will help lift returns to more acceptable levels, but still mid to high single digits. Over the longer term, we'll be looking at how we can expand production there through projects like BFX, but those are still in study.

Do you think it is -- this merit's still being a BHP asset?

Yes. So if I step back and look at the fundamentals, we start with, do we like the commodity? We've been quite clear that we like copper. It is one of these commodities that's going to see strong growth ahead of it. It's got good fundamentals on the supply side, and this is a big resource. And I'm confident that as we work our way through this plan that we put in place that we will improve the underlying operational stability and cost base and lift returns. And importantly, I believe that we've got the capabilities to operate this asset longer term, and it's got upside optionality.

Our next question comes from the team in the London room.

It's Jason Fairclough from Bank of America. There's about 50 of us in the room. Congrats from all of us here, so everyone can sort of save themselves from that.

Thank you to all.

Yes. So look, just -- you used the word decarbonization. And I just was wondering how is BHP framing both internally and then also when engaging with the external stakeholders, the difference here between essentially thermal coal and met coal? Obviously, met coal is a huge product for you guys. Thermal coal, you've indicated, is being deemphasized. But particularly met coal, there's quite a bit of debate, at least with investors, on how this fits into things. So how do you frame that internally and how do you frame it to your investors?

So look, it's always the safest space to be is, is talking about internally and externally in the same way. Two very different commodities, notwithstanding the fact that they have coal on the end of their name.

In the case of thermal coal, higher degree of substitutability, and that's been the case for a long period of time. And if you look at the -- you're familiar with the scenario analysis that we run. The bias of those scenarios is towards the downside for thermal coal over the medium to long term. So we look at that, couple it with the fact that it's a tiny part of our portfolio and the conclusion here is clear, if there was an opportunity for us to exit at value, we'd entertain that.

Met coal, not currently and for the foreseeable future, substitutable in the blast furnace steelmaking route. And it's a more material part of the business with better supply-side fundamentals. So that whereas in thermal coal you've got a relatively flat cost curve, the cost curve in met coal is steeper. So we like that commodity. We've got great assets. We have the capability to operate them since a different view on met coal than for thermal coal.

Do you feel like investors appreciate the difference?

Look, it's -- I think, and this isn't to downplay the fact, but I know that investors will be under pressure from their investor base. I believe that most investors do understand that these are 2 fundamentally different commodities. We need to get better at how we go about engaging the broader public on that point. And of course, we need to back it all up with the strong action that we are taking on climate change so that people understand that we see climate change as an issue that the world needs to address. We're taking strong action on that front in terms of our own operational emissions. And we're working with our customers, including blast furnace steelmakers, to reduce their Scope 3 footprint.

Okay. That's all for me, but I'll probably just pass to somebody else in the room, if that's okay.

That's fine, Jason.

It's Myles at UBS. Just a few quick questions. First of all, could you share your thoughts on Jansen? I guess some of us are sniffing around the (inaudible). Do you think the Sirius project is a credible threat that will impact your view of potash and returns on Jansen?

And secondly, you said there's enormous potential, which is quite (inaudible) and exciting in many ways. But could you try to explain what that is? Is that above and beyond your medium-term kind of production and unit cost sort of guidance? Are they meaningfully about those? Or how should we sort of conceptualize your potential? And then the second thing is on -- this is the last question, last one.

Go ahead, Myles.

On the changes you've implemented since the coming through, there's been some management changes. Are you done with setting up the new management structure? And what's the rationale that you're applying in terms of the new team?

Okay. Okay. So look, let me take those in order. On potash, and I don't want to comment much on or at all, to be honest, on the Sirius project other than to say it's a different commodity than potash, notwithstanding the fact that it has some potassium in it. How are we seeing potash? We like the commodity. It's a sufficiently sizable industry. It's got good dynamics on the longer-term supply side. We believe that demand growth is going to require more greenfield supply in due course. And we've got great resources and the capability to operate them. So we like the -- fundamentally like the commodity.

But that needs to be coupled with a project that we like as well. And that's a decision that we'll take by next February. For Peter and I to carry potash forward to the Board for sanction, it's going to have to meet 2 hurdles. One is: it has to compete well for capital under the capital allocation framework, which mean -- that's returns, risk profile and so on; and then secondly, as the new CEO, I do -- recognizing that this is a big decision, I want to personally get across the capital assumptions and the OpEx assumptions to make sure that I'm confident in them. And subject to meeting both of those hurdles, then we carry it forward for sanction. If it doesn't, we won't take that project forward, notwithstanding the fact that we do like the commodity.

If I then turn to the potential in the business. I mean, we've come a long way on the performance front, but I believe we've got a lot further to go. In terms of medium-term targets, keep in mind that I'm -- I've been part of the system, I've helped to develop those targets, they are well beyond where we are currently. Personally, I believe we've got further to go beyond that. And if you look at the world's top companies, they managed to eke out the year-in, year-out performance improvement over time. I don't know exactly what that's going to look like or -- and maybe there is no end point.

But first objective here is achieve what we've set out. To do that, we need to become more reliable. So part of this is building trust in the reliability of our delivery of our results. We do want to become lower cost, more productive, safer, as I've said. And we'll be taking specific actions to do that, which kind of is a good segue into the next part of your question, which was around some of the changes that we've made.

So we have made some early changes. Those have involved increasing accountability in the operating line for making this the business that it can be. And we've talked about how we're transforming this business. I think to get early momentum on that, we did have to have that called out and a specific team dedicated to that. But now that we've started building up on that momentum, it's going to be ever more important that the line business owners have full accountability for that.

And on the technology front, there's 2 things at play. One is: restructuring technology to align it more with our operating assets to improve speed, reduce friction and ensure that we're focused on the right opportunities, and we also want to integrate that technology team together with some of our core technical disciplines, again, to ensure that we can move at pace on the technology front. And that brings me back to one of the further changes I've spoken about today but haven't yet implemented, and that is a senior technical person sitting around the top table that's going to be focused on driving operational and technical excellence, and technology will sit with that group of activities.

Mike, it's Ed Sterck at BMO. A couple of questions. Just wanted to follow-up on Jansen. Over the course of the last 12 months or so the percentage of completion has gone from about 51% to 55%. It does look like the growth is slow on the project, and so what's the logic behind that? And then the second one is just more holistically, when you look at the portfolio and it's mostly mix, are there any areas where you feel that you're lacking in terms of exposure? How best you can (inaudible) just to get -- are there any areas that you're not completely confident that you still have exposure to over the medium to longer term?

Okay. So look, on Jansen, definitely not a go-slow strategy, this is -- it's the nature of the underlying work. So we're now into shaft lining. So having some of the shafts now in the shaft lining, by its very nature, this is work that progresses slowly. So it's all part of the plan. We have said in the results that there's been some delays in the shaft lining. But this isn't something that impacts the overall project schedule. So we're still on track for decision by February.

In terms of the portfolio, where we're lacking exposure, the way I would put it is we're underweight exposure to where I would like to see us longer term. And it is in these commodities that will be important for the transition and will be important in a decarbonized world. Copper, we've got some growth ahead of us. We'd like more options in copper. Same in nickel. Obviously, potash, we've spoken about commodities beyond that. Peter, I mean these things we regularly review. Any comments on that?

Well, I think from a battery and materials perspective, when we look at those things, they grow quickly obviously, and it's certainly going to be the part of the future. Nickel, obviously, as Mike had said, is really the fundamental on 811 world. But cobalt is a byproduct. So if you want to be in copper and you want to be in [DFC], then that's obviously a good play, but it's not a strategy in itself. And of course, lithium, yes, kind of flat cost curve, lots of it around. But it's growing fast and it could be a material commodity. And so I think we'll just keep it -- watching based on that. So we're...

Yes. And the final part of the question then was around the commodities that may not be -- that we're less confident about in the medium to long term. I mean, clearly, we've spoken about in response to, I think it was Jason's question earlier, thermal coal is one where -- because it's such a small part of the portfolio and the way that we see the risks or the scenarios going forward, that's one where if there was an opportunity to exit for value, we would. Beyond that, the other question that comes up regularly is oil and gas. I think there is value for us to be -- to create through petroleum. We've got good assets. We have more attractive high-returning options in petroleum. But we will continue to review that as time goes on. But at this point in time, I think that's attractive -- an attractive business that fits with the portfolio.

Our next question comes from the line of Daniel Major from UBS.

Two questions. Firstly, with respect to your thermal coal business, I think you've indicated that you'd sell it at the right price. Are there actually any active sale processes ongoing for thermal coal? Are there buyers out there that are anywhere near the right price? That's the first question. The second question on potash. You're clearly moving Jansen towards potentially a decision at the Board level. There are clearly some large potash assets in the market trading at -- in expensive valuations. Would you look at the buy-versus-build option in potash? Or are you just focused on the organic growth through Jansen?

Okay. So on thermal coal, again, I just don't want to comment on process, and that's just kind of a position that we adopt generally, not going to comment on process. Jansen buy versus build, we think we've got a great resource here. We're obviously partway through the project. And any time that we look at assets, it's -- we want assets that meet our criteria around being high-quality assets, low on the cost curve with upside optionality. Jansen gives us the opportunity to create that in the near term.

(Operator Instructions)

Our next question comes from the line of Hunter Hillcoat from Investec.

I just wanted to ask one simple question. I hear what you're saying about petroleum in terms of having very good asset positions and being able to take advantage of supply shortfalls as the industry evolves. But how do you avoid appearing cynical in light of the other climate change initiatives you've got across the group?

Well, it's -- so first of all, none of what we do is greenwashing or anything else. If you look at the positions that we've come up with, we've been active advocates for action on climate change, and we've backed that up with effort and dollars, in some instances. In the past half, big move to fully renewable power in Chile, 60% reduction in our emissions footprint there, 15% for the group overall. So anybody looking in at BHP will see us taking tangible action.

If we then look at the world as it evolves through on this path to decarbonization, I think it's generally accepted that there will be a period in which oil, gas, coal will continue to be used by the world. And having us in there with our strong view on climate change, taking the actions that we take around our operational emissions footprint, we think that, that will be recognized. But obviously, that's something that we need to continue to be out there telling the story around and backing it up with clear actions.

Our next question comes from the team in London room.

(Operator Instructions)

This is Sylvain Brunet with Exane BNP Paribas. Just staying with the ESG question in (inaudible). When we look at your target for now, these new Scope 3 production targets, presumably work in progress. So how close are you to disclose that? And what -- could you give us a bit more color on the initiatives you could take on products to help your customers?

A related question on ESG as well on coal-fired power contracts. Are there other Escondida-like power contracts across the group that you could look at replacing by renewable contracts? And lastly, on Jansen. As you looked at -- or could you be in a position to share some of the metrics behind the contribution to portfolio diversification that Jansen would contribute? As I'm sure you're looking at all the metrics and just IRR alone, which are not very compelling at the moment.

Okay. So look, I'll -- maybe I'll talk to Scope 3 initiatives on products, coal-fired power generation, I'll make a high-level comment on Jansen. And Peter, you might want to comment on that one as well.

So look, Scope 3, that will be later this calendar year where we'll come up with clear goals. I don't want to preempt that process. But what I will say is any time we come out with something on this, goals, commitments and so on, they are tangible. They have clear plans behind them. They move the needle or they have impact and they will be very well thought out. And you've seen that in Scope 1 and Scope 2. We'll also be coming forward at the same time with updated Scope 1 and Scope 2 targets, which then -- that if I talk about initiatives on products, we've already been doing some things on Scope 3.

So this isn't a new thing for us. We've had investments that we've made in advancing carbon capture and storage in Canada, in China. In fact, one of possibly my first job, if not one of my first jobs with BHP back in 2003, was getting BHP involved in a carbon capture and storage project in the U.S. that ultimately didn't progress. But then that's how long we've been focused on Scope 3. With these new set of goals that we set out, we'll be laying out some more activity in that space.

Your next question was around are there more Chile-like renewable opportunities out there for the group? Absolutely. So this is something that we'll be looking at quite hard here in Australia as well, to see whether we can replicate some of the success that we've seen in Chile. Obviously, different power markets, the dynamics aren't quite the same, but I'm confident that there will be some opportunities here.

On Jansen, Peter will speak to the metrics. I just want to start by saying Jansen will never be progressed on the basis of diversification. It has to compete both for capital under the capital allocation framework. Peter?

Yes. I don't actually -- we've done that analysis and I just don't have that number to hand. But no question that as we look through our portfolio, as we've -- I think we've shown graphs on this in the past. You take a sort of a base portfolio of iron ore stand-alone, you get some diversification. So diversification is defined as lowering the volatility of cash flow. And obviously, we calculate that back and forward, and then we make some projections based on historic volatilities, relative volatilities.

So met coal doesn't make that much difference. It's not surprising because it's obviously going into steelmaking. Oil makes more difference. Gas makes more difference again. And then, of course, potash really does make -- and copper, of course, makes -- is quite diversified. And of course, the biggest change of all is, of course, potash. And we can dig our numbers and show you that, maybe, Mike, when you get to London room there, we can give that chart to show. I think it's an important chart. A great -- I mean, that's absolutely right, this diversification is important but everything has to stand on its own 2 feet. Absolutely, they're right.

Mike, it's Tyler Broda from RBC. I guess, one question. Samarco, how does it fit into the portfolio in your view? But then, I guess, just more widely -- just I guess from your announcing the CEO seat, how would you describe the sort of philosophical approach to M&A? How do you look at things like jurisdictional risk?

Okay. So just writing down to make sure I remember your questions. Look, Samarco, to be honest, the main focus around Samarco is just coupled with Renova. The focus around Renova has been on remediating the damage to communities, the river and so on, and we've been making good progress there. We are subject to making sure that we can do it safely and a few things falling into place. There is an intent to get one concentrator restarted at Samarco. As to whether we move beyond that in due course, we'll see whether the business case stacks up.

Longer term, is this an asset that we would want to hold in the portfolio? Probably not a good fit. But that hasn't been the focus at this point. The focus at this point has just been remediating the damage, getting the operation restarted. Broader question around how we think about it philosophically or how I think philosophically about M&A and jurisdiction risk. Let me address the second one first.

Jurisdiction risk because I have spoken about wanting to secure more options in commodities like copper and nickel and so on, very strong preference there to do that through exploration in jurisdictions that we like. But we won't ignore if there's an attractive enough opportunity in new jurisdictions or harder jurisdictions, we'll consider it. It's not first preference. First preference is to be where we currently are or in new jurisdictions that we're more comfortable with, you see us in Ecuador, in Mexico with Trion and so on.

If I then come back to M&A more broadly, having been part of or felt the pain of big acquisitions on the wrong point in the cycle, definitely do not want to be there again. And Peter and I have both been part of the team as we worked back from that over the past 6 years. Don't want to be there. Now I don't -- on the other hand, I -- we can never say never and we do need to be open to M&A for the right assets at the right point in the cycle, and those things don't provide that offer. So I'm not pegging this as high likelihood, much bigger focus is going to be on early-stage entry and exploration.

Our next question comes from the line of Richard Hatch from Berenberg.

Just one on thermal coal. I know in the commentary you talked about taking New South Wales Energy Coal costs down to $46 to $50 a tonne over the medium term. What kind of time frame are you expecting that to happen? And kind of how -- sort of how much of a gradual step down is that? Can you just give us a bit more flavor on it?

Sure. So generally, we're -- kind of rough way of thinking about it, Richard, is when we say medium term that's on a 5-year horizon. So the challenges that we've had at New South Wales Energy Coal have been some two- or threefold. So we are in a period, because of what's happened in the marketplace of switching product types, so we're moving to lower volumes, higher-quality product to secure better pricing. Two, we're in a period of increasing strip ratio as we move through a geological structure. In doing that, we've been opening up some new pits, which will give us some lower strip ratio material, that early on that's incurring some costs as we open those pits up.

And three, to be quite frank, this hasn't been our most productive mine in terms of our truck-shovel operations, and that's been weighing on cost as well. We have seen a marked improvement in truck-shovel productivity in the past few months, and we'll carry that forward. But again, coming back to the start of your question, medium term, 5 years, and that's a period over which we expect to bring costs out.

Our next question comes from the line of Christian Georges from Societe Generale.

A quick question on the dividend. I see that consensus seems to continue to aim at your net debt reaching somewhere between $9 billion and $10 billion for year-end. So if we take into account your guidance of the lower end of $12 million to $17 billion range, am I right to assume that the Board, come year-end, we adjust that net debt to $12 billion based on a higher level of dividend or share buyback to make sure that target is reached? Or should we assume that possibly you will end up below that net debt target?

Okay. So Peter, why don't you comment on this one?

Yes. Look, I think firstly, I wouldn't comment on what consensus I have for net debt and so on. I mean, it is what it is. All I'd just -- all I'd say is to reiterate, really, what -- how we think about this. We've got $12.8 billion of net debt today. That's obviously after IFRS 16, which obviously have quite a bit of difference this time last year and this year. But putting that aside, still very strong. And our new target of $12 billion to $17 billion in the event when we -- we'll continue to target the bottom end of that range. We don't have to be exactly at the bottom of that range. And we'll make an assessment about dividends as and when we get there.

But it's fair to say that we've paid a very, very strong -- yet another very strong dividend or we declared another very strong dividend today. And it wasn't 70% payout ratio, so we'll adjust that as we've been paying over the last couple of years. And we'll adjust the payout ratio and dividend according to how we see the -- what we've just returned, and what we're likely to earn in the near term. So I don't know. Hopefully, that helps.

Next question comes from the team in London room.

Mike, it's Jason Fairclough from Bank of America again. So just 2 quick ones from me. I don't know if you've been involved in the DLC discussions over the years, but I was wondering if you had any thoughts on the future of the DLC. And then just maybe a more general question, which would be -- everyone sort of, I suppose, is going to take some time to find their own style. But if you have to sort of talk about some nuances in your approach to running BHP versus Andrew. Anything -- any thoughts? You don't have to define yourself about who you're not, but...

Sure. Clearly. Look, on the DLC, we've got a company of simplifiers and I'm certainly in the space of simple is better, Jason. And you know the history of the DLC, stood up in 2001 to facilitate the merger. If we were starting it fresh with the portfolio that we have today, it wouldn't be what we would do. But as with any change, business case has to stack up. Business case doesn't stack up today, we'll maintain it under review.

As to me versus Andrew, and probably the way I would paint it is, you have leaders for the times. And Andrew had very specific objectives when he landed in that role, I think he's been successful at, certainly, restructuring the portfolio, establishing some strong foundations. With those foundations now in place, I want to get this business humming. And in spite of us having come a long ways on the performance front, we have further to go. I think a lot further to go. But to do that, it requires a different focus than the focus when you're putting the foundations in place in the first place.

And my focus is going to be very much about how we get everybody aligned through the organization, pulling in the same direction, focused on front-line operational outcomes. We need to have the right people in place. And so I've spoken about increase in the proportion of people that are permanent BHP employees that we can invest in. And we have to have the right leadership in place. And that means if I take supervisors as an example, skilling, getting them upskilled, giving them the right spans of control and then, importantly, enabling them through removing some of the administrative effort that's weighing on them currently so they can spend more high-quality time in field with their people.

So a very kind of operationally-oriented, capability-focused approach to how we'll unlock performance in this company. Because at the end of the day, it's not going to be about pulling big levers, it's about getting 72,000 people really kind of bringing energy to work and a passion to work to improve, being willing to push the boundaries, take risks, take decisions. And yes, if we can do that, this place can be terrific.

Okay. Well, look, it sounds like that's it in terms of calls. I'll just close off by again picking up on what I was just saying. I want this company to be unquestionably the industry's best operator, safer, lower cost, more reliable and more productive, with a portfolio and capabilities fit for the future. And off the back of that, we will reliably grow value and returns for a long time to come.

Thank you, everybody, and I look forward to seeing a number of you in London in a couple of weeks' time.

Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.