This Report continues to disclose our total direct economic contribution, including the taxes and royalties we paid on a country-by-country and project-by-project basis.

We also disclose additional voluntary information such as details of each of our subsidiary entities in ‘tax haven’ countries and the tax incentives granted by some of our host governments.

In addition, we disclose our intra-group transactions and relationships with tax authorities in compliance with the Australian Voluntary Tax Transparency Code.

Read more from our CFO

Evaluation and exploration

• Payments to suppliers and contractors
• Wages paid to employees
• Permits, licence fees and employment taxes
• No royalties or corporate tax

Evaluation and exploration work is largely about creating the potential for future value. Payments to governments during the exploration phase are usually relatively low, reflecting the high levels of investment and risk of this work. Permits, licence fees and employment taxes make up the majority of payments to governments. Contributions to the community include payments to suppliers and contractors for any construction or excavation and wages to employees (often for highly skilled and specialist roles, such as geologists, metallurgists and environmental scientists).

Development

• Capital expenditure
• Payments to suppliers and contractors
• Wages paid to employees
• Employment and sales taxes, import duties
• No royalties or corporate tax
• Host community contributions

Development involves construction of facilities, excavation and any supporting infrastructure that is required. This can extend to construction of whole towns, including schools, medical facilities and recreation areas. More jobs are created, both directly in construction and more broadly through the provision of goods and services to the site and workforce. Host community contributions begin to be made. Payments to governments are largely in the form of indirect taxes (such as goods and services taxes or excise fees) on equipment and materials, and employment taxes.

Extraction and processing

• Net profits – corporate taxes paid
• Royalties paid from extraction
• Payments to suppliers and contractors
• Wages paid to employees
• Employment and sales taxes, import duties
• Host community contributions

Once extraction begins, royalties and resource taxes begin to be paid. Employment taxes increase as the operating workforce commences. Corporate income tax may also begin to be paid; however, this is often lower in the early years of an operation as tax losses from the construction phase are offset against income. Over the life of the operation, payments to governments will be significant and can often equal as much as 50 per cent of profit. Host community contributions continue through the operating life. Payments to shareholders, lenders and investors also increase as income from operations is generated. As we invest in long-term assets, we also create high-value, long-term job opportunities and build strong relationships with communities, suppliers and contractors.

Rehabilitation and closure

• Payments to suppliers and contractors
• Corporate taxes paid if alternative revenue streams from post-mining land use are found
• Lower employment and sales taxes
• Low or no royalties

Land no longer required for operations is rehabilitated, taking into account regulatory requirements and community expectations. Rehabilitation activities are often interwoven with the continuing development of nearby operations. Payments to governments will be lower, as will employment and payments to suppliers and contractors, but post-mining land uses may generate new revenue streams for BHP and the local community.

Commercial function

Sales and Marketing and Procurement are separate core businesses of BHP, connected under the Commercial function. They are aligned to our assets and are the link between BHP’s global operations, our customers and our local and global suppliers.

We sell and transport our products and obtain the goods and services that flow into our supply chain. Contributions include payments to suppliers, with a significant amount of spending directed to businesses in the communities in which we operate. We employ more than 2,000 people in our Commercial business globally. The contribution of our other businesses is enhanced by the activities of our Commercial function. Sales and Marketing maximises the prices received for the sale of our products and Procurement ensures our unit costs are competitive, maintaining the sustainability of our operations. 

2019

• Annual Report
• Economic Contribution Report
• Economic Contribution Report (XML)
• Sustainability Report
• Sustainability Report Navigator

Explore our interactive economic contributions map.

Past Reports

2018

• Annual Report
• Economic Contribution Report
• Economic Contribution Report (XML)
• Sustainability Report
• Sustainability Report Navigator
• Water Report
• 20-F

2017

• Annual Report
• Economic Contribution Report
• Sustainability Report
• Sustainability Report Navigator
• Form 20-F

2016

• Annual Report
• Sustainability Report
• Economic contribution and payments to governments Report

2015

• Annual Report
• Strategic Report
• Sustainability Report
• Economic contribution and payments to governments Report

2014

• Annual Report
• Strategic Report
• Summary Review
• Sustainability Report