Water is integral to what we do and vital to the longevity of BHP. We depend on access to water and cannot operate without it.
Access to safe, clean water is a basic human right and essential to maintaining healthy ecosystems. Our Water Stewardship Position Statement outlines BHP’s vision for a water secure world by 2030, which is aligned with the United Nations (UN) Sustainable Development Goals. This is a world where water resources are conserved and resilient so they can continue to support healthy ecosystems, maintain cultural and spiritual values and sustain economic growth; where the human right to safe and accessible water and the traditional rights of Indigenous peoples are realised and upheld; and where water governance is effective and beneficial, ensuring communities and ecosystems thrive for future generations.
Water Stewardship Position Statement
In FY2019, we developed our Water Stewardship Position Statement that expresses BHP's commitment to and advocacy for water stewardship.
Our vision for water is outlined in our Water Stewardship Position Statement and is supported by our Water Stewardship Strategy and our goals and targets. Our approach to water stewardship is visually represented in the figure below. Each element of our approach is discussed on this webpage.
The Position Statement was developed following broad internal and external engagement and is aligned to the UN Sustainable Development Goals and other initiatives such as the UN Global Compact's CEO Water Mandate (CEO Water Mandate) and the International Council on Mining and Metals (ICMM) Water Position Statement. Our Position Statement describes the challenges facing fresh and marine waters across the globe and seeks to reinforce that it is everyone’s responsibility to together. Our approach to realising this vision includes taking action to improve water management within BHP and catalyse actions to strengthen water governance beyond our operated assets.
Our approach and position
Our vision in our Water Stewardship Position Statement is supported by our Water Stewardship Strategy which was adopted in FY2017 to improve our management of water, increase transparency and contribute to the resolution of shared water challenges. The strategy was reviewed in FY2022 to ensure it remains effective and continues to align with ambitions of our business and society. The review resulted in refinements to our FY2017 strategy and corresponding minor updates to our Water Stewardship Position Statement. The current version of the strategy’s pillars is shown below.
Setting targets on critical metrics helps us focus our efforts, monitor progress and hold ourselves accountable. We have had water-specific public targets for more than 15 years. These have evolved from targets that were set from the top down, based on intensity metrics (water used per tonne of product), to a combination of risk-based targets and absolute volume reduction targets to regional context-based water targets (CBWTs).
Over the period of FY2018 to FY2022 we had a public water-related sustainability target to reduce FY2022 freshwater withdrawal1 by 15 per cent from adjusted FY2017 levels across our operated assets. The FY2018 to FY2022 target was exceeded with a 29 per cent reduction of freshwater withdrawal from adjusted FY20217 levels across our operated assets.
We have continued our efforts to refine our approach to target and goal setting. Between FY2020 and FY2023, BHP commissioned water resource situational analyses (WRSAs)2 to establish a collective view on the shared water challenges within the regions or catchments where we operate. These WRSA’s have shown that while minimisation of freshwater withdrawal will remain important for us and other stakeholders, in some of the regions where we operate freshwater withdrawal is not the key water-related risk or challenge for the region. In addition, during the FY2018 to FY2022 period, there was a focus on reducing the use of fresh water and shifting the source of water to lower quality sources. This has increased our use of non-freshwater sources in some of our regions.
We committed in our Water Stewardship Position Statement to developing CBWTs, with the aim to improve our internal BHP water management and contribute to the collective benefit and shared approaches to water management in the regions where we operate. Informed by catching scale risk assessments and WRSAs, in FY2023 we released our first suite of asset-level CBWTs, which will apply for seven years until FY2030.3
Due to the regional nature of water challenges our CBWTs recognises that water challenges vary by location due to physical and social differences.4 For example in our Chilean assets, where our water is now predominately sourced from desalination, marine protection and efficiency of water use are key water challenges. The CBWTs are intended to contribute to more effectively addressing the shared water challenges in our operating regions and were informed by our catchment knowledge and our WRSAs. Performance against these CBWTs will be reported in future disclosures and we will continue to test the relevance of the CBWTs and milestones as the collective understanding of the catchments where we operate grows. More information on the WRSAs and CBWTs can be found at Shared water challenges.
We set a longer-term goal in FY2017 to collaborate to enable integrated water resource management in all catchments where we operate by FY2030. We reviewed this longer-term goal during the development of our new 2030 goals and have incorporated our longer-term water goal into our Healthy environment goal. O 2030 Healthy environment goal is supported by our CBWTs, as they are expected to contribute to the protection and or restoration of water-dependent ecosystems in the vicinity of our operated assets.
1 Withdrawal is defined as water withdrawn and intended for use (in accordance with the ICMM guidance). Fresh water is defined as waters other than seawater, wastewater from third parties and hypersaline groundwater. Freshwater withdrawal also excludes entrained water that would not be available for other uses. These exclusions were made to align with the target’s intent to reduce the use of freshwater sources that are subject to competition from other users or the environment. The FY2017 baseline data has been adjusted to account for the materiality of the worker strike affecting water withdrawals at Escondida in FY2017 and improvements to water balance methodologies at WAIO and BMA in FY2019, which included alignment of water balances to ICMM guidance. Discontinued operations (Onshore US-operated assets and Petroleum), BHP Mitsui Coal (BMC) and non-operated joint ventures were excluded.
2 Water Resource Situational Analysis (WRSA) is a holistic assessment of the water situation where an asset operates. The process is designed to describe the water challenges that stakeholders share and the opportunities for collective action to address those challenges. The WRSA is prepared by a credible third party and draws on publicly available information and direct stakeholder input. Within a defined area that includes the water resources that BHP interacts, each WRSA includes assessment of:
- the sustainability of the volume and quality of the water resources, interactions of all other parties and any related environmental, social or cultural values and climate change forecasts
- the sustainability of the volume and quality of the water resources, interactions of all other parties and any related environmental, social or cultural values and climate change forecasts
- the environmental health of the water catchments that feed the water resources the extent of vegetation, runoff, and any conservation of the area
- external water governance arrangements and their effectiveness
3 CBWTs are intended to apply at the asset-level for our operated assets. Due to the previous divestment review of our NSWEC asset, the development of CBWTs for this asset are planned to be completed in FY2024, along with CBWTs for our non-operational legacy assets. We will review the need to revise or develop new or additional CBWTs when there are substantial changes to our portfolio or one of our operated assets moves into the operational phase, which may firstly require a Water Resource Situational Analysis (WRSA) to the extent that an existing WRSA is not applicable.
4 UN Global Compact CEO Water Mandate, Pacific Institute, CDP, The Nature Conservancy, World Resources Institute, WWF, UNEPDHI Partnership Centre for Water and Environment, 2019. Setting Site Water Targets Informed by Catchment Context: A Guide for Companies.
We use our Water Position Statement, our water stewardship strategy and our standards (Our Requirements for Environment and Climate Change standard, Water Management Standards) to manage water at BHP. Each of our operated assets has assigned accountability and responsibility for its key water management activities and this is a requirement of our Water Management Standards.
Governance for our water activities is essential for us as water is integral to our business and vital to the longevity of BHP. We cannot operate without it. We use water in many ways, including but not limited to:
- extracting it for activities including ore processing, dust suppression, ecosystem irrigation and processing mine tailings
- managing it to access ore through dewatering (extraction of water from below the water table to allow access to ore) and at our legacy assets (legacy assets refers to those BHP-operated assets, or part thereof, located in the Americas that are in the closure phase)
- providing drinking water and sanitation facilities for employees and townships
- discharging water back to the receiving environment
- interacting with marine water resources through our port facilities
- utilising marine water for desalination
For a more detailed example of how we use water in our operated assets, refer to our Olympic Dam case study.
As we use water in many ways and given the criticality of water to BHP, we have a responsibility to effectively manage and have governance over our water interactions and avoid or minimise our potential or actual adverse impacts on water resources. We also recognise the importance of working with others to enable more effective water governance and stewardship across the communities, regions and countries where we operate.
Effective water stewardship must begin within our operated assets. From there, we can more credibly collaborate with others toward solutions to shared water challenges. Responsible water management will ultimately make BHP more resilient and will contribute to enduring environmental and social value.
We must manage a variety of water risks and challenges. Water challenges faced by BHP may include water scarcity or high variability in water supply due to climatic conditions or cumulative use or impacts within a catchment. These challenges need to be managed appropriately to avoid or minimise actual and potential adverse impacts and support positive impacts to the environment, communities and BHP’s ongoing viability. We seek to identify and assess opportunities to reduce stress on water resources from our operations and to collaborate with others on challenges and opportunities like water scarcity or high variability in water supply.
Specific governance that is in place for water is detailed below. These initiatives are in addition to the governance mechanisms and processes that are discussed for environment on the Environment webpage. The Our Requirements for Environment and Climate Change standard requires that our operated assets establish baseline water conditions, identify water-dependent receptors, water uses and stressors, and seek to predict changes to these conditions, including the potential impacts of climate change, for the ‘life of asset’.
Our operated assets are also required to determine their contribution to the current and future cumulative impacts and define thresholds and controls (e.g. environmental effects monitoring) to manage catchment-scale impacts, develop and review water forecasts over the life of asset, undertake a WRSA and develop operated asset-specific, context-based water targets.
BHP has developed technical standards that set minimum standards for water management across its operated assets. These standards include the requirements for all operated assets, including legacy assets, to implement measures to avoid or minimise potential or actual adverse impacts to water resources and water-dependent ecosystems, communities and cultural values.
The standards require development of:
- plans that incorporate initiatives that substitute, reuse and reduce our reliance on and potential adverse impacts to fresh water
- water balances that consider all primary water inflows, uses, treatment, storage, losses, diversions and discharges
- plans for management of excess water (storm water, dewater and runoff) to ensure a minimum tolerable level of impact to the receiving environment is achieved
- documentation of potential and known sources of groundwater and surface water contamination across the exploration, project, operating and closed sites
- a risk-based management program where there is potential for groundwater or surface water contamination or water quality impacts. The program must characterise the type, distribution and fate of contamination and establish water quality performance criteria in operational management activities (e.g. for excess water release or treatment)
DisclosureOur water disclosures here and in the BHP Annual Report 2023, Operating and Financial Review 6.13 - Environment have been prepared predominately pursuant to the ICMM Water Reporting Good Practice Guide (2nd Edition) (2021) (ICMM guidance) minimum disclosure standard, which is an international water accounting framework that enables comparable water data across the mining and minerals sector.
Our water reporting also considers other relevant frameworks. BHP is a signatory to the CEO Water Mandate and our disclosures here and in the BHP Annual Report 2023, Operating and Financial Review serve as BHP’s Communication of Progress against the core elements of the CEO Water Mandate. Our reporting is also consistent with the Global Reporting Initiative (GRI). For more information on how this webpage meets the GRI standard refer to our ESG Standards and Databook.
We have reported our water withdrawals and discharges and had water-specific public targets in place for more than 15 years since the establishment of the Minerals Council of Australia's Water Accounting Framework (WAF).
We transitioned our reporting in FY2019 to align with the ICMM ‘A Practical Guide to Consistent Water Reporting’, and since FY2022 we have aligned our reporting with the updated ICMM guidance, ‘Water Reporting Good Practice Guide (2nd Edition)’.
The ICMM guidance and the WAF make use of a site water balance to establish a water account. The water balance approach is commonly used in hydrological studies to determine the flow dynamics of a system. A site water balance is a simplified water account where all water components are classified and those with common characteristics (e.g. consumed via evaporation) are aggregated to the highest possible level. The use of a water balance allows the generation of consistent site metrics for external reporting and provides a tool for effective water management for the mining sector. Site water balances are a live management tool that should be reviewed and updated on a regular basis.
A generalised water balance ‘equation’ requires water inputs to equal the outputs plus any change in storage. That is: water withdrawals/inputs = water discharges + water consumption +/- change in water storage.
Water balance information has a variety of sources with differing degrees of accuracy. Following the WAF, information is classified as of high accuracy when measured directly or there are simulations with good accuracy over many reporting periods, or a forced balance in flows, medium accuracy when modelled or simulated using estimates based on historical data or coefficients. Information is classified as low accuracy when estimated or simulated using general coefficients.
We recognise water balances contain a degree of uncertainty and, over a given period, the reported withdrawal may not be in balance with the sum of discharge, consumption and net storage change. The ICMM guidance requires that, at a site level, the delta storage derived by mathematical balance broadly reconciles with the actual change in volume of water in storage over the same period. This infers there is some allowance for uncertainty in the balance if actual changes are measured while other components of the balance are estimated, and comparison is considered a useful check for validating site data. Therefore, the balance should be reviewed and potential lags or uncertainties in the water system should be considered when assessing validity.
The general practice in the mining sector (in accordance with the ICMM guidance and WAF) is to force a balance in water accounts, such that withdrawals/inputs equal discharges plus consumption plus or minus change in storage, by creation of a balancing point, for example assumed evaporation or change in storage volumes.
We have elected not to artificially adjust any dimensions of the water balance to force a balance in water accounts at our coal assets (BHP Mitsubishi Alliance (BMA) and New South Wales Energy Coal (NSWEC)), where storage changes are potentially large. At our coal assets, we have chosen to retain the calculated differences in the water balance and recognise the differences represent levels of uncertainty within the water balance. This understanding of uncertainty is considered in our ongoing water management decisions and guides the ongoing improvement of our water balance models, which are continually developing as we apply new measurement points, enhanced measurement methods, and improved practices to estimate indirect data (for example the runoff from rainfall, evaporation and seepage volumes). This approach is aligned with the intent of frameworks, including the ICMM guidance, WAF and GRI, that recommend water balances be used as a live management tool that can identify ongoing improvement in water accounts.
An improvement program commenced in FY2022 at our coal assets and continued in FY2023. There may continue to be relatively high uncertainty in the water balance of the coal assets until the key improvement program changes are complete and have had time to influence a substantial period of data. As we gain experience in measuring storage, runoff from rainfall, evaporation and seepage across all our operated assets, we expect to see uncertainty reduce, and there may need to be retrospective corrections to the data.
In line with our commitment to continuous improvement of our water accounts and data, we continue to review our assumptions for accounting for water metrics and refine our methodology in water models and water balances, recognising that water modelling and balances contain a degree of uncertainty. Water models and measurement techniques will continue to evolve and our understanding and knowledge will grow over time. Our focus in FY2024 will be a review and refinement of our water accounts and model at our Nickel West asset.
Our reporting metrics are in line with the ICMM guidance and defined in the BHP Annual Report 2023 Glossary, such that we report:
- water withdrawals (water intended for use by an operated asset) by source, by quality and by operated asset
- water consumption (water used by the operated asset) via the type of consumption (e.g. evaporated, entrained)
- water discharge (water returned to the environment) by destination, operated asset and quality
- other managed water (water actively managed by an operated asset but not used for any operational purpose) by quantity and quality
- water recycled/reused (water that is used more than once at the operated asset) by quantity
- change in water storage (the net change in the volume of water stored over the annual period) for material water stores
We use the WAF accuracy statement to provide an indication of the accuracy for each metric by classifying them according to whether they are measured directly, simulated or estimated. We use the accuracy statement as one tool to identify data gaps and opportunities for more or improved flow measurement in our water balances that inform our water management decisions. Where possible, we endeavour to maximise direct measurement and minimise estimation. We simulate or estimate elements that are challenging to measure directly, such as evaporation, seepage from tailing storage facilities, and rainfall runoff quantity and quality.
Based on our application of the WAF accuracy methodology, in FY2023 approximately 70 per cent of withdrawal and 90 per cent of discharge volumes were measured for a majority of sources for the majority of the year, therefore this data is considered to be at a high accuracy level. We also recognise the WAF accuracy statement is a guide and only one tool to evaluate data quality and identify opportunities for improvement. We continued to make other improvements to the quality of our water data during FY2023.
We seek to minimise our withdrawal of high-quality water. The WAF and the ICMM water quality categories do not completely align with the generalised definition of fresh water, which is typically classified on the basis of salinity alone and related to drinking water guidelines (with a threshold of 1,000 mg/L Total Dissolved Solids). The majority of the significant volumes of water accessed and managed by mining and metals operations is not for a drinking water end use and therefore using the drinking water definition of high-quality water for reporting purposes would place inappropriate emphasis on the relatively small proportion of water managed. The WAF and ICMM guidance defines more specifically high quality water for application to the mining and metal sector, which is water with low levels of salinity, metals, pesticides and bacteria and relatively neutral (pH 6-8.5). The definitions for water quality types are provided in the BHP Annual Report 2023 Glossary, and a detailed description is available in section 2.2.4 WAF. BHP has continued to group water quality into three categories in line with the WAF: Type 1 and Type 2 defined by the WAF equate to high-quality water defined in ICMM guidance, while the Type 3 WAF definition equates to low-quality water under the ICMM guidance.
In FY2023, approximately 66 per cent of our water withdrawals consisted of water classified as low quality by ICMM definition.
This section provides detailed disclosure of our various water metrics in line with the ICMM guidance, GRI sustainability reporting Standards and the Sustainability Accounting Standards Board (SASB) Standards. To allow year-on-year comparison with FY2023 BHP operated assets, the water performance data presented here excludes water data from the following Discontinued operations: Onshore US assets (sold on 31 October 2018), BMC (sold on 3 May 2022); and assets in BHP's Petroleum business (merged with Woodside on 1 June 2022) to ensure ongoing comparability of performance. All water data currently excludes assets acquired from OZ Minerals, and we intend to include this data in our FY2024 disclosures. Definitions of water metrics, sources, types and detailed water data by asset are provided in our ESG Standards and Databook, in the Glossary of the BHP Annual Report 2023 and in the ICMM Guidance and WAF. We have presented data from FY2019 as this is when we commenced reporting of the metrics as per ICMM Guidance. Data has been rounded to the nearest 10 megalitres to be consistent with asset/regional water information in this webpage and with the BHP Annual Report 2023. In some instances the sum of totals for quality, source and destination may differ due to rounding.
Since FY2021, BHP has used the WWF Water Risk Filter to describe basin risk for our operated assets as discussed on this webpage under BHP basin risk. Using the WWF Water Risk Filter, it was found that two (legacy assets – United States and Pampa Norte) of our 10 operated assets (20 per cent), as of the end of FY2023, are classified as being under high or very high water stress due to location. The data for these water stressed assets are shown in our ESG Standards and Databook.
Water withdrawals represent the volume of water, in megalitres (ML) received and intended for use by the operated asset from the water environment and/or a third-party supplier.
Water withdrawals for FY2023 across our operated assets increased by 1.5 per cent from FY2022 (from 402,610 ML to 408,540 ML). Note that the data does not include Petroleum, BMC or OZ.
Our withdrawal of high-quality water (Type 1 and Type 2) increased by 17 per cent from 118,770 ML in FY2022 to 138,410 ML in FY2023. This increase is due to the inclusion of water to supply the new concentrator at our Spence operations. This water is supplied by a third party and we disclose this water as Type 2 as this is the quality as we receive it. However, the original source of this water is Type 3 or low-quality water. Increases in withdrawals of high-quality water also increased at our BMA (climate conditions) and Western Australia Iron Ore WAIO. The proportion of high-quality water as a proportion of total withdrawals was 34 per cent, similar to FY2022. Total water withdrawals from operated assets located in high or very high water-stressed areas (as determined by WWF Water Risk Filter) was 29,710 ML (7 per cent of total withdrawals for BHP operated assets) and consisted of 63 per cent high quality (Type 1 and 2) water. This is a significant shift from FY2022 due to the fact that Escondida is no longer a water stress area, as determined by the WWF Water Risk Filter but our Legacy Assets located within the United States are.
The majority of our water withdrawals (52 per cent) came from seawater, noting that some of the third-party water from Nickel West and Pampa Norte is sourced from desalination facilities, some of which are supplied by seawater. Currently, most of Escondida’s operational water consumption is met by desalinated water.1 The proportion of withdrawals relating to groundwater across BHP’s operated assets remained relatively stable, from 22 per cent of withdrawals in FY2022 to 23 per cent of withdrawals in FY2023. WAIO and BMA account for approximately 60 per cent of ground and surface water withdrawal across our operated assets.
The withdrawals and the material contributors to these were within expectations for FY2023 and in line with our ambition to minimise our withdrawal of high-quality fresh water and replace these with seawater/low-quality withdrawals where feasible. As the results are within expectations, we do not anticipate any implications for current commitments, strategy or costs for the business with respect to water withdrawals aside from those related to delivery of the context based water targets.
The availability of water for multiple uses was identified through WRSA as a shared water challenge in the majority of the regions where we operate. To address this challenge, a number of our assets have released context-based water targets that may assist in reducing our withdrawal of water from the environment or increase water supplied from low-quality sources (such as seawater) by either increasing efficiency of water used for operational purposes, maximising return of surplus water (without use) to the environment (called ‘Other managed water’ by ICMM Guidance) or share/return our licenced water allocations to others. For example at BMA we have a target to support water stress reduction in the Fitzroy Basin through better use of water in our operations.
Water discharge includes water that has been removed from the operated asset and returned to the environment or distributed to a third party. This includes seepage from tailings storage facilities to groundwater, discharge from operations to surface waters (which are also affected by periods of higher rainfall) and discharge to seawater. Water we treat and then on-supply to third parties is captured as diverted water consistent with the ICMM guidance as it is not intended for operational purposes.
Total water discharges for FY2023 were 140,370 ML, a minor increase from 139,600 ML in FY2022. Total water discharge in high or very high water-stressed areas was 2,630 ML, 100 per cent of which was Type 3/low-quality water. Eighty-eight per cent of our total discharges were from Escondida, which is the bi-product of desalination via reverse osmosis of seawater. Only 10 per cent of our discharges are comprised of high-quality water.
Discharge to surface water (usually riverine systems) is influenced by climatic conditions such as rainfall and occurrence of extreme weather events, and therefore is subject to higher variability and is less predictable. Water management practices at our operated assets where this may occur are designed to accommodate this variability. Therefore, the occurrence of such events is not anticipated to affect our current management activities and strategy or result in elevated exposure to risk.
In FY2023, 22 per cent of our operated assets did not discharge water as their water was either consumed in operational activities or reused/recycled. This is lower to previous years due to our NSWEC asset undertaking discharge due to high rainfall for the first time in many years and Pampa Norte due to the new concentrator.
The ICMM guidance defines reused water as water that has previously been used at the operated asset that is used again without further treatment, and recycled water is water that is reused but is treated before it is used again.
During FY2023, the total volume of water recycled/reused was 344,710 ML. The amount of recycled and reuse to total withdrawals is 84 per cent.
The ability of our operated assets to reuse and recycle water varies depending on the recovery processes used and the water quality requirements. The accuracy of the recycled/reused metric currently varies depending on the complexity of the process and how closely water movements are measured and understood. As our data collection and analysis improves, we expect to be able to more robustly assess opportunities to recycle or reuse water.
Other managed water
Other managed water (previously called diverted water) is water that is actively managed by an operated asset but not used for any operational purposes. For example, we withdraw water and treat it for use as drinking water by local communities, such as in the town of Roxby Downs in South Australia. In FY2023, 91, 220 ML of water was withdrawn without any intention to be used at BHP operated assets, and 31, 400 ML of this was in water-stressed areas. The majority of the other managed water is Type 1 and, in water stressed areas, 23 per cent was high quality (Type 1 and 2).
Most of our other managed water comes from treatment processes in our legacy assets in North America and dewatering at WAIO (which is described further in the WAIO water case study).
As the withdrawal of Other Managed Water may occur in a different reporting period to its discharge, in any given annual period there may be a differential between withdrawal and discharge volumes for Other Managed Water. In FY2023, we discharged 61,000 ML of Other Managed Water.
In FY2023, evaporation and entrainment remained the most significant contributors to consumption. Evaporation occurs during a number of operational activities, including dust suppression, storage of tailings and storage of water.
Evaporation consumption is inherently linked with climatic conditions. Evaporation data is estimated or simulated using average climatic conditions and therefore consumption due to evaporation should remain relatively stable. Due to the link with climatic conditions, the volumes consumed via evaporation are mostly outside of BHP’s direct control.
Entrained water includes water incorporated into product and/or waste streams, such as tailings, that cannot be easily recovered. Entrainment may show variability due to the type and location of ore during any given reporting period. The use of water in our processing facilities, or for reducing dust release during storage of product can result in entrainment of water.
The category of ‘other’ for consumption includes several uses, the most significant being water used by people for drinking or ablutions at operated assets.
The collation and disclosure of consumption will assist in identifying areas for improvements in data accuracy for entrainment and evaporation, and assist with identifying opportunities to reduce, where possible, loss of water. For example, in FY2022 we commenced further analysis of our Nickel West consumption data. Once completed, we anticipate we will be able to more accurately reflect on the type of consumption (e.g. volumes consumed via evaporation and entrainment) of water within this operation.
Total water consumption in FY2023 was 307,850 ML. Consumption in high or very high water-stressed locations was 33,710 ML (11 per cent of overall water consumption for BHP operated assets). The operated assets in FY2023 that consumed the most water were Escondida, WAIO and BMA. Entrainment of water in tailings is the largest contributor to consumption at Escondida, whereas evaporation is the key driver of consumption at WAIO and BMA mainly via evaporation from dust suppression, tailings and water storage. It should be noted that in any given reporting period, consumption and discharge volumes might be higher than withdrawals as evaporation can occur from water that has been captured and stored during previous periods.
Changes in water storage
The ICMM guidance recommends reporting of changes in water storage for clarity, as an indicator of internal water dynamics, and to provide increased transparency of all elements of a water balance. The ICMM recommends reporting of aggregate volumes for all sites within the company and for all sites within water-stressed areas. The ICMM, WAF and GRI recommend disclosure of changes in water storage when the volumes influence water-related decisions, have a significant water-related impact on the site, environment, communities or stakeholders, represent a material component of the site’s water balance or trigger significant changes in flows volumes or quality.
The ICMM guidance requires that, at a site level, the delta storage derived by mathematical balance broadly reconciles with the actual change in volume of water in storage over the same period. This infers there is some allowance for uncertainty in the balance if actual changes are measured while other components of the balance are estimated, and comparison is considered a useful check for validating site data. Therefore, the balance should be reviewed and potential lags or uncertainties in the water system should be considered when assessing validity.
As discussed above, we have elected not to force a water balance at BMA and NSWEC to assist us in identifying the opportunities for improvements in the accuracy of our water balances at these operated assets. During FY2023, improvement in our BMA and NSWEC water balance continued to be implemented. We acknowledge that this data still contains uncertainty and as a result, changes in data (including retrospective changes) may occur as we focus our efforts on the water balances at our BMA and NSWEC operated assets.
As expected, the largest changes in water storage during FY2023 occurred at our BMA operated assets. This is where the majority of our water source is from rainfall and as discussed in the Water-related risk at BHP section on this webpage, is highly variable year to year.
Water-related legal performance
During FY2023, we had five incidents of water-related non-compliance that resulted in a formal enforcement action and one that resulted in a warning. Four of the enforcement incidents occurred at BMA, with one of the enforcement notices received in FY2023 in respect to an incident that occurred in FY2022. One incident related to releasing mine affected water, one to uncontrolled release of piped mine tailings and two occurred due to release of raw sewerage. One, enforcement action occurred at our Escondida operation and related to compliance with groundwater extraction monitoring requirements.
In addition, a warning letter was received by our WAIO operations relating to the wetting front extent from discharges from our operations, with no further action from BHP required.
Water-related legal issues are currently pending at our Minerals Americas operated assets. These relate to:
- an environmental damage action related to the alleged impact to the Lagunillas aquifer, the nearby wetlands and lagoon at Cerro Colorado
- regulatory proceedings for alleged non-compliances to Escondida’s approval governing the extraction of water from the Monturaqui aquifer
These legal cases are still pending as of the end of FY2023. More information can be found in the BHP Annual Report 2023, Operating and Financial Review 6.13 - Environment.
1 Small quantities of groundwater are extracted for pit dewatering to allow safe mining, and this water is used for operational consumption.
In FY2024, we intend to commence implementation of activities to achieve our existing CBWTs and milestones. We also intend to commence development of CBWTs for our remaining operated assets, and non-operational legacy assets. We plan to continue our collaboration on water governance and management with external parties and integrate OZ Minerals water disclosures with our disclosures.
The shared nature of water resources means we also need to think ‘beyond the fence’, which includes the interactions within catchments (a term used interchangeably with ‘basins’ on this webpage) when managing risk. As part of our Risk Framework, our operated assets are required to identify, assess and manage the water-related risks associated with their activities and make strategic business decisions in line with our Risk Appetite Statement. Our Water Stewardship Strategy has been progressing a range of improvements to further identify and assess water-related risk for our operated assets, including those at basin level. In FY2020, we completed our initial risk assessments for the catchments where we operate to develop a more comprehensive understanding of the water-related risks in our operational regions. We will continue to review our water-related risk profile in line with BHP’s risk process. For more information refer to the BHP Annual Report 2023, Operating and Financial Review 8 - How we manage risk.
The management of water-related risks needs to reflect the different physical environments, hydrological systems and socio-political and regulatory contexts in which we work. BHP must take into account the interactions that we and external parties have with water resources within catchments, shared marine regions and groundwater systems. In our disclosure of water-related risk, we present two facets of risk:
- operational water-related risks (threats or opportunities to BHP’s business, water resource, communities or the environment that are related to BHP activities at our operated assets)
- basin risks (threats or opportunities associated with inherent basin characteristics in areas where BHP operates, such as drought or flooding etc.), termed ‘inherent risk’ within the ICMM guidance
We have used the WWF’s Water Risk Filter since FY2021, to assess the level of basin risk of each of the locations where we have operated assets. We use the level of basin risk as an input to assessments of our operational water-related risks; usually as a causal factor and when determining the severity of potential impacts and likelihood of the risk event occurring.
BHP and basin risk
The WWF Water Risk Filter is widely used and in FY2021, BHP adopted it in place of our own assessment method, seeking to provide greater transparency and clarity to external parties about how the evaluation of inherent basin risk is undertaken for areas where we operate. The WWF Water Risk Filter assesses the level of risk in the basin based on the location of the basin from physical, regulatory and reputational perspectives using global (or local where available) datasets of 32 basin risk indicators. Other external water guidance (e.g. the CEO Water Mandate) also classify risk using these three categories.
For some of our operated assets, there are multiple individual sites within the asset that are geographically spread, such as our BMA, WAIO and North American legacy assets. For these operated assets, multiple locations across the geographical spread were assessed in the WWF Water Risk Filter and the average overall basin risk of the locations reported for the operated asset.
The methodology that is used by the WWF Water Risk Filter allows for the use of local knowledge to verify the basin risk outcomes. This approach is also supported by other external water disclosure frameworks, such as the CEO Water Mandate and CDP7.
Although we have presented the level of basin risk in accordance with the outcomes from the WWF Water Risk Filter in our tables and figures, the discussion below indicates where, based on our local knowledge, we consider the outputs of the WWF Water Risk Filter may be under- or over-estimating basin risk.
In the majority of locations where we operate, BHP considers regulatory risk for the basin as higher than the WWF Water Risk Filter due to knowledge of specific regulatory requirements applicable to each operated asset and other operators in the region, regional policy, plans and constraints and current discussions with local and national regulators regarding water permitting and performance for the operated asset and the region. We have incorporated our local knowledge of regulatory risk within our assessment of severity and likelihood in our operational water-related risk assessments.
Other risks that we consider higher than under the WWF Water Risk Filter include physical risk for Olympic Dam due to the use of Great Artesian Basin water resource, which supports important springs and is an important shared water resource in the region and reputational risk at our Chilean operated assets (Escondida and Pampa Norte), a legacy asset in the United States and WAIO, due to widespread community and media interest in these regions. These higher basin risks have been incorporated into the relevant operational water-related risk assessment (e.g. catchment risk assessment for Olympic Dam).
Refer to the graphics below for a summary of our basin risk level due to location for each operated asset and the catchment where they are located.
The basin physical risk level from the WWF Water Risk Filter is presented in this table to indicate whether BHP’s operated assets are in a ‘water-stressed area’. The rationale for BHP’s use of this measure to determine water stress is outlined below.
Water stress is defined by the CEO Water Mandate in the Corporate Water Disclosure Guidelines (2014) as ‘the ability, or lack thereof, to meet human and ecological demand for fresh water’. The Guidelines also state that ‘compared to scarcity, water stress is a more inclusive and broader concept and that it should consider other physical aspects, such as water quality and accessibility and floods and drought. The World Resources Institute (WRI) Aqueduct database determines baseline water stress based on an assessment of water scarcity and does not explicitly consider environmental flow requirements, water quality or access to water. The WWF Water Risk Filter in its assessment of physical risk includes indicators for the potential for drought, flooding and the risk to water quality and ecosystems services, and it therefore takes a holistic view of water stress as recommended by the CEO Water Mandate. For this reason, we have elected to use the physical risk ratings from the WWF Water Risk Filter to define ‘water-stressed areas’. Operated assets with a physical risk rating of high or above, as assessed for the FY2023 period, are deemed to be in areas of water stress.
Using the approach for defining water stress discussed above (based on the WWF Water Risk Filter basin physical risk level), two of our operated assets (a legacy asset in the United States and Pampa Norte) are classified as being under high or very high water stress due to location. In line with the ICMM guidance and other frameworks (e.g. GRI/SASB), we have disclosed the proportion of our water withdrawal, discharge and consumption that occurs in water-stressed areas in the water performance section on this webpage.
Our operational water-related risk
BHP’s Risk Framework and the Our Requirements for Environment and Climate Change standard govern the identification, assessment and management of operational water-related risks. More information is contained in the table below. The basin risk discussed above also seeks to inform the assessment of operational water-related risks, usually as a cause of a risk event. For example, high water scarcity within the basin may be a cause for the risk of inadequate water supply, or inadequate flood management may be a cause for an extreme weather impact. Basin risk may also influence the severity of potential impacts and likelihood of the operational water-related risk event occurring. For example, a high basin risk for ecosystem services may increase severity of potential impacts to environmental receptors, such as groundwater-dependent vegetation, if the water resource is not managed appropriately. For more information on our approach to risk management refer to the BHP Annual Report 2023, Operating and Financial Review 8 - How we manage risk.
Unmanaged or uncontrolled operational water-related risks have the potential to adversely impact:
- the health and safety of our employees, contractors and community members
- spiritual and cultural values
- communities, including social and economic viability
- environmental resources, including water, land and biodiversity
- legal rights and regulatory compliance
- reputation, investment attractiveness or social value proposition
- production, growth and development (including exploration)
- financial performance
The BHP Annual Report 2023, Operating and Financial Review 8.1 - Risk factors outlines our threats and opportunities that may occur as a result of our activities globally. This provides information pertaining to some potential water-related threats such as risks related to tailings, natural events and weather, geotechnical instability and critical infrastructure. Key management actions for each risk factor are discussed which include some water-related controls, such as planning and designing for structural integrity and design, defining key governance roles, setting minimum technical specifications, inspections, monitoring, audits and assurance and stakeholder engagement. The information presented on this webpage expands on this and outlines the current level of operational water-related risk at each operated asset.
The water risk table summarises the operational water-related risks that we have identified across our operated assets. Generally, the majority of our operational water-related risks monitoring relates to water scarcity (not having enough water for our operations or communities), water surplus (having too much water at our operations) or to having a potentially unacceptable change to the environment or community from BHP’s water activities.
The assessment of operational water-related risk presented below does not consider the effectiveness of controls to manage identified operational water-related risks. Therefore, this table should be read as a hypothetical representation of the estimated impact to BHP in a worst-case scenario without regard to probability and assuming all risk controls, including insurance and hedging contracts, are ineffective.
We have classified the significance of BHP’s operational water-related risks as follows:
- Tier 1: Operational water-related risks that may have significant consequences, in the absence of controls (shown in the table below as ‘1’)
- Tier 2: Operational water-related risks that are still important, but may have lower consequences, in the absence of controls (shown in the table below as ‘2’)
- n/a: Operational water-related risks that are not applicable at that operated asset
The water risk table provides more details about BHP’s Tier 1 operational water-related risks that we have identified, potential impacts and how we seek to proactively manage such risks. We consider how to avoid, minimise or mitigate potential or actual adverse impacts, or enable or enhance positive impacts, including to the environment and community (including cultural and spiritual values), health and safety and our financial performance and reputation. Under our mandatory minimum performance requirements for risk management, material risks are required to be reviewed periodically to evaluate performance.
All of the risk areas have potential physical, reputational and regulatory impacts. The management of operational water-related risks requires a mixture of management types/maturity that are described by the CEO Water Mandate, CDP and ICMM guidance.
Climate-related risks are discussed in many of the risk factors in the BHP Annual Report 2023, Operating and Financial Review 8 - How we manage risk. From a water-related risk perspective, climate change can be considered as a potential amplifier of existing risks as it may increase their likelihood and/or severity or could result in new risks. Potential direct water-related impacts resulting from climate change may include changes in precipitation patterns, sea levels, storm intensities, temperatures and frequency and/or severity of natural disasters (such as floods or droughts).
Indirect potential impacts of these changes may include coastal erosion, storm tide inundation and production of toxic microorganisms and, over the longer term, reduced rainfall could create water security issues while increasing the need to manage excess water. Assessments of the potential impact of future climate change policy and regulatory, legal, technological, market and societal changes on water-related risks have a degree of uncertainty given the wide scope of influencing factors and the countries where we do business. Under our mandatory minimum performance requirements for risk management, material risks are required to be reviewed periodically to evaluate performance. These reviews are designed to ensure developments in climate change science and policy and other relevant regulatory, legal, technological, market and societal factors, including areas of uncertainty, are considered annually in our evaluation of operational water-related risks.
Our operated assets are required to apply BHP’s Risk Framework and the Our Requirements for Environment and Climate Change standard to identify, assess and manage physical climate change risks, including options to build climate resilience into their activities, for example, by designing new facilities to withstand projected sea level rise or changing climate patterns, or factoring forecast increases in extreme weather events into operated asset-level plans. We are progressively implementing full physical risk assessments under our Adaptation Strategy and intend to report on specific material physical risks and potential financial impacts in future years. We also require investment and growth opportunities to undertake analysis of climate-related risks. For more information see the Climate change webpage.
Examples of operational water-related risks
For example, WAIO in the Pilbara region of Western Australia is located alongside other mining companies’ facilities. The cumulative effect of combined activities has the potential to impact groundwater that supports local ecosystems and has important spiritual and cultural significance for Indigenous communities.
To better understand potential impacts, WAIO conducted a strategic environmental assessment that took a regional approach. A key element of the assessment was to understand the potential cumulative adverse impacts and management strategies associated with surface water and groundwater. An analysis was also undertaken to identify key, water-dependent environmental features within the upper Fortescue River catchment.
This innovative approach allowed WAIO to develop proactive, outcome-based management actions to cumulative-impact risks. These actions now inform short- and long-term operational planning to avoid and minimise adverse impacts to water-dependent environments.
In FY2022, the majority of our operating assets commenced a WRSA in line with the Our Requirements for Environment and Climate Change standard. This process involved third-party review of publicly available information and stakeholder engagement by the third party to determine the shared water challenges in the regions where we operate. This involved active engagement with various stakeholders, such as other industries, local, regional and state government agencies, civil society organisations, public authorities, local community members and other interested parties who may influence or be influenced by our site water use and activities.
Outcomes from these WRSA can be found here.
Extreme weather risk
The climate at our BMA operated assets is characterised by wet season rainfall, which includes tropical cyclone events that produce most of the annual rainfall and a dry season during which little rainfall occurs.
The management of mine-affected water (MAW) is one of the key operational water-related risks for BMA. MAW is rainfall runoff, including the large volumes obtained during storm events, from active mining areas and other water that has been used in the mining process. MAW is typically stored in mine pits and dams. Over time, this water may become more saline due to evaporation or it may have increased suspended solids due to wash-down or erosion from surrounding mining activity. MAW is used for dust suppression and coal washing. Too little MAW may limit production and excess water may obstruct access and limit production in operational pits.
Water management activities aim for the balance between too much and too little water on each site. This allows sufficient storage for runoff from rainfall events, while not affecting production and not allowing unauthorised site discharge of MAW. Discharge of MAW needs to be managed in accordance with licence conditions, which in some cases may require management of MAW prior to discharge. Appropriate management should avoid or minimise out-of-season flow in ephemeral creeks and rivers, which has the potential (if not controlled) to increase sediment and salt loads.
Due to ongoing extreme rainfall events, excess water management is central to BMA’s operating strategy. Some BMA sites still hold excess water after the 2011 and 2013 floods and tropical cyclone Debbie in 2017. One way we seek to manage this is to move MAW from sites with water excess to sites that have too little water. A further control is to avoid the accumulation of additional water from excess rainfall events. BHP undertakes detailed studies on an ongoing basis that assess the benefit and cost of various options to manage excess water and seek to ensure the design of infrastructure in flood prone areas remains adequate for the level of flood risk.
Ongoing modelling and simulations are used to inform appropriate flood risk mitigation activities, which include construction of flood levees and preparation of emergency evacuation plans.
Climate change has the potential to heighten these extreme weather risks and introduce new ones.
Water access, sanitation and hygiene risk
The remote nature of many of our operated assets means BHP is often the supplier of water for the purposes of drinking and sanitation, and the manager of effluent with respect to our workforce. In some instances, BHP has agreed to arrangements that extend this role beyond our operated assets to our neighbouring communities.
In such circumstances, we are committed to providing access to safe and reliable drinking water (potable water) and appropriate sanitation and hygiene facilities.
For example, WAIO provides drinking water to the community of Newman, five operational mining areas and one closed mine, and supplements supply to our operations at port and rail. Therefore, management of this water is critical to our activities and surrounding communities. To manage this risk, WAIO adopted a management system approach based on ISO 9001, which integrates World Health Organization (WHO) and the Australian Drinking Water Guidelines requirements, as well as a number of additional standards to enable a holistic approach to drinking water safety and infrastructure management.
Our operated assets also have the potential to affect the cultural and spiritual values associated with water resources. Where relevant, BHP engages with local and Indigenous communities to understand and seek to avoid or minimise potential or actual adverse effects to cultural and spiritual value.
Water quality risk
Our current operations and legacy sites are in jurisdictions with mature regulatory regimes. As a result priority substances within our discharges typically are identified during and regulated by our licencing and permitting process in discussion with regulatory agencies. This process generally relies on public information regarding potential toxicity, ecological and health criteria for priority substances, and where available, information pertaining to background levels of priority substances within the region of the operations, to determine discharge limits. Monitoring and reporting requirements for priority substances are also typically defined by permits and licences. BHP installs treatment equipment where water discharge is planned and agreed limits may not be met in the absence of treatment.
Where discharges are not regulated via licences or permits, we need to use a risk-based approach to determine potential monitoring for priority substances. This approach requires evaluation of both the volume and quality of the discharge and that of the receiving environment. Baseline or reference conditions for water resources within each operated asset’s area of influence are required to be set, and an assessment of potential impacts to these are required to be undertaken as outlined in the Our Requirements for Environment and Climate Change standard. Where potential adverse impacts identified include contaminants being introduced to a receiving environment at levels above those already present, appropriate monitoring programs for these discharges need to be developed and criteria set (e.g. triggers and thresholds). These criteria are informed by relevant local guidance that outlines potential health (if applicable) and or ecological impacts e.g., Australian and New Zealand Environment and Conservation Council (ANZECC) Water Quality Guidelines, the Department of Water and Environmental Regulation – Guideline - Assessment and management of contaminated sites or the International Convention for the Prevention of Pollution from Ships (MARPOL).
Around 88 per cent of global water discharge from BHP’s operated assets is from our desalination activities at Escondida. Our Escondida asset’s discharges are to seawater and regulated under government issued permits that include discharge limits. Other sites that have water discharges are shown in the water performance section and in our ESG Standards and Databook. None of our operated assets discharge untreated effluent from waste water treatment plants to any water streams.
Refer to our Offsite discharge risk reduction case study for an example of how BHP manages water quality risks.
Water-related risk in the value chain
BHP has potential exposure to water-related risks across its value chain and climate change may increase our future exposure. Customers and suppliers may be exposed to areas of high to extremely high water stress. Many are also located in areas with a higher likelihood of flooding. We need to understand these factors and respond to the challenges, working with our customers and suppliers. We are working towards increasing our understanding of potential water risks and opportunities across our supply chain that we may be able to make contribution to, or influence, reducing or enhancing respectively.
For more information on value chain initiatives please refer to the Value chain webpage.
Water stewardship is as vital for our NOJVs as it is for our operated assets.
We engage with our NOJVs to better understand their management of water-related risks.
We have worked with Antamina and its shareholders to secure Antamina’s commitment to align with ICMM Mining Principles.
For more information regarding the Samarco NOJV, refer to the BHP Annual Report 2023, Operating and Financial Review 7 - Samarco.
Water management can create opportunities
Effective water-related risk management can contribute to long-term business, social and environmental benefits, such as:
- increased productivity
- improved community benefits and resilience
- improved water disclosure and governance
- becoming a partner-of-choice to governments and communities in new and existing jurisdictions
- access to resources by obtaining and retaining rights to operate and expand our current operated asset base
- reduced liabilities and long-term legacy issues
- increased long-term business resilience
BHP’s Water Stewardship Strategy seeks to leverage technology solutions to prevent or significantly reduce adverse water-related impacts, increase water efficiency and deliver benefits beyond our operated assets.
We have developed a roadmap of potential water technologies. This roadmap identifies emerging and long-term challenges and strategic opportunities to resolve these through technology and innovation. The roadmap was developed by overlaying operated asset-level water-related risk with the water stewardship vision and objectives to leverage technology solutions that drive a step-change reduction in water-related risk and realise value creation opportunities. Some examples of technologies and initiatives that are included in the roadmap include:
- Olympic Dam tailings decant water treatment for reuse and to partially offset Great Artesian Basin supply
- Escondida tailings storage facility water recovery/treatment for reuse
- BMA mine-affected water treatment for reuse or discharge
The completion of WRSAs at our operated assets in consultation with relevant stakeholders, has identified further opportunities to collectively address shared water challenges within the regions where we operate and we have embedded some of the identified opportunities via our CBWTs. For more information see Shared water challenges.
For more information on water-related opportunities for creating social value, refer to the Social value webpage.
- Harmony Pitt Lake
- Pilbara surplus water scheme success
- New use for wastewater in the desert
- Offsite discharge risk reduction
- Water use assessments
- United Nations Global Compact’s CEO Water Mandate Initiative
- America’s WETLAND Foundation: Bayou Terrebonne Biodiversity and Resiliency Project
- Groundwater Modelling Decision Support Initiative
- Escondida: Breaking the water-energy nexus